FEDERAL COURT OF AUSTRALIA

Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2013] FCA 986

THE COURT ORDERS THAT:

1.    The claim against the first to third and fifth respondents be dismissed with costs.

2.    The claim against the fourth respondent be dismissed with costs.

THE COURT DECLARES THAT:

3.    The electronic gaming machines referred to in [133] of the decision of the Full Court in Allam v Aristocrat Technologies Australia Pty Ltd [2012] FCAFC 34, contained game software, the copyright in which was owned by one or more of the applicants, a substantial part of which was reproduced by the sixth respondent in breach of copyright.

4.    The compliance plates referred to in [162], [163] and [167] of the abovementioned decision were reproduced in whole or in substantial part, from compliance plates the copyright in which was owned by the applicants, and accordingly, in breach of the applicants’ copyright.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

INTRODUCTION

1        This matter was remitted to me by a Full Court to determine two questions. The first is what if any relief should be granted in relation to copyright infringement arising under the Copyright Act 1968 (Cth). The second is for me to determine a claim of trade mark infringement under the Trade Marks Act 1995 (Cth): see Allam v Aristocrat Technologies Australia Pty Ltd [2012] FCAFC 34 (Allam No 1); see also Allam v Aristocrat Technologies Australia Pty Ltd (No 2) [2012] FCAFC 75 (Allam No 2).

2        Special leave to appeal from the orders of the Full Court was refused by the High Court with reasons that affirmed the correctness of the Full Court’s findings: see Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2013] HCA 21.

3        The essential question which arises on the remittal is what factual findings made at first instance survive the Full Court judgment. Plainly enough, that question needs to be determined before any issue of relief under the Copyright Act or infringement of trade marks under s 120 of the Trade Marks Act can be considered.

MY JUDGMENT AT FIRST INSTANCE

4        In the proceeding at first instance, the applicants (the Aristocrat Companies) sought damages from the respondents under s 115 of the Copyright Act for infringement of copyright in the sale of second hand gaming machines assembled in Australia and sold in South America: Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2009] FCA 1495 (the Aristocrat Decision) at [5], [36]-[44].

5        The claims of copyright infringement included claims of primary infringement and secondary infringement under ss 36 and 38 of the Copyright Act: Aristocrat Decision at [40]-[41].

6        The Aristocrat Companies also claimed that by engaging in the acts which gave rise to copyright infringement, the respondents had infringed registered trade marks owned by the Aristocrat Companies: Aristocrat Decision at [45].

7        The trade marks included marks upon, or in relation to, the hardware comprising Aristocrat gaming machines as well as the names of various games played on the machines: Aristocrat Decision at [45] and [117].

8        The Aristocrat Companies did not pursue the claim for damages at the trial because they conceded that if damages were awarded for copyright infringement, as they were, no further damages for trade mark infringement would be appropriate: Aristocrat Decision at [45].

9        I found that the Aristocrat Companies had proved their claim for damages for copyright infringement in respect of 11 of the 54 transactions alleged by them: Aristocrat Decision at [879].

10        In coming to that finding, I analysed the evidence upon which I relied to make the finding in respect of each of the transactions: Aristocrat Decision at [821] ff.

11        The transactions consisted of sales of a number of gaming machines as stated in invoices issued by, or on behalf of, the first, second, third and fifth respondents (the Global/Impact respondents).

12        I found that transactions 34, 36, 48 and 54, which comprised gaming machines in the “Machines at Clubs” (MC) category contained infringing components of Aristocrat gaming machines, and in particular false Aristocrat compliance plates: Aristocrat Decision at [845], [849].

13        In coming to that conclusion I found that, aside from the counterfeit compliance plates and counterfeit Aristocrat game software, it was not possible to identify which particular components of the machines were counterfeit: Aristocrat Decision at [846].

14        The evidence upon which I relied to make the findings in respect of the machines in the MC category included records from the Office of Liquor, Gaming and Racing (the OLGR) as well as the evidence of Ms Lynne Oldfield, an employee of the Aristocrat Companies, who attended a number of clubs and hotels in New South Wales for the purpose of confirming the material sourced from the OLGR data: Aristocrat Decision at [838], [843].

15        In addition to my findings in relation to the machines in the MC category, I found that transactions 13, 20, 28, 29, 41, 46 and 51 comprised machines which contained infringing Aristocrat components. These machines were part of those which were described as falling within the “Duplicate Numbers” (DN) category: Aristocrat Decision at [860]-[863], [872].

16        Each of those transactions consisted of a sale of gaming machines to customers of the Global/Impact respondents as set out in invoices issued by those respondents to customers in Peru, Cyprus and Mexico.

17        In making the findings that the seven transactions falling within the DN category contained infringing components, I rejected the explanation given by one of the Global/Impact respondents, Mr Andrews, for the presence of duplicate serial numbers on the invoices. These were credit findings which I made against Mr Andrews, based in part upon emails between the respondents: Aristocrat Decision at [863], [868].

18        The emails between the respondents were not initially tendered against all of the respondents, that is to say, the Global/Impact respondents and the fourth and sixth respondents (the Tonita respondents). Rather, some correspondence was tendered only against the Global respondents, some against the Global/Impact respondents and some against the Tonita respondents: Aristocrat Decision at [265].

19        When I admitted the emails into evidence I admitted them subject to my “usual s 136 ruling”. This meant that each email was evidence against one or more (but not all) of the respondents. This is explained in Allam No 1 at [174].

20        At that time, Senior Counsel who then appeared for the Aristocrat Companies indicated that he would revisit the usual s 136 ruling when appropriate. It was not until final addresses that the Aristocrat Companies applied for a variation of the ruling. I then revoked the earlier ruing, admitting all of the evidence that had been admitted upon the usual s 136 ruling so that it was admitted on a provisional basis (that is to say pending my reasons for judgment) against all respondents: Aristocrat Decision at [266], Allam No 1 at [184], [208], [209].

21        The other evidentiary material which was the subject of my usual s 136 ruling consisted of seized gaming machine components including EPROMs, EPROM labels, game software, artwork and compliance plates. These items were seized from the Florey, Mascot and Botany premises of the Global/Impact respondents and the Bankstown and Georges Hall premises of the Tonita respondents: Aristocrat Decision at [376], [377].

22        The seized materials included 22 compliance plates that were not genuine Aristocrat compliance plates. These items were seized at the Botany premises of Impact and were therefore admitted evidence against it.

23        Mr Channa gave evidence that he had planted counterfeit compliance plates, manufactured by the Tonita respondents, at Impact’s Botany premises. I accepted evidence given by him that the compliance plates were planted in a ceiling at Botany where they were seized by the Aristocrat Companies in an Anton Piller raid: Aristocrat Decision at [370], [371].

24        Mr Channa’s evidence also included a CD-ROM which became Exhibit CCC-14 in the proceedings. His evidence was that he obtained the CD-ROM from one of the Tonita respondents, Mr Allam. Ex CCC-14 contained binary game files comprising Aristocrat game software and was admitted, initially, against the Tonita respondents: Aristocrat Decision at [530], [531].

25        Another significant item of evidence was a loose hard disk drive known as the “Loose HDD” which was seized from the Tonita respondents’ Georges Hall premises. The Loose HDD contained software that was said to have been used by the Tonita respondents to burn Aristocrat game software onto EPROMS: Aristocrat Decision at [496], [503].

26        I made adverse credit findings against the principals of the Global/Impact respondents, namely, Mr Andrews and Mr Cragen, taking into account, in particular, their answers under cross-examination about the content of the emails: Aristocrat Decision at [635], [647], [656], [666].

27        I found the principal of the Tonita respondents, Mr Allam, to be an untruthful witness. I set out my reasons for this finding in some detail. The reasons included Mr Allam’s evidence about the Loose HDD and Ex CCC-14 as well as false evidence of conversations about the compliance plates. I did not refer to the emails in my adverse credit findings against Mr Allam: Aristocrat Decision at [710], [711] and [712].

28        I reduced my findings as to what flowed from the adverse credit findings to five propositions which I set out in the Aristocrat Decision at [718] to [722] as follows:

718    First, the Tonita respondents burned Aristocrat game software onto blank EPROMs using the Dataman software to carry out this exercise.

719    Second, the Tonita respondents manufactured fake Aristocrat compliance plates, some of which were found at Botany, Bankstown and Georges Hall.

720    Third, Mr Andrews was aware that Mr Allam was burning Aristocrat game software onto blank EPROMs. So too was Mr Cragen.

721    Fourth, Mr Andrews and Mr Cragen were aware that Mr Allam was manufacturing false compliance plates for export to foreign markets.

722    Fifth, Mr Andrews and Mr Cragen sent, or were aware that the Global/Impact Joint Venture had sent, digital artwork to South America for the purpose of having it copied there. They also sent original artwork, or were aware that original artwork had been sent, to South America for copying.

29        I then explained my reasons for making each of those findings commencing at section 15.2.1 of the Aristocrat Decision. Importantly, the reasons which I gave in support of the third, fourth and fifth propositions relied upon the emails: Aristocrat Decision at [751]-[756].

30        I also took into account the email correspondence to determine the date on which the Global/Impact Joint Venture commenced. I found that it commenced on 1 October 2004, which was earlier than the date for which the Global/Impact respondents contended: Aristocrat Decision at [763]-[765].

31        This led to my finding that the Global/Impact respondents authorised any copyright infringements committed by the Joint Venture in carrying out its activities from 1 October 2004: Aristocrat Decision at [766].

32        The findings of authorisation of copyright infringement by the Global/Impact respondents from that date then informed the specific findings in relation to the 11 transactions referred to above. Those specific findings were, as I have said, based on evidence of OLGR data and upon Ms Oldfield’s attendance at clubs and hotels, as well as the presence of duplicate serial numbers on invoices relating to seven transactions.

33        I also found that Mr Allam authorised each of the infringing transactions but that Tonita did not do so because it was incorporated after the last of the transactions took place: Aristocrat Decision at [903], [904].

THE FULL COURT’S FINDINGS IN ALLAM NO 1

34        The Full Court observed at [121] that my findings about the manufacture of counterfeit compliance plates and the burning of Aristocrat’s game software onto the blank EPROMs (by Mr Allam) were critical to my reasoning process on the question of copyright infringement by dealing. They said that those facts, and Mr Andrew’s and Mr Cragen’s knowledge of them, considered in the context of the Global/Impact respondents’ own records and adverse credit findings led me to conclude that the infringing components in the infringing transactions included counterfeit compliance plates and counterfeit game software: Allam No 1 at [121].

35        Their Honours then said at [122]:

The appellants attacked the primary judge’s reasoning in that regard. However, we do not consider that the primary judge erred in reasoning in this way. The real question is whether his Honour’s findings in relation to the five “essential” propositions can be shown to have been made in error. The appellants contended that the primary judge did err in that regard. We turn to consider that challenge.

36        Their Honours addressed each of the propositions in the following paragraphs of their judgment. They upheld the first proposition, finding that the circumstances justified the conclusion that in relation to the infringing transactions, the gaming machines contained Aristocrat game software that had been reproduced by Mr Allam: Allam No 1 at [133].

37        The Full Court also upheld the second proposition, stating at [155] that they were not persuaded that I was in error in concluding that Mr Allam manufactured fake compliance plates, some of which were found at Impact’s Botany premises, as well as at the Tonita respondents’ premises at Bankstown and Georges Hall. But their Honours went on to say:

However, whether those fake compliance plates were made in infringement of copyright is another matter.

38        Their Honours found that in relation to two of the seized compliance plates, described as “A” and “Bankstown D”, the evidence showed “without question” that the plates were a reproduction of a substantial part of a genuine Aristocrat compliance plate: Allam No 1 at [162]-[163].

39        However, their Honours went on to find that apart from the two instances which they identified, I was in error in concluding that any wider case of copyright infringement had been established against Mr Allam in respect of Aristocrat compliance plates: Allam No 1 at [167].

40        In dealing with the third, fourth and fifth propositions, their Honours focussed upon the email communications which they described as an essential part of my reasoning process. They said that most of the emails on which I relied were subject to the usual s 136 ruling: Allam No 1 at [175].

41        The Full Court went on to say at [213]:

… it is important to emphasise that the emails were central to the conclusion reached by the primary judge in three ways. First, they were relevant to the findings about credit. Secondly, they were relevant to findings in relation to the joint venture and to the “tacit agreement” between the parties. Thirdly, they were relevant to the primary judge being satisfied as to “the counterfeiting operation” as alleged (see eg, [768]). As such, without the emails being relied upon by the primary judge, he could not have connected the particularised infringing transactions with the joint venture and “tacit agreement” as to the counterfeiting operations that his Honour found existed.

42        Their Honours concluded that I was in error in varying my usual s 136 ruling in the course of closing addresses. The effect of what they said at [234]-[238] was that I ought not to have admitted the evidence which was the subject of that ruling against all of the respondents. Thus it was admissible only against the parties in respect of whom it was originally tendered and admitted.

43        Their Honours then found at [239] that I should not have relied on the chain of emails to reach the conclusion that the infringing transactions occurred as alleged by the Aristocrat parties. They said at [240] that the emails could have had no relevance to proving that the transactions occurred but:

… they could have use in discrediting witnesses or proving the existence of a joint venture.

44        The reference to “a joint venture” in the quoted passage may be to a joint venture between all of the respondents. However, I am content to proceed upon the basis submitted on behalf of the Global/Impact respondents that it refers only to the joint venture between those respondents.

45        The Full Court’s conclusions in relation to the third, fourth and fifth propositions are set out at [246] as follows:

Therefore, the findings of the primary judge in relation to the third, fourth and fifth “essential propositions” cannot be supported, and the Aristocrat parties fail to prove the alleged infringing transactions, even accepting proof of a joint venture. Looking at the primary judge’s findings in relation to these propositions they extensively relied upon the chain of emails – see [751] to [752], [754] to [756], and [757] to [762]. No attempt was made by the Aristocrat parties before the primary judge or before us to prove the “essential propositions” without reference to the emails relied upon by the primary judge. It seems to be accepted that without reliance upon the emails, the third, fourth and fifth “essential propositions” cannot be supported, and the case brought by Aristocrat must fail.

46        Their Honours said at [247] that in light of their conclusions about the correctness of the third, fourth and fifth propositions, the appeals must be allowed.

47        Nevertheless, the Full Court then proceeded to deal at length with the balance of the issues that were raised on the appeal. They did so only upon the assumption that I was correct in the way in which I addressed the emails, that it to say, an assumption which they had specifically rejected in the earlier part of the judgment.

48        This is clear from the passage at [248] which I will set out in full:

On the assumption that the primary judge was correct in using the emails in the way he did in making the findings represented by the third, fourth and fifth “essential” propositions (such that the “knowledge” requirement of s 38 of the Copyright Act was established), and in deference to the substantial arguments of the parties, we proceed to consider and determine the remaining issues on appeal.

49        It is unnecessary to set out the lengthy consideration of the remaining issues by the Full Court because it is plain that their Honours’ views as to the correctness of my findings were based upon an assumption which they did not accept.

THE SURVIVING FINDINGS

50        The Full Court stated in plain terms that I was in error in relying upon the emails to reach the conclusion that the infringing transactions occurred. But the emails did not provide the basis for my findings that the transactions took place. Rather, as the Full Court concluded at [246] the error which I made in admitting the emails against all respondents had the effect that the third, fourth and fifth propositions could not be supported.

51        Thus, when their Honours went on to say at [246] that “the Aristocrat parties fail to prove the alleged infringing transactions”, this must be read in light of the words which precede that statement.

52        The third, fourth and fifth propositions were findings of knowledge on the part of the Global/Impact respondents of the fact that Mr Allam burned Aristocrat game software and manufactured fake compliance plates and that they were, or ought to have been, aware of other infringing activities.

53        The findings of knowledge were essential to the findings of infringement against the Global/Impact respondents by reason of their authorisation of the relevant primary acts, under s 36 of the Copyright Act and infringement by dealing under s 38 of the Copyright Act.

54        The rejection of the Full Court of my third, fourth and fifth propositions therefore had the effect that the findings made against the Global/Impact respondents of copyright infringement in relation to the 11 identified transactions were set aside.

55        But the evidence upon which I relied in relation to the existence of those transactions was not based upon the emails. In some instances it was based upon credit findings relating to the emails which was a course that the Full Court accepted.

56        As I endeavoured to explain above, the findings in relation to the MC category were based upon OLGR data and Ms Oldfield’s inspections: see [11] above. The findings in relation to the DN category were based upon the existence of duplicate serial numbers on the invoices and adverse credit findings against Mr Andrews and Mr Cragen: see [12] above.

57        As noted above, the Full Court said at [122] that I did not err in finding that the components in the infringing machines included fake compliance plates and counterfeit game software. Their Honours pointed out that the Global/Impact parties’ own records showed a duplication of serial numbers or a conflict between the serial numbers of gaming machines supplied to overseas customers and the numbers of extant machines in local premises.

58        It follows in my view that the findings which I made that the machines which were the subject of the 11 transactions contained “fake compliance plates” and “counterfeit gaming software” are not affected by the Full Court’s decision in Allam No 1. Nor is the finding disturbed that the transactions were documented in the invoices for the 11 transactions to which I referred.

59        Those transactions were, as I have emphasised, sales made by the Global/Impact respondents of gaming machines which contained fake compliance plates and counterfeit game software, although it is not possible to otherwise identify which components of the gaming machines were not genuine Aristocrat components.

60        What is critical is, as the Full Court observed, the transactions were documented on the Global/Impact respondents records, that is to say the invoices which were the subject of the 11 identified transactions.

61        It seems to me therefore that I must proceed upon the basis that the Global/Impact respondents sold the gaming machines that were the subject of those transactions to their customers who were principally located in South America.

62        The findings that the Global/Impact parties were aware that Mr Allam burned the Aristocrat game software and manufactured counterfeit Aristocrat compliance plates do not survive. However, for reasons stated later, I do not consider that questions of knowledge are relevant to the claims of trade mark infringement.

63        As to Mr Allam, the finding made by the Full Court at [133] that in relation to the infringing transactions, the impugned gaming machines contained Aristocrat game software reproduced by Mr Allam stands.

64        The finding which I made that Mr Allam manufactured fake compliance plates, some of which were found at the various premises was also sustained by the Full Court, although their Honours ultimately concluded that this evidence established only two instances of copyright infringement by Mr Allam: see [39] above.

THE TRADE MARK INFRINGEMENT CLAIM

The arguments on appeal: the factual basis for determining trade mark infringement

65        Mr M Einfeld QC who appeared for the Global/Impact respondents submitted that the effect of the Full Court’s decision was that there was no admissible evidence against those respondents of any dealing capable of giving rise to the claims of trade mark infringement.

66        Mr Einfeld submitted, in my view correctly, that the Aristocrat Companies submissions on the remitter relied on items that were seized from the Global/Impact premises without any attempt to discriminate between evidence which was tendered at the trial and evidence which survived the Full Court’s decision.

67        This was, as counsel for the Global/Impact parties submitted in their written submissions, regrettable. So too was the Aristocrat Companies’ submission that it could rely upon the body of evidence which underpinned my findings at first instance that were upheld only upon the assumption stated in [248] of the Full Court’s judgment in Allam No 1.

68        However, it does not follow that Mr Einfeld is correct in his submission that there is no evidence to support findings of trade mark infringement against the Global/Impact respondents.

69        The effect of his submission was that the critical items of evidence of counterfeiting were only admissible against the Tonita respondents. He pointed in that regard to the Full Court’s findings made against Mr Allam at [133] and [167] in Allam No 1 and submitted that these were not findings which were made against the Global/Impact respondents.

70        Whilst I do not consider that the Aristocrat Companies grappled with the force of Mr Einfeld’s submissions, it seems to me that the short answer to those submissions is found in the analysis of the Full Court’s findings which I have undertaken. That is to say, the transactions took place although the Global/Impact parties cannot be taken to have had knowledge of Mr Allam’s counterfeiting activities. Thus, sales were made of gaming machines which contained fake Aristocrat compliance plates and counterfeit Aristocrat game software but the Global/Impact respondents were not aware that the machines contained fake or counterfeit components.

71        The findings against Mr Allam in relation to the claims of trade mark infringement are relatively clear, although ultimately they do not support the claims for reasons stated later.

72        Mr Allam reproduced Aristocrat game software that was contained in the gaming machines that were the subject of the “impugned transactions”: Allam No 1 at [133]. This must be taken to be a reference to all of the 11 transactions the subject of my findings at first instance.

73        Also, Mr Allam manufactured fake compliance plates, a finding which supported two instances of copyright infringement: Allam No 1 at [155], [162], [163] and [167]. However, the findings made by the Full Court do not link those instances of infringement to the impugned transactions.

A concession made at first instance

74        In closing addresses on 1 May 2009 at T1881 I asked Mr Cobden SC, who then appeared for the Aristocrat Companies, whether I needed to know the extent to which the gaming machines had been altered, when reassembled as second hand goods, in order to determine the question of trade mark infringement.

75        Mr Cobden replied by stating that the case was put very narrowly so that the “radical alteration” of the machines by the insertion of counterfeit EPROMs and the application of false compliance plates was sufficient to amount to an infringement of Aristocrat’s trade marks.

76        The following relevant statements were made:

mr cobden:    What we say is that if the placing of infringing parts in the machine, and then the replacing it back into trade badged with Aristocrat but containing infringing EPROMs that would be enough. If your Honour is against us on that then we don’t win the trade mark case. … The compliance plate of course itself has the Aristocrat mark on it in the fancy form as it’s called, I think, in the trade mark records. That’s with the O and things like that.

…

mr cobden:    And the application of a false compliance plate would we say amount to an infringement of the trade mark if, but only if, the machine had been altered in the way I‘ve put it.

The Aristocrat trade marks

77        The Aristocrat Companies are the registered owners of a large number of registered trade marks including three word marks comprising the word ARISTOCRAT and a number of word marks for the names of Aristocrat games that are played on gaming machines.

78        The ARISTOCRAT word marks are registration numbers 154646, 332321 and 787428. The first two of these do not relate to goods of the description of those which are the subject of this proceeding.

79        The third mark, namely registered trade mark 787428 is relevant. It was registered for goods in classes 9, 37 and 41 as follows:

Class 9: Gaming machines, including poker machines, in this class; computer hardware and software used for the operation of a jackpot system; data collection and processing systems in this class associated with gaming

Class 37: Installation, maintenance, servicing, repair and relocation of gaming equipment/machines for playing games of chance of all kinds; construction and installation of props, tableaux and thematic settings in gaming venues

Class 41: Gaming services including such services provided by means on online electronic access or a global electronic network

(Emphasis in original.)

80        The Aristocrat game marks are registered in respect of goods in class 9, including “gaming machines”, “poker machines” and “parts and accessories therefore”.

81        The game marks are listed in schedule 2 to the amended consolidated statement of claim.

The claim of infringement

82        The Aristocrat Companies allege that the respondents have used one or more of the registered marks as trade marks so as to infringe s 120(1) of the Trade Marks Act.

83        The acts which the Aristocrat Companies rely upon as constituting the use of its marks by the respondents are that, in the course of carrying on their businesses, they manufactured, applied, supplied, offered to sell, sold or distributed gaming related products, including coin operated gaming machines, poker machines and related parts and accessories, in particular:

    imitation Aristocrat EPROM labels (the relevant marks being ARISTOCRAT and the game name); and

    imitation Aristocrat compliance plates (the relevant marks being ARISTOCRAT and the Aristocrat device).

84        The Global/Impact respondents admit they used certain of the trade marks, within the meaning of s 7 of the Trade Mark Act, in relation to Aristocrat gaming machines and one or more of the Aristocrat game components but deny that such use constituted infringement..

85        The Tonita respondents deny the allegations.

86        All of the respondents put in issue in their defences the question of whether their use of the marks was with the licence or permission of the Aristocrat Companies. I rejected that contention in the Aristocrat Decision at [920]-[921].

Infringement: the relevant legal principles

87        Section 120(1) of the Trade Marks Act provides that a person infringes a registered trade mark if the person “uses as a trade mark” a sign that is “substantially identical” with, or “deceptively similar” to the registered mark. The use as a trade mark must be in relation to goods or services in respect of which the mark is registered.

88        The test of substantial identicality involves a side by side comparison: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414 (Windeyer J).

89        The question of deceptive similarity is a different question. The marks are not to be looked at side by side. The test involves a comparison between the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have, and the impressions that such persons would have of the impugned mark: Shell at 415.

90        When a claim for infringement is made, a pivotal question is whether the use complained of is use by the alleged infringer as a trade mark. The answer to that question requires an understanding of the “purpose and nature” of the impugned use: Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 347 (Gummow J), citing Shell at 426 per Kitto J.

91        Use “as a trade mark” is use as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods. This is the concept embodied in the definition of a trade mark in s 17 of the Trade Marks Act, namely as a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at [19] (Black CJ, Sundberg and Finkelstein JJ); E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [43].

92        In Coca-Cola at [20] their Honours went on to say that the authorities (including Shell and Johnson & Johnson) show that the question is whether the sign used indicates origin of goods in the user of the sign; whether there is a connection in the course of trade between the goods and the user of the sign.

93        This passage from the judgment in Coca-Cola was not cited in Gallo. The Global/Impact respondents relied on the passage and the cases referred to in it, in support of the proposition that a person who affixes a mark to goods so as to indicate a connection between the goods and the owner of the registered mark does not infringe the trade mark. Rather what was said by the respondents was that use “as a trade mark” requires use which serves to indicate a connection between the registered mark and the infringer; that is to say in the present case to identify the Global/Impact respondents as the origin of the goods.

94        Other authorities, such as Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89, support the submission relied upon by the Global/Impact respondents. See in particular the observations of Gummow J at 134 and 135.

95        However, a Full Court (Keane CJ, Jagot and Yates JJ) said in Paul’s Retail Pty Ltd v Lonsdale Australia Ltd [2012] FCAFC 130 at [68] that an importer who sells goods which bear the same marks as have been registered as a trade mark is liable to an action for infringement by the registered owner if the marks were not applied by the registered owner, or with its consent.

96        See also Brother Industries, Ltd v Dynamic Supplies Pty Ltd (2007) 163 FCR 530 at [51] (Tamberlin J).

97        These cases seem to me to support the proposition that the sale of goods bearing a mark applied without the consent of the owner infringes the mark because the mark is used to indicate, contrary to the fact, a connection between the goods and the registered owner. That is to say, the mark is used in a manner in which it is not in truth a badge of origin of the registered owner’s goods.

98        Knowledge by the seller of the goods that the sale of the goods bearing that mark would amount to an infringement is not an element of that test.

99        However, for reasons which I give below, the claim of trade mark infringement fails at a more basic level.

Whether the claim of infringement has been established

100        Notwithstanding the lengthy submissions of the parties, it seems to me that there is a short answer to the Aristocrat Companies’ claim.

101        It is true that the effect of the Full Court decision is, as I have said that the Global/Impact respondents sold machines with counterfeit compliance plates and counterfeit games.

102        However, the difficulty which arises is that this was a circumstantial case. The Aristocrat Companies have the onus of proving infringement. But the failure to produce a single machine containing a counterfeit compliance plate or a counterfeit game makes it impossible to conduct the tests stated by Windeyer J in Shell. I cannot conduct a side by side comparison. Nor can I carry out a comparison of the impression based on recollections of the person of ordinary intelligence.

103        Thus, whilst the machines which were the subject of the transactions contained signs which must be accepted to be counterfeit, the difficulty is that Aristocrat has failed to prove which of the machines contained counterfeit Aristocrat plates and which contained counterfeit Aristocrat games. Moreover, it would be necessary to demonstrate which game or games were installed on each machine. This has not been established.

104        In my opinion, it is not possible to perform either of the comparisons required under the necessary test by a process of inference. This is because I would need to be satisfied of the particular acts of infringement taking into account the matters referred to in s 140(2) of the Evidence Act 1995 (Cth). This is analogous to the requirements of the test in Briginshaw v Briginshaw (1938) 60 CLR 336 which requires exactness of proof and actual persuasion.

105        The evidence which was admissible against the Global/Impact respondents consisting of the materials seized at their premises does not assist the Aristocrat Companies. This is because they do not enable the comparison test to be carried out.

106        The counterfeit compliance plates planted by Mr Channa at the Botany premises are not admissible against the Global/Impact respondents. Even if they were, they do not assist because they cannot be linked to the transactions.

107        These difficulties seem to me to be acknowledged in Mr Cobden’s concession at [76] above. What was required was evidence of an infringing machine, radically altered in the manner suggested, so that I could determine whether the machines as a whole, or some components thereof, fell within the monopoly conferred by the registered trade marks. No such evidence was admitted.

108        The claim against Mr Allam is slightly different. This is because the Full Court was satisfied that in relation to the transactions, the impugned gaming machines contained Aristocrat game software that had been reproduced by Mr Allam: Allam No 1 at [133].

109        But again, this does not permit me to determine which of the machines contained the Aristocrat game software or the particular games that were installed in each machine.

110        The Full Court also found at [167] that the evidence establishes two instances of copyright infringement by Mr Allam. However, as I have said, the particular findings are not linked to the impugned transactions.

111        The material seized from the Tonita respondents’ premises suffers from the same defect in relation to trade mark infringement as I identified in relation to the materials seized from the Global/Impact respondents.

112        It follows in my opinion that the claims of trade mark infringement fail against all of the respondents.

RELIEF

113        It follows from the orders made by the Full Court, and from what I have said above, that the claims against the Global/Impact respondents fail in their entirety.

114        Accordingly, I will order that against those respondents, the proceeding be dismissed with costs.

115        The claim of trade mark infringement against Mr Allam also fails. However, the Aristocrat Companies succeeded against him in the copyright claim to the extent accepted by the Full Court at [133] and [167]. I do not understand the Aristocrat Companies to press their claim for damages against him for copyright infringement. Rather, the remitter was limited to the question of declaratory and injunctive relief.

116        The breaches are now of great antiquity. The Aristocrat Companies have adduced no evidence of any current or subsisting threat posed by Mr Allam. These are powerful reasons for refusing injunctive relief. Indeed, it was for these reasons that I refused such relief three years ago; see Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (No 2) [2010] FCA 277 at [21]-[22].

117        I gave the same reasons for refusing declaratory relief at that time but I also took into account in that judgment the fact that I had awarded substantial damages. That award has now been set aside, so that if I were to refuse declaratory relief, there would be no order against Mr Allam.

118        It seems to me that in the changed circumstances which have occurred since my earlier judgment, there is utility in the grant of declaratory relief. It is now appropriate to grant a declaration so as to mark the Court’s disapproval of the contravening conduct: Re McDougall; ASIC v McDougall (2006) 229 ALR 158 at [54]-[55] and the authorities cited there.

119        However, as Mr Green who appeared for the Tonita respondents submitted, the difficulty is in framing a declaration in appropriate terms.

120        Nevertheless, it seems to me that it is appropriate to make a declaration which picks up the findings stated by the Full Court at [133] and [167].

121        The claim against Tonita must be dismissed for reasons previously given.

ORDERS

122        I will make the following orders:

THE COURT ORDERS THAT:

1.    The claim against the first to third and fifth respondents be dismissed with costs.

2.    The claim against the fourth respondent be dismissed with costs.

THE COURT DECLARES THAT:

3.    The electronic gaming machines referred to in [133] of the decision of the Full Court in Allam v Aristocrat Technologies Australia Pty Ltd [2012] FCAFC 34, contained game software, the copyright in which was owned by one or more of the applicants, a substantial part of which was reproduced by the sixth respondent in breach of copyright.

4.    The compliance plates referred to in [162], [163] and [167] of the abovementioned decision were reproduced in whole or in substantial part, from compliance plates the copyright in which was owned by the applicants, and accordingly, in breach of the applicants’ copyright.

Associate:

Dated:    30 September 2013