FEDERAL COURT OF AUSTRALIA

E D Oates Pty Ltd v Edgar Edmondson Imports [2012] FCA 356

THE COURT ORDERS THAT:

1.    On or before 20 April 2012, the respondent make discovery, verified on oath, of any documents in its possession, custody or control, including letters, emails, notes and memoranda, which record or evidence the development of Australian Design Registration 330806 (“Design 330806”) and the article that is marked BWF-6 to the affidavit of Bruce William Field sworn on 24 June 2011 (“the Enduro wringer bucket”) filed in this proceeding, in the following categories:

(a)    initiating instructions, directions or information provided to any person, including (but not limited to) any patent attorney involved or in respect of whom a request was made to investigate, consider or otherwise devise Design 330806 and/or the Enduro wringer bucket;

(b)    communications with, and responses from any third party, in respect of the application made by or on behalf of the Respondent, for what has issued as Design 330806, including:

    (i)    correspondence with or from IP Australia;

    (ii)    correspondence with any third party involved in the design of the Product; and or

    (iii)    communications with any patent attorney involved in the application for Design 330806.

2.    There be liberty to apply in relation to the implementation of Order 1.

3.    There be liberty to the applicant to apply on or before 4 May 2012 for an order for the examination of the respondent under Order 15A Rule 3(2)(a) of the Federal Court Rules 1979 (Cth).

4.    The application for preliminary discovery dated 4 July 2011 be adjourned to a date to be fixed before 31 May 2012; and, if no date be fixed by 31 May 2012 (and no other date be directed in lieu thereof) the application for preliminary discovery dated 4 July 2012 stand dismissed with effect from 31 May 2012.

5.    The applicant pay the costs of the respondent unless, on or before 31 May 2012, or such other date as may be directed, the applicant commences substantive proceedings substantially as described in the letter from Arcadia Lawyers to the respondent dated 11 May 2011 seeking preliminary discovery, and the further letter from Arcadia Lawyers to Piper Alderman dated 6 June 2011. In the event that such action is commenced, the costs of this application will be costs in that action.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

introduction

1    The applicant, E D Oates Pty Ltd (“Oates”) has made application for preliminary discovery pursuant to O 15A r 6 of the Federal Court Rules 1979 (Cth) (“the 1979 Rules”) against the respondent, Edgar Edmondson Imports Pty Ltd (“Edmondson”). Edmondson has opposed the making of preliminary discovery orders.

2    For the reasons stated, I would make orders for preliminary discovery.

3    In its application, Oates sought orders that:

(1)    Within 14 days of the Court determining the within Application, the Respondent shall make discovery, verified on oath, of any documents which are in its possession, custody or control in the categories as specified in the Schedule to this Application.

(2)    The Applicant do have liberty to apply to the Court within 14 days of inspection of the documents required to be discovered, in accordance with Order 1 above, for an order for examination of the proper officer of the Respondent, or any other person as the Court may deem appropriate, under Order 15A rule 3(2)(a).

(3)    Liberty to apply in relation to the implementation of Order 1 above.

(4)    The Applicant is to pay the costs of the Respondent unless, on or before the expiration of 30 days after determination by the Court of the Application herein for preliminary discovery, or such other date as may be directed by the Court, the Applicant commences substantive proceedings substantially as described in the letter from Arcadia Lawyers to the Respondent dated 11 May 2011, seeking preliminary discovery, and the further letter from Arcadia Lawyers to Piper Alderman dated 6 June 2011. In the event that such action is commenced, the costs of this Application for preliminary discovery will be costs in the cause in that action.

(5)    Such further orders and directions as may be deemed necessary by [the Court].

4    As the above indicates, Oates also relied on O15A r 3 of the 1979 Rules to support an order for examination of an officer of Edmondson, but Oates accepted that a determination as to whether such an order should be made should await the outcome of discovery and inspection of documents if this were ordered. Thus, at this stage, the Court is concerned only with Oates’ application for preliminary discovery of the documents identified in the schedule to its application.

5    The schedule to Oates’ application (“Schedule”) was in the following terms:

Categories of Documents Sought to be Discovered and Inspected

The following are the separate categories of documents required to be discovered by the Respondent, by which it is meant any written thing capable of being properly described as a document, and including any information stored on computer discs or otherwise in such a form as to be accessible by computer only (hereinafter referred to collectively and severally as document), namely:

1.    all documents including inter alia letters, emails, notes and memoranda which record or evidence the development pathway of the product depicted in the annexure to the within Schedule (Product), including, in particular:

(a)    initiating instructions, directions or information provided to any person, including (but not limited to) any patent attorney involved or in respect of whom a request was made to investigate, consider or otherwise devise the design of the Product;

(b)    all and any communications with, and any response from any third party, in respect of the application made by or on behalf of the Respondent, for what has issued as Australian Design Registration 330806 (“Design 330806”), including inter alia correspondence with or from IP Australia, including:

        (i)    any third party involved in the design of the Product; and or

(ii)    any patent attorney involved in the application for Design 330806.

6    Oates is the registered proprietor of Australian Design Registration 129429 (“Oates Registered Design”) for an article being a “bucket and wringing assembly”. The date of registration is 13 March 1997. The article the subject of the Oates Registered Design is an Oates’ product marketed as the “Oates Duraclean bucket”. I refer to this article below as the “Oates Duraclean bucket” or “Oates’ Product”.

7    Oates is concerned that its monopoly in the Oates Registered Design has been infringed by a competing mop bucket called an “Enduro wringer bucket” and/or an article that is the subject of Edmondson’s Australian Design Registration 330806 (“Edmondson Registered Design”). This Registered Design has a registration date of 17 May 2010 and is for a mop bucket.

8    Edmondson’s written submissions stated that Edmondson’s Product is “relevantly the same as [Edmondson’s] Registered Design”. Accordingly, I refer below to the allegedly infringing article simply as the “Enduro wringer bucket” or “Edmondson’s Product”. Oates considers that Edmondson’s Product arguably constitutes an obvious or fraudulent imitation of Oates Registered Design within s 30(1) of the Designs Act 1906 (Cth) (“Designs Act 1906”).

9    In July 2010, Oates’ concerns led it to file a Request for Examination of the Edmondson Registered Design. On or about 13 August 2010, an Examiner of Designs, IP Australia, advised Oates that the Examiner had concluded that the Edmondson Registered Design was new and distinctive, having regard to the material that Oates had submitted. I return to this material hereafter. Notwithstanding this conclusion, Oates remained concerned that the Enduro wringer bucket was an obvious or fraudulent imitation of the Oates Registered Design.

10    In a letter dated 16 August 2011, Oates’ solicitors advised Edmonson’s solicitors that they believed that Oates might have the following causes of action against Edmondson:

(1)    an action for infringement of Oates Registered Design under s 30(2) of the Designs Act 1906 on the basis that Edmondson:

(a)    applied the design or any fraudulent or obvious imitation of it to an article in respect of which the design is registered, such conduct constituting an infringement within … s 30(1)(a) of the Designs Act 1906;

(b)    imported into Australia for sale, or for use for the purposes of any trade or business, an article in respect of which the design is registered and to which the design or any fraudulent or obvious imitation of it has been applied outside Australia without the licence or authority of [Oates], such conduct constituting an infringement within … s 30(1)(b) of the Designs Act 1906.

(2)    an action for contravention of s 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“CCA”); and

(3)    an action for contravention of s 29 of Schedule 2 of the CCA.

Oates accepted at the hearing of this application that the two latter causes of action were, at least in a practical sense, dependent on the viability of a design infringement action.

11    Put simply, Oates claimed that, in order to determine whether it is entitled to relief against Edmondson for design infringement, Oates requires access to the documents relating to the development of Edmondson’s Product, in particular those documents that record steps taken in the design and development of Edmondson’s Product. Hence, Oates has brought this application for preliminary discovery.

evidence

12    In support of its preliminary discovery application, Oates relied on the affidavits of Bruce William Field sworn on 24 June 2011 and 29 August 2011, the affidavits of Virginia Ann Beniac-Brooks sworn on 14 July 2011, 15 August 2011 and 25 August 2011, and the affidavits of Robert Charles Kelson sworn on 16 August 2011 and 26 August 2011 (including all annexures or exhibits). In opposing Oates’ application, Edmondson relied on the affidavit of its solicitor, Timothy Ewart Clark, sworn on 26 August 2011. It is unnecessary here to refer in detail to any save the first affidavits of Dr Field and Mr Kelson.

13    Dr Field gave an expert’s opinion that further information in the nature of that sought was necessary before a determination could be made as to whether or not to recommend to Oates that Oates institute a proceeding against Edmondson for design infringement. In his capacity as a patent and trade mark attorney experienced in designs, Mr Kelson gave evidence to the same effect. Evidence of this kind has been relied on in a similar context to this and no objection to its admissibility was made on this application: compare Rosebank Plastics Pty Ltd v Duncan & Wigley Pty Ltd (1988) 11 IPR 413 (“Rosebank Plastics”) at 416-417, 419 per Ryan J. To explain why I would grant Oates’ preliminary discovery application, it is necessary to refer briefly to the evidence of Dr Field and Mr Kelson.

14    Dr Field was a mechanical engineer, with teaching and research experience in machine design, industrial innovation and invention and, more recently, with experience as an engineering consultant in product development and engineering design. Dr Field stated that, to compare the features of shape and configuration of the Oates Registered Design with Edmondson’s Product, he would need the documents recording the design development pathway for Edmondson’s Product. Dr Field said that these documents would be likely to show the extent of design changes and the reasons for them. Dr Field deposed:

I have specifically in mind that a change may well have been made, or a design feature of shape and configuration adopted in the:

(a)    Edgar Edmondson mop bucket []; and/or

(b)    Edgar Edmondson Registered Design [],

for the purposes of differentiating such designs away from the features of the article the subject of the Oates Registered Design, rather than for a genuine design purpose consistent with innovation.

15    Dr Field stated that, after considering the features of shape and configuration in the Oates Registered Design and Edmondson’s Product, he had formed the view that “the nature and extent of similarities appears to be exceptionally high, including the following features”:

(i)    the mop-wringing assembly affixed to or associated with the bucket;

(ii)    wheels affixed to the base of the bucket to assist in movement over the surface to be cleaned; and

(iii)    a foot-engagable member or stabilising pedal, which is an integral part of the bucket.

Dr Field added that “[a] particular matter which I have taken into account in forming my opinion in this regard, is that the compass of possible expression of design alternatives is reasonably large, rather than being very limited or a small compass”. Dr Field continued:

In my mind, this is a strong indicator that the person responsible for the design of the:

(a)    Edgar Edmondson mop bucket []; and/or

(b)    article the subject of the Edgar Edmondson Registered Design [],

appears to have gone as close as possible to replicating the design features of shape and configuration of the article the subject of the Oates Registered Design [], whilst, at the same time, introducing modest changes, but which changes amount, to my eye, as being no more than slight differences, alternatively, where differences are apparent to my eye and not so slight as to be insubstantial, that these have been made with the object of disguising the fact of copying.

16    It is, however, clear from his affidavit that this was essentially a tentative view. Dr Field’s evidence was that he would not be able to offer a definitive opinion that might be proffered in a design infringement proceeding unless he was able to consider documents of the kind referred to in the Schedule. Dr Field’s evidence was that documents of this kind were brought into existence as a matter of routine in the research and development design pathway followed by the creator, or initiator, of a design of the kind in issue here.

17    Mr Kelson was an experienced patent and trade mark attorney, who gave his opinion as such. He was also a legal practitioner. Mr Kelson deposed to his concern that Edmondson’s Product constituted an obvious or fraudulent imitation of the Oates Registered Design within s 30(1) of the Designs Act 1906 and to the fact that he could not form a clear view without the documents described in the Schedule. Mr Kelson stated that he had caused the Request for Examination of the Edmondson Registered Design to be filed with the Examiner of Designs, along with prior art material that he considered relevant to the newness and distinctiveness of the Edmondson Registered Design. Mr Kelson observed that the results of the examination of the Edmondson Registered Design conducted by the Examiner of Designs had not disclosed the requisite information.

18    Having regard to the attack made by Edmondson on Oates’ application and Mr Kelson’s analysis at the hearing of the application, it is important to note that Mr Kelson specifically described how he sought to determine whether an infringement proceeding was justified in such a case as this. Mr Kelson stated as follows:

As a matter of practice, I have, and continue to adhere to the view that there is a significant overlap between obvious and fraudulent imitation. As a matter of practice, I have endeavoured, wherever possible, to ascertain from the available evidence, what the intention of the designer of the alleged infringing article, was attempting to achieve for the subject article, considered by reference to matters including:

(a)    assessing the scope of the registered design against the background of the prior art at the priority date … (emphasis added);

(b)    by looking at the alleged infringing article and assessing its features of shape or configuration, and comparing that to the registered design and the representations of the article therein …;

(c)    I also consider the method of construction, as well as the materials used, and the purpose and object of the article, considered from a commercial and manufacturing perspective, as such matters are directly relevant to cost of manufacture …

19    Having done this analysis, Mr Kelson concluded:

[I]n the case of the Edmondson’s Mop Bucket [], when I look at the features and compare those to the [Oates Registered Design], although I can readily identify features apparent to my eye of similarity … I am not able to satisfy myself that the test for either obvious or fraudulent imitation … is at a sufficient level of similarity which would justify my recommending to the applicant that there is sufficient evidence to warrant commencement of an infringement action.

Referring to the features noted by Dr Field (see [15] above), Mr Kelson added that he considered that access to the documents described in the Schedule was necessary in order to have information as to “the intention or motive of the designer”, being the information that, in his view, was essential to determine whether Oates was justified in proceeding against Edmondson.

20    Mr Kelson’s position was, in summary, that, whilst the similarities between Edmondson’s Product and the Oates Registered Design were sufficient “to arguably meet the requirements of … the elements of the cause of action based on an obvious imitation, as well as a claim for fraudulent imitation, the critical evidence necessary … to be able to reasonably assist [Oates] to make a determination as to whether to commence legal proceedings against [Edmondson] would be resolved” only if the documents in the Schedule were made available. According to Mr Kelson, these documents would enable him to consider the extent of any infringements and the defences that might be open to Edmondson. Mr Kelson noted that there were related causes of action that might also be pursued in an infringement proceeding (e.g., pursuant to ss 18 and 29 of Schedule 2 of the CCA).

consideration

21    At the commencement of the hearing, with the parties’ agreement, the Court ordered that the 1979 Rules (as in force immediately before 1 August 2011) should apply. As already indicated, for preliminary discovery, Oates relied on O 15A r 6 of the 1979 Rules. In these circumstances, O 15A r 6 would apply where a prospective respondent has, or is likely to have, possession of documents relating to the question whether the applicant has a right to obtain relief. Order 15A r 6 confers a discretion on the Court to order that discovery be given by a prospective respondent to a proceeding.

22    Order 15A rule 6 of the 1979 Rules states:

Where:

(a)    there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;

(b)    after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and

(c)    there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision;

the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).

23    Before the Court can exercise the discretion to order discovery against a prospective respondent under O 15A r 6 of the 1979 Rules, three conditions must be satisfied. The first condition, set out in par (a) above, requires an applicant to demonstrate that there is “reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained”. The objective character of the condition “reasonable cause to believe” requires the Court to be satisfied that a reasonable person could form a belief, on the basis of the material before the Court, that the applicant “has or may have the right to obtain relief”’. The applicant does not have to make out a prima facie case. See St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 (“St George”) at 153-154 per Hely J, which was applied in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [43] per Black CJ and Sackville J; Apache Northwest Pty Ltd v Newcrest Mining Ltd (2009) 182 FCR 124 at 126 [2]-[3] per Moore, Gilmour JJ and 131 [26] per Flick J; and Henley Arch Pty Ltd v McDonald Jones Homes Pty Ltd [2011] FCA 687 (“Henley Arch”) at [11] per Tracey J.

24    If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, this is sufficient to dispose of the application in so far as it is based on that cause of action: see St George at 154. The word “may” in par (a) above indicates that the belief need not involve a firm view that there is a right to relief. While uncertainty as to only one element of a cause of action might be compatible with the “reasonable cause to believe” required by par (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe: see St George at 154. As French J said in East Grace Corporation v Xing (No 2) [2005] FCA 1266 at [37]:

There is no bright line test here. One way of framing the question is whether a reasonable person, having regard to the material before the Court, could say:

‘I believe that you may have a cause of action against this person but I would need further information before I could believe that you do.’

25    It is clear, however, that the words “where there is reasonable cause to believe that the applicant has or may have the right to relief” are not satisfied by mere assertion. One must have regard to the whole of the evidence: see Guy Carpenter & Company Pty Ltd v Grove [2011] FCA 708 at [32]-[34] per Jagot J. There must be more than suspicion or conjecture to satisfy this criterion: see Austrack Operations Pty Ltd (In Liquidation) v State of New South Wales [2003] FCA 1013 at [10] per Emmett J. As Lindgren J said in Glencore International AG v Selwyn Mines Ltd (2005) 223 ALR 238 (“Glencore”) at 241 [16]:

[W]hile the notion of ‘reasonable cause to believe that the applicant …. may have the right to obtain relief ….’ may be seen to set the threshold ‘at quite a low level’ (cf Gulf Petroleum (WA) Ltd v Tah Land Pty Ltd [2001] FCA 1531 at [59] per Carr J), there must be some tangible support that takes the existence of the alleged right beyond mere “belief” or “assertion” by the applicant (Minister for Health and Aged Care v Harrington Associates Ltd [1999] FCA 549 at [29]; Hooper [v Kirella Pty Ltd…] at [39]; C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 at [12]).

26    The second condition, set out in par (b) above, requires an applicant to demonstrate that, after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made as to whether to commence a proceeding in the Court to obtain that relief. To adopt the language of Hely J in St George at 154, the question posed by par (b) is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent’s breach and the likely quantum of any damages award. Whether an applicant has “sufficient information” for the purposes of par (b) also requires an objective assessment to be made. The second condition, in par (b), contemplates that the applicant is lacking a piece (or pieces) of information reasonably necessary to decide whether to commence a proceeding. See St George at 154.

27    The third condition, set out in par (c) above, requires an applicant to demonstrate that there is reasonable cause to believe that the person against whom the preliminary discovery order is sought has or is likely to have possession of any document relating to the question whether the applicant has the right to obtain the relief; and that inspection of the document by the applicant would assist in making the decision. It is no answer to an application under the rule to say that the proceeding is in the nature of a “fishing expedition” because this is what O 15A r 6 contemplates. See St George at 154.

Reasonable cause to believe Oates may have a right to relief for design infringement?

28    Oates submitted that there is “reasonable cause to believe that [it] has or may have the right to obtain relief” from Edmondson in respect of infringement of the Oates Registered Design. Edmondson argued that there was no reasonable cause to believe that Oates had any such right to relief.

29    I interpolate here that the Oates Registered Design was registered under the Designs Act 1906, which was repealed pursuant to s 150 of the Designs Act 2003 (Cth) (“Designs Act 2003”). Under s 151(2)(a) of the Designs Act 2003, however, a design registered under the Designs Act 1906 was taken to be registered under the Design Act 2003 from the date of the commencement of that Act. Nonetheless, under ss 151(3), 156(2) and 156(3) of the Designs Act 2003, such a design remains subject to the Designs Act 1906 for the purposes of determining whether the monopoly in the design has been infringed.

30    With respect to the Oates Registered Design, an action for infringement of the monopoly in a registered design will lie under the Designs Act 1906 where the monopoly in the design has been infringed: see Designs Act 1906, s 30(2). The concept of fraudulent or obvious imitation is a central one. Under the Designs Act 1906, a person is deemed to infringe the monopoly in a registered design if the person, without the authority of the owner of the design, applies the design or any fraudulent or obvious imitation of it to any article in respect of which the design is registered: see s 30(1)(a). There is a like provision for importation of an article in respect of which the design is registered and to which the design, or any fraudulent or obvious imitation of it, has been applied without the authority of the owner of the registered design: see s 30(1)(b). Under s 30 (1)(c), a person is deemed to infringe the monopoly in a registered design if the person, without the authority of the owner of the design, sells or offers for sale any article to which the design, or any fraudulent or obvious imitation of it, has been applied in infringement of the monopoly in the design.

31    There will be an obvious infringement of the monopoly in a registered design where a copy of the registered design, apparent to the eye notwithstanding slight differences, has been applied to an article in respect of which the design was registered. As the Full Court stated in Technicon Industries Pty Ltd v Caroma Industries Ltd (2009) 81 IPR 465 (“Technicon”) at 468 [17]:

[T]here will be an obvious imitation of a registered design if the design of an impugned article is such that the impugned article appears to be a copy notwithstanding slight differences. An article will be an obvious imitation is, as soon as one looks at it, it is something that strikes one at once as being so like the registered design as to be almost unmistakable. An obvious imitation is something that is very close to the registered design such that the resemblance to the registered design is immediately apparent to the eye, looking at the impugned article and the registered design together: see Dunlop Rubber Co Ltd v Golf Ball Developments Ltd (1931) 48 RPC 268 at 279. The question is whether, based on the overall impression to be gained from the registered design and of the impugned article, there is substantial similarity between them: see Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd (1999) 46 IPR 339 …

Thus, visual comparison may establish obvious imitation.

32    Fraudulent imitation also gives rise to an infringement of a design monopoly. There will be fraudulent imitation where a copy of the registered design, with differences – apparent and not insubstantial – made merely to disguise the copying, has been applied to a relevant article. Plainly enough, a finding of fraudulent imitation requires something more than obvious imitation: see Malleys Ltd v J.W. Tomlin Pty Ltd (1961) 180 CLR 120 at 127 per Taylor, Menzies and Owen JJ; Polyaire Pty Ltd v K-Aire Pty Ltd (2005) 221 CLR 287 (“Polyaire”) at 298 [21], 299-300 [27] per McHugh, Gummow, Hayne, Callinan and Heydon JJ; Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 22 IPR 1 (“Fisher & Paykel”) at 12 per Black CJ, Lockhart and Gummow JJ; and Technicon at 467 [15] per Emmett, Bennett and Jagot JJ.

33    Whilst there is overlap (cf: Lewis v Hall (2005) 68 IPR 89 at 99 [52]), the tests for obvious imitation and fraudulent imitation are different. As the Full Court said in Technicon at 468 [18]:

It is not easy to define a fraudulent, as contrasted with an obvious, imitation. An imitation may be made unconsciously and in ignorance of the existence of the design. Thus, an article is an obvious imitation when it is apparent to the eye that it has been copied consciously or unconsciously from the design. Accordingly, obvious imitation covers cases of fraudulent copying but is not confined to such cases. Section 30, when referring to a fraudulent imitation, is contemplating an imitation that is fraudulent without being obvious. It therefore contemplates a case in which the differences between the article and the design are obvious and in which recourse must be had to extrinsic evidence to establish the fact of deliberate copying. In such a case, the existence of comparatively unimportant differences, which are sufficient to prevent the imitation from being obvious, is not a fact of which the imitator can avail itself. Indeed, the existence of such differences may be one of the elements of the imitator’s fraud: see Rose v J.W. Pickavant & Co Ltd (1923) 40 RPC 320 at 332.

According to the High Court in Polyaire at 295 [17], there will be a fraudulent imitation where a design is applied with knowledge of the existence of the registration and of the absence of consent to its use, or with reason to suspect those matters, and the use of the design produces an imitation within s 30(1) of the Designs Act 1906. See also Lewis v Hall (2005) 68 IPR 89 at 99 [49].

34    The scope of a registered design is determined with reference to the prior art at the priority date of the design. As the Full Court stated in Technicon at 468 [19]:

Where novelty or originality is discovered in slight variations, there cannot be infringement without a very close resemblance between the registered design and the article alleged to be an infringement of the registered design. If the particular features that provide a novel conception have not been reproduced in the alleged infringement, the similarity of appearance between the impugned article and the registered design, if present, must necessarily reside in the common possession of characteristics that everyone is free to employ. Small differences between the registered design and the prior art will generally lead to a finding of no infringement if there are equally small differences between the registered design and the impugned article. On the other hand, the greater the advance in the registered design over the prior art, the more likely will it be that common features between the design and the impugned article will support a finding of infringement: see Dart Industries Inc & Anor v Décor Corporation Pty Ltd (1989) 15 IPR 403 at 409.

35    At this preliminary stage, Oates’ potential case with respect to obvious imitation depended on visual comparison and what Dr Field and Mr Kelson considered were close and unexplained similarities between the Oates Registered Design and Edmondson’s Product. As indicated above, Oates and Edmondson were competitors in the same market. This much would appear to be common ground. Thus, for example, in a letter dated 24 May 2011 to Oates’ solicitors, Edmondson’s solicitors referred to Edmondson as “a competitor of yours” (i.e, Oates). In an affidavit of 14 July 2011, Oates’ solicitor, Virginia Beniac-Brooks, drew attention to the website of CleanX Cleaning Supplies advertising that the Enduro wringer bucket was “[s]imilar to the Oates Duraclean bucket”. On this application, it is therefore unsurprising that Edmondson did not contest that it had relevant knowledge about the Oates Registered Design.

36    Edmondson responded to Oates’ case at various other levels, however, including that Oates ought to be able to determine whether or not to proceed with its proposed case for obvious imitation without any of the discovery sought by the present application. This argument does not assist Edmondson greatly because, even if visual comparison were sufficient for obvious imitation, according to Oates, it would still lack sufficient information for fraudulent imitation. It is plain enough that, practically speaking, a case for obvious imitation and fraudulent imitation would be intertwined.

37    Further, with respect to Oates’ case of obvious imitation, Edmondson argued that there was no reasonable cause to believe that Oates may have a right to obtain relief against it, having regard to:

(1)    the very narrow scope of Oates’ monopoly in the Oates Registered Design in light of the absence of any statement of monopoly;

(2)    the small differences between the Oates Registered Design, the prior art and Oates’ earlier registered design 123341 – a registered design that expired on 29 March 2010 (“Oates’ Expired Design”);

(3)    the legislative intent that Oates should not enjoy any monopoly in the Oates’ Expired Design, as reflected in s 27A of the Designs Act 1906 and s 75 of the Copyright Act 1968 (“Copyright Act”).

(4)    key differences between Edmondson’s Product and the Oates Registered Design, including:

(A)    the double foothold configuration of [Edmondson’s Product], as contrasted with the configuration on the Oates Registered Design of a single foothold at the base of the bucket, protruding on an angle favouring use by the left foot; and

(B)    a foot pedal lever protruding straight from the bucket of [Edmondson’s Product] to allow use by either left or right foot, as contrasted with the configuration, on [the Oates Registered Design], of a foot pedal lever protruding to an angle to favour use by the right foot.

(5)    the fact that:

(A)    the double foothold feature is common to at least three designs which [Edmondson] was entitled to copy, namely ceased Design Registrations No 130788, 133171 and 146066; and

(B)    the straight foot lever pedal feature is common to at least two designs which [Edmondson] was entitled to copy, namely the Applicant’s Expired Registration and ceased Design Registrations No 146066.

(6)    the effect of the certification by the Registrar of Designs that the Registrar has certified the Edmondson Registered Design is “new and distinctive” when compared to prior art which includes the Oates Registered Design.

38    Particularly with respect to fraudulent imitation, Edmondson contended that, having regard to the differences between the Oates Registered Design and Edmondson’s Product, and the narrow scope of the Oates Registered Design, there was no basis to conclude that the Edmondson Product had “the same fundamental or basic design” as the Oates Registered Design. Other arguments that Edmondson made in support of its contention that there was no reasonable cause to believe that Oates might have a right to obtain relief against it for fraudulent imitation included that “the more logical explanation” for any relevant similarities was that:

(a)    those features were copied lawfully from various other prior art which included such features, rather than from the [Oates] Registered Design which did not include them; and

(b)    those features were incorporated to improve the functionality of [Edmondson’s] product, which can be operated equally by left or right-footed users, as compared to the [Oates] Registered Design, which favours right-footed users.

39    As already noted, Edmondson made much of the fact that the Oates Registered Design did not include a statement of monopoly. Under s 4 of the Designs Act 1906, design means features of shape, configuration, pattern or ornamentation applicable to an article but does not include a method or principle of construction. The features must be such that, in the finished article, they can be judged by the eye. An application for registration of a design might be accompanied by a statement of monopoly in respect of the design to which the application relates: see s 20(4). Under s 4, a statement of monopoly is a statement relating to the representations of an article to which the design is applied that indicates those features of the representations in respect of which the applicant wishes to claim a monopoly and those features that are to be disregarded in considering the extent of the monopoly protection. In the absence of a statement of monopoly (and a statement of novelty) the design is the appearance as a whole, and a question of infringement is approached with this in mind: see Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd (1989) 23 FCR 331 at 349 per Sweeney, Fisher and Sheppard JJ; Wanem Pty Ltd v John Tekila (1990) 19 IPR 435 at 440 per Gummow J; D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 at 228 per Jacobs J; and Rosebank Plastics at 419-420 per Ryan J. The absence of a statement of monopoly, whilst broadening the concept of the design, also permits the alleged infringer to point more readily to respects in which the alleged infringing object differs in shape or configuration so that the differences are such as to alter the design as a matter of substance.

40    Having regard to the evidence adduced by Oates, particularly that of Dr Field and Mr Kelson, that features of shape and configuration in the Oates Registered Design are, in their opinions, replicated in Edmondson’s Product, I am unable to accept Edmondson’s submission that I should be persuaded that there is no reasonable cause to believe Oates may have a right to relief for design infringement because the absence of a statement of monopoly operates to narrow Oates’ monopoly in the Oates Registered Design. To so conclude would require evidence that is not presently before the Court; or at the least detailed argument appropriate at a trial if there should be one. I elaborate on these latter points below.

41    In relation to Oates’ Expired Design, Edmondson argued that it and anyone else “have been free to copy that design without any question of design or copyright infringement”; and that, given the scope of Oates’ Expired Design, the Oates Registered Design had “nothing new … about the features of shape and configuration as applied to the bucket component”. Edmondson submitted that “[o]n a proper assessment of the [Oates] Registered Design, viewed as a whole but also taking into account the narrowness of its scope by reason of the disclosure of the bucket component in [Oates’] Expired Design, it is clear that there is no objective ‘reasonable cause to believe’ that [Oates] may have a right to obtain relief against [Edmondson] for infringement by way of obvious imitation”. I am not, however, persuaded that Oates’ Expired Design should lead me to conclude that there is no reasonable cause to believe Oates may have a right to relief for design infringement. Edmondson’s argument involved a comparison of Oates’ Expired Design, the Oates Registered Design and Edmondson’s Product. The evidence that might assist the Court in this regard is that of Dr Field and Mr Kelson. Mr Kelson in particular was plainly aware of the Oates’ Expired Design, whether as part of the prior art in respect of the Oates Registered Design or the Edmondson Registered Design, since it formed part of the material upon which the Request for Examination in July 2010 was based (see [17] above). This material was in fact annexed to his first affidavit. Notwithstanding Oates’ Expired Design, Mr Kelson has deposed to the opinions set out above. There is no contrary evidence that might otherwise assist the Court in assessing the scope of the Oates Registered Design.

42    At the hearing, counsel for Oates drew my attention to differences between the Oates’ Expired Design and the Oates Registered Design. It is unnecessary to discuss them here, save to say they may prove important at a trial and, on the present application, appear to provide some contextual support for Mr Kelson’s position.

43    It is unnecessary to rehearse here all of Edmondson’s arguments that there was no reasonable cause to believe that Oates might obtain have a right to obtain relief because of the suggested key differences between Edmondson’s Product and the Oates Registered Design. These arguments involved a detailed comparison of the Oates Registered Design and Edmondson’s Product. Similarly, it is unnecessary to refer in detail to Edmondson’s arguments based on the prior art that accompanied Oates’ July 2010 Request for Examination, including not only Oates’ Expired Design but also ceased Design Registrations No 130788, 133171 and 146066. These arguments involved a detailed comparison of each of the ceased Design Registrations No 130788, 133171 and 146066, Oates’ Expired Registration and Edmondson’s Product. It suffices to say that Mr Kelson has deposed to his opinions notwithstanding this prior art of which he was plainly aware. In any event, in so far as the ceased Design Registrations were relevant, they were apparently relevant to the Edmondson Registered Design and not to the Oates Registered Design that pre-dated them.

44    At the hearing of the application, counsel for Edmondson contended that Oates’ case was defective and Mr Kelson’s analysis deficient because Mr Kelson had not considered the prior art referable to the Oates Registered Design, including Oates’ Expired Design. I reject this contention because it is tolerably clear from Mr Kelson’s affidavit (see the passage at [18] above and elsewhere) that he considered the prior art, including Oates’ Expired Design. In this preliminary discovery application, it was not incumbent on Oates to detail all the prior art referable to the Oates Registered Design upon which it and its advisers relied before determining to make the application. If Oates chose to institute design infringement proceedings against Edmondson on the grounds of obvious imitation and fraudulent imitation, Oates would no doubt adduce further and more detailed evidence as to the prior art. At this antecedent stage, on a preliminary discovery application, detailed evidence of the prior art is not called for and is not appropriate. It is, moreover, contrary to the approach adopted by other judges of this Court in applications of this kind: see C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 (“C7”) at [39] per Gyles J and Anglo Coal (Dawson) Management Pty Ltd v Greig [2011] FCA 941 at [31] per Collier J.

45    For similar reasons, it seems to me that, on this application, the arguments that Edmondson seeks to make with respect to s 27A of the Designs Act 1906 and s 75 of the Copyright Act, and as to the effect of certification by the Registrar following examination, must be put to one side. Before they might be accepted, Edmondson’s contention would require further detailed elaboration by argument and evidence.

46    Edmondson’s specific arguments with respect to fraudulent imitation suffer from the same difficulties as those already mentioned. They involved a detailed comparison of the Oates Registered Design and Edmondson’s Product, by reference to Oates’ Expired Design and the prior art (referable to the Edmondson Registered Design) accompanying the July 2010 Request for Examination. As stated already, on an application for preliminary discovery, even if this material were relevant to the issues in suit, there would be no occasion for this kind of detailed analysis.

47    As noted above, Dr Field and Mr Kelson specifically referred to three features in support of their opinion that the Oates Registered Design and Edmondson’s Product were closely similar to one another. At the hearing of Oates’ application, Edmondson submitted that these three features were to be found in the prior art and that the most likely explanation for the differences that distinguished Edmondson’s Product from the Oates Registered Design was “improved functionality”. This submission should not be entertained. This is because the time has not yet come for the parties to adduce detailed evidence and analysis of the prior art referable to the Oates Registered Design or the Edmondson Registered Design. Furthermore, one might reasonably expect that an analysis of the kind that Edmondson invited the court to make would be made at trial by reference to evidence designed to assist the eye of the court. Apart from the evidence to which I have referred, there was no such evidence available to the court on this application.

48    In summary, Edmondson’s opposition to Oates’ preliminary discovery application substantially consisted of arguments of a kind that would be appropriate at a final hearing. This kind of inquiry is not appropriate on an application of this kind. See C7 [39] and Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 249 ALR 495 (‘Optiver’) at 505 [48]. The issues on preliminary discovery are different from and antecedent to the issues that arise in an action for design infringement. At trial it is likely that the issue of design infringement, whether by reference to obvious imitation or fraudulent imitation, will require presentation and consideration of further detailed evidence to assist the eye of the Court to be instructed as to the features of shape and configuration of the allegedly infringing article. It would, moreover, be open to the parties at trial to adduce relevant evidence of prior art. In an application for preliminary discovery under O 15A of the 1979 Rules, the relevant issues are those to which the Rules give rise. In this case, these are presently the issues to which O 15A r 6 gives rise: see [23]-[27] above. In determining the issues under O 15A r 6, it is neither necessary nor appropriate to undertake a detailed comparison of the Oates Registered Design and Edmondson’s Product, whether by reference to the prior art referable to the Oates Registered Design or the Edmondson Registered Design, or otherwise.

49    It is sufficient to find, as I do, that, having regard to the evidence adduced by Oates, particularly that of Dr Field and Mr Kelson, the nature of the similarities between the Oates Registered Design and Edmondson’s Product, the fact that Oates’ Product was apparently available in the market prior to the Edmondson Registered Design and Edmondson’s Product coming into existence, and that Edmondson does not deny knowledge of the Oates Registered Design, there is a reasonable cause to believe that Oates may have a right to relief against Edmondson for design infringement on the basis of either obvious or fraudulent imitation. These considerations provide an objective basis for this belief.

Insufficient information after all reasonable enquiries?

50    The next question is whether Oates has insufficient information to make a decision whether to commence proceedings in the Court after making all reasonable enquiries. The nature of the contemplated proceeding is a relevant factor in making this assessment. The assessment is, however, an essentially pragmatic one: see Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited [2007] FCA 578 at [20] per Nicholson J.

51    Edmondson argued that Oates had failed to undertake a search of the prior art predating the Oates Registered Design, including Oates’ Expired Design, and to make the appropriate assessments having regard to this prior art. I would reject this argument. I would also reject the proposition that Edmondson floated, at least by implication, that Oates should have searched the prior art referable to the Edmondson Registered Design. As noted earlier, it is clear that Oates has already had regard to the alleged prior art with respect to the Oates Registered Design and, having regard to the July 2010 Request for Examination, the Edmondson Registered Design. Mr Kelson assumed responsibility for the Request for Examination, which was annexed to his first affidavit. The Request for Examination included not only Oates’ Expired Design but also other instances of prior art referable to the Edmondson Registered Design upon which Edmondson’s argument relied. Mr Kelson has also recognised the relevance of assessing the scope of the Oates Registered Design against the prior art at the priority date. Indeed, he deposed to the importance of this consideration in his affidavit. It is in this context that the Court must consider the evidence of Dr Field and Mr Kelson that there is such a high level of similarity between the features of the Oates Registered Design and Edmondson’s Product as to justify Oates having reasonable cause to believe it may have a right to relief against Edmondson for design infringement and that Oates lacks critical information in the nature of that sought by this application to determine whether to commence an infringement action. The evidence of Dr Field and Mr Kelson is that the documents sought will assist Oates in assessing the motive or intention for introducing changes and modifications to an existing design. Their evidence is, in summary, that, although Oates has a good deal of material, Oates does not know whether or not Edmondson’s claim of independent creation of its product (and design) is correct or plausible; and, if not, whether the extent or flagrancy of the infringing conduct warrants the institution of a proceeding. With its present lack of knowledge, Oates cannot determine whether it should issue proceedings. If it were to do so without the information it seeks, it incurs the costs of litigation without a proper foundation. If it does not do so because it lacks the information it seeks, it continues to suffer commercial disadvantage although it may have a right to relief. This is the very kind of situation that O 15A r 6 was designed to meet.

52    Oates has caused numerous letters to be sent to Edmondson and its solicitors stating its concerns regarding design infringement, including a letter requesting relevant documents. The documents are of a kind that Oates cannot obtain from its own files or the public domain. Compare Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (2000) 49 IPR 25 at 32 [29]-[31] per Sackville J. They are documents that may reasonably be expected to assist Oates in determining whether or not to commence proceedings for design infringement, including assessing whether or not Edmondson would have a good defence of independent creation and, if not, the extent to which Edmondson has drawn on Oates’ designs for its own purposes. This approach is well accepted in the context of actions for patent infringement: see Wundowie Foundry Pty Ltd v Milson Foundry Pty Ltd (1993) 27 IPR 202 at 207 per French J and Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 287 per Aickin J. The rationale is no different in the context of design infringement. Whether or not the documents sought contain the “smoking gun” to which Edmondson referred is not to the point. As Lindgren J said in Glencore at 240 [13], a successful applicant for preliminary discovery is entitled to no more than that which is necessary to overcome the insufficiency of the applicant’s information. In this case, the significance of documents recording or evidencing the design and development pathway for Edmondson’s Product involves matters that are not in the public domain but are germane to Oates’ evaluation of whether or not it should institute a proceeding.

53    Edmondson complains that it will be put to “trouble and expense”. In the circumstances, this is no answer to the proposition (which I accept) that, after making all reasonable enquiries, Oates has not sufficient information to enable a decision to be made as to whether to commence a proceeding to obtain relief for design infringement where there is reasonable cause to believe that Oates may have that right to relief.

Reasonable cause to belief that Edmondson is likely to have the documents sought?

54    Has Oates shown that there is reasonable cause to believe that Edmondson is likely to have possession of the documents that it seeks? The affidavits of Dr Field and Mr Kelson provide the basis for an affirmative conclusion. As indicated above, I accept that these documents relate to the question whether the applicant has the right to obtain the relief and that inspection would assist Oates in making the decision.

55    Dr Field and Mr Kelson provide sufficient evidence that there is reasonable cause to believe that Edmondson is likely to possess such documents. The evidence is that the kind of documents sought by Oates are the kind of document that Edmondson would reasonably be expected to have created for the purposes of bringing Edmondson’s Product and the Edmondson Registered Design into existence. Edmondson has not denied that it has such documents. Rather, it has resisted the making of orders for preliminary discovery.

56    For the purposes of Oates’ preliminary discovery application, I am satisfied that:

1.    There is reasonable cause to believe that Oates has, or may have, the right to obtain relief in this Court from Edmondson for design infringement.

2.    Oates has, in the circumstances, made all reasonable inquiries but has insufficient information to make a decision as to whether to commence proceedings in the Court.

3.    There is reasonable cause to believe that Edmondson is likely to have in its possession documents relevant to the question whether Oates has a right to obtain relief against it and inspection would assist Oates in making the decision.

57    Once the requirements of O 15A r 6 are satisfied, there is normally little scope for refusing relief: see Optiver at 504 [45]. I would grant the orders sought by Oates. There is no sound reason to refuse to do so on discretionary grounds. It should be borne in mind that Oates have offered to give an undertaking as to confidentiality in the usual terms in the event that discovery and inspection is ordered.

58    Edmondson will incur a burden if the discovery order is made. It may be required to search for documents that are no longer readily available to it. There will be costs associated with such an exercise. When an order for preliminary discovery is made, it is usual to make specific provision for costs incurred by those required to provide discovery. Such an order will be made in this case.

59    The costs of this application should be costs in the cause of any substantive proceeding commenced by a specified date (31 May 2012), and if no proceeding is brought within that period Oates should pay Edmondson’s costs of the present application. As discussed at the hearing, I would adjourn Oates’ preliminary discovery application with liberty to apply to Oates, in case Oates should wish to pursue its application for examination of the proper officer of Edmondson pursuant to O 15A r 3(2)(a) of the 1979 Rules. I would also reserve liberty to apply to both parties in the event that further direction is needed for carrying out the orders I would make for discovery and inspection.

Associate:

Dated:    5 April 2012