FEDERAL COURT OF AUSTRALIA Adidas AG v Pacific Brands Footwear Pty Ltd [2011] FCA 1205 Citation: Adidas AG v Pacific Brands Footwear Pty Ltd [2011] FCA 1205 Parties: ADIDAS AG and ADIDAS AUSTRALIA PTY LTD ACN 058 390 659 v PACIFIC BRANDS FOOTWEAR PTY LTD File number(s): NSD 1368 of 2010 Judge: ROBERTSON J Date of judgment: 26 October 2011 Catchwords: PRACTICE AND PROCEDURE – Trade marks – survey evidence – interlocutory application for orders that the applicants not be permitted to use or rely on proposed survey evidence – application of Practice Note CM 13 – application dismissed Cases cited: A & E Television Networks LLC v Discovery Communications Europe Ltd [2011] EWHC 1038 (Ch) cited General Electric Co (USA) v General Electric Co Ltd [1972] 1 WLR 729 followed Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 explained Date of hearing: 22 September 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Counsel for the Applicants: Mr PW Flynn Solicitor for the Applicants: Mallesons Stephen Jaques Counsel for the Respondent: Mr DB Studdy SC with Mr AR Lang Solicitor for the Respondent: Griffith Hack Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1368 of 2010 BETWEEN: ADIDAS AG First Applicant ADIDAS AUSTRALIA PTY LTD ACN 058 390 659 Second Applicant AND: PACIFIC BRANDS FOOTWEAR PTY LTD Respondent JUDGE: ROBERTSON J DATE OF ORDER: 26 OCTOBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent's interlocutory application be dismissed with costs. 2. The parties file by 2 November 2011 proposed directions to vary the directions made on 19 July 2011 either as agreed or, failing agreement, their competing proposed directions. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1368 of 2010 BETWEEN: ADIDAS AG First Applicant ADIDAS AUSTRALIA PTY LTD ACN 058 390 659 Second Applicant AND: PACIFIC BRANDS FOOTWEAR PTY LTD Respondent JUDGE: ROBERTSON J DATE: 26 OCTOBER 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicants' substantive application is brought under s 120 of the Trade Marks Act 1995 (Cth) for relief which includes: 1. A declaration that the Respondent has infringed the 3-Stripe Trade Marks by supplying the footwear depicted in Annexures C to N to the accompanying Statement of Claim 2. An order that the Respondent… be permanently restrained from: (a) manufacturing, procuring the manufacture of, importing, purchasing, selling, offering to sell, supplying, offering to supply or distributing any Infringing Products; and (b) authorising, directing or procuring any other company or person to engage in any of the conduct sought to be restrained by sub-paragraph (a) above. 2 By interlocutory application filed on 7 September 2011 the respondent applied for the following orders: 1. Pursuant to s 23 and or 37P of the Federal Court of Australia Act or further or alternatively s 192A of the Evidence Act, the Applicants not be permitted to: (a) conduct for the purposes of using or relying upon as evidence; and/or (b) using (sic) or rely upon as evidence a survey, whether as proposed in its Notice of Proposed Survey dated 3 August 2011 or otherwise. 2. Costs 3. Such further or other orders as the court thinks fit. 3 Senior Counsel for the respondent accepted that paragraph (a) did not advance the matter beyond what was sought in paragraph (b) and that the paragraphs were really one and the same. I therefore direct my attention to paragraph (b). 4 The substantive proceedings are at a relatively early stage. No trial date has been set. The most recent directions in those proceedings, made on 19 July 2011, were (retaining the original numbering) that: 2. Pursuant to Practice Note CM 13, the Applicants provide notice of any survey they propose to conduct by 3 August 2011. 3. The Respondent provide any comment on the proposed survey by 17 August 2011. 4. The Applicants file and serve any expert evidence in chief by 30 November 2011. 5. The Respondent file and serve its evidence by 24 February 2012. 6. The Applicants file and serve any evidence in reply by 20 April 2012. 7. The matter be stood over for further directions at 9:30 am on 27 April 2012. 5 For convenience I set out the terms of CM 13: 1. There are many problems in obtaining acceptable survey evidence including the failure to use relevant and unambiguous questions and whether the actual conduct of the survey (including methodology) is satisfactory. 2. The admissibility of surveys is always a matter for the trial Judge to determine but the risk of the survey being rejected or given little, if any, weight at the trial may be diminished if the following procedure is followed when a party seeks to have a survey conducted. Subject to other directions of the Court in the particular case, the Court expects that this practice will usually be followed: (1) Notice should be given in writing by the party seeking to have the survey conducted to the other parties to the proceeding. (2) The notice should give an outline of : (a) the purpose of the proposed survey; (b) the issue to which it is to be directed; (c) the proposed form and methodology; (d) the particular questions that will be asked; (e) the introductory statements or instructions that will be given to the persons conducting the survey; (f) other controls to be used in the interrogation process 3. The parties should attempt to resolve any disagreement concerning the manner in which the survey is to be conducted and any of the matters mentioned in 2 above. 4. The matter of the survey should be raised with the Court at the directions hearing as soon as possible after the steps mentioned above have been taken. 6 Returning to paragraph 1(b) of the interlocutory application and focussing on the words "or otherwise", the question is whether I am persuaded that the applicants should not be permitted to use or rely upon as evidence any survey. As to this question, on the assumption that I have the power so to order, I would not do so. Indeed, as I understood it, the respondent addressed no submissions to this issue. 7 The remaining question is whether I am presently persuaded that the applicants should not be permitted to use or rely upon as evidence the proposed survey. The terms of the proposal and the circumstances surrounding it were as follows. 8 By letter dated 3 August 2011 the applicants' lawyers attached notice of a survey that the applicants proposed to conduct. The letter asked for any comments on the proposed survey by 17 August 2011. 9 The Notice of Proposed Survey, which referred to Practice Note CM 13, was in the following general terms. It described the purpose of the survey as: To determine whether and if so the extent to which consumers associate the stripe markings on the Respondent's shoes which are the subject of the proceedings with any particular manufacturer. The Notice described the issue to which the survey was proposed to be directed as: Whether, as a result of the stripe markings appearing on the Respondent's shoes, consumers are likely to be caused to wonder whether it might not be the case that the Respondent's shoes and shoes bearing the Applicant's (sic) 3-Stripe Mark come from the same source. 10 After setting out the proposed form and methodology of survey and control to be used the Notice set out the proposed survey questions as follows: (a) Who do you think makes this shoe? (b) Why do you say that? (c) When did you last buy a pair of sports shoes? 11 By letter dated 17 August 2011 the lawyers for the respondent responded as follows: In accordance with the Orders, the Respondent's comments in relation to the proposed survey are set out below. As the case is currently pleaded, the two substantive issues in dispute in relation to liability are whether the markings on the Respondent's shoes depicted in Annexures C to N of the Statement of Claim are: 1. Used as a trade mark; and 2. Deceptively similar to the 3-Stripe Trade Marks as defined in the Statement of Claim. Both of these questions are questions of law to be determined by the Judge (assisted by appropriately qualified expert evidence). Accordingly, we cannot see that there is any necessity for survey evidence at all. As you are aware, the Respondent has conceded the Applicants' reputation in the 3-Stripe Trade Marks in its Defence dated 30 November 2010. This further supports our client's contention that there is no necessity for any survey evidence. In our client's opinion, the conduct of the survey is unnecessary, non probative and therefore of no utility. It is also a very expensive exercise and a waste of resources for both parties. 12 By letter dated 18 August 2011, the lawyers for the applicants replied, disagreeing with the respondent's conclusion that survey evidence was unnecessary in this case. Furthermore, they said, "… it is for our clients to decide the nature of the evidence on which they seek to rely at the trial of this proceeding. Equally it is for your client at the trial to make whatever submission it thinks is open to it relating to the admissibility of our client's (sic) evidence." 13 Lengthy written submissions were filed in relation to the interlocutory application. Short oral submissions were made on 22 September 2011. The respondent filed, with leave, a single page note of submissions in reply to the applicants' oral submissions. The parties also forwarded to the Court four North American cases which were said to be relevant. 14 In my view the energy, time and expense thus occasioned was disproportionate to what is, subject to one matter, essentially an exercise in case management. 15 The one matter to which I have referred is the respondent's proposition that survey evidence of the kind proposed by the applicants will not be admissible because the issue of deceptive similarity is solely "a question of law" and that the question of deceptive similarity is a matter for the judge alone. 16 In support of this proposition, the respondent referred to Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 387-389. I do not so read the passages in the judgment of Gummow J, with whom Black CJ and Lockhart J agreed. It is correct to say that deceptive similarity is a question for the tribunal of fact and is not a matter for any witness to decide but, as the passage cited by Gummow J from Lord Diplock's judgment in General Electric Co (USA) v General Electric Co Ltd [1972] 1 WLR 729 at 738 makes plain, to say that a question is for the tribunal of fact or to describe it as a "jury question" does not mean that evidence going to that question is impermissible. 17 The applicants submitted that the relief sought in the interlocutory application is premature in that there is no more than a Notice of Proposed Survey dated 3 August 2011 pursuant to Practice Note CM 13. 18 In substance, and apart from the one matter I have dealt with above, I accept the applicants' submission of prematurity. I also accept however that survey evidence is often expensive and turns out to be inadmissible or of very little weight or assistance because of either the manner in which the survey was conducted, for example remotely from the marketplace, or the form of the questions asked or a permutation of these matters. 19 On this case management aspect it seems to me that the question is whether it is sufficiently clear at this time that the proposed survey could not produce relevant or admissible or sufficiently probative evidence: see in the context of leave or permission for a survey to be conducted and for evidence resulting from previous surveys to be admitted A & E Television Networks LLC v Discovery Communications Europe Ltd [2011] EWHC 1038 (Ch). 20 In my view because the process contemplated by Practice Note CM 13 has not been completed as a matter of substance by reason of the respondent's view on the overarching question of relevance, which I have decided against it, the appropriate course is to make directions (again) for the respondent to respond as envisaged by Practice Note CM 13. The majority of the matters the respondent advanced on its interlocutory application should have been and should be part of the Practice Note CM 13 procedure so that the applicants may respond to them in that context. 21 For example, the respondent's submissions address what is said to be defects in the questions and methodological flaws in the proposed survey but those matters, in my view, should have been and should be dealt with under the Practice Direction. They do not go to the necessary irrelevance of this survey, far less do they go to the necessary irrelevance of any survey. 22 I should not be taken to be saying that none of the respondent's points in relation to the survey has substance. On each side there should be considered reflection on the points raised by the other and, where appropriate, change in the course otherwise proposed to be taken. That is the intention of Practice Direction CM 13, in my view. 23 The application for interlocutory relief is dismissed with costs. 24 It will also be necessary to vary the directions I made on 19 July 2011 and I direct the parties to file by 2 November 2011 such proposed directions as agreed or, failing agreement, their competing directions. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson. Associate: Dated: 26 October 2011