FEDERAL COURT OF AUSTRALIA

Carroll & Richardson - Flagworld Pty Ltd v PayPal Australia Pty Limited [2020] FCA 371

ORDERS

THE COURT ORDERS THAT:

1.    Within 14 days of service of this order the Third Prospective Respondent (Shopify) produce to the Prospective Applicant the name, email address, postal address, and any other address which, to the knowledge of Shopify, is or is likely to be that of the person or entity who or which is the account holder of the domain at www.freetheflag.net.

2.    The application for relief sought in prayer 3 of the Originating Application filed on 17 February 2020 is otherwise dismissed.

3.    The Prospective Applicant must serve a copy of this Order on Shopify forthwith.

AND THE COURT NOTES THAT:

The Prospective Applicant will remove Shopify as a party to this proceeding pursuant to Rule 9.08 of the Federal Court Rules 2011 (Cth) as soon as practicable following Shopify's compliance with Order 1.

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

ORDERS

THE COURT ORDERS THAT:

1.    Within 14 days of service of this order the First Prospective Respondent (Australia Post) produce to the Prospective Applicant the name, email address, postal address, and any other address which, to the knowledge of Australia Post, is or is likely to be that of the person or entity who or which is the holder of P.O. Box 5052, Torquay, 4655 Hervey Bay, QUEENSLAND.

2.    The application for relief sought in prayer 1 of the Originating Application filed on 17 February 2020 is otherwise dismissed.

3.    The Prospective Applicant must serve a copy of this Order on AusPost forthwith.

AND THE COURT NOTES THAT:

The Prospective Applicant will remove Australia Post as a party to this proceeding pursuant to Rule 9.08 of the Federal Court Rules 2011 (Cth) as soon as practicable following AusPost’s compliance with Order 1.

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

REASONS FOR JUDGMENT

MURPHY J:

1    The Aboriginal Flag, an image of which appears below, is an important symbol of the unity and identity of the Aboriginal peoples of Australia. In June 1995 the Governor-General of the Commonwealth made a proclamation recognising it as the flag of the Aboriginal peoples of Australia and a flag of significance to the Australian nation generally, under s 5 of the Flags Act 1953 (Cth).

Copyright in the design of the flag is, however, privately held. In 1997 Harold Joseph Thomas, an indigenous artist, was held to be the author of the design of the Aboriginal Flag and the owner of the copyright subsisting in that artistic work: see Thomas v Brown & Another [1997] FCA 215; (1997) 37 IPR 207 (Thomas) (Sheppard J).

2    On the basis of the material before the Court the prospective applicant in this proceeding, Carroll & Richardson – Flagworld Pty Ltd (Flagworld), is the holder of an exclusive licence from Mr Thomas to reproduce or authorise the reproduction of the Aboriginal Flag on flags, pennants, banners and bunting and to manufacture, promote, advertise, distribute and sell such products. It has filed two originating applications under rule 7.22 of the Federal Court Rules 2011 (Cth) (the Rules) seeking orders for preliminary discovery to ascertain the description of two prospective respondents who it alleges are advertising, distributing and selling flags in the design of the Aboriginal Flag in breach of copyright:

(a)    in VID 87 of 2020 Flagworld seeks orders for preliminary discovery by PayPal Australia Pty Ltd (PayPal), Vodafone Hutchison Australia Pty Ltd (Vodafone) and Shopify (Australia) Pty Ltd (Shopify) in relation to the description of the prospective respondent, being the person or persons operating the website https://freetheflag.net (the FreeTheFlag Website); and

(b)    in VID 88 of 2020 Flagworld seeks orders for preliminary discovery by Australian Postal Corporation (Australia Post), Optus Mobile Pty Ltd (Optus) and eBay Marketplaces GmbH (eBay) in relation to the description of the prospective respondent, being Nichoff Inc of Hervey Bay, Queensland.

3    Rule 7.22 provides that a prospective applicant may apply to the Court for an order to require a person to discover to the prospective applicant any document or thing in the person’s control relating to the description of the prospective respondent. The rule is intended to provide a person with a means of obtaining information as to the identity of a party against whom the person wishes to commence a proceeding, in circumstances in which the person is unable to do so because of a lack of sufficient information about that party’s description to enable an originating application to be filed: see Cape Australia Holdings Pty Ltd v Iannello [2009] FCA 709 (Siopis J) at [63]-[64] which relates to the predecessor rule.

4    Rule 7.22(1) requires that to obtain an order the prospective applicant must satisfy the Court that:

(a)    there may be a right for the prospective applicant to obtain relief against a prospective respondent; and

(b)    the prospective applicant is unable, notwithstanding having made reasonable inquiries and taken any other steps reasonably required in the circumstances, to ascertain the description of the prospective respondent; and

(c)    another person, the respondent to the application for preliminary discover, knows or is likely to know that description, or has or is likely to have, or has had or was likely to have had, control of a document that would help ascertain that description;

: see Hooper v Kirella Pty Ltd [1999] FCA 1584; (1999) 96 FCR 1 (Hooper v Kirella) at [31)-[34].

VID 87 of 2020 – the FreeTheFlag Website

5    This application only proceeded against Shopify. PayPal and Vodafone consented to orders which require them to provide preliminary discovery of the information Flagworld sought. I am satisfied that it is also appropriate to make an order for preliminary discovery against Shopify.

6    First, having regard to the affidavit of Edward Tak-Wah Ngai, an employee solicitor with CBL Business Lawyers (CBL), affirmed 13 February 2020 I am satisfied that Flagworld may have a right to obtain relief for breach of copyright against the prospective respondent(s), being the persons or entities operating the FreeTheFlag Website. In summary he deposes that:

(a)    in 1997 the Court declared Mr Thomas to be the author of the design of the Aboriginal Flag and that he was the owner of copyright subsisting in that artistic work;

(b)    by an agreement, originally made between Mr Thomas and Flagworld in 1998, Flagworld was granted an exclusive licence to reproduce or authorise the reproduction of the design of the Aboriginal Flag on flags, pennants, banners and bunting and to manufacture, promote, advertise and sell such products. By successive agreements made between Flagworld and Mr Thomas in June 2000, April 2004 and September 2005, the term of the licence has been extended to the present time;

(c)    the FreeTheFlag Website offers flags for sale titled “Aboriginal Australia Flag” and “Free the Flag, Flag”. They are in the same colours as the Aboriginal Flag, with the upper half being black, the lower half being red and a yellow shape in the middle. They are not identical to the Aboriginal Flag as the yellow shape in the centre is an outline of a map of Australia, as opposed to the Aboriginal Flag which has a yellow circle in the centre. On the “Free the Flag, Flag” the words “Free the Flag” appear in writing within the map of Australia. Images of the “Aboriginal Australia Flag” and the “Free the Flag, Flag” appear below:

(d)    in September 2019 Mr Ngai made an online purchase of an “Aboriginal Australia Flag” on the FreeTheFlag Website (the trap purchase). He exhibits screenshots from the website which describe Carl Ellis as the Managing Director of “Free the Flag” and display a photograph of him. Subsequently, Mr Ellis corresponded by email with CBL in relation to the trap purchase; and

(e)    on 23 October 2019 CBL sent a letter of demand to info@freetheflag.net which asserted that the flags advertised for sale on the FreeTheFlag Website bear a design which is a derivation of and substantially similar to the design of the Aboriginal Flag, and therefore in breach of Flagworld’s exclusive licence. There was no response to the letter.

7    To succeed in an application for preliminary discovery under r 7.22, Flagworld is not required to demonstrate the existence of a prima facie case of copyright infringement against the prospective respondent or respondents; it is enough if the prospective applicant can show that he or she may have a right to obtain that relief: Hooper v Kirella at [33].

8    It is undesirable that I express any firm view about the prospects of Flagworld’s intended action for copyright infringement. The “Aboriginal Australia Flag” and the “Free the Flag, Flag” are not the same as the Aboriginal Flag, but that does not show that Flagworld may not have a right to obtain relief. To establish that its copyright has been infringed it is enough for Flagworld to show a sufficient degree of objective similarity and a causal connection between the allegedly infringing products and the Aboriginal Flag: SW Hart & Co Pty Ltd v Edwards Hot Water Systems [1985] HCA 59; (1885) 159 CLR 466 at 472 per Gibbs CJ, with whom Mason and Brennan JJ agreed. In my view the materials show a cause of action known to the law and a real prospect of the grant of some remedy, which is sufficient for a grant of preliminary discovery: Allphones Retail Pty Ltd v Australian Competition and Consumer Commission [2009] FCA 980; (2009) 259 ALR 354 (Allphones v ACCC) (Foster J) at [54].

9    Second, I am satisfied that Flagworld has made reasonable inquiries and taken other steps reasonably required in the circumstances to ascertain the description of Free the Flag or those controlling its website, but has been unable to do so. The evidence shows that:

(a)    having regard to the searches described in the second affidavit of Mr Ngai affirmed on 10 March 2020, Free the Flag and like names are not registered as business names or corporations and do not have a registered office or address. Schedule 1 to the Rules provides that “description” means for a person who is an individual, the person’s name, residential or business address and occupation. For a person that is not an individual, it means the person’s name, and the address of either the person’s registered office, principal office or principal place of business. Flagworld obtained Mr Ellis’ name and position description from the website but it has no further details and it has not been able to ascertain the prospective respondent’s residential or business address, principal office or principal place of business, nor the residential address and occupation of any other controlling mind(s);

(b)    Flagworld conducted a historical ASIC search for the name “Carl Ellis”, and then engaged a private investigator to confirm whether the individual ascertained through those searches was the same person that appears on the FreeTheFlag Website. As it eventuated, he was not;

(c)    the private investigator located a mobile telephone number for Mr Ellis, but was unable to ascertain his residential or business address. Flagworld has now obtained consent orders requiring Vodafone to provide the name, email address, postal address and any other address which to its knowledge belongs to the person or entity that is the holder of that mobile telephone number;

(d)    Mr Ngai tried to ascertain the name and address, either residential or business, of Free the Flag and/or Mr Ellis by telephoning the Chinese company which shipped the trap purchase to him. However, his telephone call went unanswered; and

(e)    Flagworld has now obtained consent orders requiring Paypal to provide the name, address, telephone number and email address of any person authorised to use the “Flyy Flags” account which received the payment for the trap purchase.

10    Third, Mr Ngai deposes that his firm conducted a domain search of “www.freetheflag.net” and ascertained that the registrar of that domain is Tucows Domains Inc. He then conducted a search on the Tucows Domains website to locate the provider for the FreeTheFlag Website. He ascertained from that search that the provider for that website is Shopify. He exhibits Shopify’s privacy policy which states that it collects merchants’ “name, company name, address, email address, phone number(s) and payment details.”

11    Given its privacy policy, Shopify is likely to have or have had control of a document or thing that would help ascertain the description of the prescriptive respondent(s). Flagworld has not contacted Shopify and asked it to provide the name, residential address and business address of its clients, but I accept Flagworld’s submission that it is unlikely that Shopify would have agreed to do so absent a court order compelling such production. I am confirmed in this view by the fact that, having been served with this proceeding, Shopify has not agreed to supply the identifying information.

12    Flagworld has satisfied the requirements for an order for preliminary discovery against Shopify, and I have made an order accordingly.

VID 88 of 2020 – Nichoff Inc

13    This application only proceeded against Australia Post, which filed a submitting appearance. eBay consented to an order for preliminary discovery to ascertain the description of the person or entity controlling Nichoff Inc, the prospective respondent. Flagworld accepted that its materials in relation to Optus were insufficient to justify an order and did not press that part of the application.

14    I am satisfied that it is also appropriate to make an order for preliminary discovery against Australia Post.

15    First, having regard to the affidavit of Mr Ngai affirmed 12 February 2020, I am satisfied that Flagworld may have a right to obtain relief for breach of copyright against the prospective respondent(s), being the persons or entities operating Nichoff Inc. In summary he deposes as follows:

(a)    that Mr Thomas is the author of the design of the Aboriginal Flag and the owner of copyright subsisting in that artistic work, and that Flagworld has an exclusive licence to reproduce or authorise the reproduction of the design of the Aboriginal Flag flags, pennants, banners and bunting, and to manufacture, promote, advertise and sell such products;

(b)    that in August 2019, Mr Scott Thompson of Flagworld made two purchases on eBay of flags in the design of the Aboriginal Flag, from sellers using the names “nicstar-333” and “chinokat”. When those goods were delivered each of the envelopes carried the following sender details: Nichoff Inc, P.O. Box 5052, Torquay 4655 Hervey Bay, QUEENSLAND.

16    As I have explained, to succeed in an application for preliminary discovery under r 7.22, Flagworld is not required to demonstrate the existence of a prima facie case of copyright infringement against the prospective respondent or respondents; it is enough if the prospective applicant can show that he or she may have a right to obtain that relief. In my view, the evidence shows a cause of action against Nichoff Inc, or those who control it, which is known to the law and a real prospect of the grant of some remedy in respect of the conduct: Allphones v ACCC at [54].

17    Second, I am satisfied that Flagworld has made reasonable inquiries and taken other steps reasonably required in the circumstances to seek to ascertain the description of Nichoff Inc or those controlling it, but has been unable to do so. Mr Ngai deposes that:

(a)    in October 2019 he located a page on Facebook marketplace through a google search, which page was purportedly maintained by “Nichoff Inc”, but he did not save a copy of the page at that time and it has since been deleted;

(b)    he was informed by Mr Thompson that the Facebook page which had been deleted was the same page Mr Thompson had previously been able to access and that it previously contained the same contact details for Nichoff Inc including the Hervey Bay address, a mobile telephone number and an email address;

(c)    he conducted ABN and ASIC searches to identify a corporate entity named Nichoff Inc but was unable to locate a registered business name or corporate entity with that name;

(d)    CBL sent a letter of demand by registered post to the address in Hervey Bay on 11 November 2019 which Australia Post confirmed was delivered on 15 November 2019. The letter demanded that Nichoff cease supplying, distributing, offering for sale, promoting or advertising the allegedly infringing products, that it destroy all stocks of infringing products, that it provide contact details of the supplier of the product, and that it provide inventory and cost details of the allegedly infringing products; and

(e)    there was no response to the letter of demand.

18    Third, Mr Ngai deposes that he obtained an application form for a PO box from Australia Post, and he notes that it is a requirement to provide a customer name or business name and ABN, along with a street address, city, state and postcode to Australia Post. Given the information it requires in its application form, Australia Post is likely to have or have had control of a document or thing that would help ascertain the description of Nichoff Inc. Flagworld has not contacted Australia Post and asked it to provide the name, residential address and business address of the holder of the relevant PO box, but I accept Flagworld’s submission that it is unlikely that Australia Post would have agreed to do so absent a court order compelling such production. I am confirmed in this view by the fact that, having been served with this proceeding, Australia Post has not agreed to supply the identifying information and instead filed a submitting appearance.

19    In the circumstances, it is appropriate that preliminary discovery be granted against Australia Post in the terms sought and I have made an order accordingly.

Associate:

Dated:    19 March 2020