FEDERAL COURT OF AUSTRALIA

Lexmark International, Inc. v Boomerang Imaging Supplies Pty Ltd
[2001] FCA 833

PRACTICE & PROCEDURE – experiments – where applicants claim first respondent has refilled applicants’ empty toner cartridges – where cartridges have been offered for sale – where applicants claim first respondent has infringed applicants’ registered trade mark – where applicants claim first respondent has engaged in conduct which contravenes s 52 of Trade Practices Act 1974 – where applicants have acquired offending cartridges – where print tests have been performed on cartridges – where cartridges have been weighed – whether print tests and weighing cartridges constitutes “experimental proof” contemplated by Order 58 Rule 31 of Federal Court Rules – whether leave should be granted to admit evidence of print tests and weighing

Federal Court Rules Order 58 Rule 31

LEXMARK INTERNATIONAL, INC & ANOR v BOOMERANG IMAGING SUPPLIES PTY LTD (ACN 084 102 885) & ORS

N 1398 OF 1999

EMMETT J

23 MAY 2001

SYDNEY

THE COURT ORDERS THAT:

1.      1.The applicants serve on the respondents, no later than five days before the date on which it is proposed, particulars of any experiment, by way of testing cartridges, together with particulars of the facts that the applicants assert, will be established by those tests.

2.      Any such test carried out pursuant to Order 1. be conducted in the presence of a representative of the respondents and their solicitor and counsel, if the respondents so request.

3.      The costs of today be costs of the proceeding.

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

REASONS FOR JUDGMENT

1                     The applicants, Lexmark International Inc. and Lexmark International (Australia) Pty Ltd, have commenced proceedings against the respondents in which it is alleged that the respondents have passed off used toner cartridges as new toner cartridges of the applicants. Part of the allegation is that the respondents have refilled cartridges with toner, and that the refilled cartridges are of a lower quality than the new cartridges marketed by the applicants.

2                     The applicants have filed an affidavit of Rhudyll Villanueva sworn 19 October 2000 deposing to certain procedures that he undertook in order to establish that the respondents’ refilled cartridges were of a lower standard than those of the applicants. In that affidavit, Mr Villanueva says:

“2. In this affidavit, I give the results of various tests which I have carried out on cartridges for the Optra S printer which I believe were re-manufactured [by one or other of the respondents]”

3                     The respondents have foreshadowed an objection to the admission of Mr Villanueva’s affidavit by reason of non-compliance with Order 58 Rule 31. Order 58 Rule 31 provides as follows:

“1. In any proceedings in which a party proposes to submit experimental proof of a matter as evidence, that party must obtain directions from the Court:

(a) as to the service on other parties of particulars of the experiment and of the fact or facts, that the proponent asserts will, or may, be established by the experiment; and

(b) as to the conduct of the experiment and as to the persons who may attend it.

2. Unless such directions have been obtained and complied with, evidence derived from experimental proof is not admissible in the proceedings, except by leave of the Court.”

The applicants contend that the procedures described by Mr Villanueva are not experiments. Alternatively, they foreshadow an application for leave pursuant to Rule 31(2).

4                     There are two categories of procedures described by Mr Villanueva. One concerns what he describes as “tests”, or “print tests”. The second concerns the weighing of the cartridges. The paragraphs in which references are made to print tests and his references to the tests are as follows:

“7. I then tested the cartridge by running a print test, and by disassembling the cartridge and inspecting the components.

………………………

13. I tested the two cartridges.

………………………

22. I conducted a set of print samples, which showed dark banding on the printing.

………………………

27. Les Bassett informed that the second cartridge I tested on 6 September 2000 was remanufactured. I carried out the same test on that cartridge.

………………………

33. I loaded the cartridge into the printer and ran the normal print test which I used for Optra S cartridges.

………………………

41. I then loaded the cartridge into the printer and ran the normal print test which I use for Optra S cartridges.

………………………

43. In order to provide a comparison I then loaded Lexmark remanufactured Optra S cartridge into the same printer and printed the same eight test pages.

………………………

58. I then loaded the cartridge into the printer and ran the normal print test which I use for Optra S cartridges.”

Each of those references was to a different test on a different cartridge. The cartridges are identified in the affidavit and were exhibited to the deponent at the time of swearing the affidavit.

5                     The second category of procedures concerns weighing. Examples of references to the weighing procedure are as follows:

“8. (a)First the developer assembly weighed 1256.5 grams which meant that it had been overfilled with toner.

………………………

54. I then weighed the developer assembly and it weighed 1200.5 grams. The developer assembly was below the Lexmark parameters and therefore, underweight.

………………………

63. I then weighed the developer assembly and it weighed 1200.8 grams, which means the developer assembly was underweight and not enough toner had been added.”

6                     The purpose of Rule 31 is to ensure that all parties have an adequate opportunity to challenge the validity of any experiment or test intended to be relied upon and to avoid wasteful duplication by that party of an experiment that can be shown to be valid. A difficulty that might arise with a test or experiment is that the results might not be verifiable, unless an observer is present when the procedures are undertaken.

7                     Questions may arise as to validity, so long as any evidence describes the procedures with sufficient specificity and particularity. In such circumstances, arguments as to validity can be dealt with, irrespective of whether somebody has observed the procedure. On the other hand, the question of verifiability also arises in relation to validity. That is to say, there may be questions as to precisely what procedure was adopted, apart from questions as to the results observed.

8                     One additional possible difficulty with Mr Villanueva’s affidavit, is that the form of the paragraphs relating to the tests may be otherwise inadmissible, since they are assertions, rather than statements of fact. It is by no means clear, from a statement that “the cartridge was tested by running a print test”, precisely what procedure was undertaken.

9                     There are other possible deficiencies in the affidavit, although those deficiencies do not relate to non-compliance with Rule 31. For example, paragraph 8(b) contains the following sentence:

“The second fault was that the toner plug assembly was not properly fitted.”

Paragraph 8(c) contains the following phrase:

“The third fault was that the spring drum brake was not properly fitted …”.

Those assertions involve a value judgment by the deponent, but it is not entirely clear, what are the standards, if any, against which that judgment is being made. That may be another reason why such parts of the affidavit might ultimately be rejected, if objection is taken. The issue presently before me, however, is whether there has been a failure to comply with Order 58, such that the two categories of evidence described above should be rejected pursuant to Rule 31(2).

10                  I consider that both categories of procedure are experiments within the meaning of the Rule. An experiment may be defined as follows:

“1. The action of trying anything; a test, trial … 3. An action or operation undertaken in order to discover something unknown, to test a hypothesis, or establish or illustrate some known truth” – New Shorter Oxford English Dictionary.

“1. A test or trial; a tentative procedure; an act or operation for the purpose of discovering something unknown or testing a principle …”
– Macquarie Dictionary.

It seems to me that both categories of test referred to by Mr Villanueva fit those definitions.

print tests

11                  The allegation by the applicants is that the cartridges in question do not satisfy the standards that are laid down for the applicants’ products. Insofar as those standards are simply observable, or insofar as the compliance with the standards is observable, evidence can be given of those observations. Those observations can then be tested by similar observations made by another party, if the first observations are not accepted as accurate. Thus, for example, if an allegation is made that the toner plug assembly was not properly fitted, putting aside the question of the value judgment involved in that assertion, it would be open to a witness produced by the respondents to make the same observations as to whether or not the plug assembly was properly fitted.

12                  Similarly, paragraph 8(d) contains an assertion by Mr Villanueva that there was a slight indentation on the case of a drum. That is something that is observable. If it is disputed there can, no doubt, be evidence to the contrary. Ultimately, it may be a matter for the Court to examine the object and determine whether or not there is an indentation.

13                  However, insofar as a procedure is conducted in order to draw some conclusion about a cartridge, the position seems to me to be different. Mr Villanueva uses his procedures to establish, or discover whether the cartridge has certain properties. As a result of the procedures, he makes observations as to whether the cartridges’ quality is satisfactory. One cannot tell, from the level of description in Mr Villanueva’s affidavit, simply by observing a cartridge, whether it will produce printing of “appropriate” quality. The proper way to establish whether the cartridge will produce printing of the appropriate quality, is to test it by conducting an experiment. The experiment may be straightforward, but it is, nonetheless, an experiment in order to prove an hypothesis, or an assertion made about the cartridge.

14                  I consider that the procedures referred to by Mr Villanueva are experiments within the meaning of Rule 31. It has not been suggested that there would be any difficulty in repeating those tests, either on the same cartridges, or on different cartridges. If there were some evidence that it would be difficult, or impractical, to conduct the tests again, that may be a reason for granting leave under Rule 31(2). Of course, even if leave were granted under Rule 31(2), questions would arise as to the weight that would be given to experimental evidence, in circumstances where the opponent did not have the opportunity of observing, and thereby, of testing the experiment.

weighing of cartridges

15                  So far as the weighing procedures are concerned, it does appear to be impractical to repeat those tests, because the use of the cartridges involves consumption of toner. It is, therefore, not possible to repeat the experiment. I would therefore be disposed to give leave, pursuant to Rule 31(2), in relation to the evidence concerning the weighing of the cartridges. However, I would only do so provided that the respondents have been given the opportunity of examining and testing the device used to weigh the cartridges. I would also require that the respondents be given particulars of the precise procedure that was involved in the weighing of the cartridges. If those requirements are satisfied, then I would give leave for evidence to be adduced of the result of the weighing procedures carried out by Mr Villanueva.

16                  The conclusions that Mr Villanueva draws from the weight are, of course, a different matter. Whether those observations would be admissible, would have to be determined at the appropriate time, in accordance with the normal rules of admissibility. The conclusions that Mr Villanueva draws would only be admissible, pursuant to s 79 of the Evidence Act 1995 (Cth), as opinion evidence. On the assumption that Mr Villanueva can satisfy the requirements of those provisions, his opinion may be admissible. I make no determination on those questions at this stage.

17                  I consider that the appropriate course would be to direct the applicants to serve on the respondents, no later than five days before the date on which it is proposed, particulars of any experiment, together with particulars of the facts that the applicants assert, will be established by such an experiment. I would also propose to direct that any such test be carried out in the presence of a representative of the respondents and their solicitor and counsel, if required.

Associate:

Dated: 16 July 2001