, '| FOR LIMITED DISTRIBUTION - NOT SUITABLE FOR REPORTING J"'DGMENT No. RES CATCHWORDS DESIGN - alleged infringement of applicant's registered design - injunction restraining sale of article ~ application for discharge - effect of subsequent registration of design of article alleged to be substantially identical - factors weighing on exercise of Court's discretion to discharge - Ste aT NBL ewe fbb o* Bets bar S87 whether registration renders one design incapable of infringing another registered design within s.30 Designs Act . - whether a serious question to be tried remains. ss 17, 30, 31 Designs Act 1906 TURBO TEK INC. and AUTOPACE PTY. LTD. v TARGET AUSTRALIA PTY. LTD. VG 226 of 1987 Ryan J. 1 June 1988 , Melbourne . IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No VG 226 of 1987 GENERAL DIVISION BETWEEN: TURBO TEK INC. and AUTOPACE PTY. LTD. (Applicants) AND; TARGET AUSTRALIA PTY. LTD. (Respondent ) Coram: Ryan J. Date: 1 June 1988 Place: Melbourne EX TEMPORE REASONS FOR JUDGMENT This is the return of a motion on notice dated 27 May 1988 by which the respondent to these proceedings, Target Australia Pty. Ltd. ("Target") seeks, amongst other things, an order that an interlocutory injunction which I granted on 25 August 1987 at the instance of the applicants, Turbo Tek Inc. and Autopace Pty. Ltd. ("Turbo Tek" and "Autopace"), be discharged. By that injunction Target was restrained from:- "advertising, offering for sale, exposing for sale, displaying, selling or supplying any spray washer device the same as or substantially identical with the device depicted in Schedule 3 of the application herein, other than the spray washer device identified by the name Turbo-Wash." PTC erm me een ete ne in tne + * "Oe acpi 220 8 4 BRD ~ eer WR EARE Eee ye SON eer reer ten a tam An Although Target did not consent to the grant of that injunction, it accepted that its issue would be inevitable if I adhered to the reasons for judgment published on 17 August 1987 when I granted another interlocutory injunction in proceedings VG 192 of 1987, also at the instance of Turbo Tek and Autopace, restraining Sperling Enterprises Pty. Ltd. and Ewan Sperling from:- "advertising, displaying, exposing or otherwise offering for sale, selling or supplying any spray washer device the same as or _ substantially identical with" a device alleged to infringe the design registered under the Designs Act 1906 ("the Act") No 96482 of which Turbo Tek is the proprietor. It has been accepted that the device which Target has been restrained by my order of 25 August 1987 from marketing is substantially identical with the allegedly infringing device with which the application against Mr Sperling and his company is concerned. The ground on which Target seeks a discharge of the injunction against it is that on 21 April 1988 a certificate of registration issued under the Act 'in respect of a design which has been accepted as that applied to the device which Turbo Tek has alleged in both VG 192 of 1987 and the present proceedings infringes its registered design No 96482. OTR Aare 2 A TS tee oA er ate MRE ZS AG RRR. «tpn The certificate which was issued on 21 April 1988 shows the name of the owner as Hung Mei Brush Company Limited ("Hung Mei"). The article in respect of which the design is registered is described as a "water injecting gun". The statement of monopoly is recorded as "monopoly is claimed in the shape and configuration of a water injecting gun as illustrated in the accompanying representations". After the words "statement of novelty" appears the word "nil", and the date on which application for registration of the design was lodged is noted as having been 29 April 1987. It is common ground that the Court has power to discharge an interlocutory injunction before the hearing and determination of an action in which it is granted, and that it should exercise that power if changed circumstances render unjust the continued enforcement of the injunction. See, for example, Adam P. Brown Male Fashions Pty. Ltd. v Philip Morris Inc. (1981) 148 CLR 170 at 178 and the authorities there cited. Mr Roger Gillard Q.C., who appeared with Mr Rose for Target, contended that the registration of Hung Mei's design by operation of various sections of the Act had the consequence that the application of that design to articles is incapable of fraudulently or obviously imitating Turbo Tek's registered design so as to constitute an infringement of it under s.30 of the Act as long as Hung Mei's design remains on the register. cee evn mcinleae In my view no such conclusive effect is given to registration by the Act. It is true that the Act contemplates that only a new or original design which does not differ only in immaterial details or in features commonly used in the relevant trade from a prior registered design and which is not an obvious adaptation of a prior registered design shall achieve registration and thereby confer a monopoly in it on its owner. I refer to ss.17 and 31. However, s.18 makes clear that a registered design is not totally immune from invalidity as long as it remains on the register. That section provides:-— "An application for registration of a design shall not be refused, and a registered design is not invalid, by reason only that the design consists of, or includes, features of shape or configuration that serve, or serve only, a functional purpose." That recognition that a registered design may be invalid in certain circumstances is consistent with s.26 which stipulates in respect of certificates of registration that:- "(1) If the Registrar decides to register a design, he shall enter in the register the prescribed particulars relating to the design, and shall issue to the applicant a certificate of registration in the prescribed form. (3) The certificate of registration shall be rima facie evidence of the facts stated therein, and of the validity of the registration." De ee nr In my view, the fact that a certificate of registration is expressed to be only prima facie evidence of the validity of the registration precludes the conclusive effect of a certificate for which Mr Gillard, as I understood hin, contended. I am reinforced in that view by the consideration that the consequence of Mr Gillard's contention, as he appeared to concede, at least yesterday, is that however fraudulently or erroneously the issue of a certificate may have been procured, even the registered proprietor of a prior registered design which the second design blatantly infringes can obtain no relief until after the hearing and determination of an expungment application under s.39(1)(b). That consequence is so drastic that a construction which entails it should only be adopted if the language of the Act is intractable. For the reasons which I have indicated, I am not persuaded that the language of this Act is to be so regarded. It thus becomes necessary to consider the alternative contention advanced on behalf of Target, which is that the supervening registration of the Hung Mei design, with its rebuttable presumption of validity, has negatived the existence of a serious question to be tried, which was the foundation of my earlier decisions to grant interlocutory injunctions against Mr Sperling and his company, and against Target. ape ee eterna a ~~ PA as MORE MEE or However, not every new fact which, if known at the time, would have been relevant to the exercise of the Court's discretion to grant or refuse an interlocutory injunction will compel a fresh exercise of that discretion. In this regard, I agree with respect with what was said by Fitzgerald J in APM Investments Pty Ltd v Trade Practices Commission and Others (1983) 49 ALR 475, where his Honour observed at 510:- "Order 35, r 7(2)(c), now permits this court in its original jurisdiction to vary or set aside an interlocutory order 'if it thinks fit'. It is unnecessary to consider whether that rule effects any significant departure from the previous position. I doubt whether it does. The discretion vested by the rule in the court plainly cannot be exercised arbitrarily. Without seeking to express an exhaustive statement of the circumstances which might be appropriate for consideration in the exercise of the discretion, it seems safe to assume that they will generally be those described in Adam P Brown Male Fashions Fty Ltd v Philip Morris Inc (1981) 55 ALUR 546. Whether or not 'new facts' in the sense there referred to are always necessary under O 35, r 7(2)(c), the parties seeking the discharge or modification of an interlocutory order will have the onus of establishing that enforcement of the order is unjust. In the absence of 'new facts', it will not ordinarily be unjust to insist that a party abides by an order made or an undertaking given. Even where 'new facts' can be pointed to, justice may require that the order or undertaking 'be adhered to; for example, if any alternative course would be productive of injustice to the other party. In the event that, whichever course is followed, there will be detriment to one party or another, the court's task will not involve a ° mere reassessment of the balance of convenience. The onus will remain on the party seeking to have the existing order set aside or varied." It is undesirable to attempt exhaustively to catalogue the types of new facts which may entitle a respondent to be relieved from the operation of an interlocutory injunction. Some of them are indicated in the treatment of injunctions in Volume 24 of Halsbury's Laws of England, Fourth Edition, paragraph 1112. It is sufficient for present purposes to indicate my view that Hung Mei's application for registration eof the design of which it became registered, and the subsequent issue of a certificate to it, does no more than provide an additional element of the factual context in which the serious question that I have identified in my earlier reasons for judgment must be tried when the substantive applications come on for hearing. Unlike facts demonstrating suppression or misrepresentation of some matter fundamental to the finding that there was a serious question, the new fact of supervening registration, allowing it the prima_ facie validity conferred by s.26, does not, I consider, negate the existence of the serious question which I previously found. Nor has Target demonstrated that there will be injustice to it if the interlocutory injunction is allowed to continue without reconsideration at this stage of the existence of that serious question. For these reasons, the motion is refused with costs. I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Ryan. FO. Vanarve Associate Dated: / Ane 19 ¢P STINTS EN Te - 7