Tolkien Estate Limited v Saltalamacchia

Judgment (5 paragraphs)

[1]

The respondent has infringed the applicant's copyright in the copyright work set out in the annexure to these orders (the One Ring Inscription) by: (a) reproducing in material form the One Ring Inscription or a substantial part of it; (b) communicating the One Ring Inscription or a substantial part of it to the public; (c) selling rings bearing a reproduction of the One Ring Inscription or a substantial part thereof; (d) offering or exposing for sale rings bearing a reproduction of the One Ring Inscription or a substantial part thereof; (e) by way of trade exhibiting in public rings bearing a reproduction of the One Ring Inscription or a substantial part thereof, including: (f) on the websites located at the domain names www.ebay.com.au, www.ebay.co.uk and www.ebay.com; (g) on the website located at the domain name www.australianjewellerysales.com.

[2]

THE COURT ORDERS THAT: 2. The respondent be permanently restrained, whether by himself, his employees or agents or otherwise howsoever from, without the licence or authority of the applicant: (a) reproducing in material form, or authorising any third party to reproduce in material form, the One Ring Inscription or a substantial part of it; (b) communicating the One Ring Inscription or a substantial part of it to the public, or authorising any third party to do so; (c) selling products bearing a reproduction of the One Ring Inscription or a substantial part thereof; (d) offering or exposing for sale products bearing a reproduction of the One Ring Inscription or a substantial part thereof; (e) by way of trade exhibiting in public products bearing a reproduction of the One Ring Inscription or a substantial part thereof, including: (f) on the websites located at the domain names , and ; (g) on the website located at the domain name . 3. Within 14 days of the date of these orders, the respondent deliver up to the applicant or its duly authorised agent for destruction under supervision all goods in the possession, power, custody or control of the respondent (whether by himself, his employees or agents or otherwise howsoever) which reproduce the One Ring Inscription or a substantial part thereof. 4. Within 14 days of the date of these orders, the respondent deliver up to the applicant or its duly authorised agent for destruction under supervision all catalogues, price lists, brochures and other documents and materials (including materials which are or which are capable of being stored, generated or transmitted via any electronic media) in the possession, power, custody or control of the respondent (whether by himself, his employees or agents or otherwise howsoever) which reproduce the One Ring Inscription or a substantial part thereof. 5. At the applicant's election, the respondent pay to the applicant: (a) damages, and additional damages if the Court subsequently thinks fit, for infringement of the copyright in the One Ring Inscription, to be assessed together with interest thereon; or (b) an account of profits made by the respondent by the said infringements, to be assessed together with interest thereon. 6. Within 14 days of the date of this order, the respondent file and serve a statement setting out the following information and annexing any supporting purchase orders, invoices, receipts or like sales documentation: (a) the number of products bearing the One Ring Inscription which have been purchased or acquired by him or on his behalf; (b) the purchase price of each item referred to in sub-paragraph (a); (c) the identity of the vendor of each item referred to in sub-paragraph (a); (d) a list setting out details of each product bearing the One Ring Inscription sold or disposed of by him or on his behalf including (in the case of each item): (i) the product description; (ii) the date of sale; (iii) the specific website or other medium through which the product was sold; and (iv) the sale price. 7. The respondent pay the applicant's costs of the proceeding to date forthwith, to be taxed in default of agreement. 8. The further hearing of the proceeding be adjourned for directions to 7 October 2016 at 9.30am. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

INFRINGING CONDUCT 8 The applicant has filed evidence in support of its application, particularly the affidavits of Steven Andrew Maier sworn 1 July 2016, Lisa Marie Dibiagio sworn 1 July 2016 and Jennifer Louise King sworn 1 July 2016, together with the annexures. I should say at the outset that because of various presumptions arising under ss 126, 127 and 129 of the Copyright Act, it was not necessary for the applicant to rely upon several confidential annexures to the Maier affidavit. The respondent filed no evidence, although I allowed him to rely upon various emails that he had sent to my chambers setting out his position. Such emails were, for convenience, formally tendered as part of the applicant's case. The evidence filed by the applicant unequivocally establishes the following matters. 9 The respondent has infringed the applicant's copyright in the One Ring Inscription by reproducing the One Ring Inscription or a substantial part thereof and/or communicating the One Ring Inspection or a substantial part thereof to the public without the licence or authority of the applicant (see ss 14, 31 and 36 of the Copyright Act). 10 Further, the respondent has infringed the applicant's copyright in the One Ring Inscription by offering or exposing for sale, exhibiting by way of trade and selling rings which bear the One Ring Inscription or a substantial part thereof without the licence or authority of the applicant (see ss 14, 31 and 38 of the Copyright Act). 11 The respondent's infringing conduct has involved the following dimensions: (a) first, depicting (using pictures of the impugned rings which show the One Ring Inscription), promoting and offering for sale rings bearing the One Ring Inscription without the licence or authority of the applicant on the Australian Jewellery Sales website; (b) second, depicting (using pictures of the impugned rings which show the One Ring Inscription), promoting and offering for sale rings bearing the One Ring Inscription without the licence or authority of the applicant through the eBay stores; and (c) third, offering or exposing for sale, exhibiting by way of trade and selling rings bearing the One Ring Inscription without the licence or authority of the applicant; on or around 18 March 2016, a representative of the applicant made a sample purchase from the respondent through the respondent's Australian eBay store. 12 Further, the respondent's impugned conduct has continued after the commencement of this proceeding. The applicant conducted a search of the respondent's Australian eBay store on 30 June 2016 which revealed that the respondent's impugned conduct was still occurring as at that date. 13 In email correspondence with this Court, the respondent has made the following admissions in relation to his conduct: (a) "I have been selling this lord of the rings ring for about 8 years ... I have sold these rings between $5 and $30 in the past ... Over the last 8 years or so, I have sold approximately 1,300 of these rings and have about 50 left. The 1,626 sales they claim I have made, does not take into consideration how many rings have not been paid for". (b) "I have never denied that I am selling the rings ...". 14 In oral submissions before me this morning, the respondent did not deny that he sold the impugned rings on the Australian Jewellery Sales website or via his Australian eBay stores. 15 It is accepted by the applicant that in order to make out its claim under s 38 of the Copyright Act, the applicant must show that the respondent knew, or ought reasonably to have known, that the making of the impugned rings in Australia (or, if the rings were imported, the making by the importer in Australia would have) constituted an infringement of the applicant's copyright in the One Ring Inscription. This requirement is not relevant to s 36. 16 The requirement under s 38 is satisfied in the present case. The respondent ought reasonably to have known that the One Ring Inscription, which is famously a part of the Book, would be protected as a copyright work. Indeed, the respondent has promoted the impugned rings by reference to the name "Lord of the Rings" and the names "The Hobbit" and "Bilbo Baggins". Hobbits are central characters in the Book and Bilbo Baggins (a hobbit) is an important character in the Book (and a related work by JRR Tolkien called The Hobbit). Consequently the respondent ought to have known that the making of the impugned rings in Australia (or, if the rings were imported, the importing into Australia would have) constituted an infringement of that copyright. 17 Further, the applicant first placed the respondent on notice of its claims of copyright infringement on 11 February 2016. From that time, there can be little doubt that the respondent knew that the making of the impugned rings in Australia (or, if the rings were imported, the importing into Australia would have) constituted an infringement of the applicant's copyright in the One Ring Inscription. 18 Moreover, and unsatisfactorily, the respondent chose to ignore two letters of demand from the applicant's UK lawyers and one letter of demand from the applicant's Australian lawyers. Such conduct was ill-advised. The respondent's purported justification for such conduct that he put before me this morning was untenable. 19 The respondent has submitted that the impugned rings do not exactly replicate the One Ring Inscription. It appeared to me that the respondent was under the misapprehension that the applicants were concerned about his conduct because the inscription of the impugned rings had a "gap" and was not an exact replica of the One Ring Inscription. Regardless, the respondent's conduct constituted copyright infringement by the fact that he has and continues to reproduce a substantial part of the One Ring Inscription and/or communicate a substantial part of the One Ring Inspection to the public without the licence or authority of the applicant.

SUMMARY JUDGMENT 20 In my view, it is appropriate to grant summary judgment against the respondent. He has no reasonable prospect of defending the proceeding (or part of it). 21 The principles applicable to the grant of summary judgment are the following: (a) The Court must assess the strength of the allegations made by reference to the pleadings, the affidavits and any other evidence adduced. (b) The applicant bears the onus of demonstrating that the respondent has no reasonable prospect of successfully defending the proceeding. However, if the applicant establishes a prima facie case for summary judgment, the respondent must identify factual or evidentiary matters which necessitate a trial. The respondent has not done so in the present case. (c) In order to have reasonable prospects of success, the respondent must have prospects of success that are "real" and not "fanciful" or even "merely arguable". 22 In my view, the Court should grant summary judgment. The applicant has established that it is the owner of copyright in the One Ring Inscription. Moreover, there is no real dispute that the respondent has engaged in the impugned conduct described above, which involves unauthorised use of the applicant's copyright work in contravention of both ss 36 and 38 of the Copyright Act. The respondent has not put forward any relevant and real defence to the allegations of copyright infringement. It follows that the respondent has no reasonable prospect of successfully defending the liability aspects of the proceeding. 23 The applicant has sought a declaration, a permanent injunction, orders for delivery-up, an order for damages or (at the applicant's election) an account of profits, and an order requiring the disclosure of information to facilitate the inquiry as to pecuniary remedies and costs. 24 The declaration proposed by the applicant accurately identifies the infringing conduct of the respondent. 25 As to injunctive relief, section 115 of the Copyright Act identifies injunctions as one of the forms of relief that the Court may grant in infringement proceedings. 26 Permanent injunctions are the conventional remedy in cases involving the infringement of intellectual property rights and an on-going threat of infringement. Usually, the form of the injunction restrains the respondent from infringing the intellectual property generally, and not merely from repeating the particular example of infringing conduct which was the subject of the evidence. The applicant's proposed injunction is appropriate for the following reasons: (a) The applicant initially made demands of the respondent through letters sent by its UK solicitors. Those letters of demand were sent by email, the first on 11 February 2016. Such letters placed the respondent on notice that the applicant owned the copyright in the One Ring Inscription and that the applicant considered the respondent's dealings with the impugned rings to be an infringement of that copyright. Those letters went unanswered. (b) On or about 24 March 2016, the applicant's Australian lawyers sent a pre-action letter of demand to the respondent, but they did not receive any response. The present proceeding was then commenced on 21 April 2016. (c) Notwithstanding the demands made on behalf of the applicant by both its UK and Australian lawyers, the respondent has not offered any undertaking to cease the impugned conduct. Further, the respondent's impugned conduct has continued for months after the commencement of this proceeding. (d) The respondent has admitted that he has further stock of the impugned rings on hand which he wishes to retain. (e) Taken together, such matters warrant the grant of the injunction sought. 27 I accept that the respondent has stated in correspondence that he does not intend to sell the impugned rings in the future and that he will abide by the Court's ruling. However, he nonetheless wishes to retain his stock on hand. In the circumstances and given the respondent's past conduct, these statements are inadequate and no substitute for appropriate injunctive relief. In the circumstances of this case, the applicant is entitled to an injunction prohibiting further infringement of its copyright. 28 The applicant's proposed orders for delivery-up reflect the usual practice where infringement has been established. Orders for delivery-up are required in this case because the respondent has admitted that he has additional stock of the impugned products on hand. 29 The applicant is also entitled to orders for damages or an account of profits to be assessed. It is appropriate to leave open the question of any award of additional damages. 30 The applicant also seeks an order requiring the respondent to disclose details of the impugned conduct. The information sought by the applicant is relevant and required by the applicant to make an informed assessment of its case on quantum. It will also enable the parties and the Court to conduct the quantum phase of the case. 31 On the question of costs, the applicant should be awarded its costs of this discrete phase of the proceeding and it should be permitted to recover those costs forthwith. 32 I will make orders accordingly. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach.

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Judgment (5 paragraphs)

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