Federal Court of Australia RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd (No 2) [2024] FCAFC 92 Appeal from: RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2022] FCA 1042 File number: NSD 915 of 2022 Judgment of: NICHOLAS, BURLEY and HESPE JJ Date of judgment: 11 July 2024 Catchwords: COSTS – application for variation to costs orders – appropriate order as to costs – where appellants failed to establish trade mark infringement at trial and on appeal but successful in resisting validity challenge – where respondent's validity arguments raised only in response to infringement case – where appellants successful in demonstrating appealable error – whether costs awarded to the appellants should be discounted – current apportionment appropriate Cases cited: RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2024] FCAFC 10 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 8 Date of last submission: 11 April 2024 Date of hearing: Determined on the papers Counsel for the Appellants: Mr MR Hall SC, Ms E Whitby and Mr G Tsang Solicitor for the Appellants: Thomson Geer Counsel for the Respondent: Mr EJC Heerey KC and Ms F St John Solicitor for the Respondent: Ashurst Australia ORDERS NSD 915 of 2022 BETWEEN: RB (HYGIENE HOME) AUSTRALIA PTY LTD First Appellant RECKITT BENCKISER FINISH B.V. Second Appellant AND: HENKEL AUSTRALIA PTY LTD Respondent order made by: NICHOLAS, BURLEY AND HESPE JJ DATE OF ORDER: 11 July 2024 THE COURT ORDERS THAT: 1. Orders 1 and 2 of the primary judge made on 3 October 2022 be set aside. 2. The Amended Cross-Claim be dismissed. 3. Pursuant to s 105 of the Trade Marks Act 1995 (Cth), the Court certifies that Australian Trade Mark No 1008914 was used in good faith in Australia by the Second Appellant during the three year period ending 16 July 2021. 4. The Respondent's application to vary order 4 of the orders dated 16 February 2024 be dismissed, with the Respondent to pay the Appellants' costs of the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1 On 16 February 2024 we delivered judgment in these proceedings; RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2024] FCAFC 10 and made the following Orders: 1. The appeal be allowed in part. 2. Order 3 of the primary judge made on 3 October 2022 be set aside. 3. The respondent be restrained, whether by itself, its directors, employees or agents, from offering for sale or selling its Somat Excellence products under or by reference to the following device: 4. The respondent pay 80% of the costs of the appeal. 5. The parties confer and supply to the Court within 21 days of these Orders draft short minutes setting out any further or other orders that they contend should be made, marked up to indicate any points of disagreement between them. 6. In the event that the parties disagree as to the form of further or other orders, within 14 days after the date in Order 5: (a) the appellants provide a submission of no more than 5 pages setting out their position; (b) the respondent provide within 14 days thereafter a submission in answer of no more than 5 pages; and (c) the appellants to file a submission in reply of no more than 3 pages within 7 days thereafter, with the dispute to be resolved by the Court on the papers. 7. Order 3 above be stayed for a period of 14 days or until further order. 8. The respondent is to file and serve any application to vary Order 7 within 12 days. 2 By an interlocutory application dated 28 February 2024, the respondent, Henkel Australia Pty Ltd, sought the following variation to order 3 of the Orders: The respondent be restrained, whether by itself, its directors, employees or agents, from offering for sale or selling its Somat Excellence products under or by reference to the following device unless the formulations of the products change such that the whole capsules, including their contents, are biodegradable: 3 On 1 March 2024, the Full Court granted Henkel's application and made an order to that effect. 4 In accordance with order 5 of the Orders, the parties have agreed the form of some further orders. We accept that those orders are appropriate and make them here. 5 Henkel additionally seeks to vary order 4 of the Orders, relating to the costs of the appeal. It asks that it be revisited and amended so that it is required to pay 50% (rather than 80%) of the costs of the appeal. That application exceeds the leave given in order 6 of the Orders. Nonetheless, we consider it briefly here, adopting the definitions used in the judgment, and for the reasons set out below reject the application. 6 Henkel's application is made on the basis that RB commenced the proceedings against Henkel and failed at trial, and on appeal, to establish trade mark infringement. The validity challenge made by Henkel succeeded at trial, but failed on appeal, however, that challenge was only advanced because it was part of Henkel's defence to RB's infringement case. Accordingly, as a matter of commercial practicality, the case advanced by RB failed because the impugned products remain on the shelves, having not been found to infringe. Furthermore, Henkel submits that a number of RB's arguments on appeal failed. 7 However, the fact is that RB was successful in establishing appealable error in the primary judge's conclusion that the 914 mark and the 311 mark should each be removed from the Trade Marks Register. That was, substantially, the contest on appeal. RB also succeeded on appeal in relation to the ACL Biodegradability claim. Whilst RB did not succeed in all of its arguments, including in relation to infringement, it remains our view that an appropriate apportionment of costs is that Henkel pay 80% of the costs of the appeal. 8 Accordingly, Henkel's application to vary order 4 of the Orders must be dismissed with costs. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Nicholas, Burley and Hespe. Associate: Dated: 11 July 2024