FEDERAL COURT OF AUSTRALIA GSM (Trademarks) Pty Ltd v Shao [2006] FCA 1272 GSM (TRADEMARKS) PTY LTD (ACN 085 955 291) AND GSM (OPERATIONS) PTY LTD (ACN 085 950 803) v DAVID WEI SHAO NSD 1731 OF 2006 GRAHAM J 21 SEPTEMBER 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1731 OF 2006 BETWEEN: GSM (TRADEMARKS) PTY LTD (ACN 085 955 291) First Applicant GSM (OPERATIONS) PTY LTD (ACN 085 950 803) Second Applicant AND: DAVID WEI SHAO Respondent JUDGE: GRAHAM J DATE OF ORDER: 21 SEPTEMBER 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Applicants have leave to file in Court a Notice of Motion dated 20 September 2006, an affidavit of Kenneth James Taylor sworn 20 September 2006, an affidavit of Themis Papas sworn 19 September 2006, and an affidavit of Nathan James Shepherd sworn 20 September 2006. 2. The requirements of Order 19 rules 3 and 4 be dispensed with in relation to the Notice of Motion dated 20 September 2006, and such Notice of Motion be returnable instanter. 3. Pursuant to Order 7 rule 10, the application, the affidavit sworn by Kenneth James Taylor on 7 September 2006 and the affidavit sworn by Marianne David on 8 September 2006 be taken to have been served on the Respondent on 12 September 2006. 4. Pursuant to section 137(5) of the Trade Marks Act 1995 the 2,965 mobile phone covers bearing the mark BILLABONG seized by the Australian Customs Service on 10 August 2006 not be released by the Chief Executive Officer of the Australian Customs Service to the Respondent. 5. The Applicants notify the Respondent of these orders and the reasons for judgment delivered 21 September 2006, by sending a copy of the orders as entered, and a transcript of the reasons for judgment, by pre-paid post to each of 728 Parramatta Road, Petersham NSW 2049 ("Petersham Address") and Unit 808, 199 Pyrmont Street, Pyrmont NSW 2099 ("Pyrmont Address"), such postage to be effected by no later than 5pm on Monday 25 September 2006, or in the event that the transcript is not available by that time, as soon as it becomes available. 6. The Applicants notify the Chief Executive Officer of the Australian Customs Service of these orders today by facsimile or other electronic means and subsequently provide a copy of the transcript of the reasons for judgment delivered 21 September 2006, and the orders as entered, as soon as those documents become available to the Applicants' solicitors. 7. Costs of the Notice of Motion dated 20 September 2006, and the hearing for interlocutory relief on 21 September 2006, be reserved. 8. The matter be listed for further directions at 9:30am on 12 October 2006. 9. The Applicants' solicitors notify the Respondent of the date of the directions hearing on 12 October 2006 by a letter sent by pre-paid post to each of the Petersham Address and the Pyrmont Address. UPON THE APPLICANTS, BY THEIR COUNSEL, GIVING THE USUAL UNDERTAKINGS AS TO DAMAGES, THE COURT ORDERS THAT: 10. Until further order, the Respondent by himself, his servant or agents, be restrained from: (a) importing; (b) causing or procuring the or importation of; (c) selling or offering or exposing for sale, goods bearing: (i) one or more of the trade marks set out in the Schedule to these Orders; or (ii) any mark which is substantially identical with or deceptively similar to any one or more of the trade marks set out in the Schedule to these Orders, without the prior consent of the Applicants. Schedule Trade Mark Reg no. Class Goods in respect of which trade mark is registered BILLABONG 358063 25 Articles of clothing and footwear. BILLABONG 416930 6 Keys, key rings, key chains, key cases in this class, pewter goods, and souvenirs formed from metal in this class, being goods included in class 6 BILLABONG 416931 18 All goods in Class 18 including handbags and wallets but excluding picnic cases and all other items adapted to picnic BILLABONG 416932 24 All goods in this class, including towels and fabrics, but excluding bath linen and travelling rugs BILLABONG 416933 25 Clothing; footwear; headgear and wet suits in this class, being goods included in class 25 BILLABONG 419740 42 Retailing and wholesaling of clothing, footwear, and headgear, being services included in class 42. BILLABONG 429670 9 Optical apparatus, including spectacles, sunglasses, eye shades, spectacle glasses, spectacle frames, spectacle cases; spectacle accessories, including spectacle straps, chains and cords; anti-glare visors and glasses; wet suits for diving; being goods included in class 9 BILLABONG 575467 9 Protective clothing, including wet suits for diving but excluding helmets and mouth guards; sunglasses, frames for sunglasses, straps, bands and tethers for sunglasses; video tapes and video films, sound recordings including recorded sound tapes and records; parts, fittings and accessories in this class for the abovementioned goods BILLABONG 587692 16 Posters, stickers, decals and transfers, prints, pictures and photographs; books, magazines, newspapers and periodicals; advertising promotional material in this class including brochures, leaflets and catalogues; educational and instructional material in this class; packaging materials in this class BILLABONG 663448 28 Gymnastic and sporting articles in this class including surfboards, surfskis, sailboards, body boards, snow boards, skate boards, skis; bags and covers for all of the aforegoing goods; leg ropes and tethers for boards; waxes for boards and skis BILLABONG 805362 22 Textile materials in this class including wool, cotton, linen, canvas, jute and hemp, other materials in this class for textile use, and goods made of all of the aforegoing materials in this class; sails; bags and sacks in this class including bags and sacks of textile for packaging; nets in this class; ropes in this class; string; bands, not of metal for wrapping or binding; packaging, packing, padding and stuffing materials in this class; none of the aforegoing being tents or rug carriers BILLABONG 964518 9 Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, recording, signalling, checking (supervision), and observation apparatus and instruments, devices, apparatus and equipment in this class for sensing, detecting and indicating time, distance, velocity, wind speed, temperature, pressure, fluid level, flow rate, and electricity, including time recording apparatus and devices including time clocks, radios incorporating clocks, time switches, distance recording apparatus, rulers and measuring tapes, compasses, anemometers, thermometers in this class, thermostats and other thermo-sensing devices, flow rate control devices and flow rate meters, gauges in this class, electrical circuits, electrical conduits, cables, optical fibres, signal sensors, apparatus for applying stimuli in response to computer generated signals, speed indicators and regulators, speed checking apparatus, radar equipment, radar detectors, apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electronic signals, signal panels in this class, receivers and transmitters of signals in this class including electronic signals and signals via satellite, receivers and transmitters of signals emitted by sensors including sensors of temperature, pressure, movement, fluid flow, voltage, light and sound, apparatus and devices for detecting, measuring monitoring and regulating electrical current, voltage or an electromagnetic field, circuit breakers, voltage surge protectors, voltage surge suppressors; parts, fittings and accessories for all of the aforegoing goods; electronic devices, apparatus, equipment and instruments (included in this class), electrical appliances in this class; parts, fittings and accessories for all of the aforegoing goods; apparatus for generating, reception, recording, transmission or reproduction of sound and/or images; television devices, apparatus and equipment, including television sets, pocket television sets, and other receivers and display units for television signals, devices with capabilities for interactive viewer response and viewer engagement, parts, fittings and accessories for all of the aforegoing goods; recording media for data, sound and/or images including magnetic and optical data media and carriers, cassettes, tapes, recording disks including magnetic disks, optical disks, compact disks, floppy disks, DVDs (digital versatile disks), covers, bags and cases for all of the aforegoing goods including, covers, bags and cases for floppy disks, compact disks and DVDs; holders for floppy disks, compact disks and DVDs; encoded cards and disks in this class including magnetically encoded cards and disks, cards and disks incorporating integrated circuits, pre-paid and rechargeable cards and disks; debit cards, credit cards, holograms, readers and scanning devices including scanners, card readers, bar code readers, optical character readers; cash registers, calculating machines and devices; automatic vending machines and mechanisms for coin operated apparatus; parts, fittings and accessories for the aforegoing goods; downloadable publications including electronic books, electronic and multimedia publications, audio, audiovisual and interactive media; downloadable digital content, including images, moving pictures, music and pictures; downloadable logos and designs, and computer programs which enable or facilitate the downloading, use, display, reproduction, application, manipulation and conversion of logos and/or designs; computer programs including interactive computer programs, downloadable computer programs; computer games programs in this class including games adapted for use with television receivers and mobile telephones, and downloadable computer games programs; electronic games in this class including downloadable electronic games, video games in this class including downloadable video games, apparatus, devices, parts, fittings accessories for all of the aforegoing goods including games consoles, visual display facilities, keyboards and joysticks; computer hardware and other computer equipment, parts, fittings and accessories for the aforegoing goods, including computer terminals, computer monitors, screens, and other visual display units; keyboards, mice and mouse pads, computer printers, computer peripheral devices, integrated circuits including integrated circuit chips, printed circuit boards, modems, cables, adaptors and converters, computer memory storage media including memory cards, memory sticks, read only memory chips; discs or tapes; information and data storage and retrieval apparatus; disc drives; data processors, apparatus for the generation, reception, display, monitoring and manipulation of electronic and computer generated imagery and sound; computer-interactive, manipulative and control apparatus, data processing equipment, interactive data transfer apparatus, devices for capturing and storage of data including image data; digital imaging devices and equipment; aforegoing goods; charge coupled devices and equipment; telescopes, photographic apparatus, instruments and equipment, and other equipment for capturing, recording, storage and reproduction of images (including moving pictures) and/or sound, including camera and camera equipment for still and video images, video recording equipment, and parts, fittings and accessories for all of the aforegoing goods including stands and tripods for the aforegoing goods; communications equipment, apparatus, instruments and devices; telecommunications equipment, apparatus, instruments and devices including mobile telephones, videophones, and other handheld communications apparatus in this class, messaging devices in this class; parts, fittings and accessories for all of the aforegoing goods including mobile telephone housings, faceplates, covers, cases and pouches, keyboards, keypads, keypad covers, straps for handheld telecommunication apparatus, mobile telephone holders, telephone grips, handsfree car kits, portable handsfree kits, head sets, ear pieces, belt clips, sport clips, holsters, antennas, batteries, battery chargers, adaptors including space impact adaptors, data cables, USB cables, connectors, adaptors and converters, datalinks, snakesticks, cords, straps and lanyards for the aforegoing goods; communications hardware and software including facsimile, telex, telephone, telegram, modem, network and Internet hardware and software; hardware and software for transmission, transfer or receipt of audible, visual and audiovisual content; parts, fittings and accessories for the aforegoing goods; recorded media containing telecommunications related information and data, personal organisers in this class including electronic organisers, electronic digital assistants, and devices with address book capabilities, parts, fittings and accessories for the aforegoing goods; remote control apparatus, equipment and instruments including electronic door and window openers, apparatus for the remote control of signals, apparatus in this class for remote ignition, monitoring systems, theft and intruder prevention installations in this class, antitheft alarm systems and detectors; electronic locks, and electronic locking systems, electronic security tags, anti-intrusion alarms; burglar alarms; fire alarms; personal security alarms; controls and sensors for use in security and warning systems, including antitheft detectors and alarm systems, sirens including sirens for vehicles; smoke detectors; mirrors in this class; fire fighting apparatus and equipment in this class including fire extinguishers and fire blankets, emergency warning lights, beacon lights, lamps and lanterns in this class, reflective safety devices in this class; signs in this class including safety signs, illuminated and reflective signs, neon signs, luminous signs, customised signs; screens and display units in this class including fluorescent screens, display panels including electric luminescent display panels, electronic notice boards, navigation apparatus and instruments in this class including vehicle navigation apparatus, instruments and systems; global positioning system (GPS) navigation, communication and sonar devices, instruments, equipment and systems including personal GPS devices, vehicle safety apparatus and equipment in this class; devices and circuits for signalling engine temperature and loss of pressure, engine cut-off devices; vehicle speed controls and meters; electromechanical controls for use in vehicles; vehicle radios, vehicle and flight simulators, life saving apparatus, safety equipment and devices in this class, life belts, life buoys, life jackets, buoyancy vests and life vests, swimming belts, safety restraints, belts and harnesses, life rafts, reflective devices and materials for wear in this class; clothing in this class including safety clothing, headgear and footwear, thermal protective clothing, headgear and footwear, including electrically heated socks, protective clothing, protective headgear, protective footwear, protective suits, vests and waistcoats in this class, swimming jackets; buoyancy vests, diving suits including wetsuits and drysuits for diving, diving boots, gloves for divers, divers' masks, diving apparatus and equipment, breathing apparatus and respirators in this class, snorkelling apparatus and equipment, weights in this class; protective helmets in this class including protective helmets for sports, bicycle helmets; protective shields in this class including face shields, protective masks; mouth guards and teeth protectors; protective goggles, glasses and visors in this class, including goggles and visors for sports including goggles for skiing and swimming; ear plugs, nose plugs and other protective devices in this class for the ears and nose; optical apparatus and instruments; sunglasses and spectacles, anti-glare glasses, anti-glare visors, anti-dazzle shades, goggles and visors, parts, fittings and accessories for the aforegoing goods, including lenses for optical goods, frames, cases, chains, cords and straps and lanyards for the aforegoing goods; rechargeable and non-rechargeable power cells including batteries, battery and other power cell rechargers; magnets including decorative fridge magnets, electronic pens in this class, electronic novelty and souvenir items; teaching apparatus and instruments; parts, fittings and accessories for all of the aforegoing goods Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1731 OF 2006 BETWEEN: GSM (TRADEMARKS) PTY LTD (ACN 085 955 291) First Applicant GSM (OPERATIONS) PTY LTD (ACN 085 950 803) Second Applicant AND: DAVID WEI SHAO Respondent JUDGE: GRAHAM J DATE: 21 SEPTEMBER 2006 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The first applicant is the owner of the registered trademark Billabong number 964518 in class 9. The protection afforded by that registration extends to the use of the mark in respect of mobile phones and parts, fittings and accessories for mobile telephone housings, face plates, covers, cases and pouches. 2 On or about 10 August 2006 the Australian Customs Service seized 2965 mobile phone covers bearing designs, labels and/or markings that appeared to infringe the registered trade mark in respect of which the second applicant was an authorised user. 3 It would appear that an entry for home consumption was presented to the Australian Customs Service which nominated David Wei Shao as the owner of the mobile phone covers. Accordingly, Mr Shao was the designated owner of the goods within the meaning of the Trade Marks Act 1995 (Cth) ('the Act'). 4 By letter dated 10 August 2006, which appears to have been received by the second applicant on 14 August 2006, the Australian Customs Service notified the second applicant that it had seized the mobile phone covers. Under s 137 of the Act it was open to the applicants to institute proceedings for infringement of the mark and to seek relief in respect of the seized goods. It would appear that on 25 August 2006 the Chief Executive Officer of the Customs Service extended the time within which proceedings for infringement may be commenced to at least 8 September 2006 or, arguably, 11 September 2006. As it transpires, the proceedings now before the Court were commenced on 8 September 2006, that is to say, within the time permitted by s 137 of the Act. 5 What is presently before the Court is a Notice of Motion filed in Court in the proceedings today which seeks relief in respect of service of the application and two of the supporting affidavits. In addition, the applicants seek interlocutory relief generally in accordance with prayers for relief 12 and 13 in the application itself. Paragraph 12 seeks an order under s 137(5) of the Act and paragraph 13 seeks an interlocutory injunction in respect of the further importation amongst other things of infringing goods. 6 The seized goods were inspected by Kenneth James Taylor, a Director of Mainpack Pty Limited, which carries on business under the business name Trade Mark Investigation Services. Trade Mark Investigation Services has been authorised by Billabong International Limited, the parent company of the applicants, to represent Billabong International Limited and its subsidiaries in matters pertaining to the infringement and/or unauthorised use of its intellectual property. 7 When Mr Taylor inspected the seized goods he photographed cardboard cartons said to contain the seized goods. From the contents of one of the cartons showing, when opened, numerous items in various colours within clear plastic containers and also some of the items themselves following their removal from the relevant cardboard carton, it seems clear that the seized goods answer the description of being mobile telephone covers and upon each of them the word or the mark Billabong is prominently displayed. 8 Prior to the institution of the proceedings, Mr Taylor says that he had a telephone conversation with a person whom he described as 'the respondent'. The conversation is said to have taken place in circumstances where Mr Taylor telephoned a mobile telephone number 0433 168 887. After leaving a message inviting the recipient to call Mr Taylor back, Mr Taylor spoke with the person whom he described as 'the respondent'. His conversation included: Taylor: 'The Billabong phone covers seized by Customs are counterfeit and I urge you to forfeit the covers and settle the matter.' Respondent: 'There are many companies called Billabong Australia, why don't you look on the IP Australia website? Billabong is a generic word and contained in the Oxford Dictionary. Is the company going to sue the Oxford Dictionary as well? I don't care if I'm going to court, I have my point to argue. … If you can give my company the licence I will buy. …' Taylor: 'Why have Billabong on it?' Respondent: 'I make the market colourful. I have rights. I will argue my rights. …' Taylor:'What is the best address to send you mail?' Respondent: '728 Parramatta Road, you know where I am. Just send it there and I will pick it up.' 9 The address apparently provided to Customs in the entry for home consumption was 728 Parramatta Road, Petersham NSW 2049. I will shortly refer to a number of attempts at service at that address and also at an address Unit 808, 199 Pyrmont Street, Pyrmont NSW. This Pyrmont address is an address for a residential unit which was established as being an address for one 'Wei Shao' who happens to be an officer of Amtel International Pty Limited (ACN 111 770 597). 10 Mr Themis Papas says that on the afternoon of 16 September 2006 he telephoned the mobile telephone number 0433 168 887, being the same telephone number as Mr Taylor rang that resulted in his conversation with 'the respondent' set out above in [8]. In the course of his conversation on 16 September 2006 Mr Papas said a conversation took place as follows: Papas: 'Am I speaking to David Shao?' Respondent: 'Yes.' Papas: 'Where can I deliver these documents to you today?' Respondent: 'I'm interstate on holidays.' Papas: 'Where on holidays?' Respondent: 'I don't have to tell you where I am.' Papas: 'Did you get the documents I gave to Henry Hong?' Respondent: 'I don't have anything to do with Henry Hong.' Papas: 'Did Henry give you the documents last week?' Respondent: 'No.' Papas: 'Henry said he was delivering the documents to you last Tuesday night.' Respondent: 'Send them in the post. Send them in federal post, I got some documents last time as I am avoiding service.' Papas: 'I need to hand deliver them to you. Where can I deliver these documents to you tomorrow?' Respondent: 'Deliver them through the post, I don't want them hand delivered. Last time someone delivered documents he took my photo. I had a fight with him and then he laughed at me because he took film of me and the Police got involved. I don't want this. I don't know how you have to deliver but I don't want this trouble again. I'm not going to meet you anywhere for you to deliver. I don't want to meet anyone from Trademark or ACAG. Just deliver to 728.' Papas: 'So you are avoiding service of these documents?' Respondent: 'Yes.' Papas: 'Can I deliver them to your home address?' Respondent: 'Yes. Deliver them to 728.' Papas: '728 where?' Respondent: 'Parramatta Road, Petersham.' Papas: 'That can't be your home address?' Respondent: 'Yes, it's my home address. Send it in the mail like before.' 11 Several attempts were made to effect service of the initiating process and two of the supporting affidavits on 8, 9, 11, 12 , 13, 16 and 17 September 2006. In fact, a copy of the application and two of the supporting affidavits were left at the premises at 728 Parramatta Road, Petersham on 11 September 2006 with a Mr Henry Hong. At the time of the provision of those documents to Mr Hong a conversation took place as follows: Papas: 'Is David Shao here?' Hong: 'No, but you can leave them here with me', and he pointed to the court documents in Mr Papas's hand. Papas: 'What is your name?' Hong: 'Henry.' Mr Papas proceeded to hand the documents to Mr Hong saying 'Thanks and bye.' 12 On 12 September 2006 Mr Hong had further conversation with Mr Papas in which he indicated that he had delivered the documents which had been left with him on 11 September to Mr Shao. This was further confirmed in a later conversation between Mr Papas and Mr Hong at about 6.30 pm on 12 September 2006 and again at about 4.45 pm on 13 September 2006. 13 It is clear that the applicants have been unable to effect personal service of the originating process upon the respondent as required by Order 7 rules 1 and 2 of the Federal Court Rules ('the Rules'). Order 7 rules 9 and 10 make provision for substituted service or for confirmation of informal service. Substituted service may be ordered where for any reason it is impractical to serve a document in the manner required by the rules. 14 Order 7 rule 10 permits the Court to make an order confirming that service has been effected where for any reason it is impractical to serve a document in the manner set out in the Rules and steps have been taken to bring the document to the notice of the person to be served. Order 7 rule 10 provides: '10. Where for any reason it is impractical to serve a document in the manner set out in the Rules, but steps have been taken to bring the document to the notice of the person to be served, the Court may order that the document be taken to have been served on that person on a date specified in the order.' 15 In the circumstances of the case it would appear to me appropriate for an order to be made in accordance with Order 7 rule 10 to the effect that the application and copies of the affidavits of Kenneth James Taylor sworn 7 September 2006 and Marianne David sworn 8 September 2006 be taken to have been served on the respondent on 12 September 2006. 16 In relation to the application for interlocutory relief, s 137 of the Act relevantly provides: '137(3) In addition to any relief that the court may grant apart from this section, the court may: (a) at any time, if it thinks it just, order that the seized goods be released to their designated owner subject to the conditions (if any) that the court considers fit to impose; or (b) order that the seized goods be forfeited to the Commonwealth. … (5) If, after 20 working days from the day on which the action was brought, there is not in force at any time an order of the court directed at the Customs CEO preventing the goods from being released, the Customs CEO must release the goods to their designated owner. (6) If the court orders that the goods be released, the Customs CEO must, subject to section 140, comply with the order.' 17 By letter dated 11 September 2006 to the applicants' solicitors, the Australian Customs Service noted the institution of the current proceedings and indicated that it did not oppose the making of orders which might impose an obligation upon and/or affect the rights of Customs as sought in paragraph 12 of the application. Customs advised that it did not wish to appear at the hearing and indicated its position on an undertaking that no costs order would be made against it. No costs order is sought by the applicants against the Australian Customs Service. 18 Apart from the fact that the application was expressed to be returnable before the Court at 9.30 am today, a solicitor employed by the solicitors for the applicants left a telephone message for the respondent yesterday after ringing the mobile telephone number 0433 168 887. The message that was left indicated that the matter would be heard before me today at 9.30 am in courtroom 20D, which is the courtroom in which the proceedings are presently being dealt with. Mr Shepherd, who made the telephone call, indicated the nature of the relief that would be sought today. 19 It seems clear to me that an order should be made in accordance with s 137(5) of the Act directed at the Chief Executive Officer of the Australian Customs Service preventing the seized goods, being 2965 mobile phone covers bearing the mark Billabong, from being released to the respondent. I consider that an order should also be made restraining the respondent by himself, his servants and agents, from importing or offering for sale any further mobile telephone covers bearing the mark Billabong until further order. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 25 September 2006 Counsel for the Applicant: Mr P W Flynn Solicitor for the Applicant: Baker & McKenzie The Respondent did not appear. Date of Hearing: 21 September 2006 Date of Judgment: 21 September 2006