FEDERAL COURT OF AUSTRALIA

Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd (No 2) [2019] FCA 18

ORDERS

In these orders:

    Lumen Australia means the First Applicant;

    Lumen International means the Second Applicant;

    Frontline means the First Respondent;

    Vision means the Second and Third Respondents; and

    Unless otherwise indicated, capitalised terms have the meaning given in the Reasons for Judgment dated 22 November 2018.

THE COURT DECLARES THAT:

1.    Frontline has infringed the Lumen trade mark.

2.    Frontline and Vision have infringed Lumen Australia’s copyright in:

(a)    the Engineering Drawings;

(b)    the Installation Instructions; and

(c)    the Circuit Markings.

3.    Frontline has, in trade or commerce, engaged in misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law (ACL), and made false or misleading representations in contravention of sections 29(1)(a), (g) and (k) of the ACL, by representing that:

(a)    each of the Vision wiring harnesses is the same product as the respective Lumen wiring harnesses;

(b)    the supplier and manufacturer of the Vision wiring harnesses is the same as the supplier and manufacturer of the Lumen wiring harnesses;

(c)    the Vision wiring harnesses have the sponsorship or approval of the supplier and manufacturer of the Lumen wiring harnesses;

(d)    the Vision wiring harnesses are of the same standard and quality as the Lumen wiring harnesses;

(e)    the Vision wiring harnesses have the same place of origin as the Lumen wiring harnesses;

(f)    the Vision wiring harness was manufactured, supplied, licensed or approved by Lumen Australia;

(g)    the towbar kits supplied by Frontline to vehicle manufacturers at all times subsequent to the approval of the PPAP Submissions (as defined in paragraph 39A of the third further amended statement of claim) contained the parts detailed in the PPAP Submissions, including the Lumen wiring harness; and

(h)    the Vision wiring harness had been subject to and passed the same level of testing as the Lumen wiring harness prior to being supplied to vehicle manufacturers.

4.    Frontline has engaged in the tort of passing off.

5.    Frontline has breached its obligation of confidence to Lumen Australia by supplying the Engineering Drawings to Vision.

6.    Frontline has, by supplying the samples, the Engineering Drawings and the Installation Instructions to Vision, breached the Lumen T&Cs.

THE COURT ORDERS THAT:

Injunctive Relief

1.    For so long as the Lumen trade mark remains valid and in force, Frontline, whether by its servants, agents or otherwise, be restrained from:

(a)    Infringing the Lumen trade mark; and

(b)    Advertising, promoting, selling, offering for sale, or otherwise disposing of any automotive product under or by reference to the name LUMEN (unless authorised by the Applicants).

2.    For so long as copyright subsists in the Engineering Drawings, both Frontline and Vision, whether by their servants, agents or otherwise, be restrained from infringing Lumen Australia’s copyright in the Engineering Drawings.

3.    For so long as copyright subsists in the Installation Instructions, both Frontline and Vision, whether by their servants, agents or otherwise, be restrained from infringing Lumen Australia’s copyright in the Installation Instructions.

4.    For so long as copyright subsists in the Circuit Markings, both Frontline and Vision, whether by their servants, agents or otherwise, be restrained from infringing Lumen Australia’s copyright in the Circuit Markings.

5.    Frontline, whether by its servants, agents or otherwise, be restrained from advertising, offering for sale, or selling any product created by on behalf of Frontline by reference to the Engineering Drawings, other than a product including a Lumen wiring harness.

6.    Both Frontline and Vision, whether by their servants, agents or otherwise, be restrained from advertising, marketing, offering for sale or supplying the Vision wiring harnesses or any product containing a Vision wiring harness.

Delivery Up and Destruction

7.    On or before 1 March 2019, Frontline must:

(a)    Procure the supervised destruction of any of the following physical articles in its possession or under its control:

(i)    any Vision wiring harnesses;

(ii)    any products containing a Vision wiring harness from which the Vision wiring harness cannot be removed;

(iii)    any tooling or moulds used in the manufacture of the Vision wiring harnesses; and

(iv)    any infringing reproductions of:

        (A)    the Engineering Drawings;

        (B)    the Installation Instructions; or

        (C)    the Circuit Markings,

including those delivered up by Vision in accordance with order 9 below.

(b)    Provide the Applicants with an affidavit from a person supervising the destruction of the articles verifying the destruction of these articles in accordance with this order 7, such an affidavit to include the following:

(i)    the date on which the items were destroyed;

(ii)    a description of the items destroyed;

(iii)    the number of each item destroyed; and

(iv)    photographs of the items destroyed.

8.    On or before 1 March 2019, Frontline must:

(a)    Engage a suitably qualified forensic IT consultant to permanently delete from any computer hard drive, or any other electronic media storage device in its possession or under its control, any of the following items in electronic form:

(i)    any infringing reproductions of:

   (A)    the Engineering Drawings;

   (B)    the Installation Instructions; or

   (C)    the Circuit Markings.

(b)    Provide the Applicants with an affidavit from the person carrying out or supervising the deletion of these items verifying their deletion.

9.    On or before 15 February 2019, Vision must:

(a)    Deliver up to the solicitors for Frontline (or to another address nominated by Frontline in writing) any of the following physical articles in their possession or under their control:

(i)    any Vision wiring harnesses;

(ii)    any products containing a Vision wiring harness from which the Vision wiring harness cannot be removed;

(iii)    except where order 11 applies, any tooling or moulds used in the manufacture of the Vision wiring harnesses; and

(iv)    any infringing reproductions of:

        (A)    the Engineering Drawings;

        (B)    the Installation Instructions; or

        (C)    the Circuit Markings.

(b)    Provide the Applicants and Frontline with an affidavit from a person supervising the delivery up of the articles verifying the delivery up of these articles in accordance with this order 9, such an affidavit to include the following:

(i)    the date on which the items were delivered up;

(ii)    a description of the items delivered up;

(iii)    the number of each item delivered up; and

(iv)    photographs of the items delivered up.

10.    On or before 15 February 2019, Vision must:

(a)    Engage a suitably qualified forensic IT consultant to permanently delete from any computer hard drive, or any other electronic media storage device in their possession or under their control, any of the following items in electronic form:

(i)    any infringing reproductions of:

   (A)    the Engineering Drawings;

   (B)    the Installation Instructions; or

   (C)    the Circuit Markings.

(b)    Provide the Applicants with an affidavit from the person carrying out or supervising the deletion of these items verifying their deletion.

11.    On or before 15 February 2019, Vision must provide the Applicants with an affidavit evidencing that any moulds used in the manufacture of the Vision wiring harnesses have been permanently modified so that they can only be used to manufacture products that are not the Vision wiring harnesses.

12.    On or before 15 February 2019, Vision must deliver up to the solicitors for the Applicants (or to another address nominated by the Applicants in writing) any physical copies of the Engineering Drawings in their possession or under their control.

13.    On or before 15 February 2019, Vision must permanently delete from any computer hard drive, or any other electronic media storage device in their possession or under their control any electronic copies of the Engineering Drawings.

Damages, Exemplary Damages and Interest

14.    On or before 1 March 2019, Frontline and Vision (jointly and severally) must pay to Lumen Australia:

(a)    the sum of $140,750.30 in compensatory damages;

(b)    interest on the above amount accruing from 15 February 2016 at the following rates;

(i)    from 15 February 2016 to 30 June 2016 – at the rate of 6.00%;

(ii)    from 1 July 2016 until 31 December 2016 – at the rate of 5.75%;

(iii)    from 1 January 2017 until the date of these orders – at the rate of 5.50%; and

(iv)    from the date of these orders until the date payment is made – at the rate of 7.5%.

15.    On or before 1 March 2019, Frontline must pay to Lumen Australia:

(a)    the sum of $500,000.00 in exemplary damages; and

(b)    interest on the above amount accruing from the date of these orders until the date payment is made – at the rate of 7.5%.

Costs

16.    Frontline pay the Applicants’ costs of the proceeding on an indemnity basis.

Cross-Claims

17.    There be judgment for Vision against Frontline on Vision’s Cross-claim for the following amounts by way of damages:

(a)    $260,000.00 for stock held in Melbourne;

(b)    THB 1,011,034 for stock held in Thailand;

(c)    US$5,665.74 for stock held in Taiwan;

(d)    $13,870.00 for tooling costs in Taiwan;

(e)    $134,307.00 for development costs; and

(f)    warehousing costs calculated at $952 per month plus GST from 15 February 2016 to the date of Vision’s compliance with order 9(a).

(In total: the gross damages amount).

18.    There be deducted from the gross damages amount the amount of $29,776.07, being profit earned by Vision on the sales of Vision wiring harnesses to Frontline leaving the net damages amount.

19.    Interest on the said net damages amount at the following rates:

(a)    from 3 November 2016 to 31 December 2016 – at the rate of 5.75%;

(b)    from 1 January 2017 until the date of these orders – at the rate of 5.50%; and

(c)    from the date of these orders until the date payment is made – at the rate of 7.5%.

20.    On or before 1 March 2019, Frontline must pay to Vision the net damages amount and the interest thereon.

21.    Frontline indemnify Vision for the compensatory damages and interest thereon that Vision is ordered to pay Lumen Australia.

22.    Frontline indemnify Vision for any costs incurred in compliance with orders 9 to 13 above.

23.    The indemnity referred to in orders 21 and 22 shall be by payment by Frontline to Vision of the amounts of damages, interest and costs that Vision has paid or incurred.

24.    Frontline’s Cross Claim against Vision is dismissed.

25.    Frontline further pay Vision, by way of damages, the amount representing Vision’s actual costs of the proceeding which, to avoid doubt, includes Vision’s actual costs of and incidental to:

(a)    defending the proceeding brought by Lumen,

(b)    prosecuting Vision’s Cross-Claim against Frontline; and

(c)    defending Frontline's Cross-claim against it,

save for any costs unreasonably incurred.

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

REASONS FOR JUDGMENT

MOSHINSKY J:

1    On 22 November 2018, I published reasons for judgment on liability and quantum in this matter: Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd [2018] FCA 1807 (the Reasons). The parties have provided proposed minutes of orders to give effect to the Reasons. The parties are largely agreed as to the orders to be made, including as to costs. These reasons, which should be read together with the Reasons, deal with the form of orders to be made. I adopt the abbreviations used in the Reasons.

2    The applicants provided proposed minutes of orders on 11 December 2018 (including proposed declarations). These were largely agreed as between the applicants and Vision. At that stage, Frontline had not communicated its position on the proposed orders.

3    On 13 December 2018, Vision provided a short submission relating to the proposed minutes of orders.

4    Also on 13 December 2018, Frontline provided proposed minutes of orders (including proposed declarations) and a copy of the applicants’ proposed orders marked up to show how Frontline’s proposed orders departed from them. As stated in the covering email from Frontline’s solicitors, little separated the parties. In particular, Frontline did not resist an order that it pay the applicants’ costs on an indemnity basis. The differences between the proposed orders were explained in the covering email.

5    Vision indicated on the same day that it agreed with Frontline’s proposed orders.

6    On 17 December 2018, the applicants’ solicitors indicated that the applicants agreed with Frontline’s proposed orders, save for one matter. The one matter concerned paragraph 15 of the proposed orders, which related to exemplary damages. In the applicants’ original form of orders, they had proposed an order as follows: “On or before [a date 14 days from the date of these orders], Frontline must pay to Lumen Australia the sum of $500,000.00 in exemplary damages.” In Frontline’s proposed orders, the following order was proposed: “On or before 1 March 2019, Frontline must pay to Lumen Australia the sum of $500,000.00 in exemplary damages.” In response, the applicants proposed that Frontline’s proposed order be varied to read: “On or before 1 March 2019, Frontline must pay to Lumen Australia: (a) the sum of $500,000.00 in exemplary damages; (b) interest on the above amount accruing from [the date of these orders] until the date payment is made – at the rate of 7.5%.” In my view, the variation proposed by the applicants is appropriate, as it recognises the period of time that will elapse between the date of the orders and the date for payment by Frontline of the exemplary damages. I note that the proposed rate of interest, and the period in respect of which interest would run, are consistent with paragraph 14(b)(iv) of the proposed orders, which is agreed between the parties. I also note that Frontline did not seek to make any submission in response to the applicants’ solicitors’ email dated 17 December 2018.

7    Accordingly, I will make declarations and orders as proposed by Frontline, save in respect of paragraph 15. In respect of that paragraph, I will make an order in the revised form proposed by the applicants.

Associate:

Dated:    18 January 2019