FEDERAL COURT OF AUSTRALIA Louis Vuitton Malletier S A v D & L Design Pty Ltd [2003] FCA 475 TRADE MARKS – application for summary judgment – infringement action pursuant to s 120 Trade Marks Act 1995 (Cth) – infringing conduct admitted –– respondent companies offering for sale and selling handbags bearing marks which were substantially identical with, or deceptively similar to, the applicants' registered trade marks – whether declarations and injunctions should be granted. TRADE PRACTICES – misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) – false representations in contravention of s 53(c) of the Trade Practices Act 1974 (Cth) – contravening conduct admitted – respondent companies offering for sale and selling handbags bearing marks or styles which were substantially identical with, or deceptively similar to, the applicants' registered trade marks and unregistered marks or styles with which the applicants had come to be associated. TORT – passing off – contravening conduct admitted – respondent companies offering for sale and selling handbags bearing marks or styles which were substantially identical with, or deceptively similar to, the applicants' registered trade marks and unregistered marks or styles with which the applicants had come to be associated – no direct evidence of loss or damage suffered by applicants but probability that loss and damage occurred. Trade Marks Act 1995 (Cth): s 120 Trade Practices Act 1974 (Cth): ss 52 and 53(c) Pinky's Pizza Ribs on the Run Pty Ltd v Pinky's Seymour Pizza & Pasta Pty Ltd [1997] ATPR 41‑600, referred to Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177, referred to LOUIS VUITTON MALLETIER S A & ORS v D & L DESIGN PTY LTD V 522 of 2002 GOLDBERG J 16 MAY 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V522 of 2002 BETWEEN: LOUIS VUITTON MALLETIER S A First Applicant CHRISTIAN DIOR COUTURE Second Applicant FENDI ADELE SRL Third Applicant AND: D & L DESIGN PTY LTD First Respondent RED BERRY ENTERPRISE PTY LTD Second Respondent HOT CHILLI GROUP PTY LTD Third Respondent JUDGE: GOLDBERG DATE OF ORDER: 28 MAY 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. There be summary judgment for the applicants pursuant to O 20 r 1 of the Federal Court Rules in the terms of the declarations and orders hereinafter set out. THE COURT DECLARES THAT: 2. The first and third respondents have infringed Australian Registered Trade Mark No 729025 ("the Damier trade mark"), have engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the TPA") and made misrepresentations in contravention of s 53(c) of the TPA by the use of the Damier trade mark and have passed off handbags bearing the Damier trade mark as and for handbags manufactured by or under the authority of the first applicant. 3. The first and third respondents have engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by offering for sale and selling handbags displaying what is described in par 8 of the statement of claim filed herein on 13 August 2002 ("the statement of claim") as the first applicant's "Damier Style" of canvas, a representation of which is Annexure "A" to this order and have passed off such handbags as and for handbags manufactured by or under the authority of the first applicant. 4. The first, second and third respondents have engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by offering for sale and selling handbags displaying what is described in par 9 of the statement of claim as the first applicant's "Epi Style" of leather, a representation of which is Annexure "B" to this order and have passed off such handbags as and for handbags manufactured by or under the authority of the first applicant. 5. The first and second respondents have engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by offering for sale and selling handbags bearing what is described in par 10 of the statement of claim as the first applicant's "Monogram Vernis Fleurs Style", a representation of which is Annexure "C" to this order and have passed off such handbags as and for handbags manufactured by or under the authority of the first applicant. 6. The third respondent has infringed Australian Registered Trade Marks Nos 208745, 336090, 641876 and 620002 ("the Christian Dior trade marks"), has engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by its use of the Christian Dior trade marks and has passed off handbags bearing one or more of the Christian Dior trade marks as and for handbags manufactured by or under the authority of the second applicant. 7. The first and second respondents have engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by offering for sale and selling what is described in par 32 of the statement of claim as the second applicant's "Saddle Style" handbag, a representation of which is Annexure "D" to this order and have passed off such handbags as and for handbags manufactured by or under the authority of the second applicant. 8. The third respondent has infringed Australian Registered Trade Marks Nos 303037 and 453492 ("the Fendi trade marks"), has engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by its use of the Fendi trade marks and has passed off handbags bearing one or more of the Fendi trade marks as and for handbags manufactured by or under the authority of the third applicant. 9. The third respondent has engaged in misleading and deceptive conduct in contravention of s 52 of the TPA and made misrepresentations in contravention of s 53(c) of the TPA by offering for sale and selling handbags bearing what is described in par 51 of the statement of claim as the third applicant's "Fendi Style", a representation of which is Annexure "E" to this order and has passed off such handbags as and for handbags manufactured by or under the authority of the third applicant. THE COURT ORDERS THAT: In relation to the first applicant's claims: 10. The first and third respondents each be permanently restrained, whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from infringing Australian Registered Trade Mark No 729025. 11. The first and third respondents be permanently restrained whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from using or applying the Damier Style of canvas on handbags without the licence or authority of the first applicant. 12. The first, second and third respondents each be permanently restrained whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from using or applying the Epi Style of leather on handbags without the licence or authority of the first applicant. 13. The first and second respondents be permanently restrained whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from using or applying the Monogram Vernis Fleurs Style on handbags without the licence or authority of the first applicant. 14. The first and third respondents, within 21 days of the date of this order, deliver up on oath to the first applicant, or its nominated agent, for destruction under the supervision of the first applicant or its nominated agent: (a) all handbags in the possession, power, custody or control of the first and third respondents, or their directors, officers, employees or agents, to which the Damier trade mark has been applied without the licence or authority of the first applicant; (b) all handbags in the possession, power, custody or control of any of the first and third respondents which incorporate the Damier Style, which has been applied without the licence or authority of the first applicant; (c) all catalogues, price lists, brochures and other promotional or advertising documents and materials in the possession, power, custody or control of any of the first and third respondents, or their directors, officers, employees or agents, displaying handbags to which the Damier trade mark or Damier Style have been applied without the licence or authority of the first applicant. 15. The first, second and third respondents, within 21 days of the date of this order, each deliver up on oath to the first applicant, or its nominated agent, for destruction under the supervision of the first applicant or its nominated agent: (a) all handbags in the possession, power, custody or control of any of the first, second or third respondents which incorporate the Epi Style of leather, which has been applied without the licence or authority of the first applicant; (b) all catalogues, price lists, brochures and other promotional or advertising documents and materials in the possession, power, custody or control of any of the first, second or third respondents, or their directors, officers, employees or agents, displaying handbags to which the Epi Style has been applied without the licence or authority of the first applicant. 16. The first and second respondents, within 21 days of the date of this order, deliver up on oath to the first applicant, or its nominated agent, for destruction under the supervision of the first applicant or its nominated agent: (a) all handbags in the possession, power, custody or control of the first and second respondents, or their directors, officers, employees or agents, to which the Monogram Vernis Fleurs Style has been applied without the licence or authority of the first applicant; (b) all catalogues, price lists, brochures and other promotional or advertising documents and materials in the possession, power, custody or control of any of the first and second respondents, or their directors, officers, employees or agents, displaying handbags to which the Monogram Vernis Fleurs Style has been applied without the licence or authority of the first applicant. 17. The first and third respondents each pay the first applicant damages for infringement of the Damier trade mark and for passing off in respect thereof, to be assessed together with interest thereon, or, at the option of the first applicant on a date to be fixed, the first and third respondents account for the profits made by them by the said infringements and passing off and pay to the first applicant the amount found to be due on the taking of such account, together with interest thereon. 18. The first and third respondents each pay to the first applicant damages in respect of their use of the Damier Style of canvas in contravention of s 52 and s 53(c) of the TPA and in passing off, or, at the option of the first applicant on a date to be fixed, the first and third respondents account for the profits made by them by the said passing off and pay to the first applicant the amount found to be due on the taking of such account together with interest thereon. 19. The first, second and third respondents each pay to the first applicant damages in respect of their use of the Epi Style of leather in contravention of s 52 and s 53(c) of the TPA and in passing off, or, at the option of the first applicant on a date to be fixed, the first, second and third respondents account for the profits made by them by the said passing off and pay to the first applicant the amount found to be due on the taking of such account together with interest thereon. 20. The first and second respondents each pay to the first applicant damages in respect of their use of the Monogram Vernis Fleurs Style in contravention of s 52 and s 53(c) of the TPA and in passing off or, at the option of the first applicant on a date to be fixed, the first and second respondents account for the profits made by them by the said passing off and pay to the first applicant the amount found to be due on the taking of such account together with interest thereon. 21. The first and third respondents each provide discovery, verified by affidavit, to the first applicant within 28 days of the date of this order in respect of all documents relating to the purchase, importation, acquisition (on consignment or otherwise) or sale, by the first and third respondents or their directors, employees, servants or agents, of any handbags: (a) to which the Damier trade mark has been applied; or (b) which use or incorporate the Damier Style of canvas, without the licence or authority of the first applicant. 22. The first, second and third respondents each provide discovery, verified by affidavit, to the first applicant within 28 days of the date of this order in respect of all documents relating to the purchase, importation, acquisition (on consignment or otherwise) or sale, by the first, second and third respondents or their directors, employees, servants or agents, of any handbags which use or incorporate the Epi Style of leather without the licence or authority of the first applicant. 23. The first and second respondents each provide discovery, verified by affidavit, to the first applicant within 28 days of the date of this order in respect of all documents relating to the purchase, importation, acquisition (on consignment or otherwise) or sale, by the first and second respondents or their directors, employees, servants or agents, of any handbags which use or incorporate the Monogram Vernis Fleurs Style without the licence or authority of the first applicant. In relation to the second applicant's claims: 24. The third respondent be permanently restrained whether by itself, its directors, officers, employees or agents or otherwise howsoever, from infringing Australian Registered Trade Mark Nos 208745, 336090, 641876 and 620002. 25. The first and second respondents each be permanently restrained whether by themselves, their directors, officers, employees or agents or otherwise howsoever, from using or applying the Saddle Style on handbags without the licence or authority of the second applicant. 26. The third respondent, within 21 days of the date of this order, deliver up on oath to the second applicant or its nominated agent for destruction under the supervision of the second applicant or its nominated agent: (a) all handbags in the possession, power, custody or control of the third respondent, or its directors, officers, employees or agents, to which any of the Christian Dior trade marks have been applied without the licence or authority of the second applicant; (b) all catalogues, price lists, brochures and other promotional or advertising documents and materials in the possession, power, custody or control of the third respondent, or its directors, officers, employees or agents, bearing any of the Christian Dior trade marks without the licence or authority of the second applicant. 27. The first and second respondents, within 21 days of the date of this order, deliver up on oath to the second applicant or its nominated agent for destruction under the supervision of the second applicant or its nominated agent: (a) all handbags in the possession, power, custody or control of the first and second respondents, or their directors, officers, employees or agents, which incorporate the Saddle Style which has been applied without the licence or authority of the second applicant; (b) all catalogues, price lists, brochures and other documents and materials in the possession, power, custody or control of the third respondent, or its directors, officers, employees or agents, displaying the Saddle Style without the licence or authority of the second applicant. 28. The third respondent pay the second applicant damages for infringement of the Christian Dior trade marks and for passing off in respect thereof, to be assessed together with interest thereon, or, at the option of the second applicant on a date to be fixed, the third respondent account for the profits made by it by the said infringements and passing off and pay to the second applicant the amount found to be due on the taking of such account, together with interest thereon. 29. The first and second respondents each pay to the second applicant damages in respect of their use of the Saddle Style in contravention of s 52 and s 53(c) of the TPA and in passing off, or, at the option of the second applicant on a date to be fixed, the first and second respondents account for the profits made by them by the said passing off and pay to the second applicant the amount found to be due on the taking of such account together with interest thereon. 30. The third respondent provide discovery, verified by affidavit, to the second applicant within 28 days of the date of this order in respect of all documents relating to the purchase, importation, acquisition (on consignment or otherwise) or sale, by the third respondent or its directors, employees, servants or agents, of any handbags to which the Christian Dior trade marks have been applied without the licence or authority of the second applicant. 31. The first and second respondents each provide discovery, verified by affidavit, to the second applicant within 28 days of the date of this order in respect of all documents relating to the purchase, importation, acquisition (on consignment or otherwise) or sale, by the first and second respondents or their directors, employees, servants or agents, of any handbags which use or incorporate the Saddle Style without the licence or authority of the second applicant. In relation to the third applicant's claims: 32. The third respondent be permanently restrained whether by itself, its directors, officers, employees or agents or otherwise howsoever from infringing Australian Registered Trade Marks Nos 303037 and 453492. 33. The third respondent be permanently restrained whether by itself, its directors, officers, employees or agents or otherwise howsoever, from using or applying the Fendi Style on handbags without the licence or authority of the third applicant. 34. The third respondent, within 21 days of the date of this order, deliver up on oath to the third applicant or its duly nominated agents for destruction under the supervision of the third applicant or its nominated agent: (a) all handbags in the possession, power, custody or control of the third respondent, or its directors, officers, employees or agents, to which any of the Fendi trade marks have been applied without the licence or authority of the third applicant; (b) all handbags in the possession, power, custody or control of the third respondent, or its directors, officers, employees or agents, which use or incorporate the Fendi Style which has been applied without the licence or authority of the third applicant. (c) all catalogues, price lists, brochures and other promotional or advertising documents and materials in the possession, power, custody or control of the third respondent, or its directors, officers, employees or agents displaying handbags to which the Fendi trade marks or Fendi Style have been applied without the licence or authority of the third applicant; 35. The third respondent pay the third applicant damages for infringement of the Fendi trade marks and for passing off in respect thereof, to be assessed together with interest thereon, or, at the option of the third applicant on a date to be fixed, the third respondent account for the profits made by it by the said infringements and passing off and pay to the third applicant the amount found to be due on the taking of such account, together with interest thereon. 36. The third respondent pay the third applicant damages in respect of its use of the Fendi Style in contravention of s 52 and s 53(c) of the TPA and in passing off, or, at the option of the third applicant on a date to be fixed, the third respondent account for the profits made by it by the said passing off and pay to the third applicant the amount found to be due on the taking of such account together with interest thereon. 37. The third respondent provide discovery, verified by affidavit, to the third applicant within 28 days of the date of this order in respect of all documents relating to the purchase, importation, acquisition (on consignment or otherwise) or sale, by the third respondent or its directors, employees, servants or agents, of any handbags: (a) to which the Fendi trade marks have been applied; or (b) which use or incorporate the Fendi Style, without the licence or authority of the third applicant. Other orders: 38. The hearing in relation to the assessment of damages or, alternatively, an account of profits arising from the said infringements and passing off, be adjourned to a date to be fixed by the Court. 39. The respondents pay the applicants' costs of and incidental to the proceeding to be taxed and paid forthwith. 40. Liberty to apply be reserved for further orders for discovery in respect of discovery ordered in pars 21, 22, 23, 30, 31 and 37. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules ANNEXURE "A" ANNEXURE "B" ANNEXURE "C" ANNEXURE "D" ANNEXURE "E" IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V522 of 2002 BETWEEN: LOUIS VUITTON MALLETIER S A First Applicant CHRISTIAN DIOR COUTURE Second Applicant FENDI ADELE SRL Third Applicant AND: D & L DESIGN PTY LTD First Respondent RED BERRY ENTERPRISE PTY LTD Second Respondent HOT CHILLI GROUP PTY LTD Third Respondent JUDGE: GOLDBERG DATE: 16 MAY 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicants allege that the respondents have infringed a number of trade marks, of which the first, second and third applicants are respectively the registered proprietors, in contravention of s 120 of the Trade Marks Act 1995 (Cth). The applicants also claim that the respondents have committed the tort of passing off, and engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the TPA") and made false representations in contravention of s 53(c) of the TPA by using the registered marks and certain unregistered marks or styles with which the applicants' goods are associated. The conduct of the respondents giving rise to the applicants' claims relates to their offering for sale and selling ladies' handbags. By an amended notice of motion filed 28 November 2002 the applicants seek summary judgment in relation to each of their claims. 2 The first applicant ("Louis Vuitton") and the second applicant ("Christian Dior") are companies incorporated in France. The third applicant ("Fendi") is a company incorporated in Italy. The applicants are each members of worldwide groups of companies, the Australian constituents being Louis Vuitton Australia Pty Ltd, Christian Dior Australia Pty Ltd and Fendi Australia Pty Ltd respectively. These groups carry on a global business of manufacturing and marketing a range of luxury goods, including, inter alia, leather bags, leather travel cases and canvas bags. 3 The respondents are companies incorporated in New South Wales. The first respondent is the beneficial owner of all the issued shares in the second and third respondents. The respondents import manufactured fashion goods from China which they sell by wholesale to the retail market. Handbags form a limited part of the respondents' trade with no more than 100 pieces of any particular style usually being imported. Louis Vuitton's trade marks and unregistered marks 4 Louis Vuitton is the registered proprietor of Australian Registered Trade Mark No 729025 in class 18 in the following form: ("the Damier trade mark"). 5 Louis Vuitton uses a number of unregistered marks or styles, which it says have come to be associated with Louis Vuitton, the name and trade mark "Louis Vuitton" and with the worldwide Louis Vuitton group of companies and its business. 6 The Louis Vuitton group of companies has promoted, marketed and supplied "Damier Style" canvas bags and travel cases throughout the world since at least 1888, and throughout Australia since 1991, under and by reference to the name and trade mark "Louis Vuitton". The Damier Style of canvas displays a design pattern consisting of brown and yellow squares which have a grain effect appearance in the following form: 7 Since 1985 the Louis Vuitton group of companies has manufactured, promoted and supplied throughout the world, including Australia, leather bags incorporating the "Epi Style" of leather: 8 During 1999 and 2000 the Louis Vuitton group of companies has manufactured, promoted and supplied throughout the world, including Australia, leather bags featuring the "Monogram Vernis Fleurs Style": Christian Dior's trade marks and unregistered marks 9 Christian Dior is the registered proprietor of four Australian Registered Trade Marks Nos 208745, 336090, 641876 and 620002 in class 18 in respect of the words "Christian Dior" and "Dior" ("the Christian Dior trade marks"). 10 The Christian Dior group of companies has manufactured, promoted and supplied leather bags throughout the world since at least 1947, and throughout Australia since 1970, under and by reference to the name and trade mark "Christian Dior". 11 Christian Dior uses an unregistered style, the "Saddle Style," which it says has come to be associated by the public with Christian Dior, the name and trade mark "Christian Dior" and with the worldwide Christian Dior group of companies and its business. Since at least 2000, the Christian Dior group of companies has manufactured, promoted and supplied leather bags, including caramel coloured leather bags, incorporating the Saddle Style. Fendi's trade marks and unregistered marks 12 Fendi is the registered proprietor of two Australian Registered Trade Marks Nos 303037 and 453492 in class 18 in respect of the device "" by itself and in conjunction with the word "Fendi", in the form "" ("the Fendi trade marks"). 13 The Fendi group of companies has manufactured, promoted and supplied bags throughout the world, including Australia, for many years under and by reference to the name and trade mark "Fendi". 14 Fendi uses an unregistered mark, the "Fendi Style", which it says has come to be associated by the public with Fendi, the name and trade mark "Fendi" and with the worldwide Fendi group of companies and its business. For many years the Fendi group of companies has manufactured, promoted and supplied leather and canvas bags incorporating the Fendi Style. The conduct of which Louis Vuitton complained 15 Louis Vuitton alleged that the first and third respondents infringed its Damier trade mark, and made use of its Damier Style on handbags they offered for sale and sold which use was misleading and deceptive and falsely represented that the handbags had Louis Vuitton's sponsorship, approval or an affiliation with Louis Vuitton. 16 On 13 August 2001 a person engaged on behalf of the applicants purchased a handbag from the first respondent's business premises at Shop 1, 8‑24 Kippax Street, Surry Hills, New South Wales ("Shop 1") which appeared to bear the Damier trade mark. On the same day, the purchaser attended the third respondent's business at Shop 2, 26‑44 Kippax Street, Surry Hills, New South Wales ("Shop 2") and saw two handbags which appeared to bear the Damier trade mark. The purchaser was informed by a staff member that a new shipment of these handbags had been received but had not yet been unpacked. On 17 August 2001 the purchaser purchased a handbag from the third respondent's Shop 2 premises. On that occasion, the purchaser saw more than 20 handbags bearing the Damier trade mark. On 23 August 2001 another purchaser on behalf of Louis Vuitton purchased a handbag from the first respondent's business premises at 11 Harper Street, Abbotsford, Victoria ("Abbotsford premises"). On that occasion, the purchaser saw approximately 40 handbags which appeared to bear the Damier trade mark. On 5 June 2002 another purchaser on behalf of the applicants purchased a handbag from the first respondent's Abbotsford premises. On that occasion, the purchaser saw two handbags, including the handbag she purchased, which appeared to bear the Damier trade mark. 17 The four handbags exhibited as being purchased from the first and third respondent's various business premises bore either the Damier trade mark or a mark, sign or device substantially identical with, or deceptively similar to, the Damier trade mark, or incorporated the Damier Style or a style substantially identical with, or deceptively similar to, the Damier Style. There was evidence that they were not made with the licence or authority of Louis Vuitton, and were of an inferior quality to the products of Louis Vuitton. 18 Louis Vuitton alleged that the first, second and third respondents made use of its Epi Style which use was misleading and deceptive and falsely represented that the goods had Louis Vuitton's sponsorship, approval or an affiliation with Louis Vuitton. Louis Vuitton alleged that on 9 August 2001 a handbag was purchased from the first respondent's Shop 1 premises, on 17 August 2001 a handbag was purchased from the third respondent's Shop 2 premises, on 23 August 2001 a handbag was purchased from the second respondent's business premises at 206‑220 Montague Road, West End, Queensland ("West End premises") and that on 4 January 2002 a handbag was purchased from the first respondent's Shop 1 premises. The handbags purchased from the respondents' various business premises were said to incorporate the Epi Style or a style substantially identical with, or deceptively similar to, the Epi Style. 19 Louis Vuitton alleged that the first and second respondents made use of its Monogram Vernis Fleurs Style which use was misleading and deceptive and falsely represented that the handbags had Louis Vuitton's sponsorship, approval or an affiliation with Louis Vuitton. Louis Vuitton alleged that on 23 August 2001 a handbag was purchased from the second respondent's West End premises, and that on 4 January 2002 a handbag was purchased from the first respondent's Shop 1 premises. The handbags purchased from the first and second respondents were said to incorporate the Monogram Vernis Fleurs Style or a style substantially identical with, or deceptively similar to, the Monogram Vernis Fleurs Style. The conduct of which Christian Dior complained 20 Christian Dior alleged that the third respondent infringed its Christian Dior trade marks. On 14 June 2002 a purchaser engaged on behalf of the applicants purchased a handbag from the third respondent's Shop 2 premises. The handbag bore the Christian Dior trade mark or a mark, sign or device substantially identical with, or deceptively similar to, the Christian Dior trade mark. On that occasion, the purchaser saw approximately 30 handbags in a style similar to the handbag he had purchased, although he was not able to say whether each of those handbags bore a Christian Dior trade mark. There was evidence that the handbag was not made with the licence or authority of Christian Dior and was of an inferior quality to Christian Dior's products. 21 Christian Dior alleged that the first and second respondents made use of its Saddle Style on handbags it offered for sale and sold which use was misleading and deceptive and falsely represented that the handbags had Christian Dior's sponsorship, approval or an affiliation with Christian Dior. On 23 August 2001 a handbag was purchased from the second respondent's West End premises and on 28 August 2001 a handbag was purchased from the first respondent's Abbotsford premises. The two handbags were said to incorporate the Saddle Style or a style substantially identical with, or deceptively similar to, the Saddle Style. The conduct of which Fendi complained 22 Fendi alleged that the third respondent infringed its trade marks, and made use of its Fendi Style on handbags it offered for sale and sold which use was misleading and deceptive and falsely represented that the handbags had Fendi's sponsorship, approval or an affiliation with Fendi. On 14 June 2002 a handbag was purchased from the third respondent's Shop 2 premises. The handbag bore the ""trade mark and incorporated the Fendi Style. On that occasion the purchaser saw at least 50 handbags that appeared to be of a similar style to the handbag he purchased and bore the "" trade mark. There was evidence that the handbag was not made with the licence or authority of Fendi and was of an inferior quality to Fendi's products. The respondents' admissions of liability 23 By letter dated 30 October 2002 the respondents, with some exceptions to which I shall refer, admitted the allegations in the statement of claim. 24 In summary the respondents admitted: (a) Incorporation of all parties. (b) The nature of the business and reputation of each applicant, the products they sold and the reputation and distinctiveness of their products and the products' identification and association with the respective applicant. (c) The particular reputation and distinctiveness of the following products: · Louis Vuitton - Damier Style canvas bags and travel cases Epi Style leather bags Monogram Vernis Fleurs Style leather bags · Christian Dior - Saddle Style leather bags · Fendi - Fendi Style bags. (d) The registration and subsistence of various trade marks in the names of the respective applicants. (e) The distribution of handbags which were substantially identical with, or deceptively similar to, the applicants' handbags and bore the applicants' trade marks or marks substantially identical with, or deceptively similar to, those trade marks. (f) The respondents' acts were calculated to mislead and had misled members of the public into the false belief that the handbags sold by the respondents were manufactured by or under the authority of the applicants and that such acts were calculated to injure and had injured the applicants. (g) They had infringed the trade marks, but denied that they were continuing to do so. (h) They had engaged in misleading and deceptive conduct, but denied that they were continuing to do so. (i) They had wrongly represented that the handbags were manufactured under or with the sponsorship or approval of the applicants, but denied that they were continuing to do so. This admission was an acknowledgment of contraventions of s 53(c) of the TPA and not contraventions of s 53(d) as alleged by the applicants. (j) They had passed off the handbags as handbags manufactured by or under the authority of the applicants, but denied that they were continuing to do so. 25 The respondents said that they had removed the offending handbags from sale "some time ago" and did not intend to deal in those handbags in the future. They denied that: · they were threatening to commit the acts alleged against them; · they had made profits by their conduct; · the applicants had suffered loss and damage as a result of their conduct; · they had refused to cease the acts complained of. 26 In short, the respondents have admitted liability for the acts in the past alleged against them but deny any intention to continue those acts. They contest the applicants' claims to have suffered loss and damage and to be entitled to an account of profits. The respondents' contentions 27 The respondents relied upon an affidavit of Ms Zhan Yun Li who said she was a director of each of the respondents. She did not say for how long she had been a director, or for how long she had been involved in the business of the respondents. It did not appear that she had any direct knowledge of the importation of the infringing products, and insofar as she gave evidence as to the knowledge of the respondents at the relevant times of the purchase and importation of the infringing products, I am not satisfied that she was in a position of being able to give probative evidence of the nature and extent of the respondents' knowledge or lack of knowledge in relation to the applicants' trade marks and reputation in its products and their style and get‑up. Ms Li relied for a significant part of her evidence upon information obtained from Ms Holly Ke and I was given no explanation as to why Ms Ke had not sworn an affidavit in relation to matters that were directly within her own knowledge. 28 Ms Li said that the respondents had been operating in Australia for several years and that their main trade was in the wholesale importation and sale of fashion garments such as blouses, skirts, dresses and pants. They had little trade in handbags or other similar accessories and normally would not import more than 100 pieces of a particular style of handbag with the more usual total order being around 50 pieces. Ms Li acknowledged that at certain times during the period July 2001 to June 2002 the respondents had imported larger quantities of handbags because they thought there was a business opportunity in importing more handbags. 29 Ms Li said that at the time of receiving letters of demand and the application initiating the proceeding, the respondents had little knowledge of any of the applicants or their goods. I find this statement hardly credible. The evidence of the applicants disclosed an extensive, long‑standing and well‑established reputation in their names and their products and I do not consider it credible that persons engaged in the wholesale importation and sale of fashion garments, albeit at the cheaper end of the fashion garment trade, would not be aware of the names of the applicants, the nature of their trade marks and the nature of the style, get‑up and display of their products. Ms Li said that neither she nor any of the respondents' staff had much knowledge of the applicants' designs or styles including any trade marks. However, Ms Li did not assert that they had no knowledge whatsoever of the applicants' designs, styles or trade marks. I am not prepared to accept that they did not have such knowledge as would have alerted them to the fact that the handbags which the respondents imported bore trade marks of the applicants and imitated their style and get‑up to such an extent that they would have known that they were made without the licence or approval of the applicants or any company associated with them. 30 Ms Li asserted in her affidavit that: "the Court will understand that the Respondents were innocent of the intention to violate the rights of the Applicants when they imported and sold the infringing handbags." I am not prepared to accept this evidence, or rather this submission, as I do not accept that the respondents were not aware to some extent of the applicants' ownership of the relevant trade marks, designs and styles relating to the imported handbags. 31 Ms Li challenged some of the evidence of the persons who had purchased handbags from the respondents in relation to the numbers of handbags which they saw on display. However, it is not necessary for present purposes to resolve any issue as to the quantities of handbags imported, offered for sale and sold, as I am only determining whether an order should be made that damages be paid by the respondents to the applicants or alternatively, that there be an account taken of profits. Any issue as to the quantities imported, offered for sale and sold will be determined upon any assessment of damages or the taking of any account of profits. 32 The respondents submitted that, whilst they had infringed the applicants' trade marks and unregistered marks, they had done so "innocently". The respondents claimed to be "innocent" in that, whilst they admitted that they infringed the applicants' rights, they said they were unaware of the applicants' rights at the time they engaged in the prohibited conduct and were not aware that they were acting in breach of the law. 33 To that end, Ms Li exhibited to her affidavit a number of magazines and catalogues showing garments with patterns such as check patterns and designs said to be used quite often in the fashion industry. The magazines and catalogues had been supplied by the respondents' legal advisers. For example, in par 26 of her affidavit Ms Li referred to one of the respondents' handbags which was purchased on behalf of the applicants which is now admitted to infringe Louis Vuitton's Damier trade mark. Ms Li said that the pattern of the fabric of that bag was very similar to the pattern used on many other fashion garments and accessories and that, whilst the Damier trade mark related to a check pattern, the infringing handbag bore a diamond pattern in a furry fabric. In this context Ms Li referred to the magazines and catalogues exhibited to her affidavit which had been supplied by the respondents' legal advisers. Ms Li then stated: "Therefore, the Third Respondent honestly believed that it could sell style 2203 without violating any intellectual property rights belonging to the First Applicant." (par 26) This statement however has no probative value when it is taken in conjunction with the last sentence in par 24 that: "The Respondents do not subscribe to any fashion magazines or catalogues." 34 As the respondents did not subscribe to any fashion magazines or catalogues, it follows that it cannot be suggested that the respondents had a belief that the handbags they were importing were of the type commonly seen in fashion magazines or in catalogues. The magazines and catalogues therefore have no relevance or bearing upon the respondents' claims that they were innocent infringers. 35 Ms Li also referred to the Monogram Vernis Fleurs Style handbag of Louis Vuitton and to similar types of colourful designs applied to fabric for making garments and to materials for making accessories. She said that the Monogram Vernis Fleurs Style reminded her of patterns and colours she had read were popular in the fashion industry in the 1960s and the 1970s and she produced some examples from magazines. Again, this evidence is not relevant to any of the issues before me having regard to the admissions made by the respondents that they have offered for sale and sold infringing products. 36 Similar evidence was given by Ms Li in relation to the remaining trade marks and styles of the applicants and the infringing handbags. For the reasons to which I have referred, such evidence is not relevant to any issue before me. 37 The respondents made much of what were said to be inconsistencies in letters of demand from Louis Vuitton and Christian Dior's solicitors relating to the nature of the trade marks said to have been infringed. However, in the light of the admissions made by the respondents, such inconsistencies as exist have no bearing upon the nature of the orders which should be made consequent upon the making of those admissions. In particular, such confusion does not bear upon the issue as to whether the respondents were innocent infringers. 38 The respondents complained about their inability for some time to be given inspection of the handbags held by the applicants in which intellectual property rights were claimed and the handbags which had been purchased from the respondents. Again, this delay has no bearing upon the orders which should be made having regard to the admissions which have been made. 39 The respondents also complained about notices to admit not having been served upon the respondents. Any consequence of a notice to admit does not bear upon the issue as to the form of orders which is presently before me. The orders sought 40 In response to the admissions made by the respondents, the applicants filed an amended notice of motion on 28 November 2002 seeking summary judgment pursuant to O 20 r 1 of the Federal Court Rules in respect of all their claims. 41 There was no issue between the parties as to the entitlement of the applicants to summary judgment in respect of the causes of action alleged. However the parties disagreed as to the form of the orders which should be made. The respondents agreed that an order for delivery up of all infringing handbags was appropriate, although there was some debate as to the width of the order. The parties made submissions regarding the appropriateness of the granting of injunctions, the making of declarations and the award of damages or an account of profits. 42 The respondents submitted that declarations should not be made and that injunctions should not be granted as they were innocent infringers, the conduct complained of was not continuing, they had not refused to cease such conduct and the affidavit of Ms Li established that the respondents did not intend to repeat such conduct. 43 The injunctions sought are predicated upon a number of alternative bases. Section 126 of the Trade Marks Act 1995 (Cth), s 80 of the TPA and the Court's equitable jurisdiction. Section 80(4) of the TPA empowers the Court to grant an injunction whether or not the respondent intends to engage in the offending conduct in the future. Injunctions are warranted under s 126 of the Trade Marks Act 1995 (Cth) where there is a threat of repetition of the infringing conduct. Such a threat may be inferred from the circumstances surrounding the initial infringing conduct. Conclusion 44 I am satisfied that declarations should be made and permanent injunctions should be granted. Both forms of relief are discretionary and I am satisfied that it is appropriate in the circumstances of this case to grant both forms of relief. In reaching this conclusion I have taken into account the extent and range of the infringing products imported, the quantities of handbags imported, the fact that they were imported for commercial gain and the extent and nature of the admissions made by the respondents. Although the respondents assert through Ms Li that their conduct will not be repeated, there is no sanction which can be applied if that assertion proves false. The nature of the respondents' business and the extent of their infringing conduct in the past warrants the grant of permanent injunctions to ensure that such conduct is not repeated. In this context I also take into account the length of time involved before the respondents offered undertakings as to their future conduct, earlier false denials, their failure to provide solicitors with instructions and the fact that on 5 June 2002 a further handbag infringing Louis Vuitton's rights was sold notwithstanding that the first and third respondents had been placed on notice of Louis Vuitton's Damier trade mark and the rights claimed in relation to it. Ms Li said that this sale was an accident but her explanation was hardly credible. However, whether that sale was accidental is not to the point. Rather, the point is that it is desirable and appropriate, having regard to the respondents' previous conduct, that there be a sanction involved in relation to the enforcement of the respondents' intention not to infringe the applicants' intellectual property rights in the future. 45 However, I am not disposed to grant injunctions in the extremely broad terms proposed by the applicants. In my view, the injunctions should be couched in terms which define clearly and unambiguously the nature and extent of the conduct which is prohibited by the court order. At the same time the order should not be so narrow as to enable the respondents to avoid the effect and substance of the order by a minor alteration to the handbags. 46 I am also satisfied that the applicants are entitled to an order that the respondents pay the applicants' damages to be assessed with interest or, at the election of the applicants, an accounting or enquiry as to the profits made by the respondents as a result of their infringing conduct and the payment of any such profits. Such entitlement arises in respect of each cause of action established for infringement of a registered trade mark. 47 The respondents contended that as they innocently passed off the handbags, damages as an alternative to an account of profits should not be granted in a passing off action. In support of this proposition the respondents relied on 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299. Having regard to my rejection of the submission that the respondents were innocent infringers in respect of their contravening conduct, it is not necessary to consider this submission any further. 48 The respondents denied that the applicants had suffered any damage as a result of the respondents' contravening conduct. They contended that it would be very difficult for the applicants to prove they had suffered any loss or damage. Although there was no direct evidence of any particular loss and damage suffered by the applicants, I am satisfied that there is a probability that such loss and damage occurred having regard to the quantities and range of handbags offered for sale and sold by the respondents. I am satisfied that it is probable that some purchasers were influenced in making their purchases by the get‑up and markings of the respondents' handbags. There was also evidence that the handbags purchased were of an inferior quality to the products of the applicants. In such circumstances I am prepared to infer that some damage was caused to the goodwill and reputation of the applicants and their handbags: Pinky's Pizza Ribs on the Run Pty Ltd v Pinky's Seymour Pizza & Pasta Pty Ltd [1997] ATPR 41‑600 at 44,283; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 196. 49 Any further issues which may arise as to the difficulties of establishing the amount of any loss and damage should be resolved on any assessment of damages. 50 I therefore propose to make orders recording appropriate declarations, permanent injunctions and entitlements to an election to recover damages or to have an account of profits. I will give the parties seven days to make any submissions they wish to make as to the costs of the proceeding. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate: Dated: 16 May 2003 Counsel for the Applicants: Ms E A Strong Solicitor for the Applicants: Corrs Chambers Westgarth Counsel for the Respondents: Dr L J Duncan Solicitor for the Respondents: Mervyn Finlay, Thornburn and Marshall Date of Hearing: 4 December 2002 Date of Judgment: 16 May 2003