IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VG No 518 of 1995 BETWEEN: ANDREW TALARICO Applicant -and- JAMES HENRY ARTHUR Respondent Coram: Olney J Place: Melbourne Date: 7 June 1995 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The applicant's application for interlocutory injunctive relief be dismissed. 2. The respondent file and serve a defence on or before 21 June 1995. 3. The respondent file and serve a request for further and better particulars of the statement of claim on or before 21 June 1995. 4. The applicant file and serve any reply on or before 5 July 1995. 5. The applicant file and serve his response to any request for further and better particulars of the statement of claim on or before 5 July 1995. 6. The applicant file and serve any request for further and better particulars of the defence on or before 19 July 1995. 7. The respondent file and serve his response to any request for further and better particulars of the defence on or before 19 July 1995. 8. The directions hearing be adjourned to 14 August 1995 (intellectual property list). 9. Each parties costs of this day and of the application be reserved. 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 GENERAL DIVISION VG No 518 of 1995 BETWEEN: ANDREW TALARICO Applicant -and- JAMES HENRY ARTHUR Respondent Coram: Olney J Place: Melbourne Date: 7 June 1995 REASONS FOR JUDGMENT The applicant seeks an injunction to restrain the respondent, pending the hearing and determination of this proceeding, from manufacturing and selling a product known as a hayfeeder which the respondent manufactures and sells under the name of "Affordable Hay Feeder" and to restrain him from manufacturing and selling upright posts of a particular design which form part of such hayfeeders. The applicant claims that by manufacturing and selling the "Affordable Hay Feeder" and the upright posts, the respondent has infringed the applicant's rights under Australian Registered Designs Nos 114675 and 114765. The application for Australian Registered Design No 114675 was lodged on 4 October 1991 and the design was registered on 28 July 1992. The certificate of registration describes the article in respect of which the design is registered as an animal feeder and monopoly is claimed in the shape and/or configuration of an animal feeder as illustrated in representations which accompany the certificate of registration. The application for Australian Registered Design No 114765 was lodged on 4 October 1991 and the design was registered on 5 August 1992. The certificate of registration describes the article in respect of which the design is registered as an upright post for an animal feeder and monopoly is claimed in the shape and configuration of an out-turned inverted-U post for use in an animal feeder as shown in representations which accompany the certificate of registration. Since about 1991 the applicant has manufactured and sold animal feeders made in accordance with registered designs Nos 114675 and 114765 under the name of "The Ultimate Animal Feeder". A hayfeeder is a device for containing the area in which dry feed for stock is placed. Its purpose is to minimise hay loss due to wind or cattle trampling. "The Ultimate Hay Feeder" has an octagonal base with enclosed raised sides for containing feed placed within the base. The height of the base is such that cattle, standing outside the base, can eat the feed placed within the base. Two inverted-U shaped upright posts are attached to each of the eight side panels of the base. They are spaced so as to permit feeding stock to have access to the feed placed within the confines of the base and to define the number of cattle which can feed at any one time. The upright posts used in "The Ultimate Hay Feeder" are bent outwards, a design which is said by the applicant to suit the feeding motion of cattle so that when leaving the feeder they can step back and lift their heads with ease in one smooth motion. The applicant's patent attorney has described the shape of the upright posts as having an "elegant outward curvature", which he says is "the essential feature of the applicant's design registration". In about May 1993 the applicant saw in an advertisement in "The Shepparton News" a photograph of a product which seemed to closely resemble his registered designs. His enquiries revealed that the advertised product had been manufactured, and was being sold, by the respondent under the name of "Affordable Hay Feeders". The applicant threatened legal action and after some exchanges between the parties and their representatives the respondent wrote to the applicant by letter dated 19 July 1993 in the following terms: 19 July 1993 Mr Andrew Talarico Hooper Road TATURA VIC 3616 Dear Mr Talarico, Australian Design Registration Nos 114765 and 114675 in respect of "Upright Post for an Animal Feeder" and "An Animal Feeder" in the name of ANDREW TALARICO. I refer to correspondence and telephone calls with your patent attorneys, Phillips Ormonde and Fitzpatrick, and your solicitor, Mr DJ Calabro. Mr Calabro's statement of claim refers to registered design no. 114675 for an octagonal feeder. Since any animal feeders manufactured me(sic) are round and contain different numbers of uprights, I cannot see the relevance of this registered design. Turning to registered design no 114765, I deny that I have infringed this design. Any uprights manufactured by me are splayed in nature, and are constructed of material of a generally square cross-section. Notwithstanding my comments above, I am prepared to give you the following information: 1. The total number of animal feeders incorporating my own design manufactured by me was nine. 2. The total number sold by me was six. 3. Manufacture and sale commenced at the beginning of May 1993, and stopped prior to 16 June 1993 on which date I communicated this information to Phillips Ormonde and Fitzpatrick. No advertisements have been placed for animal feeders containing my design since that date. I undertake that I will not now nor in the future manufacture any uprights according to registered design no. 114765. I further undertake that, while denying infringement as set out above, I will not manufacture uprights according to my design as discussed above. On 20 July 1993 the parties executed a document in the following form: THIS DEED OF SETTLEMENT is made the 20th day of July 1993. BETWEEN: MR ANDREW TALARICO of Hooper Road, Tatura, Victoria 3616 ("the first party") of the one part. AND MR JAMES HENRY ARTHUR of RMB 4760 "Pine Lodge" Shepparton, Victoria 3630 ("the second part") of the other part. WHEREAS: A. The first party is the owner of Australian Registered Design Number 114675 in respect of an animal feeder lodged on 4 October 1991. B. The first party is the owner of Australian Registered Design Number 114765 in respect of an upright post for an animal feeder lodged on 4 October 1991. C. The first party manufactures or causes to be manufactured and uses in the course of its business its design applied to an animal feeder in Australia. D. The first party manufactures or causes to be manufactured and uses in the course of its business its design applied to an upright post for animal feeder in Australia. E. The first party maintains that the second party is using the first party's registered design with respect to an animal feeder and upright post for an animal feeder constituting a breach of the provisions of the Design Act 1906 (Commonwealth), an actionable passing off at common law and a breach of the provisions of the Fair Trading Act 1985 (Victoria). F. The second party denies all the allegations made by the first party in respect of the articles for which the design is registered. G. To avoid the costs, delays and uncertainty of litigation, the parties have agreed to settle this matter on the terms and conditions hereinafter set out. NOW IN CONSIDERATION of the mutual promises, covenants and conditions, hereinafter contained it is hereby agreed: 1. Immediately upon execution of this Deed, the second party undertakes that it (sic) will not manufacture, sell or offer to sell animal feeders and upright posts for animal feeders incorporating the designs owned by the first party. 2. That both parties agree that the second party has prior to the date of this Deed, manufactured or caused to be manufactured a total of nine (9) animal feeders and sold a total of six (6) animal feeders. 3. That the first party from the date of this Deed, will thereinafter release and forever discharge the second party from all claims whatsoever relating to and arising out of the past manufacture, offers to sell and sales by the second party. 4. Each party shall pay its own costs of and incidental to the preparation of the Deed of Settlement and in respect of all other costs incurred in this matter to date. In May 1995 the applicant became aware that a hayfeeder, which he thought was a copy of his registered designs, was available for sale at several commercial establishments in the Shepparton region. His enquiries revealed that these hayfeeders were manufactured by the respondent and were being offered for sale on consignment on his behalf. In an affidavit filed in support of the application, John Charles Gibbs (a patent attorney) identified 6 differences which he was able to discern between the upright posts used in the respondent's hayfeeder and that of the applicant, namely: (1) the respondent's upright posts appear to be made from a metal tubing which has a square cross-section rather than a circular cross section. (2) the respondent's upright posts appear to be made from a slightly thinner gauge of piping. (3) the outward bend on the respondent's upright posts appears to occur at a slightly lower position on the posts. (4) the legs on the respondent's upright posts are slightly splayed. (5) the respondent's upright posts have a slight inwards bend towards the top. (6) the respondent's posts have indentations where they are bent. The owner of a registered design has a monopoly in that design (Designs Act 1906, s 25). Section 30 of the Designs Act provides: 30. (1) A person shall be deemed to infringe the monopoly in a registered design if he, without the licence or authority of the owner of the design: (a) applies the design or any fraudulent or obvious imitation of it to any article in respect of which the design is registered; (b) ... (c) sells, or offers or keeps for sale, or hires, or offers or keeps for hire, any article: (i) to which the design or any fraudulent or obvious imitation of it has been applied in infringement of the monopoly in the design; or (ii) ... (2) If any person infringes the monopoly in a registered design, the owner of the design may bring an action or proceeding against him for infringement of the monopoly in the design. In a proceeding for the infringement of the monopoly in a registered design the Court may, inter alia, grant an injunction and, at the option of the plaintiff, order either damages or an account of profits (Designs Act s 32B(1)). Section 4(1) of the Designs Act defines "design" to mean: ... features of shape, configuration, pattern or ornamentation applicable to an article, being features that, in the finished article, can be judged by the eye, but does not include a method or principle of construction; In Malleys Limited v J.W. Tomlin Pty Ltd (1961-2) 35 ALJR 352, in an attack on the validity of a registered design, it was argued that due to the lack of precision in the description or representation, the design was too vague to qualify for registration. At pp 252-3 of the report the High Court (Taylor, Menzies and Owen JJ) said: The same contention was put somewhat differently in the form of an argument that any person inspecting the certificate of registration, although shown the features of the design, could not know the extent to which a different arrangement of those features would be protected by the registration of the design. The answer to these contentions lies, we think, in the recognition of what is essential to distinguish a design from a mere shape. It is, of course, true that every shape is not a design; there must be "sufficient individuality of appearance" to distinguish it from what Russell-Clarke in Ch. 2 of his book Copyright in Industrial Designs aptly describes as "the fundamental form" of an article. Furthermore, the existence of that sort of individuality is to be determined by the eye and not by measuring dimensions. It follows that a design need not have the precision of a working drawing; it concerns the shape or configuration of an article, as it appears to the eye. If a design applied by another has the features that are characteristic of the registered design and are so arranged that to the eye the resulting shape is substantially the same, there is infringement, whereas if the same features are arranged so that to the eye the resulting shape is different, there is, in the absence of fraudulent imitation, no infringement. In deciding one way or the other the proportions of common features may be of the utmost importance, but acceptance of this does not involve deciding that to be registrable the representation of the design must be represented so that its proportions can be accurately calculated; it is sufficient if it shows a shape with enough individuality of appearance to distinguish it and to enable it to be determined by visual comparison whether the shape of an article is either the same as, or nothing more than an imitation of, that disclosed by the registered design. If, for instance, a crescent were a new or original design for a light reflector, it could be registered although the representation depicted did not specify the degree of the curve, and if the question ever arose whether a reflector in the shape of a crescent but with a curve that by measurement was not the same as that represented would constitute an infringement, a comparison of the sort already indicated would then have to be made. The following passage from p 354 of the report has since been frequently quoted by courts of various jurisdictions and approved by the High Court (Wilson, Brennan, Deane, Dawson and Gaudron JJ) in Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd 9 IPR 353: Turning to s. 30 it is apparent that there is infringement in any one of three cases - that is, where the design which has been applied is:- (i) the registered design (ii) an obvious imitation of the registered design (i.e., not the same but a copy apparent to the eye notwithstanding slight differences) and (iii) a fraudulent imitation (i.e., a copy with differences which are both apparent and not so slight as to be insubstantial but which have been made merely to disguise the copying). Visual comparison will establish (i) or (ii) but a finding of fraudulent imitation must require something more because in such a case visual comparison is not of itself sufficient to establish imitation; otherwise it would be an obvious imitation. In Wanem Pty Ltd v Tekiela 19 IPR 435 Gummow J expressed the established principles for determining a claim for infringement of a registered design at p 440: In Dart Industries Inc v Decor Corp Pty Ltd (IPR at 308-12; AIPC at 38,976-38,979) Lockhart J (in a judgment with which Jenkinson J and I agreed) dealt with the authorities which establish that (i) first impressions are important in determining whether there is an infringement of a design, (ii) an obvious imitation is one which is not the same as the registered design but is a copy apparent to the eye notwithstanding slight differences, (iii) the question must be looked at as one of substance and by examining the essential features of the design (iv) a closer correspondence between the registered design and the alleged infringing design is necessary to satisfy the test of obvious imitation than that of fraudulent imitation, (v) precise mathematical comparisons or matters of measurements or ratios, which form no part of the mental picture which the eye conveys to the brain of shape or configuration suggested by the design, are not to be applied as the test of infringement; appearance to the eye is the critical issue, and (vi) questions of infringement must not be determined by a narrow or overly technical approach in comparison between the design and the alleged infringement, lest the registration be sapped of its worth to the registered owner. The authorities are replete with statements of principle to the same effect. The first of the 3 alternatives referred to in s 30(1)(a) of the Designs Act is clearly not relevant in this case. The applicant does not assert that the respondent has applied the registered design to his product. Indeed, the applicant's evidence identifies 6 specific differences between the registered design and the impugned product. The second question to consider is whether the respondent's product is an obvious imitation of the registered design. The test is not whether the two articles serve the same or a similar function but rather whether the impression made upon my eye by each of the registered design and the impugned article is such as to allow me to regard the latter as an imitation of the former. It is obvious to the eye that registered design 114675 relates to an article which is octagonal in shape and has solid sides whereas the respondent's product is round with open mesh sides. The overall impression is that the base of the applicant's product is solid and angular whereas the respondent's appears to be much lighter in weight and to be open (as distinct from closed in) and round. The differences are too great to permit me to say that the respondent's product is an imitation of the registered design. The main debate between the parties has been in relation to the design of the upright post about which 3 things can be said: first, the applicant's post has parallel sides whilst the respondent's are splayed outwards; second, the top portion of the applicant's post has an "elegant outward curvature" whereas the respondent's post has two angular (as distinct from curved) bends, the first outwards and the second (near the top of the post) inwards, so as to give the impression of a "dog-leg"; third, the applicant's post is made of circular piping whereas the respondent's has a square cross-section. I have only had the opportunity of seeing photographs of the two products, but as neither party has suggested that I view the actual products, I assume that both are content that I should judge the case on the basis of the visual impression created by the photographs. Viewed from the side, the general visual impression created by the upright post used in the respondent's product is that it is angular and of light weight construction whereas that in the applicant's product has the appearance of being curved and solid. Viewed straight on, the distinctive shape caused by the splaying of the legs on the respondent's product is immediately obvious, and again, the general appearance is of something less substantial than the applicant's post. The impression made upon my eye is that the respondent's post is not an obvious imitation of registered design 114765. I turn now to consider the matter of fraudulent imitation. The question in issue is whether the differences to which reference has been made above have been made merely to disguise the alleged copying of the registered design by the respondent. The use by the respondent of lighter weight tubing of square cross section is something that distinguishes his post from the applicant's. The evidence is that the square tubing is considerably cheaper than the circular tubing used by the applicant. The respondent has used a different material for sound commercial reasons and not so as to disguise the copying of the registered design. The applicant's evidence refers to the elegant outward curvature of his post as the essential feature of the registered design. It is said by the applicant that his post has been specially designed to the feeding motion of cattle so that when leaving the feeder they can step back and lift their heads with ease in one smooth motion. He further says of the respondent's post that it is dangerous to have a dog-leg bend because cattle put their heads down between the uprights and they cannot then move out in one continuous action but halfway through withdrawing they must lift their heads again to clear the bends. The respondent on the other hand says that he designed the dog-leg upright not only to increase the strength of the structure of the upright (which he says he was able to ascertain on the basis of his experience as a structural engineer) but also the design involves the upright projecting less from the side of the base than is the case with the applicant's design thus eliminating the need for the animal to step back when leaving the feeder, which, he says, he perceived might be a problem with the applicant's design. The respondent says that he designed the upright post of his feeder with splayed legs in preference to parallel legs to minimise the risk of injury to cattle caused by getting their heads stuck between the straight sides of the uprights. The applicant on the other hand says that the splaying of the legs makes little difference to the width at the working point of the post which is at the top of the base. On balance I am satisfied that the differences introduced by the respondent in the design of the upright post were adopted for economic and functional reasons and not to disguise any copying of the applicant's design. In my opinion, on the evidence adduced at this stage of the proceeding, there is no serious question to be tried and accordingly injunctive relief will be refused. In reaching this conclusion I have not ignored the written undertaking given by the respondent on 19 July 1993 and the terms of settlement executed by the parties on 20 July 1993. Both documents relate to the future manufacture of uprights by the applicant in accordance with the design then being used by him. Whilst he denied that his design infringed registered design 114765 he agreed not to continue to manufacture uprights in accordance with such design. There is very little evidence as to the appearance of the design used by the respondent in 1993, but what evidence there is (notably the photograph published in "The Shepparton News") suggests that the appearance of the upright post now used by the respondent is readily distinguishable from the earlier design used by him. Although it is unnecessary to consider the balance of convenience, I would observe that on the evidence available to the Court, the respondent's activity in the hayfeeder market is minimal compared with that of the applicant and does not appear to constitute any real threat to the continued viability of the applicant. In the circumstances I would have thought, had it become necessary to decide the question, that the balance of convenience would not be in favour of granting injunctive relief, the respondent having offered to keep and maintain full accounts concerning sales of his feeders. The application for interlocutory relief will be dismissed. I certify that this and the preceding 12 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney Associate: Dated: Heard: 25 May 1995 Place: Melbourne Judgment: 7 June 1995 Appearances: Ms E.A. Strong (instructed by D.J. Calabro) appeared for the applicant. Ms S. Thompson (instructed by James Murray & Co) appeared for the respondent.