FEDERAL COURT OF AUSTRALIA Tu v Pakway Australia Pty Ltd (ACN 093872738) (T/AS Pakway Plastics) [2004] FCA 1151 INTELLECTUAL PROPERTY — registereddesigns — plates — whether registered designs invalid by reason of prior publication to die-maker or by reason of prior art —whether lack of novelty or originality DESIGNS — alleged infringement of registered designs in respect of plates — whether alleged infringing plates an obvious imitation of registered design — whether alleged infringing plates a fraudulent imitation — essential features of the design —functional nature of the design — whether insubstantial differences to disguise copying — whether deliberate copying EVIDENCE — admissibility of expert evidence on comparison between registered designs, prior art and alleged infringing plates TRADE PRACTICES — where breach of Designs Act also pleaded as constituting breach of trade practices legislation — whether misleading or deceptive conduct — relationship between breach of Designs Act 1906 (Cth) and Trade Practices Act 1974 (Cth) — adequacy of evidence of breach JOINT TORTFEASOR — personal liability for directors of infringing company WORDS AND PHRASES — "secret use" Designs Act 1906 (Cth) ss 4, 17, 18, 25, 25A, 26, 30 Trade Practices Act 1974 (Cth) ss 52, 53, 75B Federal Court Rules O 58 r 22 Macrae Knitting Mills Ltd v Lowes Ltd (1936) 55 CLR 725 referred to Richsell Pty Ltd v Khoury (1994) 30 IPR 129 referred to Richsell Pty Ltd v Khoury (1995) 32 IPR 289 referred to J Rapee & Co Pty Ltd v KAS Cushions Pty Ltd (1989) 15 IPR 577 cited Dart Industries Inc v Decor Corporation Pty Ltd (1989) 15 IPR 403 cited Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 cited D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 cited LJ Fisher & Company Ltd v Fabtile Industries Pty Ltd (1978) 1A IPR 565 referred to Re Wingate's Registered Design (1934) 52 RPC 126 referred to Malleys Limited v J W Tomlin Pty Limited (1961) 180 CLR 120 cited Wilson v Hollywood Toys (Australia) Pty Ltd (1996) 34 IPR 293 referred to Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd (1989) 15 IPR 617 referred to Fisher and Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 22 IPR 1 referred to Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd (1987) 180 CLR 483 referred to Wanem Pty Ltd v John Tekiela (1990) 19 IPR 435 referred to Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd (1999) 46 IPR 339 referred to Dunlop Rubber Co Ltd v Golf Ball Developments Ltd (1931) 48 RPC 268 cited K-Aire Pty Ltd v Polyaire Pty Ltd [2003] FCAFC 310 cited Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 referred to Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 referred to Mantech Systems Pty Ltd v Alpha Nursing Pty Ltd [2004] FCA 754 referred to WILLIS TU AND GENFAC PLASTICS PTY LTD (ACN 006 205 876) v PAKWAY AUSTRALIA PTY LTD (ACN 093 872 738) (T/AS PAKWAY PLASTICS) AND CHINH PHI TO AND HAI SO TRUONG V 892 of 2001 KENNY J 7 SEPTEMBER 2004 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 892 OF 2001 BETWEEN: WILLIS TU FIRST APPLICANT GENFAC PLASTICS PTY LTD (ACN 006 205 876) SECOND APPLICANT AND: PAKWAY AUSTRALIA PTY LTD (ACN 093 872 738) (T/AS PAKWAY PLASTICS) FIRST RESPONDENT CHINH PHI TO SECOND RESPONDENT HAI SO TRUONG THIRD RESPONDENT JUDGE: KENNY J DATE OF ORDER: 7 SEPTEMBER 2004 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. On or before 17 September 2004, the parties file and serve submissions concerning the orders that should be made to give effect to the reasons for judgment delivered today. 2. The proceeding be adjourned to a date to be fixed. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 892 OF 2001 BETWEEN: WILLIS TU FIRST APPLICANT GENFAC PLASTICS PTY LTD (ACN 006 205 876) SECOND APPLICANT AND: PAKWAY AUSTRALIA PTY LTD (ACN 093 872 738) (T/AS PAKWAY PLASTICS) FIRST RESPONDENT CHINH PHI TO SECOND RESPONDENT HAI SO TRUONG THIRD RESPONDENT JUDGE: KENNY J DATE: 7 SEPTEMBER 2004 PLACE: MELBOURNE REASONS FOR JUDGMENT the claims 1 The applicants claim injunctive relief and damages for infringement of the first applicant's registered designs Nos 130281 and 130427 ("the registered designs") in respect of plates or, at the first applicant's option, an account of profits in respect of the infringement of its designs. They seek delivery up for destruction of the infringing plates and material used in connection with their sale and promotion. They also claim damages for breaches of ss 52 and 53(c) and (d) of the Trade Practices Act 1974 (Cth) ("the TPA"). The respondents deny the alleged infringement and allege that the registration of the registered designs is invalid. The first respondent makes a cross-claim for a declaration that the entries regarding the designs on the register of designs are invalid and seeks an order for rectification of the register by expunging the entries. 2 Pursuant to an order made by the Court on 16 November 2001, the issues of liability and quantum were split, with the issue of liability to be determined first. the parties 3 The first applicant, Mr Willis Tu, is the managing director and a shareholder of the second applicant, Genfac Plastics Pty Ltd ("Genfac"). He is also a qualified plastics technician and responsible for the development and design of Genfac's products. He is named on the register of designs as the owner of the registered designs. His registration is current. Mr Tu has licensed Genfac to utilise the registered designs in the manufacture and sale of plastic plates. 4 Genfac, a company incorporated in Victoria, carries on the business of importing, manufacturing and selling plastic products for use in the take-away food industry. Genfac manufactures its products by injection moulding. Amongst other things, it manufactures and sells plastic plates to which the registered designs have been applied. 5 The second and third respondents, Mr Chinh Phi To and Mr Hai So Truong, are directors of the first respondent, Pakway Australia Pty Ltd ("Pakway") and involved in the day-to-day management of its business. Mr To also terms himself a "director of a business known as Chung Hing Beancurd Manufacturers, which makes fried bean curd, bean curd and soya drinks". Chung Hing Beancurd Manufacturers was one of Genfac's customers before Pakway started business. Mr To commenced the business of making plastic take-away containers by injection moulding in 1994, trading under the name "Pakway Plastics". In about July 2000, Pakway assumed the business of Pakway Plastics. Like Genfac, Pakway sells its products to take-away food outlets and to distributors. the parties' claims 6 Both the registered designs are for a plate. Design 130281 has a priority date of 28 September 1995, and is constituted by a number of drawings in the register of designs. Design 130427 has a priority date of 4 December 1995, and is also constituted by a number of drawings in the register of designs. 7 By their further amended statement of claim, referred to below simply as the "statement of claim", the applicants claimed that the respondents infringed the first applicant's monopoly in the registered designs, in breach of s 30(1)(a) and (c) of the Designs Act 1906 (Cth) ("the Act"). Specifically, the applicants make their infringement claim in respect of (1) the initial 180 mm (PKB 7) and 216 mm (PKB 8) Pakway plates (together, WT 7); (2) the modified 180 mm (PKB 9) and 216 mm (PKB 10) Pakway plates; (3) the further modified plates (PKB 16); (4) the 230 mm T&T Plastics plate ("R 7"); and (5) the 180 mm (PRB 17) and 216 mm (PRB 18) plates purchased in June 2003. 8 The applicants also allege that, by this infringing conduct, the first respondent breached ss 52 and 53(c) and (d) of the TPA; and that the second and/or third respondents have been directly or indirectly concerned in, or party to, the contravention within the meaning of s 75B of the TPA; "and/or have otherwise been joint tortfeasors with the First Respondent in the conduct constituting infringement of the registered designs". 9 Whilst the respondents admitted that the registered designs were entered on the register of designs and that a sample of a Genfac plate was available at the time the plans for the Pakway plates WT 7 were being prepared, they denied the alleged infringement. The respondents claimed that the designs of Pakway's plates were materially different from the registered designs. The respondents said that, although the Genfac and the Pakway plates "incorporate the same basic elements of a base, a side-wall, a rim and a flange", the differences "can be seen immediately with the eye" because of the differences in the pattern on the rim and the dome effect on the Pakway plate's base. As will appear, the dome effect was a more significant feature of the later Pakway plates than the earlier versions. 10 Whilst denying infringement, the respondents also alleged that the registration of the registered designs was invalid. In conformity with O 58 r 22(1) of the Federal Court Rules ("the Rules"), the respondents gave the following particulars: "The registered designs were neither new nor original at the date of the application for registration of them and were before that date published in Australia in respect of the same articles or differed from such designs only in immaterial details or in features which are variants commonly used in the trade. These details and features include the raised base, the sloping wall, the horizontal rim, the existence of a pattern on the rim and a lip at the edge of the rim. Each of the registered designs was the same, or substantially identical to designs used and applied in Australia prior to the application for registration of them and was the subject of common general knowledge in Australia. The registered designs relate to the process or mode of manufacture of plastic plates and incorporate features necessary to manufacture plastic plates. The raised base, the sloping wall, the rim and the lip are all features of the production of plastic plates. The respondents have not yet completed their searches and enquiries and will provide further particulars after they have been completed." 11 Pursuant to O 58 r 22(2) of the Rules, the respondents gave the following particulars of the alleged time and place of the previous publication or user: "The shape of plates as depicted in the registered designs is known and it is also known to apply various types of pattern to the horizontal rim. Several other designs have been registered. The shape of plates and the use of patterns are depicted in other registered designs as follows (with copies of abstracts of registration attached): Applicant Date US Design no. Adolf Zahner 23 May 1990 Des. 337,480 William Craford et al 25 May 1993 Des. 335,798 Adolf Zahner 14 September 1993 Des. 339,268 The respondents also rely on the publication of the registered designs by the first applicant before applying for registration, as deposed to in the affidavit of the first applicant sworn on 27 August 2001. The respondents may provide further particulars." 12 The US designs referred to in these particulars were the subject of a Notice to Admit, in consequence of which the applicants were taken to admit that the US designs became open to inspection in the Patent Office in Canberra on a date prior to the registration of the registered designs. As these particulars foreshadowed, the respondents' case on prior disclosure depended on a statement by Mr Tu in his affidavit of 27 August 2001, namely, that after completing work on the designs by mid‑1993, he sent the design drawings to a die-maker, G I Walton Engineering Pty Ltd ("Walton Engineering"). 13 The respondents delivered further particulars on the first day of trial, as follows: "The article in respect of which the registered designs are registered is 'a plate'. The round shape of the plates depicted in the registered designs was commonly used in respect of plates prior to 1995. Pursuant to O.58 r.22(2), the respondents provide further particulars of prior publication or user: (a) Since 1978 Merino Pty Ltd has produced and sold plastic plates in Australia with the diameter of 180mm and 230mm plates. A sample of the 180mm plate is exhibit "LRF-1" to the affidavit of Laurence Rowland Fagan sworn on 19 June 2003. Since at least 1990, Merino Pty Ltd has produced and sold plastic plates with a diameter of 216mm and 260mm. Samples of the 230mm and 260mm plates are exhibit "LRF-2" to the affidavit of Mr Fagan. A sample of the 216mm plate is exhibit "CPT-25" of the affidavit of the second respondent sworn on 14 June 2002. (b) Prior to 1995, there was available for purchase in Australia a plastic plate manufactured by 'Lily', a sample of which is exhibit "CPT-26" to the second respondent's said affidavit. The respondents are unable to give any further particulars in respect of the Lily plate." 14 In essence, the respondents' case on invalidity was that the registration of the designs was invalid on account of the lack of newness or originality; the previous publication of the US designs; the prior use in Australia of the Merino plate; the prior use in Australia of the Lily plate; the prior disclosure by Mr Tu to Walton Engineering; and the functional nature of the design. As their counsel observed, if the Court accepted that the registration was invalid, it would be unnecessary to consider the infringement claims. 15 In response, the applicants contended that the US designs did not satisfy the test of "obvious adaptation" in s 17(1)(b) of the Act. They also submitted that neither the Merino nor the Lily plates were the same as or substantially identical to designs used in Australia prior to the priority dates of the registered designs and, in any case, there was insufficient evidence of prior use of the Lily plate. They denied that there was any relevant prior disclosure by Mr Tu to Walton Engineering, and relied on s 18 of the Act on the question of functionality. the legislative framework (a) The Designs Act 1906 (Cth) 16 Any discussion of the Act begins with the definition of "design" in s 4(1). This provides that, unless the contrary intention appears, "design" means: "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." 17 Section 17, which concerns the circumstances in which a design can be registered, relevantly provides: "(1) Subject to this Act, a design shall not be registered unless it is a new or original design and, in particular, shall not be registered in respect of an article if the design: (a) differs only in immaterial details or in features commonly used in the relevant trade from a design that, before the priority date in respect of the application for registration, was registered, published or used in Australia in respect of the same article; or (b) is an obvious adaptation of a design that, before the priority date in respect of the application for registration, was registered, published or used in Australia in respect of any other article. (1A) For the purposes of subsection (1), account shall be not be taken of any secret use." 18 Section 18(1) provides that an application for registration 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" (emphasis added). This does not enable the registration of a "method or principle of construction", which, by virtue of s 4(1), is not a design for the purposes of the Act. 19 The owner of a registered design has a monopoly in that design: see s 25; also s 25A. Section 30 concerns infringement of this monopoly. Paragraphs (a) and (c) of s 30(1), upon which the applicants specifically rely, provide: "(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) in respect of which the design is registered and to which the design or any fraudulent or obvious imitation of it has been applied outside Australia without the licence or authority of the person who was the owner of the registered design at the time when the design or imitation was so applied." 20 Section 30(2) provides that, "[i]f 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". Pursuant to s 32, a defendant in such an action or proceeding may apply, by way of counter-claim, "for the rectification of the register by the expunging of the entry of the registration of the design from the register". (b) The Trade Practices Act 1974 (Cth) 21 The applicants claimed damages pursuant to s 82(1) of the TPA for breach of ss 52 and 53(c) and (d), alleging that (1) Pakway was a corporation that, in trade or commerce, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive in breach of s 52 of the TPA; and (2) Pakway contravened s 53(c), by representing that its goods had "sponsorship, approval, performance characteristics, accessories, uses or benefits" that they did not have, and s 53(d), by representing that Pakway had "a sponsorship, approval or affiliation" that it did not have. the evidence 22 The applicants relied on the affidavits of Willis Tu sworn on 27 August 2001, 8 October 2001, 8 February 2002 and 17 June 2003; Robin Walton sworn on 3 September 2001, 10 September 2001 and 15 February 2002; and Peter Kingsley Bayly sworn on 12 February 2002, 16 June 2003, 19 June 2003 and 23 June 2003, as well as on the exhibits which accompanied these affidavits. The deponents were cross-examined. The respondents relied on the affidavits of Chinh Phi To sworn 12 September 2001, 12 October 2001 and 14 June 2002; Paul Peter Zahra, die-maker, sworn on 12 September 2001; and Laurence Rowland Fagan, sworn on 19 June 2003. These deponents were also cross-examined. (a) Mr Robin Walton 23 Mr Robin Walton, who has been Genfac's general manager since 1999, gave evidence concerning the process of manufacturing and packaging. He described how the plates were manufactured in an injection-moulding die. In his affidavit of 15 February 2002, he deposed: "The process of manufacture involves the injection of plastic into a die unit, which consists of two halves, the core and cavity. The spread of plastic is confined, as intended by the die manufacture, as well as to ensure that there is sufficient venting of the captured air to ensure combustion does not occur in the process which causes the plastic to burn. The plastic is injected at temperatures in excess of 220 degrees Celsius. The die temperature is refrigerated to temperatures below 12 degrees Celsius. The immediate effect of the plastic meeting the cold die is the solidification of the plastic into the shape of the die. This process is called 'curing'." 24 Mr Walton said that the front of the die was designed to etch into the back of the plate any lettering and numbering. He deposed that: "With reference to the exhibit "WT3" the smallest circular point seen at the base of the product shows the entry point of the plastic, which is injected through the sprue bushing." 25 The next circle, which on WT 3 was approximately 20 to 25 mm in diameter, was formed by the liquefied plastic partly entering the air gap where the sprue bushing meets the main body of the die cavity. He added that it was at this point that "air is forced into the cavity while the dye halves remain closed". Mr Walton deposed: "This is for the purpose of ensuring that the product fixes to the core half or the back part of the die, which is also the moving part of the die. Once the die or mould halves are open sufficiently, air is then forced into the back part of the die where the part known as the mushroom meets the core-body. At the same time the mushroom is forced forward by the moulding machine. This simultaneous action is to achieve the ejection of the product from the die core." The mushroom, as Mr Walton termed it, had the function of pushing the formed plate away and out of the die. An hydraulic or electric press held the halves of the die together, whilst the hot plastic was forced under pressure into the cavity, after which the halves separated again. 26 Mr Walton said that his role was to ensure that the plates could be efficiently manufactured and packaged and his brother, Greg Walton of Walton Engineering, actually made the dies that were used to produce the plates. Mr Walton said that he did not do any drawing work for Genfac's plates prior to their manufacture and that he did not see any designs or plans for the plates until the commencement of this proceeding. 27 In his 15 February 2002 affidavit, Mr Walton said that, for manufacturing reasons and in line with the particular type of die construction Genfac adopted, the diameter of the mushroom had to be a certain size relative to the total area of the plate or moulding, in order to ensure that the plate was ejected as a whole from the die unit "without deformation and with ultimate reliability". Notwithstanding this, in re-examination, Mr Walton stated that the circle left by the mushroom could be of any size. He also said that "[t]he upper raised part of the centre of the plate [did] not serve a manufacturing function", although this was the area where the mushroom made perfect contact with the plastic. 28 Also in his 15 February 2002 affidavit, Mr Walton said that there was a "degree of variability about the radius at the top and bottom of the inner part of the wall circle of the product". He added that the "outer angle of the top rim of the product matches the inner angle, and is designed to retain rigidity and to retain the flat shape of the outer rim and to fall in line with stack height and separation requirements". In cross-examination, Mr Walton stated that, in the case of Genfac's plates, a function of the flange was to give rigidity to the plates. His evidence was that the manufacturing and stacking process affected the "wall angles and the depth of the product". Wall angle was, according to him, important "from the perspective of efficient storage". He said that, whilst the pattern on the rim of the plate had little to do with the manufacturing process, the three-dimensional pattern affected the ease with which the plates could be stacked or packed. (b) Mr Tu 29 In his 27 August 2001 affidavit, Mr Willis Tu deposed that he was the author of the design drawings shown in the registered designs and that he started work on them in 1993. In cross-examination, he said that he made his first drawings, which were the design drawings dated 4 June 1993, on one particular day, although a great deal of time was spent thereafter in ensuring that the designs were suitable for Genfac's automation and therefore capable of production. He also said that these first design drawings depicted the items that were ultimately manufactured and the design did not change between June 1993 and his application for registration. Initially, in cross-examination, Mr Tu said, in conformity with his affidavit, that he began the design work in mid‑1993, although later he said that he first examined the possibility of designing a plate for Genfac to manufacture prior to mid‑1993. Subsequently, in cross-examination, he stated that he first discussed the manufacture of an "injection thin-wall moulding plate" with Greg Walton on "[c]ould be January 1993" [sic]. Mr Tu's evidence was that Greg Walton prepared drawings for a plate die in February 1993 and July 1995. 30 In cross-examination, Mr Tu said that Genfac did not manufacture plates prior to 1993, although he was aware that plastic plates were available in the market in 1993 or earlier. In particular, he acknowledged that he was aware of the Merino and Decor plates, but not the Lily plate, in or prior to 1993, although the Lily plate "could … possibl[y]" have been available prior to 1995. Although he did not remember precisely the date, Mr Tu said that he had seen a 180 mm Merino plate on one occasion in a supermarket and "[t]hat's why I sit down and design my own 180 millimetre plate". He said that he had not bought the plate, but had simply looked at it inside its packaging and then put it back on the shelf. He maintained that the Merino plate was not similar to his product because it had a bigger curve between the base and the side wall and the side wall was also higher than on his product. 31 In his 27 August 2001 affidavit, Mr Tu deposed that "I completed the design work by about mid 1993, at which [point]I sent the design drawings to a die-maker, G. I. Walton Engineering Pty Ltd". He said that he did not apply to register the design until after a trial run was undertaken for the purpose of confirming that the plate could be moulded successfully. According to Mr Tu, during the production of the dies, he discussed the design work with Greg Walton and, indeed, "spoke to him many times over the period 1993 to 1995 during which time the dies were being created". Mr Tu said that he introduced the rings around the outer rim of the plate during this discussion phase. 32 Mr Tu gave evidence concerning the confidentiality of these discussions with Mr Walton. In his 17 June 2003 affidavit, he said: "Prior to forwarding my design drawings to G.I. Walton Engineering Pty Ltd ("Walton Engineering") for the development of the required moulds, I told Greg Walton of Walton Engineering that I intended to make an application to register my designs. At such time, I said that I required that the design drawings and details of the designs be kept strictly confidential. In response to my request, Greg Walton said that [he] agreed to keep my designs confidential and that he would not disclose them to any other person. The design drawings provided to Walton Engineering and the work undertaken by it on my behalf was, prior to the application for registration of the designs, kept confidential in accordance with the understanding referred to herein." 33 In cross-examination, Mr Tu reiterated that he spoke to Greg Walton about confidentiality before he obtained the application for design registration. Mr Tu said, "I remember I show[ed] him the application form. … 'This is confidential', I told him". Mr Tu added, "[a]s soon as I draw it up, I said - as soon as I draw it up, I already told him [about] the confidentiality" [sic]. In further re-examination (with leave), Mr Tu gave evidence that he had an understanding of confidentiality with Mr Walton, affirming that "I always said to Greg, 'Whatever job I give it [sic] to you I want you to keep it in [sic] confidential'". 34 Although he did not lodge a registration application until September 1995 (for design 130281), his evidence was that he had an application form for design registration in 1993 before Greg Walton made a die design, although not (possibly) before he made a plate design in June 1993. (I interpolate here that the plate depicted on a die drawing of February 1993 was different in a number of respects from the plate design that Mr Tu subsequently prepared in June 1993. There were also die drawings for a plate that were prepared in July 1995, which depicted a plate of the kind Genfac subsequently manufactured. I accept that, as the applicants' counsel submitted, some of the confusion in Mr Tu's evidence was attributable to the fact that, in cross-examination, he was asked about the February 1993 drawing (R2), which was not the drawing for the registered designs.) 35 Mr Tu gave specific evidence concerning the designs. In an affidavit of 8 February 2002, he deposed that: "A key objective in my design work was to create designs which could be efficiently manufactured using the injection moulding process, and thereafter stacked efficiently using automated stacking processes. There were also some features of the design which were not solely directed by manufacturing or stacking considerations, such as the rings around the side of the plates which may assist in gripping. I have deliberately placed numbers of rings in the designs which give a total number which ends in the numbers three or eight. This is done as in Chinese custom the numbers three and eight are regarded as lucky. A good number of the users of our product are Chinese take-away food operators, and I believe that this feature of design helps make sales to these customers. The use of the rings in the design also aided the separation of the product when being unpacked, with the raised rings facilitating the creation of small pockets of air between each plate. The design of the raised "inner" portion of the plates was dictated by the look or appearance that it conveyed. I was concerned to give a sense of symmetrical or even appearance and made decisions about the shape of the raised centrepiece accordingly. This raised centrepiece also serves an important functional purpose in that it is designed to absorb the heat of food into that part of the plate and therefore deflect the heat from the surface of the plate which touches either a table or the lap of the user of the plate." 36 Mr Tu added: "I was looking at ways of both ensuring efficient manufacture and stacking. Creating smooth and rounded surfaces aided the stacking process. I think the rounded feature also gave the plate a more aesthetic appeal rather than having straight lines and sharper angles." He said: "In arriving at this design I was concerned to work with both aesthetic and functional considerations, the chief aesthetic consideration being, from a cross-sectional view, the presentation of a product which I thought would work better with curves than sharp finishes." 37 Also in his 8 February 2002 affidavit, Mr Tu referred to the design for the 180 mm plate and said: "[T]he inner raised part of the design takes up more of the surface area of the bottom part of the plate than is the case with the 230mm design. The decision on the relative size of the inner raised part was primarily one of aesthetic value. Secondly, in the design process, I had to give balance to the various areas assumed by the related die mechanical components. Fortunately, the raised area that I selected for aesthetic value, also coincided with parameters enabling the mushroom to assume this area. This was irrespective of whether that area remained raised or flat, which would then propagate an efficient and reliable ejection process." 38 In cross-examination, Mr Tu acknowledged that, as Mr To deposed in his 12 September 2001 affidavit, plates with diameters of 180, 216 and 230 millimetres were standard sizes within the industry. Mr Tu said that he considered the cost of production as well as the design. As to the design, there was, he said, a need to design a plate that would: (a) store compactly; (b) unstack easily; (c) be readily carried; (d) be strong enough for its intended purpose; and (e) have sufficient rigidity. 39 In cross-examination, Mr Tu's evidence was that he consciously decided to use the round plate in preference to a hexagonal plate, since this shape "was easier for our automation process". He added that he had not thought of anything other than a flat "two-stepped" base for his product. He acknowledged that the flat raised central area on the base, which was a feature of other Genfac products, corresponded with the mushroom of the die. In cross-examination, he denied that the principal reason for the centrepiece was the operation of the die. He agreed that the sprue bush circle on the bottom of Genfac's plates was greater on plates of larger diameter than plates of smaller diameter, because the sprue bushing was only water cooled for the larger plates. He denied that the curve between the base and the side wall had a functional purpose relating to stacking and unpacking, or even eating, although he admitted that the automation process imposed restrictions on him as a designer. He said that he made the side wall straight and the rim flat to suit Genfac's automation and for ease of stacking. He agreed that the angle of the side walls also affected rigidity; and that the angle of the flange could affect stacking and rigidity. He affirmed that the circle pattern on the rim of Genfac's plates made it easier for the plates to be unstacked. 40 In his 27 August 2001 affidavit, he explained how he came to be concerned about the first respondent's products. He stated that he visited the premises of a toolmaker, Paul Zahra of P Z Tooling and Engineering Pty Ltd, in 1998, and that: "Mr Zahra had made a tool and some machine components for Genfac since approximately 1984 to 1985. At his premises, I noticed samples of the Genfac plates and bowls to which the registered design had been applied. I asked Paul Zahra why he had these Genfac plates. He said to me that he had received the plate from [Pakway] … and that Pakway had requested a die be made. I showed Mr Zahra the underside of the plate and said to him that I owned a registered design for the plate and warned that he should not copy it. I did not hear further about the matter until late May 2001." In his 8 October 2001 affidavit, Mr Tu said that he observed samples of only Genfac's plates when he visited the premises of Mr Zahra. 41 In his 27 August 2001 affidavit, Mr Tu said that, in late May 2001, a distributor gave him the plates that constitute WT 7 in this proceeding. Mr Tu's evidence was that the T&T Plastics plate first came to his attention on or around 1 September 2001, at a take-away food shop at Dandenong Plaza. 42 Mr Tu was asked, in cross-examination, to comment on the dome effect on the Pakway plates. He conceded that PKB 17 and PKB 18 stuck to a flat surface a "little bit more" than other plastic plates. This contrasted with PKB 9, which, he said, he could lift from a flat surface "without applying any pressure". (c) Mr To 43 Mr Chinh Phi To (also known as Tony To) deposed that he commenced the business of making plastic take-away food containers, trading under the name "Pakway Plastics", in 1994. Pakway did not manufacture plastic plates prior to 1999. In his 12 September 2001 affidavit, Mr To deposed: "In designing the plastic plate in 1999 I had regard to the plates which were then on the market, including plates made by Genfac. I was only interested in the manufacture of plastic plates of 180mm and 216mm in size. … The design which I intended to use for plates to be made on behalf of Pakway Plastics was different from other plates of which I was aware on the market. I wanted the plates to be manufactured by Pakway Plastics to have a domed central raised circle to assist in the better distribution of food on the plate away from the centre, to provide for better grip on smooth table surfaces, and to provide for a circular design on the rim of the plates which would be "see through" when manufactured in tinted plastic. The see through effect is achieved by making the bottom of the plates rough except where the rings are located." 44 In his affidavit of 14 June 2002, Mr To stated: "One of the main features of Pakway's plates is the convex raised centre. This design is intended to attach the plates onto smooth, slippery surfaces, such as glass tabletops, preventing spills and improving the useability of the plates. I based this feature on the effects of a pressure gradient, ie the creation of partial vacuum. This works as follows: (a) First, the plate should be placed on a flat smooth surface. (b) The convex dome is pushed down by the use of cutlery thereby forcing air out from underneath. (c) When the dome attempts to return to its original shape a partial vacuum is created. In other words the air pressure on the outside is higher than inside the dome because air cannot seep back into the dome where the bottom of the plate makes contact with the table. (d) After a time air seeps back in the dome equalising the pressure and cancelling the partial vacuum. The plate then returns to its original state. My design revolves around the raised centre dome. A dome is better than a high flat raised area because it takes up less space during stacking. … The raised dome also corresponds with the area of the ejector which pushes formed plates away from the die. This is a common feature found in injection moulded products and it also raises the bottom of the plate to accommodate the central pip underneath." 45 In his 12 September 2001 affidavit, Mr To deposed that he visited Mr Zahra, Pakway's die-maker, at his factory in early 1999, in order to discuss making the dies for Pakway's plates. Mr To said that "[e]ither at the initial meeting with him, or shortly after, [he] provided Zahra with samples of existing 180mm and 216mm plates which were available in the market", including plates manufactured by Genfac, Quickpack, T&T Plastics and Merino. In his 14 June 2002 affidavit, Mr To deposed that the Merino plate was available to the public before 1995 and that he also knew that "a Lilly [sic] plate was around prior to 1995". 46 Mr To said that he instructed Mr Zahra that he "wanted him to make dies for 180mm and 216mm plastic plates which incorporated the domed central circle and 'see through' circles on the rim". There was, Mr To said, a considerable amount of time involved in developing the die from its initial design and Pakway did not start the sale of plates until about May 2001. 47 In his 14 June 2002 affidavit, Mr To deposed that it took several attempts to make the raised centre dome design actually work and, indeed, the development continued during the life of the proceeding. Exhibits CPT 18 and CPT 19 to his affidavit of 12 October 2001 were not, he said, the "final version of Pakway's plates and do not work as intended". In his 14 June 2002 affidavit, he was able to say, however, that "[t]he plates are now complete and the vacuum effect works for the larger size". He added, "[t]he dies for the larger plate now have Pakway's name and product number, PT 216, on the bottom". Mr To deposed that the respondents were not the manufacturers or distributors of the T&T Plastics plates. 48 Also in his 14 June 2002 affidavit, Mr To stated: "Pakway's 180mm and 216mm plates are, like Genfac's plates, disposable plastic plates intended mainly for use by takeaway food retailers. As a result the plates must meet certain requirements. They must be able to be produced quickly at low cost. They must stack compactly and be able to be removed from stacks easily. They must also have a rim people can use to carry the plate and smooth corners that allow people to easily use a plastic spoon. These features mean many disposable plates share common characterisics. An example is the angle between the base of the plate and the side wall. If the angle is too small (ie with steep walls) then the plates cannot stack properly and take up too much room. If the angle between the base and the side is too great, the plate is less rigid and holds less food. Another example is the pattern on the rim of plates. It helps [keep] plates apart for easier unstacking, but the precise pattern is not important. The pattern on the rims of Pakway's plates could be altered to be squarer without affecting the plates themselves." 49 Mr To deposed that Pakway plates used the notation "P180" and "P216" as an abbreviation for plate and a reference to plate diameter. He said that he had been unaware that Genfac used a similar code, although he admitted that he knew in 1999 that Genfac's plates were marked to show that they were the subject of a registered design. Mr To said that plates of diameters of 180, 216 and 230 mm were "the most common plate sizes in the take away food industry in Australia". In his 12 September 2001 affidavit, he maintained "there [were] obvious similarities between all plastic plates made in the 180 mm and 216 mm size range, within the restrictions imposed by maximising rigidity of plastic plates of that size and conforming to that approximate size category". In his 12 October 2001 affidavit, he deposed that the raised central circle was a feature of all thin-walled food containers and plates made by injection moulding, as was the circle on the bottom of these articles. Mr To added that "[a]ny variation in size of this circle can only be relatively small" because of the need to cool the die by water. 50 In cross-examination, Mr To reiterated that there were two features of what he referred to as his unique design. These features were the raised centre of the base and a see-through effect in the pattern on the rim. He conceded, however, that this see-through effect was not a feature of any version of the white colour plate. In cross-examination, Mr To admitted that Pakway's WT 7 (in both 180 and 216 mm sizes) and Genfac's WT 3 (in the same sizes) were "very close in appearance" or "very similar". The Pakway and Genfac plates differed, so he said, in respect of the rim pattern and the central dome. When asked to compare Pakway's WT 7 with the drawings forming part of design 130427, Mr To maintained that Pakway's product was "a little bit domed", although this difference was "a bit slight". He also maintained that the angle between the flange and the rim in the Pakway product was "a bit sharper" than the one in the drawing. 51 Mr To denied that Pakway's WT 7 (in both sizes) was a copy of Genfac's WT 3. He attributed their similarity to functional considerations, such as ease of stacking and rigidity. His evidence was that Mr Zahra decided such technical matters as the size of the diameter of the raised base, rim width, flange size, the angle between the flange and the rim, the radius between the rim and the side wall, the height of the inner wall, and the radius between the side wall and the base. 52 In cross-examination, Mr To said that there were a number of versions of Pakway's plate. Version 1 was, so he said, "just very primitive". It had no rim pattern and did not have a name on it. Mr To's evidence was that he told Mr Zahra that the weight and shape of version 1 was satisfactory, and that he asked him "to make the pattern on the rim". According to Mr To, the next version was WT 7 which was also "designed primitively". He said that the 180 mm version of WT 7 reflected the desired dome shape "just a little bit". According to Mr To, WT 7 had circles around the rim, "[b]ecause my die maker say is [sic] easy and cost less to have the round circle". 53 In cross-examination, Mr To stated that WT 7 was made at the request of one of Pakway's customers and then distributed to that customer. WT 7 was, however, subsequently withdrawn from the market. He said that he was not happy with this version, "because I find there's a mistake of the die that they have printed my name … on the bottom part – the plate that contact with the table but what I want – I would like to have that one to print inside the dome shape so I have to modify and that happens after say about two months, about July" [sic]. Mr To subsequently reiterated that changes were made to WT 7 about July/August 2001 and resulted in another modified version, which was PKB 9. He was not, however, happy with this version. In cross-examination, he denied that he had made the modifications resulting in PKB 9 because he was being sued for design infringement. 54 In cross-examination, Mr To stated that PKB 9 differed from WT 7 (also PKB 7) because the inner ring on PKB 9 was a bit bigger in diameter than the inner ring in the previous version. When asked in cross-examination why this change was made, he said "[b]ecause actually I would like to have a bigger diameter and more dome and more high in the centre part" [sic] in order to improve the vacuum suction. Mr To conceded, however, that the suction feature did not work very well in the PKB 9 version, which he maintained was not "the final version". As Mr To said, as it turned out, the "dome" was, if anything, higher in WT 7 than in PKB 9. Mr To said, "[m]y intention was to make a higher dome, but unfortunately the die making product as the final result is not as good as I expected" [sic]. He added, "[m]y original design was to make [the inner raised part] a little bit bigger, but unfortunately the final product from the die making is actually smaller". At one point in his cross-examination, Mr To said PKB 9 was never on the market, but subsequently he stated that it was distributed because "we were very busy". Mr To agreed that there was nothing difficult about the change that he had made to increase the size of the inner base to create PKB 9, although he denied making the amendment in order to take the design away from WT 7. 55 In cross-examination, Mr To said PKB 17, which was a version subsequent to PKB 9, had a much bigger dome and gave better effect to his ideas. Mr To said that he was "quite happy with this version". Mr To reiterated, in cross-examination, that the amendments to give effect to each version had not been expensive. He said that the modifications had been easy and not costly. 56 Mr To said that he had wanted to make a better plate to sell in the market; and that when the dome (which was most evident in PKB 17) was pushed down by the use of cutlery, air was forced out, creating some suction between the bottom of the plate and a smooth surface, such as a table. Mr To said that "naturally when people use the fork, the spoon, the knife, it will naturally push the food down and push the air out from the air cushion between the [plate] and the table". 57 Mr To was asked in cross-examination about his early discussions with Mr Zahra. Mr To said that he had given Mr Zahra samples of Genfac, Quickpack, Merino and T&T Plastics plates, which he had at home or at his office and "because is [sic] handy to me". He no longer possessed the precise plates that he had given to Mr Zahra, although he said that these plates were the same as those identified by him in his affidavit. In cross-examination, Mr To also said that he also gave Mr Zahra a Lily plate by way of example, although he had not mentioned this in the affidavits he filed before trial. Mr To said, in cross-examination, that he had asked Mr Zahra "to make specially [sic] a die so that I can put through the plate". Mr To added that he asked Mr Zahra to make a plate in a "traditional size", like the 180 mm diameter plate. He added: "A popular size as available to sell in the market but with some feature like it can be made by the tint colour polymer and also as a see‑through pattern on the rim of the plate. Also I would like to have the centre part of the plate to be a dome … ." Mr To said that he gave the sample plates to Mr Zahra because he wanted to make a better plate than any of them. He denied that he wanted to copy them. He conceded, however, that the Genfac plates were in the market before the Pakway plates, and that he knew that the Genfac plates were popular plates. 58 In cross-examination, Mr To initially said that he did not provide Mr Zahra with any drawings of the plates that he wanted him to make. He said, "I get him to design the plate, have a say, very popular, original that sell on the market" [sic]. Subsequently, Mr To said that he gave Mr Zahra "a draft, a sketch, simple dimension". When he was asked why he had not referred to this in his affidavit, he said that he "forgot", "didn't realise its importance" and thought it "insignificant". I note too that Mr To did not mention the sketch when he was first asked about his initial conversations with Mr Zahra in oral evidence in chief and in cross-examination. The sketch, which was undated, contained no dimensions, but pictured fish around the rim. Mr To said that he had dropped the fish motif because Mr Zahra told him that this motif would "cost more". Mr Zahra told him to "instead use the circle one". Elsewhere in his evidence Mr To said that the rim pattern assisted in stacking. Mr To denied that he had no real recollection of what he had given Mr Zahra and that the sketch was made after the first manufacture of Pakway's plates. 59 In cross-examination, Mr To stated that he could not recall precisely when the Lily plate was first available on the market. He recalled, however, seeing the Lily plate "quite a long time ago". He added "[i]t might be about 20 years ago". Mr To maintained the Lily plate (R6) was "very similar" to WT 7 and that the plates were similar "because they got [sic] the rim, got [sic] a shallow wall and got [sic] a base". Subsequently in his cross-examination, Mr To maintained that the Lily plate may have been in the market "over ten years" although he agreed there was no way of dating the appearance of the Lily plate in the market. 60 Mr To reiterated in cross-examination that Pakway was not the distributor of the T&T Plastics plates, although he conceded that Pakway had acquired these plates and sold them. He explained that, in October 2001, Pakway had bought these plates to sell to a customer. Of the twelve cartons that Pakway had acquired in October 2001, Pakway had sold only six. Another six cartons of T&T Plastics plates remained in storage. (d) Mr Zahra 61 In his affidavit of 12 September 2001, Mr Zahra, who, as already mentioned, was a tool and die-maker by trade, deposed that he was a director of P Z Tooling and Engineering Pty Ltd, a company that specialised in tooling, including the preparation of dies and repairs to dies, for plastic injection-moulding equipment. In his affidavit, Mr Zahra said that Mr To approached him in early to mid‑1999 to make dies for plastic plates of 180 mm and 216 mm in diameter. He deposed: "To told me that he wished to have the plates made so that they had a domed central circular feature, with the rim of the plate embossed with raised identical circles which would be transparent, or as near to transparent as it was possible to make, when manufactured using tinted plastic. Either at the time of providing me with initial instructions, or shortly afterwards, To also provided me with samples of various plates from other manufacturers of plastic plates of the same size, including Genfac, Quickpack, T&T Plastics and Merino. To did not ask me to copy these plates, which I would have refused to do in any event. Instead, he instructed me that he wished to make a plate which was superior to the other plates then on the market, including the Genfac plate, within the restrictions imposed by the diameter of the plate and the manufacturing process. It was on this basis that I then proceeded to make the dies requested." 62 Mr Zahra further deposed that he had "not sought to copy or imitate any design of Genfac". In his affidavit, Mr Zahra denied that Mr Tu visited his premises in 1998 or that he had any discussion with Mr Tu concerning a Genfac plate. In cross-examination, he agreed he was aware of the designs registration and that the Genfac plates were marked as having a design registration. He added that, "apart from any design on the rim of plastic plates, the plastic plates conform to an industry-standard size of 180 mm and 216 mm in diameter". 63 In cross-examination, Mr Zahra said that, at some time in 1999, Mr To asked him to make a die for a plastic plate. Mr Zahra reiterated that Mr To brought various small plates with him. He said that, as part of his initial instructions, Mr To gave him "a sketch with certain dimensions and outlines – the requirements that he wanted". Mr Zahra identified this as "A3", which showed a raised curved area on the base of the plate and included a fish motif around the rim. When asked why he had not mentioned this in his affidavit, he said that he "must have forgot about it". Mr Zahra said that Mr To "wanted it transparent on the edge … the circles that we have in the top there, he wanted transparency in fish". Mr Zahra added that "we talked about fish, actually koalas, kangaroos, all these sorts of things, around the computer … and he wanted it transparent through the edge so it looks nice". Mr Zahra said Mr To also told him that he "wanted the plate to stick to the table … and that's why we have the dome …". 64 In relation to the dome, in cross-examination, Mr Zahra said : "The object of the dome was he wanted it to stick to the table so when you're cutting or using a plate it doesn't slide around the table. So we did a lot of mucking around with this. We made an insert in the die so that we could alter the concave - because we didn't know how much it would suck down or how it was going to work. So we had to just try it, yes." 65 In cross-examination, Mr Zahra said that the convex on the plate WT 7 matched the convex on a die drawing prepared by him. The convex was, he said, designed to make the vacuum effect but "[o]ur first attempt wasn't very successful. We made it higher afterwards". When counsel for the applicants put to him that it was obvious that a very slight convex was not going to work, Mr Zahra said: "If you go too high, the plate won't bend down. … It has to be slight. That's why we put the insert in there, so we could keep changing it until we got it right. That's why you'll find there's different curves." Mr Zahra's evidence was that it was "very hard" to calculate the dome that would give the vacuum effect. He said that "I just did that on my experiences with moulding" and that was why "we decided to make an insert in the die so we could change it easily". 66 In cross-examination, Mr Zahra explained the trial and error process in making the die. He said that he began by making a drawing on the computer, which he showed to Mr To. He identified what he thought was the drawing work done in mid‑1999, although he was not "a hundred per cent sure". This drawing indicated a curved surface to the base of the plate. Mr Zahra said that "we did changes to that dome, several changes to try and make it stick to the table". He said that the plate "may have been plain first" and that the rings were introduced subsequently. He added, "we would have die-trialed it and we found that the dome didn't work and … I think we made it thinner on the base to make the dome stick up more but it still shrunk back". In the result, if PKB 9 were compared to WT 7, PKB 9 showed a slight increase in the diameter of the raised base. Mr Zahra said that, although the dome was part of the initial design: "I made a mistake on the dome size, didn't take into account the shrinkage we would get running at a certain cycle and when plastic is hot it shrinks and contorts and stresses up and goes like a drum. So that looks flat there but the mould is curved. So I make another insert and I did it three times trying to achieve that suction." Mr Zahra reiterated that there was no perceptible dome in WT 7 or PKB 9 because of "the error that I made when designing the tool, the dome shape is actually bigger than that on the tool". His evidence was that PKB 17 gave effect to the design "to make a vacuum". His evidence was that PKB 17 would stick to the table when pressed down with a knife and fork. 67 In cross-examination, Mr Zahra also explained that he had dissuaded Mr To from adopting the fish pattern. He said that it was simpler, quicker and cheaper to produce a design with rings "because his machine would not cut [the fish] shape easily". Mr Zahra added that the ring pattern "would show the transparency better than the fine detail like fish and fins". He conceded, however, that the white plates did not show up the transparency, observing that this was because there was too much white colour and that an amendment to the colour could produce the transparency effect, even for white plates. 68 Mr Zahra's evidence was that the injection-moulding method of manufacture constrained the size of the diameter of the raised base of the plate. When asked who decided the actual angles and dimensions of Pakway's plate, Mr Zahra said, "I drew the drawing and I gave it to Tony [To] to approve". He acknowledged that the angle of the flange and the side wall (55 degree) was the same in the Pakway and Genfac plates, but he said: "The angle has a relationship with stacking and rigidity of the product. We made it that angle so that it would be rigid and would stack as many as we can together and also so they would come apart." 69 Mr Zahra's evidence was that he could not have done the same thing with a 45 degree angle because "the base becomes smaller and then the plate is less stable". Mr Zahra explained in cross-examination, that "the thickness of the product has to be around .4. It has to weigh a certain amount." When counsel for the applicants put to him that it was more than a coincidence that the Genfac and Pakway plates had a 55 degree angle at the same point, Mr Zahra said: "It's done in many, many cases. All your vacuum form plates are closely nested together, all your plates at home closely nest together. It is a common angle." Mr Zahra added that injection-moulded plates such as those made by Genfac and Pakway were treated differently to vacuum form plates such as LRF‑1 (the Merino plate), which was thinner than the Genfac and Pakway plates. 70 Mr Zahra said, in cross-examination, that, in the course of designing WT 7, "[w]e made it different [to the Genfac 180 plate]. We went out of our way to make it different. I mean, how different can you make a plate?" Earlier in cross-examination, Mr Zahra said that he sought to make the Pakway plate different from the Genfac plate and, for this reason: "We put the dome feature in it and we wanted to see through it and have those light colours … and we made the outer corner sharper. We can't go away from the angle and the relationship from height." (e) Mr Bayly 71 As part of their case, the applicants sought to rely on the expert evidence of Mr Bayly, an independent industrial designer. His evidence was admitted at trial subject to the respondents' objections to admissibility (discussed below). In his affidavit of 12 February 2002, Mr Bayly identified the essential design features of the registered designs; and he considered and compared the sample Genfac and Pakway plates (including the modified Pakway plates). His conclusion was that the Genfac plates differed from the registered designs in certain respects, but that these differences did not significantly alter the essence of the designs. He also said that, although Pakway's plates, including the modified plates, also differed from the registered designs in some respects, these differences did not alter the essence of the registered designs. In his affidavit of 19 June 2003, after correcting certain errors in his earlier affidavit, which he said did not affect his overall conclusions, Mr Bayly considered other samples of Pakway plates, including PKB 17 and PKB 18. His opinion was that the pronounced convex circular surface on the base was a discernible difference but that this difference did not significantly alter the essence of the design. 72 Also in his affidavit of 12 February 2002, Mr Bayly concluded that the sample T&T Plastics plate differed from the equivalent Genfac plates in relation to the flange width and height of the raised circular surface and that these differences were indiscernible without resorting to accurate measurement. He stated that the use of fine circular rings that circumscribe fine triangular outlines in place of circular forms was not a difference which significantly altered the essence of the design. He concluded that the T&T Plastics plate was similar to registered design 130281 and the differences between this plate and the design were immaterial. Mr Bayly also gave evidence that the sample Lily plates were different or dissimilar to the registered designs. 73 Mr Bayly deposed that "[t]hin-walled plates are required to maintain complete flatness after moulding" and "to nest together closely yet be able to be discharged singly from a stack of stored plates with ease and accuracy during automated handling processes". He added that "[t]here is a close relationship between the sectional thickness of the plate, the rigidity of the plastic used in producing the plate and the item cost of each moulding". These features were, he said, "determined during the design and development of the plate, the tooling to produce it and the processing parameters". Mr Bayly gave his opinion on those aspects of the plate designs that were "discretionary", by which he meant the features of the plate that could be changed without affecting its function as a plate. His evidence was that the discretionary features of the US designs were dissimilar to the registered designs whilst the Genfac and Pakway plates were close to the registered designs. In cross-examination, Mr Bayly denied that angles and other design features were "industry standards". He conceded that function affects the configuration of design, and that everything about the design of a plate was discretionary until function was considered. He also said that the manufacturer had a discretion concerning the size of the sprue bush and the mushroom used. 74 In his affidavit of 16 June 2003, Mr Bayly concluded that the design features of US patents 337480, 335798 and 339268 (being PKB12-PKB14) were dissimilar to the registered designs, his reasons for this conclusion being set out in that affidavit. In his affidavit of 23 June 2003, Mr Bayly considered the Merino plates and the evidence of Mr Fagan (see below). He concluded that the essential design features of the Merino plates were "quite dissimilar" to the registered designs. He stated that the form, shape and proportion of the Merino plates differed markedly from the form, shape and proportion of the registered designs. 75 In cross-examination, Mr Bayly conceded that there were certain other errors in his affidavits, and that in places they lacked some precision. He also stated he was not aware of the definition of "design" in the Act. (f) Mr Fagan 76 The respondents also relied on the evidence of Mr Fagan, who was an employee of Merino Pty Ltd ("Merino") from 1975 until March 2002 and remained a consultant for the company. His evidence was that, in November 1978, Merino became the first company in Australia to produce disposable plastic plates and bowls. Mr Fagan said that Merino's first range of plastic plates and bowls were 180 mm plates, 180 mm bowls and 230 mm plates made from polystyrene. According to Mr Fagan, Merino began to extend its range in the 1980s and purchased tooling for a 260 mm plate. Mr Fagan deposed: "By 1990 Merino's range included 180 mm plates and bowls, 216 mm plates, 230 mm plates, 260 mm plates, and both large and small oval plates. These plates and bowls are also similar in design and shape, and similar designs and shapes have been used by all other companies manufacturing plastic plates and bowls in Australia." Exhibited to Mr Fagan's affidavit of 19 June 2003 was a sample 180 mm plate "as produced since 1978". 77 In cross-examination, Mr Fagan identified R1 as a 216 mm plate produced by Merino, which had not been in production for some years. In cross-examination, he conceded that there were observable differences between the Merino and Genfac plates, including differences in the inner circle, base and flange and the rim pattern of the plates. In re-examination, Mr Fagan stated that the shape and design of the plate wall, base and rim all have an effect on the rigidity of the plate. consideration of the parties' submissions 78 As we have seen, the proceeding concerns the alleged infringement of two registered designs. Each design is registered in respect of a "plate". Neither design includes a statement of monopoly or novelty. The designs contain no indication of dimension, either in the information on the register or in the drawings themselves, and they are virtually identical to one another. There was evidence that design 130281 related to a 230 mm plate, and design 130427 to a 180 mm plate. Design 130427 is expressed to relate to design 130281. At one stage, counsel for the respondents submitted that it was appropriate to regard the designs as one, although depicted on two different registrations. I would not do so, although, for the purposes of this proceeding, there is no practical distinction to be made between them. 79 At the end of the trial the principal issues for determination were: 1. Is registration of the designs invalid by reason of their publication to Greg Walton? 2. Is registration of the designs invalid because the designs are not new or original? 3. If the registration is valid, was the monopoly in the designs infringed by the respondents in respect of any, and if so which, of the Pakway plates or the T&T Plastics plate? There are additional issues concerning alleged breaches of the TPA and the personal liability of individual respondents, which are referred to hereafter. the effect of publication to greg walton 80 The certificates of registration are prima facie evidence of the facts stated therein, and of the validity of the registration: s 26(3). The certificates are not, however, conclusive and it is therefore a defence to an action for infringement to show that the designs are not registrable: see Macrae Knitting Mills Ltd v Lowes Ltd (1936) 55 CLR 725 at 728 per Dixon J. The onus is on the respondents to displace the presumption of validity: see Richsell Pty Ltd v Khoury (1994) 30 IPR 129 at 136 per Kiefel J; upheld on appeal, although on a different point, in Richsell Pty Ltd v Khoury (1995) 32 IPR 289. Counsel for the respondents submitted that the registration of the designs was invalid on account of their publication to Greg Walton and Walton Engineering prior to September 1995 and December 1995. The applicants relied on s 17(1A) of the Act, pursuant to which a "secret use" is not a disqualifying use. 81 Mr Tu's evidence was that he first considered the possibility of Genfac making a plate by injection moulding in early 1993. I accept this evidence. I also accept that, as Mr Tu said, he made the two designs, on a particular day, in mid-1993. This is borne out by the design drawings dated 4 June 1993, which depict a plate that closely resembles the plates Genfac ultimately manufactured. Mr Tu's uncontradicted evidence was that he gave the design drawings to Greg Walton in mid-1993 and, in any event, well before the priority dates This too must be accepted. The question is, however, was the use a "secret use" within s 17(1A) of the Act as the applicants contend. For the reasons that follow, I accept that it was. 82 Mr Tu's evidence was, in substance, that he gave the designs to Greg Walton upon the basis that they would be kept confidential. As the respondents' counsel noted, Mr Tu gave a number of different accounts as to when he raised the matter of confidentiality, and his evidence in this regard was unsatisfactory. In considering Mr Tu's evidence, however, it must first be borne in mind that Mr Tu had an imperfect facility in the English language. Secondly, his evidence related to events a decade before the trial and his recollection was naturally affected by the passage of time. Mr Tu was firm in his evidence that he gave the design drawings to Greg Walton on a confidential basis. I accept too that the evidence established that he gave Greg Walton the drawings for the limited purpose of preparing and making a die for the production of plates. In this circumstance, it is more probable than not that, as Mr Tu said, he gave the drawings to Greg Walton on a confidential basis; and I find that they were so given. Further, I accept the applicants' submission that the fact that confidentiality was discussed some time prior to the making of the die designs does not of itself make Mr Tu's evidence about the confidentiality of the design drawings improbable. 83 The respondents submitted that the Court was entitled to infer that Greg Walton would not have been able to give any evidence to assist the applicants' case, especially on the matter of confidentiality, from the fact that the applicants did not call him or explain their failure to do so. If this were so, however, I would not reach a different conclusion. As the applicants observed, the respondents bore the onus of proof, which I find they did not discharge. originality and novelty 84 Counsel for the respondents submitted that, viewed in their entirety, the registered designs were neither new nor original. He submitted that all the features of the designs were anticipated by the prior art and, accordingly, the registration of the designs was invalid. 85 In considering these submissions, the Court must have regard to the prior art as it was before the priority dates. The respondents submitted that the prior art consisted of: (a) Merino 180 mm plates produced since 1978 (LRF‑1); (b) Merino 230 mm plates produced since 1990 (LRF‑2); (c) Merino 216 mm plates produced since 1990 (R1); (d) US design 337480 published in Canberra on 28 September 1993 (A9); (e) US design 335798 published in Canberra on 29 July 1993 (A9); (f) US design 339268 published in Canberra on 17 November 1993 (A9); and (g) Lily plates (R6). 86 A monopoly may be obtained under the Act in respect of "features of shape, configuration, pattern or ornamentation applicable to an article": see the definition of "design" in s 4; and J Rapee & Co Pty Ltd v KAS Cushions Pty Ltd (1989) 15 IPR 577 ("J Rapee") at 582 per Gummow J. When a design is registered in respect of an article, the owner has a monopoly in the design: see s 25. The simplicity of a design does not prevent its registration under the Act and a person may obtain a monopoly in respect of a design for a plate. 87 A design is not registrable, however, unless it is a new or original design: see s 17. As Lockhart J (with whom Jenkinson and Gummow JJ agreed) said in Dart Industries Inc v Decor Corporation Pty Ltd (1989) 15 IPR 403 ("Dart Industries") at 408: "Although the shape or pattern may itself be an entirely new one never previously published or registered, it is not necessary, however, that the shape or pattern be entirely new. The novelty may consist of the application of an old shape or pattern to new subject matter … . The design is the mental conception conveyed to the mind by the eye; it is the mental picture of the shape, configuration, pattern or ornament of the article to which the design has been applied… . For a design to be protected there must be special or distinctive appearance, something in the design which captures and appeals to the eye. To have that effect, the design must be noticeable and have some perceptible appearance of an individual character … ." (Citations omitted). 88 In the respondents' submission, the prior art followed the same basic form and configuration, to which features of pattern and ornamentation had been applied. The common features of shape and configuration were the circular shape, horizontal base, an upwardly and outwardly inclined side wall, a horizontal rim, and a downwardly and outwardly inclined flange. The respondents' case was not that the designs were invalid because they were designs of a simple product or because the designs were simple. Rather, the respondents' submission was that the plates derived their distinctiveness only from the pattern and ornamentation that had been applied to them. 89 As noted above, the applicants relied on the evidence of Mr Bayly to assist the Court in identifying the various aspects of the registered designs and the application in the plates that were produced as examples of such application and alleged application. In design cases, evidence of this kind has been admitted for this purpose and, subject to the following observations, I would so admit it in this case: see, e.g., Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 ("Allen Manufacturing") at 403-404 per Wilcox, French and Dowsett JJ; D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 ("Sebel") at 225 per Jacobs J; LJ Fisher & Company Ltd v Fabtile Industries Pty Ltd (1978) 1A IPR 565 at 572 per Fullagar J; and Dart Industries at 408 per Lockhart J. Such expert evidence may also assist in identifying the similarities and differences between the registered designs and the items that constitute an alleged infringement of these designs; and I would admit Mr Bayly's evidence for this purpose too. See also Re Wingate's Registered Design (1934) 52 RPC 126 ("Re Wingate's Registered Design") at 131 per Farwell J. 90 Whilst Mr Bayly's evidence is admissible for these purposes, it must be borne in mind that it is ultimately for the court to determine "the meaning of a design in proceedings under the Act, whether the central question be the meaning of the design, novelty or infringement": Dart Industries at 408 per Lockhart J. In this case, the registered designs are simple and the need for assistance by way of expert evidence is relatively slight compared with other cases involving more complex designs. It is also to be borne in mind that questions relating to design are to be determined by the eye of the court and not by precise calculation and measurement: see Dart Industries at 412 per Lockhart J and Malleys Limited v J W Tomlin Pty Limited (1961) 180 CLR 120 ("Malleys' case") at 123 per Taylor, Menzies and Owen JJ. Finally, I accept that, as the respondents submitted, the principal questions in this proceeding are to be determined by reference to the registered designs and their application or alleged application, and not merely by reference to a description of them such as Mr Bayly gave. Bearing in mind these considerations, and the errors and other defects in Mr Bayly's affidavits, I would not attach a great deal of weight to much of his evidence. I have had little, if any, regard to his precise calculations. 91 Mr Bayly's evidence does, however, assist in identifying the significant features of the registered designs. These features are: (a) a circular dished plate; (b) a flat annular rim having a width that can be held conveniently between the lower end of a thumb and forefinger; (c) a number of circular forms of alternating large and small circles that are equispaced around the annular rim and positioned centrally with its upper surface; (d) a downwardly and outwardly angled flange depended from the outer edge of the rim at an angle of about 55 degrees to the horizontal rim surface. The flange has a width of about a third of the flat annular rim in the case of design 130427 (and less in the case of design 130281) and is connected to the flat annular rim by a small radius; (e) a smooth downwardly and inwardly angled side wall depending from the inner edge of the rim at an angle of about 55 degrees to the horizontal rim surface, with a width approximately equal to the rim width and connected to the flat annular rim by a large radius; (f) a raised circular surface positioned centrally in an otherwise flat base having an outer diameter of between about 75% to 80% of the base diameter in the case of design 130281 (and between about 65% to 70% in the case 130427). The height of the raised circular surface above the base is slight and the raised surface is connected to the base by a small upwardly angled wall that has sharp corners at both edges; and (g) the raised circular surface is flat. 92 The respondents emphasised that the raised base in the registered designs was suggestive of a method of construction and did not confer on the overall shape an element within the concept of design that could be described as novel or original. They submitted that the prior art demonstrated a fundamental form, for which there were variants; and that the variants in the registered designs did not make these designs, when considered as a whole, novel or original. Noting that there was no statement of novelty in the register, the respondents submitted (and I accept) that the designs apply to the appearance of the article as a whole as depicted in the drawings in the register: see Wilson v Hollywood Toys (Australia) Pty Ltd (1996) 34 IPR 293 at 299 per Merkel J; Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd (1989) 15 IPR 617 at 636-7 per Sweeney, Fisher and Sheppard JJ; and Fisher and Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 22 IPR 1 at 7 per Black CJ, Lockhart and Gummow JJ. 93 Whilst I accept the respondents' criticisms of Mr Walton's evidence as set out in their written outline of argument, as the respondents conceded, despite his lack of die making expertise, Mr Walton's evidence concerning the design constraints imposed by the manufacturing process was uncontroversial. His evidence was in substance that: (a) the raised rings on the rim help in the stacking and unpacking process; (b) the mushroom must have a certain relative size to the total area of the plate to ensure ejection as a whole without deformation and unreliability; (c) the wall angles and depth of the product are affected by the manufacturing and stacking process; (d) the wall angle is affected by considerations of efficient storage; and (e) the angle of the flange is designed to retain the rigidity and shape of the rim and to meet stack height and separation requirements. 94 Mr Bayly confirmed this evidence, which accorded, to a large extent, with the evidence of Mr Tu. Both Mr To and Mr Zahra also gave evidence to similar effect. In addition, they said (and I accept) that the 180, 216 and 230 mm plates were standard sizes in the industry. They said (and I accept) that the raised part of the base, which is evident in the Genfac, Pakway and other injection-moulded plates, corresponded with the area occupied by the die mushroom used in injection moulding. I accept too that, in manufacturing plates, Mr Tu and Mr To took into account the cost of production as well as the design; and that both manufacturers were constrained by the automation process and by other practical considerations, including stacking and unstacking, storage, strength and rigidity. I accept Mr Zahra's evidence that, bearing in mind these considerations, there was little scope to vary angles in their relationship to height. I also accept Mr To's evidence, which was corroborated by Mr Zahra, that Mr Zahra determined technical matters such as the size of the diameter of the raised base, rim width, flange size, the angle between the flange and the rim, the radius between the rim and the side wall, the height of the inner wall and the radius between the side wall and the base. 95 Notwithstanding these constraints in manufacturing the Genfac plates, however, I do not consider that the registered designs are invalid by reason only of features serving a functional purpose: s 18. Further, I accept the applicants' submission that the registered designs do not include a method or principle of construction in the sense used in the definition of "design" in s 4(1) of the Act. As Gummow J said in J Rapee at 583: "This concept was introduced into design law at a time when design registration often was accompanied by statements having more in common with patent claims than the statement of novelty which the Registrar may request under s 20(5) of the Act: see generally Re Wingate's Registered Design (1934) 52 RPC 126 at 130-1. As I have said, no such statement was made in the present case. In the United Kingdom, the specific statutory exclusion of methods or principles of construction has been described recently as largely redundant: Morris and Quest, Design: The Modern Law and Practice, pp 25-6." 96 The respondents submitted however, that, viewed as a whole, the registered designs lacked the qualities of novelty or originality required for registration. The Lily plate can immediately be put one side, since the evidence did not establish that it pre-dated the priority dates of the registered designs (namely, 28 September 1995 and 4 December 1995). At best Mr To recalled only that he had seen such a plate about 10 years ago, when one of his children was small. Evidence of this kind is generally regarded as unsatisfactory evidence of prior user: see Re Wingate's Registered Design at 134 per Farwell J and J Rapee at 588 per Gummow J. Further, Mr To conceded that there was no reliable way of dating the appearance of the Lily plate. 97 The US designs 337480, 335798 and 399268, which were published in the Australian Designs Office on dates prior to the priority dates of the registered designs, do not satisfy the test of "obvious adaptation" in s 17(1)(b) of the Act. Further, I have studied each of the published designs and I am not satisfied that the registered designs are the same or substantially similar to any of them, or that any differences are merely trade variants, or are explicable as methods of construction, or solely in relation to function: see s 17(1)(a). 98 I have examined the Merino plates, which were the subject of Mr Fagan's evidence. It is true that there are numerous similarities between the registered designs and the Merino plates. This much is clear when LRF‑1 is compared with the registered design 130427. There are, however, differences in shape, configuration, pattern and ornamentation. In the case of the Merino plates, the rim is rounded on an angle and is not flat as in the registered designs. The triangular pattern on the rim is different from the circular pattern on the registered design. The side wall of the Merino plate is two-stepped and not smooth as in the registered designs. Virtually all of the base of the Merino plate has a textured pattern on a central raised area. The registered designs have a flat unpatterned base with a smaller raised circular area in the middle. There are other differences too, but it is unnecessary to mention all of them. 99 Having regard to the nature of the article to which the registered designs apply, the differences between the Merino plates and the registered designs, though not perhaps large, are significant. Speaking of a chair, Jacobs J said in Sebel at 226: "I think that it is most important to bear in mind in relation to such an article as a chair, that one cannot and should not expect to find some startling novelty or originality. The element of novelty or originality will of necessity be likely to be within a small compass. I do not mean thereby that any difference of shape, outline, proportion or placement of components will thereby constitute novelty of design, but provided I can see a substantial difference from the fundamental form and from the development in the trade up to the time of the application for registration, then I do not think that it is sufficient to point to a number of elements of similarity to past design in order to show that the design is not new or original." These observations apply with equal force in the present case: see also J Rapee at 590 per Gummow J. 100 In J Rapee at 589, Gummow J discussed the history of this area of the law, observing: "In 1936, Dixon J referred to the marked economy in the statement of principles in the Australian statute as it then stood, largely reflecting as it did the British legislation of 1883; he described it as "this rather peculiar Act": Macrae Knitting Mills Ltd v Lowes Ltd (1936) 55 CLR 725 at 729. Dixon J said (at 731) that whilst the design in question was not an exact reproduction of any of the prior art, it did not show any distinctiveness in its departure from the prior art. In the same case, Starke J said (at 728) that a mere variation of a common shape or form in the trade did not constitute anything "new or original", and Evatt J (at 732) held that the design in question was "a mere trade variation" from designs of articles previously in use." 101 Also in J Rapee, Gummow J held (at 591) that designs for a chair pad or cushion were invalid because they differed only "in features commonly used at the priority date … in the relevant trade from designs published or used in Australia" with respect to these articles. In J Rapee, the Court had the benefit of a number of trade witnesses and advertising and promotional material, which was tendered in evidence. In this case, however, there is very limited evidence of prior publication. Considering the registered designs as a whole and after comparing them with the Merino plates, I can see a substantial difference in the fundamental shapes of the registered designs and the Merino plates. By virtue of the differences referred to above, the registered designs have a distinctive appearance that is quite different to the Merino plates. Accordingly, I am not satisfied that the registered designs are the same or substantially similar to the Merino plates, or that any differences are merely trade variants, or are explicable as methods of construction, or solely in relation to function. infringement of registered designs 102 A monopoly in a registered design will be infringed if a person, without the consent of the owner: (a) applies the design or any fraudulent or obvious imitation of it to any article in respect of which the design is registered (s 30(1)(a)); or (b) sells or offers for sale any article to which the design or any fraudulent or obvious imitation of it has been applied outside Australia without the consent of the owner (s 30(1)(c)). The monopoly conferred by a registered design does not extend to any feature which does not determine the actual shape or configuration: see Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd (1987) 180 CLR 483 ("Firmagroup") at 488 per Wilson, Brennan, Deane, Dawson and Gaudron JJ. The monopoly is for appearance. 103 Whether the monopoly has been infringed must be determined by visual comparison between the registered design and the alleged infringing article. According to the authorities, first impressions are important in determining whether there is an infringement of a registered design: see Dart Industries at 412 per Lockhart J and Wanem Pty Ltd v John Tekiela (1990) 19 IPR 435 ("Wanem") at 440. An obvious imitation is one that is not the same as the registered design but is a "copy apparent to the eye notwithstanding slight differences": Dart Industries at 410 per Lockhart J, citing Malleys' case at 123-124. The question must be looked at as one of substance and by examining the essential features of the design: see Dart Industries at 410 per Lockhart J and the authorities there cited. 104 A matter to bear in mind is that the scope of protection afforded by the monopoly conferred by a registered design is to be determined by reference to the prior art at the priority date. When a design has a close resemblance to the prior art, the protection will be limited. In Dart Industries, Lockhart J explained at 409: "Small differences between the registered design and the prior art will generally lead to a finding of no infringement if there are equally small differences between the registered design and the alleged infringing article. On the other hand, the greater the advance in the registered design over the prior art, generally the more likely that a court will find common features between the design and the alleged infringing article to support of finding of infringement." (Citations omitted) In Allen Manufacturing at 407 another Full Court of this Court specifically approved this approach. See also Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd (1999) 46 IPR 339 ("Autocaps") at 362 per Finkelstein J. 105 The authorities establish that "[a] closer correspondence between the registered design and the accused design is necessary to satisfy the test of obvious imitation rather than fraudulent imitation": Dart Industries at 411. In Malleys' case at 123, the Court said: "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 the same case, the High Court described an "obvious imitation", at 127, as being "not the same but a copy apparent to the eye notwithstanding slight differences": see also Dart Industries at 410. 106 In Autocaps at 363, Finkelstein J explained: "To determine whether there has been an obvious imitation (when there is not an exact replication) the question is whether, based on the overall impression to be gained from the design and the alleged infringing article, there is substantial similarity between them. While it might provide some limited assistance in arriving at a conclusion to list the similarities and differences between the design and the alleged infringing article (as I have done) such an approach has the potential to cause error. It is the overall appearance of the registered design and the alleged infringing article that must be compared, as it is not the differences that are in issue: Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd (1991) 22 IPR 1 at 10. In the case of a fraudulent imitation (that is when there has been deliberate copying with knowledge that the design being copied is registered: see Elconnex Pty Ltd v Gerard Industries Pty Ltd (1991) 22 IPR 551 at 556) greater allowance is made where there are differences with the design: Fisher & Paykel at 12 and the cases there cited." 107 Precise mathematical comparisons or matters of measurement 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: Dart Industries at 412 per Lockhart J. Questions of infringement are not to be determined by a narrow or overly technical approach in a comparison between the design and alleged infringement: see Dart Industries at 412 and Wanem at 440. 108 A design may be an obvious imitation within the meaning of s 30(1)(a) of the Act notwithstanding that the person who puts the obvious imitation on the market may not know of the registered design. A fraudulent imitation, on the other hand, presupposes a knowledge of the registered design and the making use of it by the author of the alleged infringement: Dart Industries at 411 per Lockhart J and Dunlop Rubber Co Ltd v Golf Ball Developments Ltd (1931) 48 RPC 268 ("Dunlop Rubber") at 279 per Farwell J. Distinguishing between "obvious imitation" and "fraudulent imitation", Farwell J said in Dunlop Rubber at 279-280: "Now with regard to the two words "fraudulent" or "obvious", in my judgment "obvious" means something which, as soon as you look at it, strikes one at once as being so like the original design, the registered design, as to be almost unmistakable. I think an obvious imitation is something which is very close to the original design, the resemblance to the original design being immediately apparent to the eye looking at the two. With regard to the word "fraudulent", fraudulent I think does pre-suppose a knowledge of the registered design. I think it would be difficult for a Court to come to the conclusion that an imitation was fraudulent unless the Court was satisfied that the registered design had been known to the author of the alleged infringing design, and further, it seems to me that "fraudulent" imports something in the nature of making use of the registered design. It does not necessarily import deliberate intention to steal the property of the owner of the registered design. It does not import any intention to be fraudulent, because a person may be the author of a fraudulent imitation believing perfectly honestly that he has so altered the registered design as to make them two different designs, so far as his own mind and his own intention are concerned, he may be honest in that sense. But fraudulent imitation seems to me to be an imitation which is based upon, and deliberately based upon, the registered design, and is an imitation which may be less apparent than an obvious imitation; that is to say, you may have a more subtle distinction between the registered design and a fraudulent imitation, and yet the fraudulent imitation, although it is different in some respects from the original, and in respects which render it not obviously an imitation may yet be an imitation perceptable [sic] when the two designs are closely scanned and accordingly an infringement". In Malleys' case at 127, the High Court described a fraudulent imitation as being "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". In order to establish fraudulent imitation, the overall distinctive appearance of the design must be taken. 109 In Dart Industries at 411-412, Lockhart J observed: "[T]he use of the word "fraudulent" in the Act is perhaps somewhat unfortunate since fraudulent in this context does not necessarily connote dishonesty. The essence of fraudulent imitation is that the respondents' design has knowingly, consciously or deliberately been based on or derived from the registered design and neither dishonest intent nor deliberate or conscious intention to copy is a necessary element". 110 In Turbo Tek at 635, a Full Court explained that: "The question whether there is, or is not, a fraudulent imitation must of course be answered in the context of the legislation in question. In the end an applicant for relief must establish that there is a fraudulent imitation of a design which has been registered. The conduct of the maker of the alleged infringing article must be such as to involve him in having made an imitation. That fact itself confines the ambit of the conduct which will be seen to be relevant to the enquiry. In these circumstances, we think that it is correct to say that it is open to a court to find that an imitation is fraudulent where the designer or manufacturer of an article, having reason to believe that another article is an embodiment of a design which is actually registered or in respect of which an application for registration is pending, imitates or copies the article." 111 In K-Aire Pty Ltd v Polyaire Pty Ltd [2003] FCAFC 310 ("K-Aire"), a Full Court (constituted by Mansfield, Emmett and Bennett JJ) re-examined the relevant legal principles with respect to fraudulent imitation at [22] to [31], holding at [60]: "There must be a copy (i.e. imitation) …, being a copy (i.e. imitation) that has differences that are both apparent and not so slight as to be insubstantial and therefore not an obvious imitation, as his Honour found … . But before there is fraudulent imitation, the differences must have been made 'merely to disguise the copying' (i.e. the imitation). In the absence of a finding as to the last, the pre-requisites for fraudulent imitation are not established. Fraudulent imitation requires something more than visual comparison. If visual comparison was, of itself, sufficient to establish imitation there would be obvious imitation … . At no point did his Honour give attention to the question of whether or not the differences that he had found, which were sufficient to avoid a conclusion of obvious copying of the Design, were made merely to disguise the imitation of the Design. Therein lay error." (a) Obvious imitation 112 The first impression I had when I compared the initial Pakway plates (WT 7) with the registered designs during the hearing was that the Pakway plates plainly involved an application of the registered designs. I had the same impression when I consider the modified and further modified Pakway plates. I have also examined the plates that Genfac made from the registered designs and, in each case, this examination confirmed my first impression. For the purposes of determining whether there has been an infringement, however, I have left the comparison with the Genfac plates out of account. 113 By the end of the hearing, my impression had not changed and it has not altered upon further reflection. On examination, it is apparent that the Pakway plates that are represented by WT 7 bear a close resemblance to Genfac plates of equivalent size. The WT 7 Pakway plates differed only slightly from the Genfac plates in that: (1) the raised central area is slightly convex on the Pakway plates and flat on the Genfac samples; (2) the Pakway plates have a sharper connection between the rim and the flange than the Genfac plates; and (3) the raised circles pattern with their polished underside on the rim of the Pakway plates differ from the ring pattern on the Genfac plates. The Pakway plates represented by PKB 9, PKB 10 and PKB 16 also closely resemble the Genfac plates with immaterial variations. The differences between the registered designs and the infringing articles do not detract from the overall similarity that the infringing articles have with the essential features of the designs. 114 The differences between the prior art and the registered designs highlight the similarities between the designs and the infringing Pakway plates. The coincidence in shape and the similarity in ornamentation are appreciably greater in the case of the alleged infringing articles than in the case of the prior art. 115 The respondents submitted that the T&T Plastics plate was distinguishable from the registered designs by the pattern on the rim and the width and shape of the rim. Again, however, my first impression when I compared the T&T Plastics plate with the registered designs (and in particular design 130281) during the hearing was that this plate involved an application of the registered designs. My first impression has not altered. The differences between the registered designs (and in particular design 130281) and the T&T Plastics plate do not detract from the overall similarity that the T&T Plastics plate has with the essential features of the designs (and in particular design 130281). Although Mr To first said that he did not manufacture or distribute the T&T Plastics plates, which were manufactured outside Australia, he ultimately conceded (and I so find) that he had bought 12 cartons of these plates in October 2001 and subsequently sold six of them. 116 Accordingly, I find that the Pakway plates represented by WT 7, PKB 9, PKB 10, PKB 16 and the T&T Plastics plate, which is R7, are obvious imitations of the registered designs within the meaning of s 30(1)(a) of the Act. 117 The differences between PKB 17 and PKB 18 and the infringing designs are more marked than the other infringing articles, in that the raised circular surface in the middle of the base is of a pronounced convex form. In other respects, PKB 17 and PKB 18 resembled WT 7, PKB 9, PKB 10 and PKB 16 in that they have the same circular ring pattern on the rim and the same connection between the rim and the flange. Notwithstanding the pronounced convex form on the base of PKB 17 and PKB 18, my first impression was that the Pakway plates PKB 17 and PKB 18 also involved an application of the registered designs. Upon further reflection, and having compared these Pakway plates with the registered designs, my impression has not altered. The differences between the registered designs and these infringing articles do not detract from the overall similarity that the Pakway plates PKB 17 and PKB 18 have with the essential features of the designs. Accordingly, I find that the Pakway plates represented by PKB 17 and PKB 18 are obvious imitations of the registered designs. (b) Fraudulent imitation 118 The applicants' case was also put as one of fraudulent imitation; and, lest there be any doubt about the infringing character of the final version of Pakway's plates (PKB 17 and PKB 18), I deal with the matter of fraudulent imitation below. 119 In early 1999, Mr To engaged Mr Zahra to make dies for plates to be made by Pakway. In designing Pakway's plates, Mr To had regard to the disposable plastic plates that were on the market at that time, including Genfac's plates. He supplied samples of these plates, which included Genfac's plates, to Mr Zahra at the time of his initial discussions with him. Both Mr To and Mr Zahra admitted that they were aware from the lettering on the bottom of Genfac's plate that the plates were the subject of a registered design. 120 I accept Mr To's evidence that he was only interested in making 180 mm and 216 mm plates, which were industry-standard sizes. I accept that, as Mr To said, he decided to manufacture plastic plates partly to meet the needs of one of his customers. Both Mr To and Mr Zahra denied any intention to copy Genfac's plates and, as I will explain, I find that they used Genfac's designs with the intention of making plates that were different in design from Genfac's plates. Mr To's evidence was, in substance, that he wanted to improve on the disposable plastic plates in the market. He said, and I accept, that from the outset, he wanted to design a plate that was different from and superior to Genfac's plates, by adopting the feature of a central dome on the base to assist with grip on smooth tables and by creating a see-through effect in the pattern around the rim. Mr Zahra corroborated this evidence, saying that he went out of his way to make a plate that was different to Genfac's plates by incorporating the dome feature and giving a translucent effect to the pattern on the rim. Mr Zahra's evidence was that the introduction of the dome effect was a matter of trial and error and that, from the outset, the die was designed in such a way as to make modifications of the base of the plate relatively easy and inexpensive by preparing a die with a removable central cylinder on the cavity side. 121 Both Mr To and Mr Zahra gave evidence about some sketches that Mr To had given to Mr Zahra early in their discussions. The sketches showed a fish pattern with a translucent effect on the rim and a domed base. While they gave unsatisfactory explanations as to why they had not mentioned the sketches earlier in the proceeding, I accept that the sketches were in fact made and given by Mr To to Mr Zahra in the circumstances they both described. As the respondents' counsel pointed out, a sketch was produced when called for and two copies made with a fax machine were produced later. The originals were produced the following day. Both Mr To and Mr Zahra said, in cross-examination, that the fish pattern was replaced with circles on Mr Zahra's advice regarding the comparable expense and difficulty. I accept their evidence on this matter. 122 The gist of the evidence given by Mr To and Mr Zahra was that, from the outset, they set out to make a more domed base than on Genfac's plates, but they did not succeed in doing so until the versions represented by PKB 17 and PKB 18. The sketches support their accounts. Further, both Mr To and Mr Zahra gave consistent accounts of the development of the Pakway plates, which I accept. As already noted, both said that the fish pattern shown in the sketches was replaced with circles on Mr Zahra's advice. Further, their evidence was that the plates represented by WT 7 (which was produced after a plain unpatterned version) were defective because the dome was too small and also, according to Mr To, because the company's name was on the outer area of the base. Mr To's evidence was that he asked Mr Zahra to remedy these faults but that Mr Zahra failed to do so in the attempts that resulted in PKB 9, PKB 10 and PKB 16. His evidence was corroborated by Mr Zahra, who said the creation of the dome was largely a matter of trial and error and that, in the modified plates, the height of the dome did not manifest itself due to shrinkage in the plastic. As already indicated, I accept Mr Zahra's evidence that, notwithstanding his experience as a die-maker, he found it difficult to achieve the desired dome effect. Subject to what follows, it seemed to me at the trial that Mr To and Mr Zahra were, for the most part, witnesses of truth. 123 As the applicants' counsel pointed out, the die was first modified in July/August 2001 after the commencement of these proceeding. If, however, the modifications were made only as a consequence of the proceeding, as the applicants contended, the modifications plainly failed to serve any useful purpose because they did not result in any significant change in the appearance of Pakway's plates. There was an increase in the size of the raised central area on the base of the plate; but the domed effect was apparently slightly less in the case of the Pakway 180 mm plate and apparently slightly more in the case of the Pakway 216 mm plate. This result tends to support the evidence of Mr To and Mr Zahra that the whole process was one of trial and error. At the same time, I accept that, once these proceedings were instituted, Mr To and Mr Zahra had an additional reason to differentiate Pakway's plates from Genfac's plates. 124 The applicants draw attention to the fact that the respondents in fact sold the alleged infringing plates, notwithstanding that Mr To was dissatisfied with them and that, according to Mr Zahra, the die could be altered readily. Mr To's explanation for the sales of the modified plates was poor, but it reflects what I find to be the true position. That is, having made the plates and given the demand for them, Pakway simply sold them, taking its chances in infringement proceedings. 125 The applicants also invited the court to infer from the inutility of the dome that the dome feature was merely an artifice to avoid a finding of infringement. As already noted, Mr To said that he specifically wanted to have a central dome to assist with grip on smooth tables. It is clear enough that the dome feature might, in some circumstances, assist in "better grip" on a smooth surface; and, accordingly, Mr To's credit is not to be impugned on this account. Save for this, I do not regard the utility of the dome as a matter of great weight in these proceedings. 126 As I have said, I accept Mr To's evidence, which was substantially corroborated by Mr Zahra, that Mr To set out from the beginning to make a plate that had a domed central feature, with a translucent pattern around the rim and, for the reasons I am about to give, I find that, in order to improve on Genfac's plates, Mr To and Mr Zahra sought to incorporate these features into Genfac's designs, which they otherwise copied. 127 As already noted, there was a high degree of coincidence in shape and similarity in ornamentation between WT 7, PKB 9, PKB 10 and PKB 16 and the registered designs. Both Mr To and Mr Zahra acknowledged that Pakway's plates have a close resemblance to Genfac's plates. Mr Zahra accepted that the plates were similar and that the registered designs and WT 7 were "close" in appearance. Mr To also accepted that the 180 mm Pakway plate closely resembled the equivalent Genfac plate. Mr Zahra acknowledged that he deliberately tried to make Pakway's plates different from the Genfac's plates because he knew the Genfac plate was subject to a registered design. Bearing this evidence in mind and the very close resemblance between the Pakway and Genfac products, I infer that, whilst Mr Zahra and Mr To sought to make the Pakway plates different from the Genfac plates, by incorporating the dome and translucent pattern features, they otherwise copied Genfac's designs. It is improbable that Mr Zahra would have made a die for Pakway that produced plates that resembled Genfac's plates so very closely, unless he copied Genfac's designs in material respects. No-one suggested that he had acted otherwise than on Mr To's instructions. 128 Mr To's evidence was that PKB 17 and PKB 18 embodied his original intentions. I accept this but it does not affect my conclusion. The effect of Mr Zahra's evidence was that there was a line of development from WT 7, through PKB 9, PKB 10 and PKB 16, to PKB 17 and PKB 18. I infer from this evidence that PKB 17 and PKB 18 derive from an initial copying of Genfac's designs. 129 Mr To and Mr Zahra gave some evidence that the similarities between the Genfac and Pakway plates were attributable to matters inherent in the manufacture of plastic plates by injection moulding. I have found that the sizes of the plates were industry-standard. Their evidence was, and I accept, that the raised part of the base formed on Genfac and Pakway plates corresponded with the area occupied by the die mushroom used in injection moulding. There was evidence, however, which I also accept, that the size of this raised area was not fixed; and, in any event, whilst I accept that they were constrained by the manufacturing process and by functional considerations, these constraints do not sufficiently explain the extraordinary correspondence between the registered designs and Pakway's plates, especially in the versions before PKB 17 and PKB 18. 130 Mr To and Mr Zahra knew of Genfac's registered designs and used these designs by using Genfac's plates as the basis for Pakway's plates. If (contrary to what I have said) the differences between PKB 17 and PKB 18 and the registered designs were not so slight as to be insubstantial, then were these differences made merely to disguise the imitation of the registered designs? On the evidence before the court, I find that, from the outset, Mr To intended that Pakway's plates would be different from and superior to the Genfac designs. Mr To intended to improve on the Genfac designs by the introduction of a dome feature on the base, as well as by translucency in the pattern on the rim. Mr Zahra's intention was to give effect to Mr To's ideas and, though not at first successful, by a process of trial and error, he ultimately produced a plate that satisfied Mr To, in PKB 17 and PKB 18. The respondents have succeeded in establishing that the dome feature was not introduced merely in order to disguise the imitation of the registered designs. Accordingly, following K-Aire as I must, the applicants' case of fraudulent imitation necessarily fails. the trade practices claim 131 In a written outline of argument, counsel for the respondents contended that the TPA claims were "but faintly pursued" at the trial. I agree. The applicants relied on their pleadings in relation to infringement to make out a case for breach of ss 52 and 53(c) and (d) of the TPA. In substance the applicants pleaded that, by their conduct in breach of s 30(1)(a) of the Act: "the first respondent has represented, and threatens and intends to represent, that it is entitled or permitted to manufacture and/or authorise the manufacture and/or offer for sale and sell plates utilising the first applicant's designs and/or that it is entitled or permitted by the applicants to manufacture and/or authorise the manufacture and/or offer for sale and sell such plates and/or that it is sponsored or endorsed by the applicants." 132 In oral submissions, counsel for the applicants agreed that, if the applicants failed to establish any breach of the Act, then the TPA claim must also fail. I have found, however, that the applicants' case of "obvious imitation" is made out and, therefore, the applicants' claim under the TPA falls to be considered in this light. 133 Assuming for present purposes that, though not expressly pleaded, it would be open to the court to find that the first respondent was a "corporation" engaged in "trade and commerce" within the meaning of ss 52 and 53 of the TPA, for the reasons given below, I would not be satisfied that the applicants have established, on the balance of probabilities, that the impugned conduct was misleading or deceptive or likely to mislead or deceive. Nor would I be satisfied that there had been any representation of the kind referred to in pars 53(c) and (d) of the TPA. 134 Whether there has been conduct of this kind is a question of fact, to be determined on the evidence concerning the alleged conduct and the relevant surrounding facts and circumstances: see, e.g., Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 199 per Deane and Fitzgerald JJ. The applicants made no submission as to how the alleged representations were made or to whom, and they did not attempt to identify any evidence that would specifically support a finding that the alleged representations were made. The applicants cannot simply rely upon a finding of obvious imitation to make out a breach of ss 52 or 53(c) and (d) of the TPA. This is because the regime under the Act and the regime under the TPA are directed to different fields of obligations and rights: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 ("Parkdale") at 206 per Mason J. A breach of s 30(1)(a) of the Act cannot of itself establish a breach of ss 52 or 53(a) and (c): cf Parkdale at 205-211 per Mason J. More is required, which has not been shown in this case. It follows that the applicants have failed to make out any claim under the TPA. joint tortfeasors 135 The applicants also pleaded that the second and third respondents were joint tortfeasors with the first respondent in the conduct constituting infringement of the registered designs. As I observed in Mantech Systems Pty Ltd v Alpha Nursing Pty Ltd [2004] FCA 754 at [19]-[21], the law concerning the liability of directors and other officers for corporate wrongdoings is confused: see Allen Manufacturing at 406 and 409-410 per Wilcox, French and Dowsett JJ. There are two relevant lines of authority, each supportive of a different test. As the Full Court said in Allen Manufacturing at 409: "One line supported … the 'Performing Right Society test': whether the director had "directed or procured" the company's infringement. The other line supported 'the Mentmore test': whether the director had engaged in "the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it". 136 It does not seem to me that the Full Court in Allen Manufacturing expressed a preference for one test over the other. Instead, the Full Court concluded at 410-411: "The difference between the two tests may be more apparent than rea[l]. We are not aware of any case in which it has been held that a director or officer of a company directed or procured the company's infringing act, yet that person escaped liability because he or she did not deliberately, wilfully or knowingly pursue a course of conduct that was likely to constitute infringement or that reflected indifference to the risk of infringement. This may be because, in practice, an act of direction or procurement will generally meet the Mentmore test. It is notable that, in Mentmore itself, the Canadian Federal Court of Appeal declined (at 204) to 'go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement'. The court declined to do this because that 'would be to impose a condition of liability that does not exist for patent infringement generally'. To the extent there is a real difference between the tests, each has eloquent supporters. One day it may be necessary, in a practical sense, to choose between them. But it is not necessary to do so in this case. We share the view of Gyles J that, on either test, Mr Harper must be held liable. This is not a case in which the relevant person acted only as a director of the infringing company. Mr Harper had personal knowledge of the McCallum registered design. He applied, in his own name, for registration of design No 131521, the design for the Allen hinge. He personally granted the licence to use the design to Reginald Harper and personally took back a sub-licence from Reginald Harper. … In the present case, in entering into the agreement with Nova for the manufacture and sale of the Allen hinge, Mr Harper acted on behalf of Allen Manufacturing. However, that was only one step in a sequence of actions in which Mr Harper was personally an actor invading McCallum's rights: by creating the Harper design and entering into licence and sub-licence agreements in relation to it. Mr Harper's sequence of actions, including his actions on behalf of the company, were "the deliberate, wilful and knowing pursuit of a course of conduct" that was likely to constitute infringement or, at least, reflected an indifference to the risk of infringement. Mr Harper himself infringed McCallum's monopoly in its registered design." 137 This too is not a case in which Mr To acted only as a director of the infringing company. Mr To knew that the Genfac plates were applications of registered designs. Mr To drew the initial sketches for the Pakway plates and discussed the preparation of the die with Mr Zahra. I infer from Mr To's evidence that what he described as the unique features of the desired Pakway plates – the dome and translucent pattern – were his ideas. Moreover, I infer from his evidence, including his evidence concerning the operational role of the third respondent, Mr Truong, that it was Mr To's idea to make a plate based on Genfac's plates, which was to be different from and superior to Genfac's plates. Mr To was personally involved in the development of Pakway's plates and, amongst other things, he approved the primitive version that preceded WT 7 and requested the modifications that resulted in PKB 9, PKB 10 and PKB 16 and, ultimately, PKB 17 and PKB 18. Mr To admitted that the production and design decisions were principally his, although he had discussions with Mr Truong. In substance, Mr To embarked on a process of producing plates based on Genfac's designs, although with an intention that his plates should be materially better than Genfac's plates. He caused plates to enter the market, which, although not meeting his own requirements, were very close to Genfac's designs, as he himself admitted. In the circumstances, Mr To was personally an actor in the invasion of the monopoly rights in the registered designs. His actions were "the deliberate, wilful and knowing" pursuit of a course of conduct that was likely to constitute infringement or, at least, reflected an indifference to the risk of infringement. On either the Performing Right Society test or the Mentmore test, Mr To himself infringed the monopoly in the registered designs. 138 There is insufficient evidence to conclude that Mr Truong bore the same responsibility; and the evidence is indicative of the contrary conclusion. Mr To's evidence, which I accept, was that he discussed the manufacture and sale of the infringing plates with Mr Truong, but that Mr To had the principal responsibility for production and design. Mr Truong did not give evidence. The applicants did not invite me to draw any inference adverse to Mr Truong from this circumstance, and I do not do so. Accordingly, I would not, on the evidence, find Mr Truong personally liable as a joint tortfeasor with the first respondent. disposition 139 The respondents requested that, on the publication of these reasons for judgment on liability, they be afforded an opportunity to make submissions as to the appropriate orders that should, in consequence, be made. I indicated at the trial that this opportunity would be given. I would direct that the parties file and serve submissions concerning the orders that should be made to give effect to these reasons within ten days of the delivery of this judgment. I certify that the preceding one hundred and thirty nine (139) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 7 September 2004 Counsel for the Applicant: Mr C Golvan SC with Ms S Gatford Solicitor for the Applicant: Macpherson and Kelley Counsel for the Respondent: Mr C R Northrop Solicitor for the Respondent: Harwood Andrews Lawyers Date of Hearing: 24 - 27 June 2003 and 23 July 2003 Date of Judgment: 7 September 2004