Edwards v Liquid Engineering 2003 Pty Ltd

• Jurisdiction: Australia Federal only
• Judgment Date: 26 June 2008
• Neutral Citation: [2008] FCA 970
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970

CONTRACTS – whether post-contractual conduct is admissible on the question of what a contract means – relevance of the subjective intentions of the parties to a contract – whether contract may be formed where there is an agreement to agree as to price or other substantive term – whether silence or failure to object to an unsolicited offer may constitute acceptance

COSTS – whether costs should be awarded in favour of applicant where application is dismissed as moot but would otherwise have been successful on the merits

EQUITY – estoppel – whether silence between intermittent threats of infringement may give rise to estoppel – whether equity will intervene when there is an adequate remedy at law – whether silence or failure to object to an unsolicited offer may give rise to an estoppel – whether wrongfully registered proprietor of a trade mark holds the mark on constructive trust for true owner – whether injunction should be granted where there is no showing of likelihood of future infringement

TRADE MARKS – appeal from decision of Registrar of Trade Marks that registered proprietor’s name be removed from the Register due to lack of intent to use the mark in good faith – whether appeal should be dismissed as moot where Court cannot grant relief sought even if applicant is successful – how mark is to be defined – whether mark includes or is associated with an image or particular graphic representation – whether ownership rights with respect to a mark are limited to goods of the same description – infringement action based on deceptive similarity – whether side-by-side comparison is required – whether presence or absence of additional descriptive word or associated image will avoid finding of deceptive similarity where distinctive or essential feature of the mark is borrowed – whether evidence of intent to deceive raises rebuttable presumption of consumer confusion – ownership of unregistered mark – right to register – meaning of “person aggrieved” under s 88 of the Trade Marks Act 1995 (Cth) – power of Court to direct amendment of Register by substitution of registered proprietor’s name with the applicant’s – power and discretion of the Court under ss 89, 122, 123, and 124 of the Trade Marks Act 1995 (Cth) to refuse relief where a party would otherwise be liable for infringement – quantum – election – whether applicant must elect between damages and account of profits before the close of evidence in non-split trial – whether applicant has the burden of establishing the infringer’s gross sales – whether respondent in non-split trial has burden of establishing costs incurred in relation to, including portion of general overhead reasonably attributable to, infringing goods – whether profits may be calculated using a measure of guesswork and estimation

Trade Marks Act 1995 (Cth)

Trade Practices Act 1974 (Cth)

Acme Office Service Pty Ltd v Lundstrom [2002] NSWSC 277

Adidas-Solomon AG v Turner (2003) 58 IPR 66

Allan v Development Allowance Authority (1999) FCR 264

Assa Abloy Australia Pty Ltd v Australian Lock Co Pty Ltd (2005) 147 FCR 126

Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641

Bond Brewing Holdings Ltd v National Australia Bank Ltd (1990) 1 ACSR 445

Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600

Brother Industries Ltd v Dynamic Supplies Pty Ltd (2007) 163 FCR 530

Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107

Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506

Dart Industries Inc v Décor Corporation Pty Ltd (1993) 179 CLR 101

Dr Martens Australia Pty Ltd v Bata Shoe Company of Australia Pty Ltd (1997) 75 FCR 230

E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 934

Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167

Figgins Holdings Pty Ltd v Registrar of Trade Marks (1995) 59 FCR 147

Frank Music Corp v Metro-Goldwyn-Mayer Inc (9th Cir 1985) 772 F2d 505

GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113

Hall v Poolman (2007) 215 FLR 243

Jones v Dunkel (1959) 101 CLR 298

Koninklijke Phillips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90

Lamb v Cotogno (1987) 164 CLR 1

Microsoft Corporation v TYN Electronics Pty Ltd (in liquidation) (2004) 63 IPR 137

Paramount Pictures Corporation v Hasluck (2006) 70 IPR 293

Pegela Pty Ltd v National Mutual Life Association of Australasia Ltd [2006] VSC 507

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257

Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227

Sony Computer Entertainment Australia Pty Ltd v Stirling [2001] FCA 1852

Sudojo Consulting Pty Ltd v Africa Pacific Capital Pty Ltd [2008] NSWSC 353

Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97

XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1984) 155 CLR 448

WILLIAM MICHAEL EDWARDS v LIQUID ENGINEERING 2003 PTY LTD (ACN 104 341 657)

VID 934 of 2006

AND

LIQUID ENGINEERING 2003 PTY LTD (ACN 104 341 657) v WILLIAM MICHAEL EDWARDS and ORS

WAD 189 OF 2007

GORDON J

26 JUNE 2008

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 934 of 2006

BETWEEN:	WILLIAM MICHAEL EDWARDS Applicant
AND:	LIQUID ENGINEERING 2003 PTY LTD (ACN 104 341 657) Respondent

AND

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	WAD 189 of 2007

BETWEEN:	LIQUID ENGINEERING 2003 PTY LTD (ACN 104 341 657) Applicant
AND:	WILLIAM MICHAEL EDWARDS First Respondent
AND:	LIQUIDENG FARM SUPPLIES PTY LTD (ACN 108 994 109) Second Respondent
AND:	S.K. RURAL SUPPLIES PTY LTD (ACN 108 066 397) Third Respondent

JUDGE:	GORDON J
DATE OF ORDER:	26 JUNE 2008
WHERE MADE:	MELBOURNE

THE COURT DECLARES THAT:

1. The first respondent in WAD 189 of 2007 has held each of Australian trade mark applications and registrations No. 941987 “Exit Rust” and No. 941989 “Fuel Set” on constructive trust for Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and for Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003.

THE COURT ORDERS THAT:

2. The application in VID 934 of 2006 be dismissed.

3. The respondent in VID 934 of 2006 pay the applicant’s reserved costs of and incidental to the proceedings, such costs to be taxed in default of agreement.

4. The first and second respondents in WAD 189 of 2007 pay the applicant $76,000 within 28 days, with liability for such payment to be joint and several.

5. The third respondent in WAD 189 of 2007 pay the applicant $30,175.71 within 28 days.

6. Interest be paid on the sums in orders 4 and 5 under s 51A of the Federal Court of Australia Act 1976 (Cth) calculated with effect from 30 June 2005 to the date of judgment by reference to the rates set down in the Penalty Interest Rates Act 1983 (Vic).

7. Pursuant to s 88(1)(b) of the Trade Marks Act 1995 (Cth) (the “TMA”), the Register of Trade Marks maintained under the TMA be rectified by amending the entries for registered trade mark No. 941987 “Exit Rust” and registered trade mark No. 941989 “Fuel Set,” being entries wrongly made or remaining in the Register as being owned by the first respondent in WAD 189 of 2007, and recording that the true owner of each of those registrations has been Liquid Engineering Ltd (ACN 074 772 697) from 3 February to 8 April 2003 and Liquid Engineering 2003 Pty Ltd (ACN 104 341 657) since 8 April 2003.

8. The cross-claim in WAD 189 of 2007 be dismissed.

9. The respondents pay the applicant’s costs of the proceedings in WAD 189 of 2007, including the costs of the cross-claim, on a party-party basis, such costs to be taxed in default of agreement.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 934 of 2006

BETWEEN:	WILLIAM MICHAEL EDWARDS Applicant
AND:	LIQUID ENGINEERING 2003 PTY LTD (ACN 104 341 657) Respondent

AND

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	WAD 189 of 2007

BETWEEN:	LIQUID ENGINEERING 2003 PTY LTD (ACN 104 341 657) Applicant
AND:	WILLIAM MICHAEL EDWARDS First Respondent
AND:	LIQUIDENG FARM SUPPLIES PTY LTD (ACN 108 994 109) Second Respondent
AND:	S.K. RURAL SUPPLIES PTY LTD (ACN 108 066 397) Third Respondent

JUDGE:	GORDON J
DATE:	26 JUNE 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

1 These trademark infringement and passing off proceedings have a long and unsatisfactory history. As will be seen in these reasons, from the outset of the litigation the issues have not been framed in a way that accurately identifies the dispute between the parties. This has resulted in excessive costs and consumption of Court and party resources which could have been avoided.

2 With that preamble, I set out the background and circumstances of the case. The applicant in WAD 189 of 2007, Liquid Engineering 2003 Pty Ltd (“LE 2003”), alleges that by trading under the names “Liquideng Farm Supplies” and “Liquideng”, the first and second respondents, William Michael Edwards (“Edwards”) and Liquideng Farm Supplies Pty Ltd (“LFS”), have infringed LE 2003’s trade mark registration No. 760645 “Liquid Engineering”. The same conduct is said also to constitute passing off and to constitute misleading or deceptive or false conduct in contravention of ss 52 or 53 of the Trade Practices Act 1974 (Cth) and ss 9 or 12 of the Fair Trading Act 1999 (Vic). (It is convenient to refer to these last claims as “the misleading conduct claims”). LE 2003 claims an account of profits for the alleged trade mark violation as well as exemplary damages in connection with the passing off claims....