Federal Court of Australia

Fanatics, LLC v FanFirm Pty Limited [2024] FCA 920

ORDERS

THE COURT ORDERS THAT:

1.    The hearing of the appeal be expedited.

2.    Order 2 made by Justice Rofe on 17 July 2024 (Injunction Order), the time for compliance of which was extended by orders made on 17 July 2024, 23 July 2024 and 29 July 2024, be further stayed until 4.00 pm on 11 September 2024.

3.    The parties confer and, by 4.00 pm on 21 August 2024 or such further time as may be allowed, provide to the Associate to Justice Bromwich agreed or competing draft orders for:

(a)    a stay of order 8 made by Justice Rofe on 17 July 2024 regarding the costs of the substantive proceeding before her Honour until 28 days after the resolution of the appeal;

(b)    a partial stay of the Injunction Order, substantially reflecting the terms proposed by the respondent; and

(c)    any order as to the costs of the interlocutory application dated 1 August 2024 and the stay application before the primary judge, including, if required, for evidence and short written submissions.

4.    The interlocutory application otherwise be dismissed.

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

REASONS FOR JUDGMENT

BROMWICH J:

1    This is an interlocutory application for a stay of an injunction pending the outcome of an appeal from the judgment upon which it is based. On 17 July 2024, a judge of this Court found Fanatics, LLC, now the appellant, liable for trademark infringement of a word mark and a flag mark registered to FanFirm Pty Limited, the applicant below and now the respondent, and made a declaration to that effect: FanFirm Pty Ltd v Fanatics LLC [2024] FCA 764 (Liability Judgment or LJ). The primary judge permanently injuncted Fanatics from using the word mark and related restraints in the terms reproduced below, and made orders for the rectification of the Register of Trade Marks.

2    FanFirm’s case for misleading or deceptive conduct and passing off failed before the primary judge. I consider the failure of that aspect of FanFirm’s case to be of no moment to the stay of the injunction that Fanatics seeks, notwithstanding submissions to the contrary.

3    The rectification orders were stayed by the primary judge pending the resolution of any appeal brought by Fanatics, and the parties were given leave to appeal the Liability Judgment, it being interlocutory in nature: see Monash Health v Singh [2023] FCAFC 166; 327 IR 196 at [38]-[44]. An application for a stay of the injunction pending determination of the appeal by Fanatics was dismissed by the primary judge on 29 July 2024, but the injunction was stayed by her Honour until 4.00 pm today, 14 August 2024, to allow Fanatics time to implement compliance: FanFirm Pty Limited v Fanatics, LLC (No 2) [2024] FCA 826 (Stay Judgment or SJ).

4    These reasons must be read with, and in the context of, both the Liability Judgment and the Stay Judgment, in addition to the passages from the Liability Judgment reproduced below.

5    Fanatics filed an appeal from the Liability Judgment on 1 August 2024. By an interlocutory application dated and filed the same day, Fanatics seeks afresh a stay of the injunction in the appeal proceeding, under r 36.08(2) of the Federal Court Rules 2011 (Cth). The stay is opposed by FanFirm, although a partial stay to reduce the impact of the injunction pending the outcome of the appeal is instead proposed, with draft terms provided. Fanatics’ interlocutory application is obviously not an appeal of the Stay Judgment, but the primary judge’s reasons for refusing a stay are plainly relevant and have been addressed by the parties.

6    Other relief sought by the interlocutory application in addition to the stay has been addressed as follows:

(a)    Expedition of the hearing of this interlocutory application has been addressed by an early hearing by me as duty judge two days ago and judgment today.

(b)    Expedition of the hearing of the appeal is jointly sought and will be granted, with the parties, at my request, having provided a joint appeal hearing duration estimate of 1-2 days, and joint available dates for the November 2024 appeal sittings. Those sittings are already very full and at the time of preparing these reasons the likelihood of the appeal being heard at that time is not known. A decision will be made about the appeal being heard in the November 2024 Full Court sittings on Monday, 19 August 2024.

(c)    A stay of the costs orders made by the primary judge, which has been being consented to and will be made.

7    The terms of the injunction that Fanatics seeks to be stayed are as follows:

The respondent [Fanatics] whether by itself, its directors, employees, servants, agents, related bodies corporate, or others, be permanently restrained from using the FanFirm Word Mark or any signs that are substantially identical with or deceptively similar to the FanFirm Word Mark, including the Infringing Marks, in relation to the goods and services in respect of which the FanFirm Word Mark is registered, without the permission, authority or licence of the applicant.

8    The primary judge records at SJ[18] that Fanatics would give the following undertakings for the stay to be granted:

(a)    to pursue any appeal with expedition, which it did in filing its notice of appeal on 1 August 2024 and seeking expedition of its hearing;

(b)    to keep accounts of all sales of products which would fall within the terms of the injunction made by the Court on 17 July 2024; and

(c)    until the hearing and determination of any appeal, to abide by such order as the Court may make in favour of the FanFirm for damages or an account of profits (at its election) in respect of any sales made as a result of staying final injunctive relief in the event that any appeal is relevantly unsuccessful.

9    In making orders for a short stay of the injunction until 14 August 2024, the primary judge noted that Fanatics made undertakings (a) and (c) above. The undertaking offered on this application is only (a) and (c).

10    FanFirm initially proposed in the alternative, and then ultimately as its primary outcome, a limited stay to the following effect, which, may require refinement but is otherwise not inherently objected to by Fanatics, albeit as a poor substitute for the complete stay that it seeks:

[1]    Order 2 of the orders made by the primary judge (in proceeding NSD 963 of 2022) on 17 July 2024 be stayed until 28 days after the resolution of this appeal to the limited extent necessary to permit the Appellant (Fanatics, LLC) to use the FanFirm Word Mark or any signs that are substantially identical with or deceptively similar to the FanFirm Word Mark, including the Infringing Marks:

(a)    on global customer care labels of the kind shown in Annexure JPB-1 to the affidavit of Jeffery Patrick Budway affirmed on 1 August 2024; or

(b)    in connection with the processing of returns of goods which were purchased by Australian customers from the Appellant’s online stores.

[2]    For the avoidance of doubt, the stay in order 1 above does not permit the Appellant to use the FanFirm Word Mark or any signs that are substantially identical with or deceptively similar to the FanFirm Word Mark, including the Infringing Marks, in relation to the goods and services in respect of which the FanFirm Word Mark is registered other than in the limited ways specified in sub-paragraphs (a) and (b) above.

11    For the reasons that follow, I have decided that only a partial stay of the injunction in limited terms as proposed by FanFirm should be granted, such that the substance of the absolute stay sought should be refused.

12    The relevant principles are not in doubt, although there is a divergence as to their proper application in the circumstances of this case. The Stay Judgment contains this convenient summary:

[16]    The principles in relation to the stay of an order are well known and were summarised by Rangiah J in Flight Centre Ltd v Australian Competition and Consumer Commission [2014] FCA 658 at [9] as follows:

(a)    There is an onus on the applicant to demonstrate a proper basis for a stay that will be fair to all parties.

(b)    There is a prima facie assumption that the judgment appealed from is correct.

(c    There is a prima facie assumption that the court should not deprive a litigant of the benefit of a judgment in its favour.

(d)     The court has a broad discretion as to whether to grant a stay, and it is not necessary for an applicant for a stay to demonstrate special or exceptional circumstances. It is sufficient that the applicant demonstrates a reason or an appropriate case to warrant the exercise of discretion in its favour.

(e)    The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case.

(f)    A stay will usually be granted if there is a real risk that the applicant will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal.

(g)    In the exercise of its discretion, the court will weigh considerations such as the balance of convenience and the competing rights of the parties before it.

[17]    A similar summary of the relevant principles was set out by Derrington J in Redbubble Ltd v Hells Angels Motorcycle Corp (Australia) Pty Ltd (2022) 168 IPR 74 at [37]; see also the summary by Halley J in Energy Beverages LLC v Cantarella Bros Pty Ltd (No 2) [2022] FCA 394 at [20]–[25].

13    Further authorities were relied upon by the parties, especially Fanatics.

14    In the Liability Judgement, the primary judge provided the following brief introduction to the proceeding:

[1]    At its core, this is a dispute about the trade mark “Fanatics” and its use in Australia with respect to clothing and online sales of clothing (including third party licensed sports merchandise).

[2]    The applicant, FanFirm Pty Limited, is an Australian company, the business of which has been run by Mr Warren Livingstone since its inception in 1997. The applicant began as a travelling cheer squad for the Australian Davis Cup tennis team and expanded into offering travel, tours and merchandise for (primarily) international sporting events.

[3]    The respondent, Fanatics, LLC, is a United States corporation based in Florida that operates an online retail store for sports merchandise.

[4]    The respondent maintains that both parties coexisted in Australia for over two decades until the applicant changed its business in mid-2020 to 2021 to promote and sell licensed sports merchandise, which it says is the genesis of the current dispute.

[5]    The applicant maintains that the Australian based activities of the respondent were minimal at best until about 2020 when it entered into agreements with the retailer Rebel Sport, the Australian Football League (AFL) and some AFL clubs to sell branded apparel.

15    The primary judge then described the registered trade marks for both sides, noting that each side sought cancellation of some of the other’s marks, noting at LJ[13] that both sides relied upon the same defences to infringement, and that:

Most of the issues in this case can be resolved by determining which party first used the “Fanatics” trade mark in Australia with respect to the relevant goods and services, and assessing the nature of each party’s reputation and when that reputation can be established in Australia.

16    The primary judge described in some detail FanFirm’s business at LJ[23] to [99], and Fanatics’ business at LJ[100]-[132]. Her Honour described what she concluded was coexistence between the parties prior to 2020, and what happened thereafter, as follows:

[133]    The respondent contends that prior to the applicant launching the Retail Store in 2020, the two parties had engaged in “peaceful” co-existence for over twenty years. The applicant was operating tours and events, and the respondent was operating an online retail store. Therefore, they were operating in largely different commercial spheres.

[134]    The applicant rejects that characterisation of the parties’ relationship, pointing to several skirmishes in the Australian Trade Marks Office. The first dispute was in August 2010 when the respondent opposed the applicant’s trade mark applications for the FanFirm Marks in class 25. This occurred three months before the respondent changed its name from FOOTBALL FANATICS to FANATICS. The respondent withdrew those oppositions in June 2013.

[135]    Second, in 2013, the applicant opposed the respondent’s trade mark application for the 632 TM, FOOTBALL FANATICS. On 5 April 2017, the opposition decision was made in favour of the respondent. Third, in 2019, the applicant opposed the respondent’s trade mark application for the 688 TM, the FANATICS Flag Mark, but discontinued that process in August 2020. This proceeding commenced in November 2022.

[136]    The applicant says that the present dispute has arisen because the respondent intensified its activities in Australia in 2020 by developing relationships with AFL teams and a partnership with Rebel Sport.

[137]    I consider that, other than a few skirmishes in the Australian Trade Marks Office, the parties have largely coexisted until 2020. The respondent has since 2010, operated an online retail store selling licensed third-party team apparel for a wide variety of sports, initially focussing on US sporting leagues, such as the NFL and the NBA, and then expanding to every major sporting code around the world. The applicant operated a tour and events company which sold merchandise both directly related to those events and third-party licensed merchandise relating to Australian national sporting teams such as the Wallabies, Socceroos and Matildas.

[138]    I consider that the parties were operating in the same broad field. Both were targeting sports fans and their enthusiasm/love for their sport, and selling sports merchandise to fans over the internet. Prior to 2020, the applicant had a narrower focus on Australian customers and licensed sports apparel for Australian national sporting teams (save for the few discrete examples raised by Mr Livingstone in cross-examination in relation to the 1999 NFL America Bowl in Australia, a deal with the NHL in 2003 and the NBA in 2011). The respondent did not specifically target Australian customers, instead it sold sporting merchandise primarily relating to US sporting teams and codes and European football leagues and teams.

[139]    The respondent says it has no complaint against the applicant with respect to the applicant’s activities prior to 2020. The applicant, on the other hand, does now complain about the respondent’s conduct prior to 2020.

[140]    Although both parties operate in the broad same field, they largely managed to coexist at a commercial level until 2020 by, to put it colloquially, operating in slightly different lanes that largely did not overlap. The status quo changed in 2020 by both parties moving out of their lanes: the respondent through the Rebel Sport and AFL deals, and the applicant by launching its Retail Store.

[141]    Two further examples of the respondent moving out of its lane emerged during cross-examination. First, the respondent entered into a deal with Ticketmaster in 2018 whereby Ticketmaster customers are presented with FANATICS merchandise and consumers can purchase tickets through one of the respondent’s websites. Second, the respondent opened a bricks and mortar NBA store in Melbourne.

[142]    The respondent correctly notes that these two examples are irrelevant to the applicant’s claims of trade mark infringement, misleading or deceptive conduct and passing off because they were not pleaded. Further, no evidence was provided that the FANATICS Marks were used in relation to the NBA store or that Australian consumers could purchase tickets to events through the Ticketmaster partnership. I agree that, as these instances were not pleaded, they can play no greater role than providing a possible explanation for the applicant’s decision to commence the proceeding.

17    The primary judge then made the following findings as to which party had first used the word Fanatics as a mark and in respect of which classes of goods or services in Australia it was used, ultimately resulting in:

(a)    success by FanFirm for its marks in respect of clothing (class 25);

(b)    success by FanFirm in respect the use of certain of Fanatics’ marks for online retail services (class 35);

(c)    failure for FanFirm and success by Fanatics in respect of the use of certain of Fanatics’ marks for the development of new technology for others in the field of retail store services for the purpose of creating and maintaining the look and feel of web sites for others etc (class 42).

18    It is useful to set out part of her Honour’s findings, which used lower case for references to FanFirm’s marks and upper case for references to Fanatics’ marks:

[143]    The issue of which party first used the word “Fanatics” as a mark and in respect of what goods and services in Australia is relevant to several issues in the proceeding. As such, it is convenient to deal with it here before considering each parties’ trade mark infringement claims.

[144]    The respondent changed its name to FANATICS from FOOTBALL FANATICS in December 2010. The respondent did not use FANATICS as a standalone brand or mark in Australia prior to that time. Mr Swallow gave evidence that until November 2011, when a person went to www.fanatics.com they were redirected to www.footballfanatics.com. On the basis of this evidence, senior counsel for the respondent essentially conceded in closing submissions that the respondent’s first use of the FANATICS Marks in Australia was in late 2010 or 2011. I discuss the respondent’s adoption of its name further below.

[145]    Accordingly, I am satisfied that the respondent first used the FANATICS Marks as trade marks in Australia in December 2010 at the earliest. As will be clear from my discussion below, nothing turns on whether the date selected for the respondent’s first use is 2010 or 2011.

[146]    The applicant contends that it first used the FanFirm Marks in relation to clothing (class 25) in around 1998 when its predecessor, Mr Livingstone, supplied t-shirts and caps to attendees of the Davis Cup event in Mildura which bore iterations of the FanFirm Marks. The respondent says that the applicant can only claim first use from the date of its incorporation on 30 September 2004 because it has not adduced any evidence that Mr Livingstone transferred title in the FanFirm Marks to the applicant. This disagreement is immaterial given that the respondent’s first use was no earlier than December 2010.

[147]    The applicant provided invoices from July 2006 for orders of Wallabies merchandise. This was the earliest evidence of the applicant’s actual orders or sales of merchandise. However, Wayback Machine extracts of the applicant’s website from as early as March 2004 show that customers could “browse the shop” for merchandise at that date.

[148]    Accordingly, I am satisfied that the applicant first used the FanFirm Marks in Australia in relation to clothing from at least September 2004.

[149]    The only real dispute is whether the applicant operated an online retail store for clothing before December 2010.

[150]    As noted at [45] above, the respondent accepts that the applicant (and before it, Mr Livingstone) sold clothing via a “merchandise” page on the website www.thefanatics.com from around 2002. The clothing sold on that page was limited to FanFirm branded merchandise relating to Australian sporting teams until 2012 (not third-party licensed merchandise). In 2012, it also sold third-party licensed merchandise for a select few Australian national sporting teams such as the Wallabies, Socceroos and Matildas.

[151]    This is sufficient to establish first use by the applicant in relation to the following class 35 services for which the respondent’s marks are registered:

(a)    on-line retail store services featuring sports related and sports team branded clothing and merchandise;

(b)    order fulfillment services; and

(c)    product merchandising.

[152]    The respondent contends that the applicant has not used the FanFirm Marks in relation to clothing or online retail services because the relevant goods and services were only provided as an adjunct to the applicant’s core business of tour and event services. That contention cannot be sustained. I consider that the applicant’s sale of sports-related merchandise from its website was more than an incidental aspect of the provision of its sports and events tour services: MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561 at 566–7 (per Burchett, Sackville and Lehane JJ).

[153]    Customers could purchase clothing from the applicant’s website from 2002 whether or not they had purchased a ticket for one of the applicant’s tours or events. Although it may be assumed that most people who purchased clothing from the applicant’s website did so in relation to a tour or event, there is no necessary relationship between tours and events and merchandise, such as to characterise the use of the trade mark as use other than in relation to the sale of goods.

[154]    Markovic J in Taylor v Killer Queen, LLC (No 5) (2023) 172 IPR 1 found that the artist Katheryn Hudson (known by her stage name as Katy Perry) had used the mark “Katy Perry” as a trade mark in relation to clothing in Australia. That is despite the fact that the clothing was sold primarily in relation to Ms Hudson’s concerts. Her Honour observed at [595]:

The evidence before me establishes that the Katy Perry Mark has been used in connection with the advertising, offering for sale and sale of clothes in Australia in conjunction with Ms Hudson’s tours and the release of her albums as well as through websites and some retailers. In that regard I accept the respondents’ submission that the advertising, offering for sale, sale of clothes and the clothes themselves bearing the Katy Perry Mark have been closely tied to Ms Hudson’s role as a popular music artist in Australia. Indeed most of the clothes offered for sale and sold bear images of Ms Hudson or graphics that are related to her albums or individual songs. That is, there is a close connection between Ms Hudson and the use of the Katy Perry Mark on much of the merchandise offered for sale, including clothes and, to the extent I am found to be wrong, goods of the same description. 

[155]    Markovic J’s findings on this issue were not challenged on appeal and I respectfully agree with her Honour. Using a trade mark on goods does not cease to be “use as a trade mark … in relation to goods” for the purposes of s 120(1) of the Act simply because the sale of the relevant goods is “closely tied” or an adjunct to some service offered by the applicant which is their primary or core business. In any event, I do not consider that the sale of merchandise on the applicant’s website to be merely an adjunct to its main business of providing tour and event services.

[156]    Accordingly, I am satisfied that the applicant first used the FanFirm Marks in relation to clothing (class 25) and online retail services (class 35) by September 2004 at the latest and therefore prior to the respondent’s first use of its FANATICS Marks in December 2010.

[157]    Much was made during the hearing of whether, and if so when, the applicant sold third party licensed merchandise. I do not consider that question is relevant to the question of first use in relation to class 35 services. The respondent’s marks in class 35 are limited to services for online retailing services in general and sports related and sports-team branded merchandise in particular. That describes what the applicant was selling on its website.

[158]    I consider that an online retail service selling goods is nothing more than the sale of goods via a website. The applicant’s website provided an online retail service from at least 2004 because customers could visit the website, select a product and then purchase that product. It therefore also provided order fulfillment services and product merchandising within the meaning of the respondent’s class 35 registration. The goods sold from the website from 2002 were sports related or Australian sports-team branded, such as the Davis Cup t-shirts and Australian Ashes merchandise extracted at [42] and [43] above.

[159]    However, I consider that the service of designing, setting up, managing and operating an online store for a third party, such as the respondent’s Partner Stores, is a different type of service (e-commerce creation services). This kind of service is covered by the respondent’s registrations in class 42. I consider that the respondent was the first to use FANATICS in relation to e-commerce creation services in Australia from around mid-2021, when it entered the Partner Store deals with the AFL and Essendon.

19    There is no dispute that the appeal grounds are bona fide, while FanFirm denies they have merit. I am satisfied that there are serious questions to be tried on appeal. FanFirm does not contend otherwise. Fanatics goes further and asserts that its appeal has substantial prospects of success, relying on the statement of Derrington J in Stefanovski v Digital Central Australia (Assets) Pty Ltd [2017] FCA 1121 at [4(e)] that this is a significant factor in favour of granting a stay. Fanatics challenges the primary judge’s findings on first use, denying there was any concession of first use only as late as December 2010, as well as the failure of its honest concurrent user defence, in particular by reason of evidence it relied upon to establish use of the word Fanatics earlier in time and prior to it becoming aware of FanFirm’s marks. FanFirm asserts weaknesses in those arguments.

20    I can see both sides of those arguments, but do not consider it necessary or appropriate to form, let alone express, any view as to which is stronger, nor as to the prospects of success for Fanatics’ appeal, even if that was realistically possible in the limited time available for submissions and their consideration. It follows that the success or failure of Fanatics’ application for a stay turns on the balance of convenience. A choice has to be made as to what is the fairest outcome in all the circumstances.

21    Fanatics points to the failure of FanFirm to seek an injunction prior to and separately from the trial of its case, while FanFirm says that it instead sought an early hearing. That point favours Fanatics to a limited, but not significant, degree.

22    It is not necessary to provide much detail in these reasons of the competing evidence relied upon to make the respective cases for and against the grant of a stay on the topic of the balance of convenience. Each case has been considered on the evidence advanced. I am satisfied that there is a real detriment to each side if their position does not prevail, although I do not wholly agree with the extent of that as detailed in the respective evidence and oral and written submissions.

23    Fanatics contends that it will suffer irrecoverable damage by way of a loss of revenue and goodwill, noting that while no undertaking from FanFirm is required in that regard, its absence favours the grant of a stay. I consider Fanatics’ claim of damage likely to be somewhat of an overstatement. If Fanatics succeeds on its appeal, its loss of revenue will be real and to that extent irrecoverable, but limited in scope. The evidence of the volume of sales and revenue is confidential, and I take that evidence into account. The damage to goodwill aspect will likely be made up within a relatively short period of time if and when trade is able to resume. That is, any loss of revenue will be finite and, if the appeal succeeds, relatively short term; with the damage to goodwill being likely to be more in the nature of a pause than any permanent detriment. I am satisfied that the concerns expressed by Fanatics about consumer protection and returns can be sufficiently met by the limited stay proposed by FanFirm.

24    For completeness I note that there was also a dispute between the parties as to whether or not I should have regard to the detriment to Fanatics by reference only to its Australian operations, and regard the context of its international operations as irrelevant, as Fanatics contends; or have regard to detriment in that international context as FanFirm contends. I consider it relevant to the extent that the impact of the injunction is plainly not dire in the sense, for example, of being at risk of putting Fanatics out of business. But I do not think it goes much further than that.

25    FanFirm describes its detriment if the substance of the injunction is not maintained as being that Fanatics’ infringing march into the aspect of its business that is protected by its trade mark monopoly will continue apace, and that this is hard if not impossible to quantify, such that the undertaking proffered is largely worthless. Fanatics argues that any loss incurred by FanFirm can be adequately met by the undertakings they furnish as a condition of the stay they seek.

26    I find FanFirm’s argument on this topic more compelling. The reality is that an account of profits or damages can only cover an unknown portion of any loss, and quantifying the economic effect of continued competition encroaching upon FanFirm’s trade mark protected monopoly will be difficult to establish, and likely impossible to establish to the full extent of that loss. While it is an exaggeration to describe the undertaking proffered by Fanatics as worthless, I find it is of limited and uncertain value and is unlikely to cover very much of any of the actual damage suffered.

27    FanFirm also points to the well-established principle that a judgment is not to be treated as being merely provisional because there is an appeal pending. The starting point must be that the primary judge’s decision is correct, and the successful party is entitled to the relief that it has secured. The main value of this point in this case is that it focuses attention on the need for the appealing party to make good the proposition that the balance of convenience favours the relief obtained being withheld pending the outcome of the appeal.  This feature does weigh in favour of FanFirm, but in this case only to the point of contributing to its side of the balance of convenience. It is for Fanatics to show that this is one of the features that are outweighed by the balance of convenience in its favour.

28    It follows that I find that there is an indeterminate measure of irrecoverable loss on each side if the stay sought by Fanatics is, or is not, granted. I am unable to say which is greater, so as to balance this aspect of the scales of convenience. This means that the presumptive correctness of the primary judge’s decision, and the presumed entitlement of FanFirm to the benefit of that decision, have a greater part to play as a starting point.

29    Fanatics also relies on the difficulty in addressing product returns if the injunction is not maintained. I do not find this a compelling reason for granting a stay because of the relative paucity of evidence on this topic. There was no evidence about the rate or value of returns in the confidential evidence as to sales figures and revenue provided, nor any indication that returns from sales already made could not be administered within the reasonable time that would be allowed to implement the injunction. Plainly there is no issue for returns in relation to sales that are not permitted to be made by the terms of the injunction. And finally, provision is made for a limited stay of the injunction to facilitate returns, noting that Fanatics express some reservation or concern as to how that could be made workable.

30    Fanatics describes the stay as preserving the status quo in the sense of allowing things to continue as they have since 2010. I am unable to accept that submission at least to the extent that it pays no heed to the aspect of the intensification of its activities since 2020 that falls within what has been found to be infringing conduct: see SJ[60]. I did not find the status quo argument compelling in this context. To find otherwise would almost be tantamount to treating any injunction consequent upon a finding of infringement as being required to be stayed pending an appeal. It is nothing like the preserving of the status quo so that the subject matter of the appeal is not destroyed and the appeal being thereby rendered nugatory. The injunction will occasion some detriment to Fanatics, but it does not impede the utility of the appeal in any way that I can see.

31    The evidence of the final affidavit evidence of Mr Christopher De Santana, deposing to, and producing photographs of, his attendance at the Wallabies vs Springboks Rugby Union game in Brisbane last Saturday afternoon, 10 August 2024, aided FanFirm by indicating the scale of activity that it contended would in part entail infringing conduct. That evidence showed that electronic banners alternated between the messages: “2024 MERCH ON SALE NOW”, “WALLABYSHOP.COM.AU” and “A Fanatics Experience”, the last accompanied the FANATICS flag mark. But that evidence also pointed to the potential difficulty in drawing a clear distinction between what is, and is not, infringing conduct, which could be seen as operating in Fanatics’ favour. In the end I was unable to decide that this evidence made any real difference to the conclusions I have otherwise reached.

32    It is inherently undesirable to determine an outcome by reference to the onus. However, that is the point that I have arrived at. It was for Fanatics to convince me that the balance of convenience weighed more in its favour than in favour of FanFirm, taking into account the limited stay offered by FanFirm. Fanatics have failed to do so as it is not possible to say the balance of convenience clearly favours one side over the other. If pushed to decide, if anything, I would have been inclined to find that FanFirm had the slightly better case, aided by proffering the limited stay.

33    The last remaining issue of substance is the amount of additional time that should be allowed to enable Fanatics to, using the primary judge’s words at SJ[12], arrange its affairs to comply with the injunction, with a limited stay, and thereafter in substance as proffered by FanFirm. Fanatics at different times sought an extra 14 days, an extra 28 days and an extra two months. I consider that 28 days should be ample enough time, especially given the option of geo-blocking Fanatics’ websites in Australia and setting up, relatively easily, separate websites for the purpose of facilitating returns, as deposed to by FanFirm’s expert witness, Mr John Rivas.

34    It follows that I stay the injunction for 28 days from today to enable Fanatics to organise its compliance with the injunction, being until 4.00 pm on 11 September 2024, and thereafter will order a limited stay in substance to the effect of the terms proffered by FanFirm (see [10] above). I direct the parties to confer and to furnish draft agreed or competing orders to give effect to this conclusion, and for an order for a stay of the primary judge’s costs orders within 7 days, as well as to the costs of this interlocutory application and the stay application before the primary judge.

Associate:

Dated:    14 August 2024