FEDERAL COURT OF AUSTRALIA

Sony Computer Entertainment Australia Pty Ltd v Stirling [2001] FCA 784

SONY COMPUTER ENTERTAINMENT AUSTRALIA

PTY LTD & ANOR v KAREN STIRLING

N 1233 OF 2000

EMMETT J

15 JUNE 2001

SYDNEY

THE COURT ORDERS THAT:

1.      In the absence of the respondent, the trial proceed generally.

2.      The hearing and determination of liability take place before the hearing on all issues of pecuniary relief.

THE COURT DECLARES THAT:

3.      The respondent has infringed the second applicant’s registered trade mark number 642678.

4.      The respondent has infringed the second applicant’s registered trade mark number 642679.

5.      The respondent has breached ss 9, 10 and 12 of the Fair Trading Act 1999 (Vic).

THE COURT ORDERS THAT:

6.      The respondent, whether by herself, her servants or agents or otherwise, be restrained from infringing the second applicant’s registered trade mark (no. 642678) consisting of the mark “PlayStation”, by selling or offering for sale CD ROMs containing software for use with computer game players, which bear or in which are stored electronically, representations of marks, or by reference to marks, that are identical with, substantially identical with, or deceptively similar to, registered trade mark number 642678.

7.      The respondent, whether by herself, her servants or agents or otherwise, be restrained from infringing the second applicant’s registered trade mark (no. 642679) consisting of the mark “PS”, by selling or offering for sale CD ROMs containing software for use with computer game players, which bear or in which are stored electronically, representations of marks, or by reference to marks, that are identical with, substantially identical with, or deceptively similar to, registered trade mark number 642679.

8.      The respondent, whether by herself, her servants or agents or otherwise, be restrained from representing in trade or commerce that:

(a)    the CD ROMs containing software for use with computer game players offered or supplied by the respondent are manufactured by the first or second applicants;

(b)    the respondent has the sponsorship, approval or affiliation of the first or second applicants;

(c)    the CD ROMs containing software for use with computer game players offered or supplied by the respondent have the sponsorship, approval or affiliation of the first or second applicants; and

(d)    the CD ROMs containing software for use with computer game players offered or supplied by the respondent are of the same standard and quality as the CD ROMs containing software for use with computer game players offered or supplied by the first or second applicants.

9.      Within 28 days after service on her of a copy of the Orders made on 15 June 2001, the respondent make, file and serve an affidavit which:

(a)    states the quantity of all computer software, including any CD ROM, which bore, or to which was otherwise applied:

(i)                  any representation of the second applicant’s registered trade mark (no. 642678) consisting of the mark “PlayStation” (“the PlayStation mark”); or

(ii)                any representation of the second applicant’s registered trade mark (no. 642679) consisting of the mark “PS” (“the PS mark”);

or any mark substantially identical with, or deceptively similar to, the PlayStation or PS marks or in relation to which any mark substantially identical with or deceptively similar to the PlayStation or PS marks was used (“the infringing software”) sold by the respondent:

(A)   up until 10 December 1999; and

(B)   after 10 December 1999;

(b)   states the time period in which all such sales of infringing software were made;

(c)    states the gross sales of the respondent of all infringing software for the period:

(i)                  up until 10 December 1999; and

(ii)                after 10 December 1999;

(d)   states the gross profit of the respondent derived from sales of infringing software for the period:

(i)                  up until 10 December 1999; and

(ii)                after 10 December 1999;

(e)    annexes or exhibits copies of business records of the respondent which record the calculation of the said gross profit;

(f)     states the net profit of the respondent derived from sales of infringing software for the period:

(i)                  up until 10 December 1999; and

(ii)                after 10 December 1999;

(g)    annexes or exhibits copies of business records of the respondent which record the calculation of the said net profit.

10.  Within 28 days after service on her of a sealed copy of the Orders made on 15 June 2001, the respondent deliver up to the applicants’ solicitors, Allen Allen & Hemsley, all infringing software in her possession, custody, or control by sending such infringing software by registered mail to GPO Box 50, Sydney 2000 marked to the attention of Miriam Stiel.

11.  The respondent provide discovery, within 28 days after service on her of a copy of this Order, of all records in the possession, custody or power of the respondent relating to her past sales or offering for sale of any infringing software.

12.  The respondent pay the applicants’ costs of the proceeding up to and including 15 June 2001.

13.  The applicants serve a copy of this Order, together with a notification of the terms of Order 35 Rule 7 of the Federal Court Rules, on the respondent within 14 days.

14.  Liberty be granted to the applicants to apply on 3 days’ notice.

15.  The proceeding be listed for directions in relation to the outstanding issues at 9.30am on 7 September 2001.

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

REASONS FOR JUDGMENT

1                     The applicants have commenced this proceeding by application and statement of claim filed on 17 November 2000.  The second applicant, a company incorporated in Japan, is the manufacturer and a distributor of the Sony PlayStation computer game console, and the owner of Australian registered trade marks numbers 642678 and 642679 (“the trade marks”) Both of the trade marks are registered in Class 9 in relation to computer game players combined with CD ROM drives and software for such devices.  The first applicant is the distributor of the Sony Play Station computer game console in Australia and the authorised user of the trade marks. 

2                     In the proceeding, the applicants allege that the respondent has sold CD ROMs containing software for use with computer game players which bear, or in which are stored, electronic representations of marks, or by reference to marks, that are identical, or substantially identical with, or deceptively similar to, the trade marks.

3                     It is also alleged that, by reason of such sale, the respondent has used either of the trade marks, or both of them in relation to goods in respect of which the trade marks are registered. The CD ROMs sold by the respondent were not manufactured by, or with the licence of, the second applicant and none of the actions of the respondent have occurred with the consent of either of the applicants.  Accordingly, so it is alleged, by her conduct the respondent has infringed the trade marks. 

4                     It is also alleged that by advertising CD ROMs for sale the respondent has engaged in conduct that is misleading or deceptive or likely to mislead or deceive in breach of the Fair Trading Act 1999 (Vic) (“the Fair Trading Act”).  The allegation is that the conduct of the respondent in advertising the CD ROMs is liable to mislead the public as to the nature, the manufacturing process and the characteristics of the CD ROMs containing software for use with computer game players supplied or offered for sale by the respondent.

5                     The applicants claim:

·        declarations concerning infringement and contravention of the Fair Trading Act;

·         orders restraining future infringement and contravention; and

·        damages as a consequence of the infringement and contravention; or alternatively

·        an account of profits in relation to the infringement. 

6                     There has been no appearance for the respondent on any of the occasions on which the matter has come before the Court.  There is evidence that the statement of claim and application were served on the respondent, together with a letter of 23 November 2000 from the solicitors for the applicants. Those documents were served on 25 November 2000.  The first return date for the application was 8 December 2000. 

7                     I had some reservation initially as to whether or not the affidavit of service adequately proved the identity of the recipient.  However, the subsequent evidence in relation to service of further communications on the respondent satisfies me that the respondent is aware of the existence of the proceeding and, nevertheless, has elected not to appear, or to defend the proceeding.  By notice of motion filed on 5 June 2001, the applicants now seek orders pursuant to Order 11 Rule 23 of the Federal Court Rules, which provides for judgment by default of appearance and defence. 

8                     I am satisfied from the evidence consisting of affidavits of:

·        Wayne Gladman sworn 16 May 2001;

·        Jennifer Jones sworn 19 May 2001;

·        Fiona Riley sworn 31 May 2001;

·        Nicholas Andrew Foster sworn 31 May 2001;

·         Jo-Anne Wirth sworn 4 June 2001; and

·        Miriam Anne Stiel sworn 4 June 2001

that the applicants have established the facts alleged in the statement of claim relating to infringement of the trade marks and contravention of the Fair Trading Act.  Accordingly, it is appropriate to make declarations to that effect, and orders restraining future infringement and contravention. 

9                     The statement of claim also alleges breach of an undertaking given by the respondent to the applicants on 10 December 2001.  On 12 November 1999, the solicitors for the applicants wrote to the respondent demanding that undertakings be furnished by the respondent by Monday, 22 November 1999. The undertakings were to the effect that the respondent would, in the future, refrain from importing, selling or offering counterfeit computer games and other undertakings relating to the delivery up of counterfeit copies.  The letter of 12 November 1999 threatened that the applicants would commence proceedings in the Federal Court immediately, if the respondent failed to furnish the undertakings by the deadline. 

10                  By 22 November 1999, solicitors for the respondent had indicated that she was willing to provide the undertakings within seven days.  The undertaking was not forthcoming.  On 6 December 1999 the applicant solicitors wrote again to the respondent’s solicitors indicating that, unless the proposed statutory declaration containing the undertakings was received by 10 December 1999, proceedings would be commenced in the Federal Court.

11                  Under cover of a letter of 10 December 1999 the respondent’s solicitors furnished a statutory declaration by the respondent saying inter alia:

“I will 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 …”.

12                  It may be that the communications that I have briefly summarised give rise to an enforceable contract between the applicants and the respondent to the effect that, in consideration of the applicant's forbearing to commence proceedings in the Federal Court, the respondent promised in terms of the undertaking.  There is, of course, no express communication to that effect, but that is a possible construction of the communications.  The statement of claim, while it alleges the undertaking, makes no allegation of an enforceable contractual obligation. 

13                  The applicants have asked that I make a declaration that the respondent has breached the undertaking given on 10 December 1999 by means of the statutory declaration.  While I am satisfied that there has been a breach of that undertaking, making a declaration in those terms does not appear to me to have any utility.  Merely breaching an undertaking does not, of itself, give rise to a cause of action for damages.  Furthermore, since there has been no allegation of enforceable contract, I am not disposed to make a declaration of the existence of a contract and breach of that contract.  Accordingly, I decline at this stage to make the declaration concerning breach of the undertaking in the terms sought. 

14                  However, since I am satisfied that the other matters alleged in the statement of claim have been made out, I propose to make declarations and orders to the effect that there has been infringement of the trademarks and contravention of the Fair Trading Act.  I will also make orders restraining further infringement and contravention and orders for discovery sufficient to enable the applicants to make an election as to whether they wish to proceed for recovery of damages or for an account of profits. 

Associate:

Dated:              3 July 2001