AAA Embroidery & Screen Printing Pty Ltd v John Dan & Ors [2006] FCA 1846

FEDERAL COURT OF AUSTRALIA

AAA Embroidery & Screen Printing Pty Ltd v John Dan & Ors [2006] FCA 1846

PRACTICE AND PROCEDURE - Search order - prima facie case that defendants selling t-shirts identical with those commissioned by the applicant – no urgent remedial action required - no evidence that a real possibility exists than any of the respondents might destroy incriminating material before an inter parties application can be made – application dismissed Copyright Act 1968 (Cth) Anton Piller KG v Manufacturing Processes Limited [1976] 1 Ch 55 applied AAA EMBROIDERY & SCREEN PRINTING PTY LTD v JOHN DAN, VANNY DAN, MORRIS LEDERMAN, JOHN ROSENBERG AND COURTNEY LA NSD 2310 OF 2006

TRACEY J

13 DECEMBER 2006

MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2310 OF 2006

BETWEEN: AAA EMBROIDERY & SCREEN PRINTING PTY LTD

Applicant

AND: JOHN DAN

First Respondent

VANNY DAN

Second Respondent

MORRIS LEDERMAN

Third Respondent

JOHN ROSENBERG

Fourth Respondent

COURTNEY LA

Fifth Respondent

JUDGE: TRACEY J

DATE OF ORDER: 13 DECEMBER 2006

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT:

1. Application dismissed 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 2310 OF 2006

BETWEEN: AAA EMBROIDERY & SCREEN PRINTING PTY LTD

Applicant

AND: JOHN DAN

First Respondent

VANNY DAN

Second Respondent

MORRIS LEDERMAN

Third Respondent

JOHN ROSENBERG

Fourth Respondent

COURTNEY LA

Fifth Respondent

JUDGE: TRACEY J

DATE: 13 DECEMBER 2006

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant carries on the business of importing and manufacturing high quality t-shirts emblazoned with certain pictures. Those pictures have been created by artists engaged by the applicant. The applicant has paid the artists for producing the pictures and for an exclusive licence to print the pictures on t-shirts. Since November 2005 the applicant has been aware that certain stalls at the Queen Victoria Market in Melbourne were selling t-shirts which had not been supplied by the applicant but which bore the pictures for which the applicant held exclusive licence. The applicant obtained the names and addresses of the stall holders and, in December 2005, sent letters to those stall holders asserting that they had infringed the applicant's copyright in relation to the pictures and contravened provisions of the Trade Practices Act 1974 (Cth). Various undertakings were sought from the stall holders. They included undertakings that they would cease immediately to manufacture, import, offer for sale, sell or supply t-shirts bearing the particular pictures. Affidavits were sought from the stall holders confirming that the infringing t-shirts had been withdrawn from sale. The applicant sought advice as to the names and addresses of the manufacturers and importers of the infringing t-shirts, the quantity involved and the price for which the t-shirts were purchased and sold. The applicant's solicitors threatened that, unless these steps were taken within 14 days, legal action might be commenced. It appears that no response was received from the stall holders and no follow up action was taken by the applicant. 2 In early May 2006 the applicant was again advised that there were stalls at the market selling t-shirts bearing the pictures. The managing director of the applicant went to Melbourne and purchased t-shirts which bore the pictures. He saw two other stalls selling the same t-shirts. Again the names and addresses of the stall holders were ascertained and letters were sent by the applicant's solicitors to those stall holders in similar terms to the December 2005 letters. Again legal action was threatened but no follow up action was taken. 3 On 27 October 2006 the applicant's managing director again attended the Queen Victoria Market and again found that the same three stalls were still selling the t-shirts emblazoned with the pictures. 4 By an amended application, filed in the New South Wales District Registry of the Court (but subsequently transferred to the Victoria District Registry by Order of Allsop J made on 12 December 2006), the applicant seeks various orders designed to protect its intellectual property rights in the pictures. It also claimed interlocutory relief in the form of an injunction restraining the respondents from selling, importing or causing to be imported garments bearing the pictures. An amended statement of claim was filed asserting causes of action under the Copyright Act 1968 (Cth) against each respondent. 5 This afternoon the applicant made an ex parte application for orders in the nature of Anton Piller orders or search orders. 6 Such orders are only made in exceptional circumstances. In Anton Piller KG v Manufacturing Processes Limited [1976] 1 Ch 55 at 62 Ormrod LJ identified what he described as 'three essential preconditions for the making of such an order'. They were: 'First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their procession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made.' 7 In order to satisfy the Court that it is appropriate to make the orders sought the applicant relies on two affidavits, sworn by its managing director, and affidavits of Jian Ping Gao and Chen Ben He. 8 Having read those affidavits and considered submissions made by counsel appearing for the applicant I have been persuaded that the first precondition identified by Ormrod LJ has been satisfied. The pictures appearing on t-shirts being sold by the defendants appear to be identical with those commissioned by the applicant. 9 The evidence does not, however, satisfy me that the other two preconditions have been satisfied. The action taken by the applicant in the 12 months since it first became aware that the offending t-shirts were being sold at the Victoria Market hardly suggest the need to take urgent remedial action to protect the company from serious economic loss. Solicitor's letters were sent threatening action unless the respondents took certain remedial action. There is no evidence that any attempt was made to ascertain whether the respondents had taken such action and no other steps appear to have been taken by the applicant despite the failure of the respondents to reply to the solicitor's letters. 10 There is absolutely no evidence to suggest that a real possibility exists that any of the respondents might destroy any material before an inter partes application can be made. The respondents have continued to sell the t-shirts openly in the market for over 12 months. The applicant has, from time to time, purchased t-shirts which could be tendered in evidence in any proceeding brought in support of any claimed infringement of its intellectual property rights. There is nothing to suggest that it could not do so again in the near future if it was felt necessary in order to establish ongoing sales. The solicitor's letters have alerted the respondents to the fact that the applicant is aware that the sales are continuing. Despite this, the t-shirts continue to be sold. 11 In these circumstances I do not consider that it is appropriate to make the orders sought on an ex parte basis. The applicant remains free to pursue its rights, should it be so advised, by seeking injunctive relief of the kind foreshadowed in its amended application. 12 The application made ex parte today will therefore be dismissed. I will grant leave to the applicant to file in Court its amended application and its amended Statement of Claim both dated 11 December 2006. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY.