FEDERAL COURT OF AUSTRALIA

Greenberg v Asia Pacific Beauty Products (Australia) Pty Ltd [2003] FCA 856

INJUNCTIONS – whether balance of convenience favoured granting of injunction on the facts.

Trade Practices Act 1974 (Cth)

Patents Act 1990 (Cth)

RONALD ALLAN GREENBERG & DIAMOND DERMABRASION SR PTY LTD ACN 064 984 630 v ASIA PACIFIC BEAUTY PRODUCTS (AUSTRALIA) PTY LTD ACN 098 679 595, ASIA PACIFIC BEAUTY PRODUCTS AND EQUIPMENT PTY LTD ACN 104 641 278, MULTI-PEEL PTY LTD ACN 102 391 499, CHIT CHAN, RONALD MA & YU CHAN

No S 564 of 2003

LANDER J

8 AUGUST 2003

ADELAIDE

THE COURT ORDERS THAT:

1.         On the applicants, by their counsel, providing an undertaking as to damages, there will be an order pursuant to s 23 of the Federal Court of Australia Act 1976 and s 122 of the Patents Act 1990, that until further order or until 5 September 2003 at 9 am, each of the first, second, fourth and fifth respondents be restrained, whether directly or indirectly, by their servants, agents, or by any means whatsoever, from supplying, further supplying or offering to supply any machine or apparatus of the kind inspected by Drazen Lesicar, on 25 July 2003 at the premises of Asia Pacific Beauty Products Australia Pty Ltd and depicted in photographs A to O attached to the report of Drazen Lesicar and annexed to an affidavit sworn by him on 31 July 2003. 

2.         Liberty to all parties to apply on 24 hours written notice.

3.         Costs reserved. 

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

REASONS FOR JUDGMENT

1                     This is an application for an interlocutory injunction by the applicant in proceedings brought against the respondents which were commenced on 23 June 2003.  The applicants have sought relief in this court claiming declarations that the respondents have infringed the applicants' registered patents, infringed the applicants' registered trade marks and breached a number of sections the Trade Practices Act 1974 (Cth).

2                     The proceedings were commenced by application supported by a statement of claim and a number of affidavits.  The matter first came on before me on 21 July, when the applicants sought interlocutory relief in relation to some, but not all, aspects of their claims.  On that day, with the consent of the respondents, I made a number of orders.  I made two orders in the nature of injunctions restraining the respondents from using in trade or commence the words "Diamond Peel" and further from infringing the applicants' registered trade mark for the words "Diamond Peel". 

3                     Further, I made an order pursuant to s 122(2) of the Patents Act 1990 (Cth) permitting Dr Drazen Lesicar, a Patent Attorney, to attend at the premises of the first and third respondents for the purpose of inspecting an apparatus or machine, more particularly described in certain affidavits which were filed in this court. 

4                     I made directions in relation to the proceedings as a whole and permitted the respondents, who were not present at that last hearing, to serve such affidavits as they may be advised and to file and serve any defence which they may be advised by Thursday, 7 August 2003.  The respondents have not filed any defence. 

5                     Dr Drazen Lesicar attended at the respondents' premises, as permitted by the order, and as a consequence provided a report on the inspection of the machine or apparatus at those premises.  That report has been exhibited to an affidavit sworn by him on 31 July 2003.  The report contains a number of photographs and a written description of the machine and apparatus which he inspected.  He has expressed this opinion:

‘Having satisfied myself as to the operation of the inspected machine it is my opinion that it infringes a number of patents currently in force and owned by Ronald Allan Greenberg.’ 

6                     He then refers to a number of patents which are owned or apparently owned by Mr Greenberg and identifies the manner in which those patents are infringed. 

7                     The affidavit was filed in this court on the same day as it was sworn.  The applicants now move this court for an interlocutory injunction seeking an order that the respondents be restrained from supplying or further supplying or offering to supply any machine or apparatus of the kind referred to in Dr Lesicar's affidavit and report until further order, or until at least 5 September, when the matter is to return to court on a directions hearing. 

8                     The respondents have appeared in opposition to the application and have handed up two affidavits which were read by counsel for the respondents in opposition to the applications. 

9                     The machine, or apparatus in question, is a machine which relates to microdermabrasion equipment.  It appears, at least for the purpose of this application, that the first applicant, Ronald Allan Greenberg, is entitled to a number of patents in relation to the machine.  It appears, and I am satisfied, at least at this interlocutory stage, that the machine which Dr Lesicar inspected has sufficient similarities to raise a serious question to be tried of infringement on the part of the respondents. 

10                  The real question in this case is whether the balance of convenience is with the applicants or with the respondents. 

11                  Whilst the applicants and the respondents are in competition and the respondents are entitled to compete with the applicants, the respondents are not entitled to infringe the applicants' patents. 

12                  The applicants, by reading an advertisement in a professional beauty magazine in November 2002, became aware that the respondents, or parties associated with the respondents, intended to distribute a machine of the kind inspected by Dr Lesicar.  The advertisement contained copies of a photograph of the machine which indicated to Mr Greenberg that there was a potential infringement of his patents. 

13                  In about May 2003, he was advised that a new distributor had been appointed by the respondents in Hong Kong and China and that the new distributor was to exhibit and demonstrate the machine at the Melbourne Beauty Expo which was to take place in Melbourne from 10 to 11 May 2003.  The Melbourne Beauty Expo is one of the two largest beauty expos in Australia; the other being in Sydney.  Those expos exhibit machinery for use by beauticians.  The applicants' distributor attended the Melbourne expo for the particular reason of inspecting the machine which was exhibited by the respondents.  She took photographs of that machine and provided those to Mr Greenberg.  She also obtained a number of brochures which were the basis for other claims upon which I have already made interlocutory injunctions by consent.

14                  On 15 May 2003 the applicants’ solicitors wrote to the respondents complaining of the exhibition of the machine at the Melbourne beauty exposition and further complaining that the particular machine infringed the applicants' patents.  The solicitors sought details in respect of a number of matters by close of business on 16 May 2003.  The matters which were sought related to transactions involving the machine which would have given the applicants, if the information had been provided, an understanding of the respondents' profits in relation to the sale of that machine.

15                  On the same day the respondents’ solicitors were asked whether they had instructions to accept service.  I do not know if it was for that reason or other reasons, but in any event the letter seeking those particulars was not replied to.  

16                  At no time prior to the commencement of these proceedings did the respondents reply to the applicants' communications.  After commencement of these proceedings, the applicants sought  (as I have already mentioned) an order allowing Dr Drazen Lesicar to inspect the machine or apparatus, and I have referred to the results of that inspection.  As I have already indicated, in my opinion, there is a serious question to be tried in relation to the applicants' claim of infringement of the applicant's patents.

17                  Mr Bedrossian, who appeared for the respondents, did not really argue otherwise.  He submitted, however, that the applicants' delay disentitled the applicants from relief; because if any relief was granted it would affect the respondents' business in that the respondents would be unable to exhibit at the International Beauty Expo which is to take place commencing on 9 August 2003 in Sydney. 

18                  It is clear that this application has been brought by the applicants to prevent the respondents from exhibiting at the 2003 International Beauty Expo which is to be held in Sydney on 9 and 10 August 2003.  That is the other significant beauty exhibition in Australia to which I previously referred.  The respondents have argued that they have had arrangement in place for nearly one year to take part in that beauty exhibition. 

19                  The respondents claim that the applicants should be disentitled from interlocutory relief because of the delay by the applicants in bringing these proceedings.  In the alternative they say that in the circumstances of this case they should not be taken out of the market.  In the further alternative, they argue that damages would be an adequate remedy. 

20                  In my opinion the applicants have not been guilty of delay which would disentitle them to relief on an interlocutory application of this kind.  There is no doubt that they have been involved, through their solicitors, in a number of communications with the respondents and their solicitors over a long period of time, relating to other matters and more recently, this matter. 

21                  A reading of the correspondence shows that the applicants have, at all times, been anxious to protect their proprietary rights in the intellectual property which they claim they own. The applicants could never, at any stage, have been said to have led the respondents to believe that the applicants would do anything, in due course, other than to protect those proprietary rights.  I do not believe that they have been guilty of delay.

22                  If an order of the kind sought by the applicants was made the respondents would be unable to exhibit at the International Beauty Expo commencing on 9 August.  Of course, that is the very reason why the application is made. 

23                  If that were to happen, that would take the respondents out of the market, but I think Mr Rochow (the appellants’ counsel) was right when he said that the purpose of this application was merely to protect proprietary rights and to ensure that those proprietary rights were not infringed. 

24                  The respondents will suffer financial loss if I make the orders sought by the applicants.  However, of course, those orders will be on terms including the usual undertaking as to damages and the respondents will be able to recover from the applicants if in due course the applicants' claims fail.

25                  The respondents contended that the applicants were protected because damages would be an adequate remedy. However these claims are not only about damages; they are also about protection of intellectual property and, in my opinion, the applicants would not be fully protected by an order as to damages.  I am also not sure that the applicants could be protected in fact in relation to a claim for damages.  I am not sure that a regime adequately facilitating the assessment of damages could be put in place which would protect the applicants in that regard.

26                  During the hearing of this application I raised on two occasions with counsel, whether counsel could agree upon a regime which would protect the applicants if, in fact, the applicants later succeeded on these claims in relation to any profits made by the respondents and losses made by the applicants, but the parties were not able to agree on any such regime.  That is no criticism of counsel or the parties.  It seems to me just to show how difficult any regime of that kind was to put in place.

27                  In those circumstances I think that the balance of convenience lies with the applicants and that the order or orders of the kind sought ought to be made.  In my opinion it would be appropriate to make orders in the following terms:

1.         On the applicants, by their counsel, providing an undertaking as to damages, there will be an order pursuant to s 23 of the Federal Court of Australia Act 1976 and s 122 of the Patents Act 1990, that until further order or until 5 September 2003 at 9 am, each of the first, second, fourth and fifth respondents be restrained, whether directly or indirectly, by their servants, agents, or by any means whatsoever, from supplying, further supplying or offering to supply any machine or apparatus of the kind inspected by Drazen Lesicar, on 25 July 2003 at the premises of Asia Pacific Beauty Products Australia Pty Ltd and depicted in photographs A to O attached to the report of Drazen Lesicar and annexed to an affidavit sworn by him on 31 July 2003. 

2.         Liberty to all parties to apply on 24 hours written notice.

3.         Costs reserved. 

Associate:

Dated:              9 September 2003