FEDERAL COURT OF AUSTRALIA

Sony Computer Entertainment Australia Pty Ltd v Saleh [2001] FCA 717

TRADE MARKS – infringement – importation into Australia of goods bearing marks substantially identical to registered trade marks where affixation of marks and importation not authorised by owner of registered marks – whether importation constituted infringement

Trade Marks Act 1995 (Cth) ss 120, 131, 133

Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 referred to

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED (ACN 077 583 183) & ANOR v NABIL SALEH

N 72 of 2001

LINDGREN J

14 JUNE 2001

SYDNEY       

THE COURT DECLARES THAT:

1.                  The Respondent has infringed the Second Applicant’s registered Trade Mark No. 642678.

2.                  The Respondent has infringed the Second Applicant’s registered Trade Mark No. 642679.

3.                  The Respondent has breached the undertakings given to the First Applicant on or about 10 March 2000.

THE COURT ORDERS THAT:

4.                  The Respondent, whether by himself, his servants or agents or otherwise, be restrained from infringing the Second Applicant’s registered Trade Mark No. 642678 consisting of the mark “PlayStation”.

5.                  The Respondent, whether by himself, his servants or agents or otherwise, be restrained from infringing the Second Applicant’s registered Trade Mark No. 642679 consisting of the mark “PS”.

6.                  The 79 CD-ROMs which use the PlayStation and PS marks and which were imported by the Respondent and seized by the Australian Customs Service on 19 December 2000 be forfeited to the Commonwealth.

7.                  The Respondent pay the Applicants’ costs of the proceeding on a party and party basis.

8.                  The provisions of Order 62 rule 36A of the Federal Court Rules do not apply.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

INTRODUCTION

1                     The applicants seek relief based on alleged infringement of registered trade marks of the second applicant (“KKSCE”) in respect of which the first applicant (“Sony Australia”), its Australian subsidiary, is an authorised user.  KKSCE is the registered owner of registered trade mark No 642678 which is the word “PlayStation”and of registered trade mark No 642679 in respect of a device which I will not attempt to reproduce but which is a stylised representation of a vertical letter “P” and a horizontal letter “S” intertwined.  I will refer to it as “PS”.

2                     The applicants allege that the respondent (“Mr Saleh”) imported into Australia for the purpose of sale or commercial distribution seventy-nine (79) compact discs (CD-ROMs), on 29 November 2000 at Sydney International Airport, and that the registered trade marks appeared, in some cases on the disc or associated material (the “slick”), and in some cases on the monitor when the CD-ROMs were played in an appropriate machine.

3                     On the hearing, Mr Saleh, who appeared in person, conceded that infringement of the trade marks had occurred by reason of what appeared on the slicks and on the monitor, but contended that he did not import the CD-ROMs at all.  Rather he said he imported digital video discs (DVDs).  This factual issue was the only issue in the case.

4                     In addition to seeking relief for infringement of the trade marks, the applicants seek relief based on alleged breach by Mr Saleh of an undertaking which he gave previously to the applicants not to infringe the trade marks.  For this reason and others, I find it convenient to summarise the background facts in chronological order.

background facts

5                     I find the following facts proved by the evidence.

6                     On 14 October 1997 the applicants’ solicitors, Allen Allen & Hemsley (“Allens”), wrote to the Chief Executive Officer of the Australian Customs Service (“ACS”) lodging a Notice of Objection on behalf of Sony Australia under s 132 of the Trade Marks Act 1995 (Cth) (“the Act”).  The letter enclosed a Notice of Objection under s 132, a documentary security of the kind referred to in s 133 of the Act and a letter from KKSCE dated 5 September 1997 authorising Sony Australia to execute and lodge the Notice of Objection.  The Notice of Objection requested that any consignment of goods bearing either of the trade marks not addressed to Sony Australia be seized before entering into commerce in Australia.  The Notice of Objection was renewed and was in force at the time relevant to this case.

7                     On 14 February 2000 Allens received a letter dated 8 February 2000 from ACS attaching a “Notice of Seizure to Objector” in relation to 310 CD-ROMs and other peripheral items which had been seized by ACS pursuant to s 133 of the Act.  Of the 26 titles, all except one were multiple copies.  The importer was Mr Saleh whose address was given as 1-58/60 Fourth Avenue, Campsie, NSW 2194.  On 14 February 2000 Mr Saleh signed a consent to the forfeiture to the Commonwealth of, relevantly, the 310 compact discs, which were described as appearing “to infringe the Sony PlayStation trade mark”.

8                     On 9 March 2000 Allens received a second letter, this time dated 7 March 2000, from ACS attaching a “Notice of Seizure to Objector”, this time in relation to 300 CD-ROMs seized pursuant to s 133 of the Act.  Again the importer was Mr Saleh of the same address.  Like the earlier 310 compact discs, these 300 compact discs were described as appearing also to infringe the “PlayStation” trade mark.  There were 28 titles and there were multiple copies  of each title.  On this occasion Allens sent a letter dated 9 March 2000 to Mr Saleh seeking an undertaking to their client, Sony Australia, that he would lodge with the Chief Executive Officer of ACS a consent to the forfeiture of the goods and that he would give an undertaking to refrain in the future from importing, selling or offering for sale any counterfeit computer games or associated hardware for the Sony PlayStation computer game console.  Mr Saleh did, on 10 March 2000, sign and return to Allens the written undertaking they had sought.  As well, he consented to the forfeiture as requested by them.

9                     On 4 October 2000 Allens received a third letter, this time dated 28 September 2000, from ACS attaching a “Notice of Seizure to Objector”, this time in relation to 220 CD-ROMs seized pursuant to s 133 of the Act.  Again, the importer was stated to be Mr Saleh of the same address.  Again, the compact discs were described as appearing to infringe the trade marks.  There were 18 titles and there were multiple copies of each title. On this occasion Allens launched proceedings in this Court, N 1094 of 2000, against Mr Saleh on behalf of the applicants.  On 2 November 2000, by consent as between the applicants and Mr Saleh, Tamberlin J made orders giving judgment for the applicants against Mr Saleh in the amount of $600 for damages and costs and ordered that Mr Saleh be restrained from infringing the two trade marks.  As well, and again by consent, his Honour ordered pursuant to par 137(3)(b) of the Act that the 220 CD-ROMs be forfeited to the Commonwealth.  Finally, and again by consent, his Honour ordered that Mr Saleh deliver to Allens by 9.30am on 6 November 2000 any software bearing, or on which was stored electronically, any representation of the “PlayStation” or “PS” marks, alternatively, by that date, make, file and serve an affidavit that he did not have any such software to deliver up.

10                  Only 27 days after the making of those consent orders, on 29 November 2000, Mr Saleh was stopped upon entering Australia at Sydney International Airport when his luggage was searched and the offending 79 CD-ROMs, the subject of the present proceedings, were allegedly taken from him.

11                  As noted earlier, the dispute between the parties is as to precisely what was taken from Mr Saleh on that occasion.  The ACS officer concerned was Sarah Louise Wheeler.  She made an affidavit and gave oral evidence before me and was cross-examined by Mr Saleh.  It is not in dispute that Mr Saleh arrived on flight TG993 from Bangkok at Sydney Kingsford Smith International Airport. Nor is it in dispute that goods were taken from his baggage.  In the “Receipt For Goods” form, No 192464, which was signed by Ms Wheeler and handed to Mr Saleh, the relevant goods were described as 177 “DVD’s (MIXED)”.  The receipt also referred to eight other items, including 4 “computer games (mixed)” and 45 “scooter handles”.

12                  It is not in dispute, and I find, that in Mr Saleh’s presence the goods which were seized were placed in a container which was securely sealed.  According to the “Receipt for Goods” form the seized goods were to be referred to “CPR” “for trademark infringements”.  The reference to “CPR” is a reference to the “Commerce Prohibition and Restrictions” Section of ACS.

13                  It is common ground that the offending goods, which have been tendered in evidence, are not 79 DVDs at all, but 79 CD-ROMs.  Mr Saleh’s case is that he bought from an unidentified person in a market in Bangkok 177 DVDs and it is these that were in his baggage and were seized by Ms Wheeler.  Accordingly, so his case goes, the tender in evidence of the offending 79 CD-ROMs does not establish infringement of the trade marks by Mr Saleh.

14                  In her affidavit and oral testimony, Ms Wheeler has explained that the 177 items in question which were seized appeared to her to be DVDs.  She has explained that she did not have access to electronic equipment which would have enabled the true technical description of them to be tested.  However, she says she recognised the names of certain movie titles on some of them and therefore described them on the “Receipt For Goods” form as “DVD’s (MIXED)”.  I take judicial notice of the fact that DVDs and CD-ROMs have a similar appearance, that DVDs are capable of storing more information and that they are commonly used to store movies.

15                  After the container of seized goods was sealed up in the presence of Mr Saleh, Ms Wheeler gave it together with a copy of the “Receipt For Goods” form to the Goods Detained Clerk who, in her presence, placed the sealed container in the “Detained Goods Locker” at the Airport for storage and subsequent transfer to the CPR Section.

16                  The evidence shows that the following day, 30 November 2000, Steven Muvceski, another Customs Officer employed by ACS at the Airport, transferred the goods together with a copy of the “Receipt For Goods” form from the “Detained Goods Locker” to Customs Officer Gina Vangelovska in the CPR Section.

17                  An affidavit by Gina Vangelovska is to the effect that on 30 November 2000 she requested Mr Muvceski to obtain the goods for her.  She states that she took delivery of them from him together with a copy of the “Receipt For Goods” form and placed the goods together with that document in the CPR Section secure storage area pending further action.

18                  According to Ms Vangelovska, on 8 December 2000, she retrieved the goods from that area and undertook an initial examination of them and compared them to the details on the “Receipt For Goods” form.  She says she saw a number of CD-ROMs which appeared to bear trade marks substantially identical to, or deceptively similar to, the trade marks which are the subject of Sony Australia’s Notice of Objection.  She said she noted that the goods were incorrectly described on the form as “DVD’s (MIXED)”.  She repacked the goods and returned them to the CPR Section secure storage area.  Later the same day she instructed Customs Officer Lesley Jackson to conduct a further examination of the goods to determine if any of them bore a sign substantially identical with, or deceptively similar, to a trade mark in respect of which a Notice of Objection under s 132 of the Act had been lodged with ACS.

19                  Lesley Dawn Jackson, a Customs Officer employed by ACS, has testified that on 11 December 2000 she retrieved the goods from the CPR Section secure storage area for examination as previously directed by Ms Vangelovska.  She saw, among other things, 177 CD-ROMs and noted that they were described on the “Receipt For Goods” form as “177 DVD’s (MIXED)”.  She says she examined each of the 177 CD-ROMs and observed the colour of the disc and whether or not the notified trade marks appeared on the disc or the slick for that disc.  As well, she inserted each of the 177 discs into a “PlayStation” console connected to a television monitor to observe whether or not each disc caused the notified trade marks to be displayed on the television screen.  She observed that 79 of the CD-ROMs did so.  She also observed that the 79 which did so were silver.  She says she was aware from training she had received that genuine copies of “PlayStation CD-ROMs” are black not silver.  Therefore she concluded that the 79 CD-ROMs involved an infringement of trade mark. 

20                  Exhibited to Ms Jackson’s affidavit were 64 of the 79 CD-ROMs.  As recounted below, the other fifteen (15) came to be taken by Andrew Patrick O’Keefe of Allens.  Ms Jackson states, however, that she inspected those 15 CD-ROMs also and found that they also caused the notified trade marks to be displayed on the television screen.  Thus, all 79 CD-ROMs caused one or both of the trade marks to be reproduced.

21                  On 19 December 2000 Ms Jackson prepared two “Notices of Seizure to Designated Owner” addressed to Mr Saleh at the address previously mentioned.  One of these related to the seizure of the 79 CD-ROMs.  Ms Jackson then referred the Notices to her supervisor, Customs Officer Gai Lambourne, for her signature as delegate of the Chief Executive Officer of Customs.  Once Ms Lambourne had signed, the relevant Notices of Seizure were returned to Ms Jackson, who, on 19 December 2000, sent the appropriate letter and the Notices of Seizure to Mr Saleh by registered mail.  On 28 December 2000, she received confirmation from Campsie Post Office that the mail had been accepted.

22                  There was affidavit evidence from Gai Denise Lambourne that she signed the relevant Notices of Seizure on 19 December 2000.

23                  On 30 January 2001, Mr O’Keefe of Allens met with Ms Lambourne and she delivered to him a sample of 15 of the offending 79 CD-ROMs for the purposes of the current litigation.  Ms Lambourne says she retrieved the 15 from the secure storage area within the CPR Section.

24                  Mr O’Keefe’s affidavit establishes that he took delivery of the sample 15 CD-ROMs on 30 January 2001 and that those 15 sample discs are exhibited to his affidavit.  On 30 January 2001 he examined each of the 15 discs and inserted each into a Sony “PlayStation” console connected to a television monitor.  He observed the silver colour of the disc, whether or not the “PlayStation” or “PS” trade mark appeared on the disc or slick for that disc, and whether or not the disc caused either trade mark to be displayed on the television screen.  Exhibited to Mr O’Keefe’s affidavit is a table establishing the results. 

25                  The applicants made available in Court the necessary equipment to enable the images to be shown on the monitor.  Mr Saleh indicated that he did not wish to question the correctness of the assertion that the 79 discs had electronically stored on them the “PlayStation” or “PS” trade mark or both of them.  A random check by me of Mr O’Keefe’s table suggested that it was accurate in so far as it related to the discs and slicks.  I proceed on the basis that it is not in dispute that the 79 CD-ROMs involve an infringement of the trade marks by someone, the only issue in contest being whether Mr Saleh infringed them.

REASONING

26                  Who is to be believed – Mr Saleh or Ms Wheeler and the other ACS officers?  On the hearing, Mr Saleh tendered what purported to be three “Cash Sale” receipts for payments of money.  He said that these were issued to him by an unidentified seller in a Bangkok market.  One of these is dated 26 November 2000 and refers to “177 PCS DVD MOVIE”.  Ms Dowling of counsel objected to the tender of the cash sale receipts on the basis that they were “hearsay”.  I admitted them into evidence subject to the objection.

27                  I uphold the objection.  The relevant cash sale receipt was tendered to prove a representation by the seller that Mr Saleh had paid him or her cash for what were truly 177 DVDs.  Section 59 of the Evidence Act 1995 (Cth) applies.  The conditions of the operation of the business records exception (cf s 69 of the Act) to the hearsay rule are not proved to have been satisfied by the respondent.

28                  Even if the cash sale receipts had been ruled admissible I would not have found them persuasive.  There is no testimony from the seller. Certain aspects of the documents are suspicious.  For a start, it is perhaps not to be expected that an unidentified seller in a market in Bangkok would issue cash sale receipts which corresponded so precisely with the “Receipt For Goods” form issued by ACS, number 192464.  The three cash sale receipts cover eight of the nine items listed on that “Receipt For Goods” form, the only missing one being a receipt for payment for the forty-five scooter handles.

29                  In any event, might not the seller to Mr Saleh in Bangkok have made precisely the same error Ms Wheeler made?  That is, might not the seller have erroneously described the 177 items as “DVD MOVIES” rather than CD-ROMs.  After all, they look alike.

30                  Mr Saleh held up in Court a slick for what he said was a DVD.  He intended me to observe a difference between it and the slicks for the 79 CD-ROMs which are in evidence.  But the slick which he held up appeared to be of about the same size as those in evidence.

31                  I accept Ms Wheeler’s testimony that on the basis of certain movie titles, she assumed that all of the items in question were DVDs and that it was only later that someone told her that the true position was otherwise.  I also accept that a misunderstanding of the kind in question could easily occur in the absence of testing equipment.

32                  There has been no effective challenge by Mr Saleh to the security of the system according to which the goods which were admittedly seized from him were sealed up and transmitted through the hands of the various Customs Officers resulting in 15 of the discs being tendered through Mr O’Keefe and the remaining 64 through Ms Jackson.  Acceptance of Mr Saleh’s testimony would involve accepting that in some unidentified way, someone in the ACS substituted the offending 79 CD-ROMs for the 79 DVDs which have gone missing.  I do not accept that this occurred.

33                  I accept that although there was a misdescription on the “Receipt For Goods” form, number 192464, the goods that were seized were in fact the goods which included the 79 offending CD-ROMs.

34                  I infer:

·        that Mr Saleh was importing the 79 CD-ROMs as part of a business activity conducted by him and with the intention of selling them or otherwise dealing with them commercially;

·        that when he acquired them overseas and brought them by air to Australia and took steps at the Airport to bring them into the country, he was acting in the course of his business activity;

·        (from the number of CD-ROMs in question and his previous importations) that Mr Saleh knew that the 79 CD-ROMs bore the two trade marks;

·        (from Ms Jackson’s evidence) that the CD-ROMs can be put to use only by means of a “PlayStation” console, that is, by means of equipment manufactured by, or with the consent of, KKSCE;

·        that at the time of buying the CD-ROMs overseas, bringing them by air to Sydney and attempting to import them, Mr Saleh knew this to be the case.

35                 Do these findings establish that Mr Saleh infringed the two registered trade marks?

36                 Subsection 120(1) of the 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 trade mark in relation to goods or services in respect of which the trade mark is registered.”

The use complained of must be use “as a trade mark”. The expression “use of a trade mark in relation to goods” is defined in subs 7(4) of the Act to mean “use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).” However, the Act does not go on to define the term “use” in relation to goods. Nor does subs 120(1) require the use complained of to be “in the course of trade” (cf 62 of the Trade Marks Act 1955 (Cth)).

37                  Part 13 of the Act relates to the “importation of goods infringing Australian trade marks”. Section 131 of the Act states:

“The object of this Part is to protect registered trade marks by making provision allowing the Customs CEO to seize and deal with goods that are imported into Australia if the importation infringes, or appears to infringe, a registered trade mark.” (my emphasis)

38                 Section 133 provides for the seizure of goods by the “Customs CEO”:

“(1)     This section applies to goods manufactured outside Australia that:

(a)               are imported into Australia; and

(b)               are subject to the control of Customs within the meaning of the Customs Act 1901.

(2)               If goods to which this section applies:

(a)               have applied to them or in relation to them a sign that, in the opinion of the Customs CEO, is substantially identical with, or deceptively similar to, a notified trade mark; and

(b)               are goods in respect of which the notified trade mark is registered;

the Customs CEO must seize the goods unless he or she is satisfied that there are no reasonable grounds for believing that the notified trade mark is infringed by the importation of the goods.” (my emphasis)

The expression “Customs CEO” is defined in s 6 of the Act to mean “Chief Executive Officer of Customs”.

39                  The above provisions contemplate that an importation may, but will not necessarily, constitute an infringement.  They do not expressly make importation an element of any particular form of infringement (cf ss 37 and 38 of the Copyright Act 1968 (Cth)).  Statements can be found, however, which might be thought to support the general proposition that all importations are infringements: Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 per Aickin J at 688; and cf Lahore, Patents, Trade marks and Related Rights (Butterworths, looseleaf at [56,120]).  In my opinion, whether importation in a particular case constitutes an infringement depends on whether, in all the circumstances of the case, the importation satisfies the terms of subs 120(1) of the Act.

40                  Whatever the position may be in another case of importation (for example, an isolated and “innocent” importation of a single good for private use or consumption by the importer), I find that by dealing with the CD-ROMs as described in par [34] above, Mr Saleh used the marks which were on the 79 CD-ROMs and associated slicks and which were electronically stored in those CD-ROMs, as trade marks, and therefore infringed KKSCE’s “PlayStation”and “PS” trade marks.  It follows that he also breached the written undertaking he gave to Sony Australia on or about 10 March 2000.

CONCLUSION         

41                  There will be declarations and orders in the form of the short minutes of orders provided by counsel for the applicants.

Associate:

Dated:              14 June 2001