Barry Bowden Investments Pty Ltd v XOXOXO Trading Pty Ltd [2004] FCA 11 (12 January 2004)

Last Updated: 23 January 2004

FEDERAL COURT OF AUSTRALIA

Barry Bowden Investments Pty Ltd v XOXOXO Trading Pty Ltd [2004] FCA 11

BARRY BOWDEN INVESTMENTS PTY LTD & ORS V XOXOXO TRADING PTY LTD & ORS
V1129 OF 2003

HEEREY J
12 JANUARY 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V1129 OF 2003

BETWEEN:	BARRY BOWDEN INVESTMENTS PTY LTD and OTHERS APPLICANTS
AND:	XOXOXO TRADING PTY LTD and OTHERS RESPONDENTS
JUDGE:	HEEREY J
DATE OF ORDER:	12 JANUARY 2004
WHERE MADE:	MELBOURNE

UPON THE APPLICANTS, by their Counsel, undertaking to the Court:

(a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order; and
(b) to pay the compensation referred to in (a) to the person there referred to.
THE COURT ORDERS THAT:-
1. Until further orders or the trial of this proceeding, the First, Second, Third, Fourth, Sixth, Seventh, Eighth, Ninth and Tenth Respondents by themselves, their servants or agents or any of them howsoever be restrained:

(a) from reproducing, or substantially reproducing, the Copyright Materials as defined in the Second Amended Statement of Claim dated 12 January 2004 filed herein, or authorising such conduct;
(b) from manufacturing, importing for sale, selling, or by way of trade, offering and/or exposing for sale, or exhibiting in public, the garments:
(i) labelled "XOXOXO" with style number 59871;
(ii) labelled "XOXOXO" with style number 28716;
(iii) labelled "XOXOXO" with style number 28371
(iv) labelled "XOXOXO" with style number 28518; and
(v) labelled "Drop Dead Gorgeous" with style number 28737.
(c) from disposing of the garments listed in (b) above and any materials or documents used in their creation.

2. The First, Second, Third and Fourth Respondents, not later than 15 January 2004, write to all retailers to whom the garments listed in 1(b) above were sold, requesting that these garments be immediately removed from sale and be returned to the First, Second, Third and/or Fourth Respondents.
3. The Applicants’ solicitors by their agents attempt to personally serve the Sixth, Seventh, Eighth, Ninth and Tenth Respondents with:

(a) the Application dated 16 December 2003;
(b) the Statement of Claim dated 16 December 2003;
(c) the Certificate of Legal Representative dated 16 December 2003;
(d) the Affidavits of Anthony Brooke Watson sworn 16 December 2003, 17 December 2003, 22 December 2003, 9 January 2004 and 12 January 2004;
(e) the Second Amended Statement of Claim dated 12 January 2004; and
(f) this order;
prior to the next directions hearing of this proceeding.

4. Costs reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V1129 OF 2003

BETWEEN:	BARRY BOWDEN INVESTMENTS PTY LTD and OTHERS APPLICANT
AND:	XOXOXO TRADING PTY LTD and OTHERS RESPONDENT

JUDGE:	HEEREY J
DATE:	12 JANUARY 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 The applicants, who are four unrelated companies, are sellers of women's garments. They seek an interlocutory injunction to restrain dealings in what are described in par 45 of the amended statement of claim as the "Copyright Materials". That definition in turn refers to earlier paragraphs of the statement of claim where it is pleaded, in the case of each applicant, that it produced design drawings from which a cardboard sample dressmaking pattern was produced. A sample was then produced from the cardboard pattern and a graded dressmaking pattern which was produced which was scanned into a computer program.

2 The first, second, third, and fourth respondents (hereafter "the respondents"), who are represented by Dr Duncan of counsel, oppose the grant of an injunction. Last month a consent injunction was granted against the fifth, eleventh, and twelfth respondents. The sixth, seventh, eighth, ninth, and tenth respondents have not yet been served.

3 The striking feature of the case is the physical similarity between the applicants’ garments produced as a result of the Copyright Materials and the allegedly infringing garments. They appear for all practical purposes to be identical in design, manufacture, structure and, in most cases, in the fabric and the designs which appear on the fabric.

4 This is of course very relevant to the issue of reproduction that turns on both resemblance and causal connection. The degree of objective similarity may constitute cogent material from which to draw the inference that the respondent has in fact copied the copyright work: Francis Day and Hunter Ltd v Bron [1963] Ch 587 at 627.

5 The respondents in opposing the application did not put on any evidence. Their main complaint was as to the inadequacy of the evidence relied upon by the applicants, particularly as to the subsistence of copyright.

6 It is true that the only evidence in that regard was in the form of affidavits by the applicants’ solicitor Mr Anthony Watson. However I agree with counsel for the applicants that it is not correct to characterise this as double hearsay. For example, in the case of the first applicant Mr Watson desposes that he is instructed by Joula Bowden a director of that company and believes that Ms Joanne Kearney in the course of her employment with the company created a sketch for a halter neck dress with contrast colour, piping and trim which was ultimately called the Petulia dress.

7 Mr Watson further deposes that he is instructed by Ms Bowden and believes that the design drawing was given to Mr Quok Lew a contract pattern maker who had created a sample dressmaking pattern based on Ms Kearney's drawings and instructions. A fair reading of all that in my opinion is not that Ms Bowden is simply relating what Ms Kearney told her but rather that Ms Bowden is speaking of her own knowledge as to what happened within her company. In any event, as I say, the physical similarity of the garments rather outweighs any criticism that can be made of other evidentiary weakness.

8 There is no direct evidence that the respondents are manufacturers of the infringing garments. The applicants rely primarily on s 38 of the Copyright Act 1968 (Cth). They contend that there is a triable issue that the respondents have produced the infringing garments and in the course of doing so have cut fabric in accordance with the applicants’ patterns and also that the production of the garments necessarily involves the respondents using patterns used to mark articles in infringement of the copyright.

9 In terms of s 38 it is put therefore that the respondents have exposed for sale - which is not in substance disputed - garments which they knew or ought reasonably to have known if made in Australia would have constituted such an infringement in the way mentioned. I think there is a triable issue, in particular there were continued sales after the sending of letters of demand.

10 Mention was made of s 77 of the Act but it would seem at least arguable that the term "article" in s 77(2) refers to an article of manufacture, that is an item which is on the market and sold separately: see Muscat v Le [2003] FCA 1540 at [62].

11 Dr Duncan, as well as criticising the form of evidence relied on, attacked the statement of claim saying that it was defective in not providing dates on which the applicants’ patterns and the like were produced and otherwise being defective in particulars.

12 There is some force in that criticism. The unsatisfactory state of the pleading at the moment is perhaps explained, if not excused, by the history of litigation in this and a related matter in which the applicants contend that post dated contracts were fabricated to make out a case of earlier manufacture in China prior to the date of the alleged creation of the applicants’ designs.

13 This also was relied on by counsel for the respondents as a reason for not adducing evidence. However the time for such procedural skirmishing has passed and I propose to make some directions which hopefully will put this matter back on a proper basis.

14 Nevertheless I am left with an arguable case of infringement. I turn then to the balance of convenience. The evidence in substance is that the infringing garments are sold much more cheaply at retail than the applicants’ garments.

15 For example the Petulia dress already referred to is retailed by the first applicant at $119 to $125 whereas the respondents' garment sells for $59.95. In the case of other garments there is an even greater disparity. For example the T-shirt "Pilgrim Hell" retail price is $189.95. The respondents' price is $45. The applicants put it that they suffer not only financial loss by not being able to make the profit on popular styles but they suffer the loss of return customers as their reputation for originality and exclusivity of designs is damaged by proliferation of cheaper imitations.

16 I think there is an arguable case that if the injunction is not granted and the applicants’ ultimately succeed at trial they will suffer significant damage which will be very difficult, if not impossible, to quantify. On the other hand if an injunction is granted and the respondents succeed at trial their loss should be readily ascertainable and will be covered by the applicants’ undertaking. The respondents did not adduce any evidence of difficulty in this regard.

17 Upon the applicants giving the usual undertaking as to damages, I will grant the injunction and other orders sought.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

Associate:

Dated: 22 January 2004

Counsel for the Applicants:	M W Wise
Solicitors for the Applicants:	Middletons
Counsel for the first, second, third and fourth respondents:	L J Duncan
Solicitors for the first, second, third and fourth respondents:	Mervyn Finlay, Thorburn & Marshall
Date of Hearing:	12 January 2004
Date of Judgment:	12 January 2004