Hills Industries Limited v Hualin Pty Ltd [2009] FCA 1143

1. The First Respondent has infringed Australian Patent No 753525 by reason that from a date being at least since March 2005, the First Respondent has, without licence or authority of the Applicant:

1.1. made; and/or

1.2. sold; and/or

1.3. offered to make; and/or

1.4. offered to sell a mounting assembly for a roof mounted antenna mast (referred to in this Order as the Hualin roof mount) being a mast assembly for mounting an antenna as described in each of claims 1, 2, 3, 4, 5, 6 and 12 of Australian Patent No 753525.

2. The First Respondent has infringed Australian Registered Design No 142238 S (referred to in this Order as the First Design)by reason that from a date being at least since March 2005, the First Respondent has, without the licence or authority of the Applicant:

2.1. applied the First Design, and/or a fraudulent or obvious imitation of the First Design, to; and/or

2.2. sold; and/or

2.3. offered to sell; and/or

2.4. kept for sale;

the Hualin roof mount, being an article to which the First Design or a fraudulent and/or obvious imitation of the First Design has been applied, and/or in respect of which the First Design is registered and to which the First Design or a fraudulent and/or obvious imitation of the First Design has been applied outside Australia without the licence of the Applicant.

3. The First Respondent has infringed Australian Registered Design No 143480 S (referred to in this Order as the Second Design) by reason that from a date being at least since March 2005, the First Respondent has, without licence or authority of the Applicant:

3.1. applied the Second Design, and/or a fraudulent or obvious imitation of the Second Design, to; and/or

3.2. sold; and/or

3.3. offered to sell; and/or

3.4. kept for sale;

the bracket arm contained or comprised in the Hualin roof mount, being an article to which the Second Design or a fraudulent and/or obvious imitation of the Second Design has been applied, and/or in respect of which the Second Design is registered and to which the Second Design or a fraudulent and/or obvious imitation of the Second Design has been applied outside Australia without the licence of the Applicant.

4. The Second Respondent is jointly liable for the infringement by the First Respondent of Australian Patent No 753525 by reason of the conduct of the Second Respondent in directing, procuring and inducing the First Respondent to engage in the conduct referred to in paragraph 1 above, and/or aiding, abetting, counselling, procuring or inducing and/or being directly or indirectly knowingly concerned in, or a party to, the conduct of the First Respondent referred to in paragraph 1 above.

5. The Second Respondent is jointly liable for the infringement by the First Respondent of the First Design by reason of the conduct of the Second Respondent in directing, procuring and inducing the First Respondent to engage in the conduct referred to in of paragraph 2 above, and/or aiding, abetting, counselling, procuring or inducing and/or being directly or indirectly knowingly concerned in, or a party to, the conduct of the First Respondent referred to in paragraph 2 above.

6. The Second Respondent is jointly liable for the infringement by the First Respondent of the Second Design by reason of the conduct of the Second Respondent in directing, procuring and inducing the First Respondent to engage in the conduct referred to in of paragraph 3 above, and/or aiding, abetting, counselling, procuring or inducing and/or being directly or indirectly knowingly concerned in, or a party to, the conduct of the First Respondent referred to in paragraph 3 above.

7. The Third Respondent is jointly liable for the infringement by the First Respondent of Australian Patent No 753525 by reason of the conduct of the Third Respondent in directing, procuring and/or inducing the First Respondent to engage in the conduct referred to in paragraph 1 above, and/or aiding, abetting, counselling, procuring or inducing and/or being directly or indirectly knowingly concerned in, or a party to, the conduct of the First Respondent referred to in paragraph 1 above.

8. The Third Respondent is jointly liable for the infringement by the First Respondent of the First Design by reason of the conduct of the Third Respondent directing, procuring and/or inducing the First Respondent to engage in the conduct referred to in paragraph 2 above, and/or aiding, abetting, counselling, procuring or inducing and/or being directly or indirectly knowingly concerned in, or a party to, the conduct of the First Respondent referred to in paragraph 2 above.

9. The Third Respondent is jointly liable for the infringement by the First Respondent of the Second Design by reason of the conduct of the Third Respondent directing, procuring and/or inducing the First Respondent to engage in the conduct referred to in paragraph 3 above, and/or aiding, abetting, counselling, procuring or inducing and/or being directly or indirectly knowingly concerned in, or a party to, the conduct of the First Respondent referred to in paragraph 3 above.

10. The First Respondent, whether by itself, its directors, officers, servants or agents or otherwise howsoever, be restrained from making, selling or hiring, or offering to make, sell or hire, or using or importing, or keeping for the purpose of making, selling, hiring or using, or otherwise exploiting, a mounting assembly for a roof mounted antenna mast of a kind previously made, sold, hired, used, imported or kept, or otherwise exploited by the First Respondent so as to infringe Australian Patent No 753525 or Australian Registered Design No 1422385 S or Australian Registered Design No 1434805 S.

11. Each Respondent deliver up, or cause to be delivered up, for collection by the Applicant, or its nominated agent, at the premises of the First Respondent at Unit 51, 159 Arthur Street, Homebush West, in the State of New South Wales, at 12.00 pm on Thursday 15 October 2009, or at such other time and date, not earlier than 15 October 2009, as may be nominated by the Applicant by not less than 24 hours notice in writing to the First Respondent at the said address, for the purpose of destruction by the Applicant, or its nominated agent all products referred to in paragraphs 1, 2 and 3 of the Order, and which are in the possession, power, custody or control of the Respondents or any one of them.

12. The First Respondent, by its proper officer, file and serve on the Applicant on or before 21 October 2009 an affidavit setting out in respect of the supply or sale within Australia by the First Respondent of any or all of the products referred to in paragraphs 1, 2 and 3 of this Order:

12.1. the total number of such products sold or otherwise supplied by the First Respondent;

12.2. the price at which the products were sold or otherwise supplied;

12.3. the cost to the First Respondent associated with the importation, manufacture or acquisition and supply of such products including an explanation as to the method of allocating overheads, if such allocation forms part of the claimed cost.

13. On or before 21 October 2009, each of the Respondents give discovery verified on oath of all documents relating to the importation, or acquisition or manufacture or sale or other supply of the products referred to in paragraphs 1, 2 and 3 of this Order and of all other documents, if any, relied upon by the Respondent for the purpose of making the affidavit referred to in paragraph 12 hereof.

14. The First Respondent account to the Applicant for all profits of the First Respondent by reason of its supply or sale within Australia of all products referred to in paragraphs 1, 2 and 3 of this Order.

15. The parties have liberty to apply, such liberty to apply to be exercised no later than 5 March 2010, to the intent that there be no further order on the application in the event that the liberty to apply is not exercised by that date.

16. The Respondents pay the Applicant’s costs of these proceedings to date.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 123 of 2009

BETWEEN:

HILLS INDUSTRIES LIMITED ACN 007 573 417

Applicant

AND:

HUALIN PTY LTD ACN 069 089 103

First Respondent

CHUAN TIAN

Second Respondent

XIA PING WANG

Third Respondent

JUDGE:	MANSFIELD J
DATE:	8 OCTOBER 2009
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1 The applicant commenced this proceeding on 19 August 2009, supported by a detailed statement of claim.

2 It alleges contraventions by the first respondent, in which the second and third respondents were directly involved, of its Australian Patent No 753525 for an invention entitled “improved mounting arrangement for a roof mounted antenna mast” and its registered Designs No 142238 S and No 143480 S, respectively for a design for an antenna mast mount and for a bracket arm for an antenna mast mount in the form specified in the statement of claim. The infringing conduct is alleged to have occurred by the first respondent, without the licence or authority of the applicant, having made and sold, and having imported into Australia, a mounting assembly for a roof mounted antenna mast and from 12 August 2008 having offered that antenna mast for sale within Australia. It also alleges that the first respondent has, without licence or authority, applied each of the designs or a fraudulent or obvious imitation of them in the mounting assembly for the roof mounted antenna mast sold and imported by it into Australia. Particulars of those contraventions are given in the statement of claim.

3 The second and third respondents are alleged to be, and on the evidence are shown to be, the directors and shareholders of the first respondent. It is alleged that they directed, procured and induced the first respondent to engage in its wrongful conduct and aided and abetted it in doing so, so that they are complicit in its breach of the patent of the two designs and liable for its contraventions pursuant to ss 117 and 122 of the Patents Act 1990 (Cth) and ss 156 and 73 of the Designs Act 2003 (Cth) and s 32B of the Designs Act 1906 (Cth) for infringement of the two designs.

4 By motion of 1 October 2009, the applicant seeks judgment by default against the respondents for failing to file an appearance or defence, under O 35A of the Federal Court Rules. As at the time of hearing that application, the respondents had not filed an appearance or defence.

5 The evidence plainly indicates that the respondents have been served with, and are aware of, this proceeding. The matter first came on for directions on 16 September 2009. On the morning of that hearing, the first respondent, by facsimile apparently signed by the third respondent, acknowledged awareness of the proceedings, asked that the matter be referred to the New South Wales District Registry of the Court, and asserted a “very good defence”. On that occasion, I extended the time for the respondents to file any appearance and defence to 25 September 2009. I adjourned the directions hearing to 7 October 2009. I indicated that, if no appearance and defence had been filed by 25 September 2009, any application for judgment in default would be addressed. I directed the Registrar to notify the respondents of the orders made.

6 Subsequently, on 29 September 2009, the Court received by mail a document headed Notice of Motion to have the matter transferred to the Federal Magistrates Court in Sydney, and a request for hearing by video link or telephone. A Court Officer contacted the first respondent and spoke to someone, identified as Phillip Tian. The Court Officer was told that the respondents did not wish to proceed with those two applications, and that the respondents were endeavouring to come to some arrangement with the applicant. The Court Officer pointed out that it was necessary for the respondents to comply with the orders previously made, in particular to file an appearance and defence, by the date specified.

7 No further communication was received from the respondents before the motion of 1 October 2009 was heard on 7 October 2009.

8 The evidence adduced by the applicant indicates that the application and the statement of claim were served in a timely manner, and that the period for an appearance had elapsed before the directions hearing on 16 September 2009. The notice of motion was served on the respondents by letter of 30 September 2009.

9 In all the circumstances, in my view, it is clear that the respondents have failed to file an appearance and defence in accordance with the time specified in the Rules, as extended by the direction given on 16 September 2009. Consequently, pursuant to O 35A, the applicants are entitled to apply for judgment in default as they have done.

10 It was previously the case that there was no presumption, upon default of a respondent not filing an appearance and defence, as to the correctness of an applicant’s claims. In Luna Park Sydney Pty Limited v Bose [2006] FCA 94, Jacobson J at [16]-[18] noted that position and that O 35A now provides the foundation for a finding that, in the absence of a defence and where there is a pleading by way of statement of claim, then the facts in the statement of claim are admitted. That decision was followed by Logan J in Humphries v Halifax Vogel Group Pty Ltd [2008] FCA 569 (Humphries) at [7]-[9]. His Honour referred to some recent authorities which have adopted a similar approach.

11 In those circumstances, in my view, it is appropriate to consider the requirements of O 35A r 3(2)(c) in determining the notice of motion. That requires the applicant to appear to be entitled to the relief claimed on the statement of claim, and for the Court to be satisfied that it has power to grant that relief. If those criteria are satisfied, the Court has a discretion as to whether or not to grant that relief.

12 I have briefly summarised the nature of the applicant’s claim as expressed in the statement of claim. The detail of the patent is set out in the statement of claim. The nature of the registered designs is re-produced. I shall not repeat those allegations. The conduct of the first respondent, in which the second and third respondents are complicit, said to contravene the patent and the two designs is also set out in detail. Again, I shall not repeat it.

13 I am satisfied on the basis of what is alleged in the statement of claim that it appears that the patent is a valid patent, and that the conduct of the first respondent as alleged amounts to an infringement of that patent contrary to s 117 of the Patents Act 1990 (Cth). I am also satisfied, having regard to the criteria in s 122 of that Act that the conduct of the first respondent in infringing the patent warrants the grant of relief against the first respondent. As Logan J pointed out in not dissimilar circumstances in Humphries at [20]-[23], in such circumstances the Court then has the power to grant relief of the kind sought.

14 I am also satisfied for the same reasons that it appears that each of the designs is a registered design in respect of which, under s 25 of the Designs Act 1906 (Cth), and by operation of s 151 of the Designs Act 2003 (Cth), is a registered design in which the applicant has at all materials times had a monopoly pursuant to s 25 of the Designs Act 1906 (Cth). I am also satisfied that the applicant has infringed each of those designs, contrary to s 30 of the Designs Act 1906 (Cth). By reason of ss 73 and 156 of the Designs Act 2003 (Cth) and s 32B of the Designs Act 1906 (Cth), I am also satisfied that the Court has power to grant the relief sought for infringement of the applicant’s monopoly in those designs.

15 As the second and third respondents are each the directors and shareholders of the first respondent, and as alleged in the statement of claim acted as its servants or agents in effective control of its business, I am satisfied that they are complicit in the contraventions by the first respondent of those provisions and are also liable for them.

16 I heard the motion on 7 October 2009. I then indicated that I would make orders of the nature sought on the motion. There were some drafting issues to be addressed in terms of the orders to be made. I indicated that I would make formal orders, and give reasons for the orders, the following day.

17 After that hearing, the respondents by facsimile sent to the Registry what purported to be a defence, and an affidavit of the third respondent. I have considered whether to further extend time to file the defence, and to allow the matter to proceed to a hearing. I do not propose to do so. There is no explanation for the delay. More importantly, I do not consider there is any arguable defence demonstrated. The proposed defence simply purports to deny the material allegations in the statement of claim about the respondents infringing the patent and the designs, by the elliptical detail: “see attached affidavit”. The affidavit does not deny those allegations. It acknowledges that in about 2005 the first respondent contravened the patent by selling a product which infringed it and that, upon that matter being brought to its attention by the applicant, it desisted from that conduct. Between 2005 and 2007, the first respondent acquired the applicant’s roof mount. In 2008, to secure a large transaction, it again acquired and sold a roof mount from an outside source which appeared to be the same as the applicant’s roof mount. In other words, it accepts the alleged infringing conduct occurred again to take up a business opportunity.

18 In my view, this is a matter where it is appropriate, in the exercise of the Court’s discretion, upon the matters I have found, to grant relief generally of the nature sought by the applicant. Contrary to an assertion made in a letter to the applicant by the first respondent on 30 September 2009, after service of the notice of motion for default judgment, the applicant has previously notified each of the respondents of their conduct contravening the patent and the registered designs. Such notices were given to the first respondent on 17 May 2009, and subsequently then to the respondents on 20 April 2009, 29 May 2009 and 7 July 2009. The evidence confirms the proof of the service of those notices. They did not apparently elicit any satisfactory response. It has taken these proceedings to elicit a response, and then also belatedly.

19 The applicant has, therefore been placed in a position of having to commence this proceeding to vindicate its rights. The proceedings have now been on foot for some time. The respondents have taken no timely action to resist them. There was at the time the application was heard no indication that, in substance, the respondents have any defence. Nor was there any basis for thinking that, in reality, the respondents had any intention to defend the proceedings. As noted, there is still no material to suggest that there is any arguable defence. In the meantime, the applicant continues to incur the expense of conducting the proceedings, including serving the respondents with the necessary documentation. The applicant is entitled to assert, and to progress its claims, and the respondents have had ample opportunity both prior to the proceedings and up to now to indicate that in some substantive way that there is a defence to the claims.

20 It is, in my view, appropriate to grant declaratory and interlocutory relief. That relief will clearly indicate the conduct which amounts to the contraventions and which the first respondent is not to engage in in the future. It is also appropriate to make an order for delivery up of the infringing products. I am satisfied that the order to be made is sufficiently precise to enable the respondents each to understand their respective obligations in respect of that order.

21 The applicant has elected to seek an account of profits. It is entitled to do so. For that purpose, it is appropriate also to make orders requiring the first respondent to provide such information as is appropriate to enable such an account to be taken, if the applicant chooses to pursue it. The orders I make will give effect to that purpose.

22 I will otherwise give liberty to apply to the parties to the intent that if, by 5 March 2010, the liberty to apply has not been exercised, there will be no further order on the application. That is simply to ensure that the proceedings are brought to finality.

23 The liberty to apply extends to the respondents.

24 The respondents should pay the applicant’s costs of the proceedings to date. I so order.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate:

Dated: 8 October 2009

Counsel for the Applicant:	A Dal Cin

Solicitor for the Applicant:	Donaldson Walsh

Counsel for the Respondents:	The respondents did not appear

Date of Hearing:	7 October 2009

Date of Judgment:	8 October 2009

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