FEDERAL COURT OF AUSTRALIA

GSM (Trademarks) Pty Ltd v Shao [2006] FCA 1272

GSM (TRADEMARKS) PTY LTD (ACN 085 955 291) AND GSM (OPERATIONS) PTY LTD (ACN 085 950 803) v DAVID WEI SHAO

NSD 1731 OF 2006

GRAHAM J

21 SEPTEMBER 2006

SYDNEY

THE COURT ORDERS THAT:

1.                   The Applicants have leave to file in Court a Notice of Motion dated 20 September 2006, an affidavit of Kenneth James Taylor sworn 20 September 2006, an affidavit of Themis Papas sworn 19 September 2006, and an affidavit of Nathan James Shepherd sworn 20 September 2006.

2.                   The requirements of Order 19 rules 3 and 4 be dispensed with in relation to the Notice of Motion dated 20 September 2006, and such Notice of Motion be returnable instanter.

3.                   Pursuant to Order 7 rule 10, the application, the affidavit sworn by Kenneth James Taylor on 7 September 2006 and the affidavit sworn by Marianne David on 8 September 2006 be taken to have been served on the Respondent on 12 September 2006.

4.                   Pursuant to section 137(5) of the Trade Marks Act 1995 the 2,965 mobile phone covers bearing the mark BILLABONG seized by the Australian Customs Service on 10 August 2006 not be released by the Chief Executive Officer of the Australian Customs Service to the Respondent.

5.                   The Applicants notify the Respondent of these orders and the reasons for judgment delivered 21 September 2006, by sending a copy of the orders as entered, and a transcript of the reasons for judgment, by pre-paid post to each of 728 Parramatta Road, Petersham NSW 2049 (“Petersham Address”) and Unit 808, 199 Pyrmont Street, Pyrmont NSW 2099 (“Pyrmont Address”), such postage to be effected by no later than 5pm on Monday 25 September 2006, or in the event that the transcript is not available by that time, as soon as it becomes available.

6.                   The Applicants notify the Chief Executive Officer of the Australian Customs Service of these orders today by facsimile or other electronic means and subsequently provide a copy of the transcript of the reasons for judgment delivered 21 September 2006, and the orders as entered, as soon as those documents become available to the Applicants’ solicitors.

7.                   Costs of the Notice of Motion dated 20 September 2006, and the hearing for interlocutory relief on 21 September 2006, be reserved.

8.                   The matter be listed for further directions at 9:30am on 12 October 2006.

9.                   The Applicants’ solicitors notify the Respondent of the date of the directions hearing on 12 October 2006 by a letter sent by pre-paid post to each of the Petersham Address and the Pyrmont Address.

UPON THE APPLICANTS, BY THEIR COUNSEL, GIVING THE USUAL UNDERTAKINGS AS TO DAMAGES, THE COURT ORDERS THAT:

10.               Until further order, the Respondent by himself, his servant or agents, be restrained from:

(a) importing;

(b) causing or procuring the or importation of;

(c) selling or offering or exposing for sale,

goods bearing:

(i)                  one or more of the trade marks set out in the Schedule to these Orders; or

(ii)                any mark which is substantially identical with or deceptively similar to any one or more of the trade marks set out in the Schedule to these Orders,

without the prior consent of the Applicants.

Schedule

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

REASONS FOR JUDGMENT

1                     The first applicant is the owner of the registered trademark Billabong number 964518 in class 9. The protection afforded by that registration extends to the use of the mark in respect of mobile phones and parts, fittings and accessories for mobile telephone housings, face plates, covers, cases and pouches.

2                     On or about 10 August 2006 the Australian Customs Service seized 2965 mobile phone covers bearing designs, labels and/or markings that appeared to infringe the registered trade mark in respect of which the second applicant was an authorised user.

3                     It would appear that an entry for home consumption was presented to the Australian Customs Service which nominated David Wei Shao as the owner of the mobile phone covers. Accordingly, Mr Shao was the designated owner of the goods within the meaning of the Trade Marks Act 1995 (Cth) (‘the Act’).

4                     By letter dated 10 August 2006, which appears to have been received by the second applicant on 14 August 2006, the Australian Customs Service notified the second applicant that it had seized the mobile phone covers. Under s 137 of the Act it was open to the applicants to institute proceedings for infringement of the mark and to seek relief in respect of the seized goods. It would appear that on 25 August 2006 the Chief Executive Officer of the Customs Service extended the time within which proceedings for infringement may be commenced to at least 8 September 2006 or, arguably, 11 September 2006. As it transpires, the proceedings now before the Court were commenced on 8 September 2006, that is to say, within the time permitted by s 137 of the Act.

5                     What is presently before the Court is a Notice of Motion filed in Court in the proceedings today which seeks relief in respect of service of the application and two of the supporting affidavits. In addition, the applicants seek interlocutory relief generally in accordance with prayers for relief 12 and 13 in the application itself. Paragraph 12 seeks an order under s 137(5) of the Act and paragraph 13 seeks an interlocutory injunction in respect of the further importation amongst other things of infringing goods.

6                     The seized goods were inspected by Kenneth James Taylor, a Director of Mainpack Pty Limited, which carries on business under the business name Trade Mark Investigation Services. Trade Mark Investigation Services has been authorised by Billabong International Limited, the parent company of the applicants, to represent Billabong International Limited and its subsidiaries in matters pertaining to the infringement and/or unauthorised use of its intellectual property.

7                     When Mr Taylor inspected the seized goods he photographed cardboard cartons said to contain the seized goods. From the contents of one of the cartons showing, when opened, numerous items in various colours within clear plastic containers and also some of the items themselves following their removal from the relevant cardboard carton, it seems clear that the seized goods answer the description of being mobile telephone covers and upon each of them the word or the mark Billabong is prominently displayed.

8                     Prior to the institution of the proceedings, Mr Taylor says that he had a telephone conversation with a person whom he described as ‘the respondent’. The conversation is said to have taken place in circumstances where Mr Taylor telephoned a mobile telephone number 0433 168 887. After leaving a message inviting the recipient to call Mr Taylor back, Mr Taylor spoke with the person whom he described as ‘the respondent’. His conversation included:

Taylor: ‘The Billabong phone covers seized by Customs are counterfeit and I urge you to forfeit the covers and settle the matter.’

Respondent: ‘There are many companies called Billabong Australia, why don’t you look on the IP Australia website? Billabong is a generic word and contained in the Oxford Dictionary. Is the company going to sue the Oxford Dictionary as well? I don’t care if I’m going to court, I have my point to argue. … If you can give my company the licence I will buy. …’

Taylor: ‘Why have Billabong on it?’

Respondent: ‘I make the market colourful. I have rights. I will argue my rights. …’

Taylor:‘What is the best address to send you mail?’

Respondent: ‘728 Parramatta Road, you know where I am. Just send it there and I will pick it up.’

9                     The address apparently provided to Customs in the entry for home consumption was 728 Parramatta Road, Petersham NSW 2049. I will shortly refer to a number of attempts at service at that address and also at an address Unit 808, 199 Pyrmont Street, Pyrmont NSW. This Pyrmont address is an address for a residential unit which was established as being an address for one ‘Wei Shao’ who happens to be an officer of Amtel International Pty Limited (ACN 111 770 597).

10                  Mr Themis Papas says that on the afternoon of 16 September 2006 he telephoned the mobile telephone number 0433 168 887, being the same telephone number as Mr Taylor rang that resulted in his conversation with ‘the respondent’ set out above in [8]. In the course of his conversation on 16 September 2006 Mr Papas said a conversation took place as follows:

Papas: ‘Am I speaking to David Shao?’

Respondent: ‘Yes.’

Papas: ‘Where can I deliver these documents to you today?’

Respondent: ‘I’m interstate on holidays.’

Papas: ‘Where on holidays?’

Respondent: ‘I don't have to tell you where I am.’

Papas: ‘Did you get the documents I gave to Henry Hong?’

Respondent: ‘I don't have anything to do with Henry Hong.’

Papas: ‘Did Henry give you the documents last week?’

Respondent: ‘No.’

Papas: ‘Henry said he was delivering the documents to you last Tuesday night.’

Respondent: ‘Send them in the post. Send them in federal post, I got some documents last time as I am avoiding service.’

Papas: ‘I need to hand deliver them to you. Where can I deliver these documents to you tomorrow?’

Respondent: ‘Deliver them through the post, I don't want them hand delivered. Last time someone delivered documents he took my photo. I had a fight with him and then he laughed at me because he took film of me and the Police got involved. I don't want this. I don't know how you have to deliver but I don't want this trouble again. I’m not going to meet you anywhere for you to deliver. I don't want to meet anyone from Trademark or ACAG. Just deliver to 728.’

Papas: ‘So you are avoiding service of these documents?’

Respondent: ‘Yes.’

Papas: ‘Can I deliver them to your home address?’

Respondent: ‘Yes. Deliver them to 728.’

Papas: ‘728 where?’

Respondent: ‘Parramatta Road, Petersham.’

Papas: ‘That can’t be your home address?’

Respondent: ‘Yes, it’s my home address. Send it in the mail like before.’

11                  Several attempts were made to effect service of the initiating process and two of the supporting affidavits on 8, 9, 11, 12 , 13, 16 and 17 September 2006. In fact, a copy of the application and two of the supporting affidavits were left at the premises at 728 Parramatta Road, Petersham on 11 September 2006 with a Mr Henry Hong. At the time of the provision of those documents to Mr Hong a conversation took place as follows:

Papas: ‘Is David Shao here?’

Hong: ‘No, but you can leave them here with me’, and he pointed to the court documents in Mr Papas’s hand.

Papas: ‘What is your name?’

Hong: ‘Henry.’

Mr Papas proceeded to hand the documents to Mr Hong saying ‘Thanks and bye.’

12                  On 12 September 2006 Mr Hong had further conversation with Mr Papas in which he indicated that he had delivered the documents which had been left with him on 11 September to Mr Shao. This was further confirmed in a later conversation between Mr Papas and Mr Hong at about 6.30 pm on 12 September 2006 and again at about 4.45 pm on 13 September 2006.

13                  It is clear that the applicants have been unable to effect personal service of the originating process upon the respondent as required by Order 7 rules 1 and 2 of the Federal Court Rules (‘the Rules’). Order 7 rules 9 and 10 make provision for substituted service or for confirmation of informal service. Substituted service may be ordered where for any reason it is impractical to serve a document in the manner required by the rules.

14                  Order 7 rule 10 permits the Court to make an order confirming that service has been effected where for any reason it is impractical to serve a document in the manner set out in the Rules and steps have been taken to bring the document to the notice of the person to be served. Order 7 rule 10 provides:

‘10. Where for any reason it is impractical to serve a document in the manner set out in the Rules, but steps have been taken to bring the document to the notice of the person to be served, the Court may order that the document be taken to have been served on that person on a date specified in the order.’

15                  In the circumstances of the case it would appear to me appropriate for an order to be made in accordance with Order 7 rule 10 to the effect that the application and copies of the affidavits of Kenneth James Taylor sworn 7 September 2006 and Marianne David sworn 8 September 2006 be taken to have been served on the respondent on 12 September 2006.

16                  In relation to the application for interlocutory relief, s 137 of the Act relevantly provides:

‘137(3) In addition to any relief that the court may grant apart from this section, the court may:

(a) at any time, if it thinks it just, order that the seized goods be released to their designated owner subject to the conditions (if any) that the court considers fit to impose; or

(b) order that the seized goods be forfeited to the Commonwealth.

…

(5) If, after 20 working days from the day on which the action was brought, there is not in force at any time an order of the court directed at the Customs CEO preventing the goods from being released, the Customs CEO must release the goods to their designated owner.

(6) If the court orders that the goods be released, the Customs CEO must, subject to section 140, comply with the order.’

17                  By letter dated 11 September 2006 to the applicants’ solicitors, the Australian Customs Service noted the institution of the current proceedings and indicated that it did not oppose the making of orders which might impose an obligation upon and/or affect the rights of Customs as sought in paragraph 12 of the application. Customs advised that it did not wish to appear at the hearing and indicated its position on an undertaking that no costs order would be made against it. No costs order is sought by the applicants against the Australian Customs Service.

18                  Apart from the fact that the application was expressed to be returnable before the Court at 9.30 am today, a solicitor employed by the solicitors for the applicants left a telephone message for the respondent yesterday after ringing the mobile telephone number 0433 168 887. The message that was left indicated that the matter would be heard before me today at 9.30 am in courtroom 20D, which is the courtroom in which the proceedings are presently being dealt with. Mr Shepherd, who made the telephone call, indicated the nature of the relief that would be sought today.

19                  It seems clear to me that an order should be made in accordance with s 137(5) of the Act directed at the Chief Executive Officer of the Australian Customs Service preventing the seized goods, being 2965 mobile phone covers bearing the mark Billabong, from being released to the respondent. I consider that an order should also be made restraining the respondent by himself, his servants and agents, from importing or offering for sale any further mobile telephone covers bearing the mark Billabong until further order.

Associate:

Dated: 25 September 2006