Federal Court of Australia

The Pokémon Company International, Inc v Pokemon Pty Ltd (No 2) [2023] FCA 1507

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 10.24 of the Federal Court Rules 2011 (Cth) (the Rules), the applicant’s interlocutory application for default judgment dated 24 October 2023, evidence in support (being paragraphs 7 to 10, 16, 17, 27, and 28 of the affidavit of David Gabriel Fixler affirmed on 19 December 2022 and Mr Fixler’s affidavits affirmed on 20 December 2022 and 26 April, 11 July, 8 August, and 24 October 2023) and written submissions dated 21 November 2023 will each be taken to have been served on the third respondent upon the solicitors for the applicant emailing these documents to the

email addresses: davidbush78@gmx.com; info@pokeworld.game; info@kotiota.com.au; OsheaHayes31@outlook.com; and pokemon.pty.ltd@outlook.com.

2.    The applicant serve the material referred to in Order 1 together with these orders and the orders made on 3 October 2023 on the third respondent (in the manner contemplated by Order 1) on the date these orders are made.

3.    The applicant file by no later than 4.00 pm on 4 December 2023 a further affidavit relating to the service contemplated by Orders 1 and 2.

4.    Pursuant to r 5.23(2)(e) of the Rules, and subject to the applicant’s compliance with Orders 1, 2, and 3, Orders 5, 6, and 7 take effect 21 days after the applicant’s compliance with Order 3, unless within that period the third respondent files and serves on the applicant a notice of address for service, in which event Orders 5, 6, and 7 will not take effect.

5.    Subject to Order 4 and pursuant to s 232 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL), the third respondent, whether by itself, its servants or agents, be restrained in trade or commerce from:

(a)    representing (in any manner whatsoever) that:

   (i) it is:

a.    licensed to develop Pokémon Games by or on behalf of the applicant or The Pokémon Company or Nintendo Co. Ltd (Nintendo) or to authorise others to do so;

b.    affiliated with, associated with, or otherwise connected in the course of trade with, approved by, or authorised by, the applicant or The Pokémon Company or Nintendo,

(the Kotiota Representations);

  (ii)  any Pokémon non-fungible tokens (NFTs) issued or offered by it are:

a.    licensed by the applicant or The Pokémon Company or Nintendo;

b.    affiliated with, associated with, or otherwise connected in the course of trade with, approved by, authorised by or connected with, the applicant or The Pokémon Company or Nintendo,

(the NFT Representations);

  (iii)  the virtual game PokeWorld (PokeWorld) is:

a.    licensed by the applicant or The Pokémon Company or Nintendo;

b.    affiliated with, associated with, or otherwise connected in the course of trade with, approved by, authorised by, or connected with, the applicant or The Pokémon Company or Nintendo,

(the PokeWorld Representations);

(b)    using without the license or authority of the applicant, the Pokemon Company and Nintendo:

  (i)  the words “Pokemon”, “Pokémon”, or “PokeWorld” or any name or word that is misleadingly or deceptively similar to any of those words, in the course of trade for a product or service;

  (ii)  the words “Pokemon”, “Pokémon”, or ‘PokeWorld” or any name or word that is misleadingly or deceptively similar to any of those words, or images of Pokémon characters or the names of Pokémon characters, to promote products or services of the third respondent or any other company or business associated with the third respondent (whether on the website located at the domain name kotiota.com.au or the website located at the domain name pokeworld.game, or on Twitter or on any other website);

  (iii)  launching or allowing access to PokeWorld; and

  (iv)  selling or otherwise making available Pokémon NFTs.

6.    Subject to Order 4, and pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth), it be declared that by making the Kotiota Representations, the PokeWorld Representations and the Pokémon NFTs Representations, the third respondent has:

   (i) engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL;

   (ii) made false representations of sponsorship or approval, in contravention of s 29(1)(g) of the ACL; and

   (iii) made false representations of sponsorship, approval, or affiliation, in contravention of s 29(1)(h) of the ACL.

7.    Subject to Order 4, the third respondent pay the applicant’s costs.

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

REASONS FOR JUDGMENT

YATES J:

1    The applicant seeks default judgment against the third respondent under r 5.23(2)(e) of the Federal Court Rules 2011 (Cth) (the Rules) on the basis of the third respondent’s failure to: (a) file a notice of address for service as required by Order 3 made on 12 July 2023; (b) attend Court on 9 August 2023 for a case management hearing listed by Order 4 made on 12 July 2023; and (c) file a defence as required by r 16.32 of the Rules.

2    The third respondent has not participated in this proceeding since its joinder on 2 June 2023 pursuant to r 9.52 of the Rules. On 8 June 2023, a notice of discontinuance was filed in respect of the first and second respondents. On 3 October 2023, I made orders at the applicant’s request providing for the filing of an interlocutory application seeking default judgment and the filing of written submissions by the parties in relation to that application. I also ordered that the application for default judgment be listed for hearing on 28 November 2023.

3    At the commencement of the hearing on 28 November 2023, the applicant informed the Court that the interlocutory application and supporting material had not been served on the third respondent. I was nevertheless prepared to entertain the application for three reasons.

4    First, as I have said, the third respondent has not participated in the proceeding. There is abundant evidence before the Court to show that the third respondent has been evading identification by various means, including by the adoption of other person’s identities. In these circumstances, it seems most unlikely that, even if it had been served, the third respondent would have responded to the application for default judgment.

5    Secondly, the third respondent’s ability to contest, substantively, the causes of action pleaded against it in the amended statement of claim dated 7 June 2023 could be preserved by making any final orders subject to the applicant serving the third respondent with the interlocutory application and supporting material within a limited period, and providing that the orders not take effect if the third respondent were to file, also within a limited period, a notice of address for service, as previously ordered to do.

6    Thirdly, given the circumstances I have outlined above, the efficient and cost-effective, but nevertheless fair and just, disposition of the interlocutory application strongly favoured the hearing on 28 November 2023 proceeding as appointed.

7    In Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606, I summarised the legal principles that apply in seeking default judgment under r 5.23(2)(c):

13    The power to give judgment against a defaulting party is undoubtedly discretionary. The discretion must be exercised cautiously. Where the defaulting party is a respondent to a pleaded claim, the giving of judgment for final relief on the application will deliver complete success to the applicant without investigation of the merits of the pleaded claim: ACOHS Pty Ltd v Ucorp Pty Ltd [2009] FCA 577 at [27]. There is no requirement that the act or acts of default be intentional or amount to contumelious conduct. There is no requirement that the act or acts of default result in inordinate or inexcusable delay. That said, such features, if present, will be relevant to the exercise of the Court’s discretion. So too will conduct that persuades the Court that the defaulting party is manifesting an inability or unwillingness to cooperate with the Court and the other party or parties to the proceeding.

14    Rule 5.23(2)(c) requires the Court to be satisfied that the applicant is entitled to the relief claimed in the statement of claim. This requirement has been interpreted as meaning that the Court must be satisfied that “on the face of the statement of claim” the applicant is entitled to the relief that is claimed. It is not a requirement that the applicant prove its claim by way of evidence. Put another way, the facts alleged in the statement of claim are taken to have been admitted: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [42]. If, on inspection of the statement of claim, the Court is satisfied that the applicant would be entitled to the relief sought then this requirement of r 5.23(2)(c) will be met: CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170 at [18] – [19]; Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [23]. The Court may permit further evidence to be adduced, but not evidence that would alter the pleaded case: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; 236 ALR 665 at [45], [48] – [50]; United Broadcasting International Pty Ltd v Turkplus Pty Ltd (No 2) [2010] FCA 1413 at [42] – [44]; Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352; 195 FCR 1 at [62] – [63].

8    The principles apply equally to default judgment under r 5.23(2)(e).

9    The applicant has read a number of affidavits in support of its application. Those affidavits do not deal with the substance of the applicant’s claims. Rather, they concern, in the main, the procedural steps that the applicant has undertaken in the proceeding to date, including investigations to ascertain the identity and whereabouts of the third respondent. These matters are relevant to the exercise of the discretion given to the Court to give judgment on default.

10    I do not propose to summarise the allegations made in the amended statement of claim in any detail. It is sufficient for me to record that the amended statement of claim pleads that the third respondent has made, in various ways, three groups of misrepresentations, defined as:

(a)    the Kotiota Representations—namely, that the third respondent is licensed to develop Pokémon Games by or on behalf of the applicant, or The Pokémon Company (Pokémon Company), or Nintendo Co. Ltd (Nintendo), or to authorise others to do so, and/or the third respondent is affiliated with, associated with, or otherwise connected in the course of trade with, approved by, or authorised by, the applicant or Pokémon Company or Nintendo;

(b)    the NFT Representations—namely, that Pokémon non-fungible tokens (NFTs) that are issued or offered by Pokemon Pty Ltd (an Australian company purportedly associated with the third respondent) are licensed by the applicant or Pokémon Company or Nintendo, and/or are affiliated with, associated with, or otherwise connected in the course of trade with, approved by, or authorised by, the applicant or Pokémon Company or Nintendo; and

(c)    the PokeWorld Representations—namely, that the virtual game PokeWorld is licensed by the applicant or Pokémon Company or Nintendo, and/or is affiliated with, associated with, or otherwise connected in the course of trade with, approved by, or authorised by, the applicant or Pokémon Company or Nintendo.

11    The amended statement of claim pleads that these representations are false, misleading, and deceptive. It pleads further that, by making them, the third respondent has, in trade or commerce, engaged in conduct that is misleading or deceptive or likely to mislead or deceive, and has contravened ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)).

12    The amended statement of claim also pleads that the third respondent threatens to continue to make the Kotiota Representations, the NFT Representations, and the PokeWorld Representations.

13    All these allegations are taken to have been admitted.

14    I am satisfied that the third respondent is in default (see r 5.22) as the applicant contends, and that orders on default should be made. In this regard, I am satisfied that declaratory relief and injunctive relief should be granted, particularly in circumstances where consumer interests are involved and the third respondent’s unlawful conduct continues to be threatened.

15    The injunctions that are now sought are narrower than the injunctions claimed in the amended originating application dated 7 June 2023. During the hearing, I discussed with counsel for the applicant various matters of drafting which will be reflected in the orders I propose to make.

16    I record that, although the amended originating application claims relief by way of damages, and the amended statement of claim pleads that the applicant has suffered loss or damage by reason of the third respondent’s conduct, the claim for damages is not pursued. An order for costs is pursued.

17    Relief will be granted accordingly.

Associate:

Dated:    1 December 2023