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Federal Court of Australia |
Last Updated: 12 December 2008
FEDERAL COURT OF AUSTRALIA
Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 3) [2008] FCA 1869
INTELLECTUAL PROPERTY – TRADE
MARKS – infringement of s120 Trade Marks Act 1995 (Cth) by
software enabled internet postal service – form of injunctive
relief
COSTS – applicant successful on one cause of action
– whether costs should follow event – whether circumstances justify
apportioning percentage of costs – effect of undertaking given during
trial
Held: declarations and injunction ordered
– applicant not completely successful – circumstances justify
awarding applicant
its costs at
80%
Federal Court of Australia Act
1976 (Cth) s 43(2)
Trade Marks Act 1995 (Cth) s 7(4), s 10, s
120(1)
Trade Practices Act 1974
(Cth)
Australian Trade Commission v
Disktravel [2000] FCA 62 cited
Bing! Software Pty Ltd v Bing
Technologies Pty Limited (No 1) [2008] FCA 1760 related
Bing! Software
Pty Ltd v Bing Technologies Pty Limited (No 2) [2008] FCA 1761
related
Dodds Family Investment Pty Ltd v Lane Industries Pty Ltd
(1993) 26 IPR 261 cited
Doric Products Pty Ltd v Lockwood Security
Products Pty Ltd (2002) 54 IPR 495 cited
Dr Martens Australia v
Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 cited
Foots v Southern
Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 241 ALR 32 cited
Hughes v Western
Australian Cricket Association (Inc) (1986) ATPR 40-748 cited
New
South Wales Dairy Corporation v Murray Goulburn Co-operative Company (1989)
14 IPR 75 considered
Oshlack v Richmond River Council [1998] HCA 11; [1998] 193 CLR
72 cited
Probiotec Ltd v The University of Melbourne (2008) FCAFC 5
cited
Verna Trading Pty Ltd v New India Assurance Pty Ltd [1991] 1 VR
129 cited
BING! SOFTWARE PTY
LTD ACN 078 281 197 v BING TECHNOLOGIES PTY LIMITED ACN 098 420 903 and STEVEN
PATRICK CRANITCH
QUD 234 of 2007
COLLIER
J
10 DECEMBER 2008
BRISBANE
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AND:
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THE COURT ORDERS THAT:
1. It is declared that the use by the first respondent of the word "bing" to describe, name or refer to software utilised by it or its customers was an infringement of the applicant’s Trade Mark 836622.
2. It is declared that the first respondent’s conduct trading under and by reference to a name which includes the word "bing" does not infringe the said trade mark.
3. In relation to all references to software in the course of the first respondent’s business, the respondents are restrained by injunction:
a. from using the word "bing" when directly referring to software in any documentation, on websites, or otherwise;
b. from referring to software itself as "bing" or any other combination of words using the word "bing";
c. where there is a reference to software from referring to it as "bing" software, or "bing" mailroom software or any other combination of words using the name "bing".
4. The respondents pay the applicant’s costs of the notice of motion filed 16 May 2008.
5. The respondents pay 80% of the applicant’s costs of the amended
application filed on 20 November 2007.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
The text of entered orders can be located using eSearch on the
Court’s website.
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BETWEEN:
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BING! SOFTWARE PTY LTD ACN 078 281 197
Applicant |
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AND:
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BING TECHNOLOGIES PTY LIMITED ACN 098 420 903
First Respondent STEVEN PATRICK CRANITCH Second Respondent |
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JUDGE:
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COLLIER J
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DATE:
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10 DECEMBER 2008
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PLACE:
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BRISBANE
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REASONS FOR JUDGMENT
1 On 25 November 2008 I gave judgment in the primary proceedings in this matter (Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760) and also in relation to a notice of motion filed 16 May 2008 (Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 2) [2008] FCA 1761). In summary, I found that the conduct of the first and second respondents had infringed the applicant’s registered trade mark, but that the effect of compliance with an oral undertaking given by the first respondent during the hearing of the primary proceedings was that the infringement of the applicant’s registered trade mark by the respondents ceased. Notwithstanding that undertaking however, I allowed the application in part because I considered that the applicant was entitled to an injunction based upon the oral undertaking. Upon giving judgment I directed the parties to make submissions as to the terms of the injunction in light of the reasons given in my judgment. I also directed that the parties make submissions as to costs.
2 On 3 December 2008 Counsel for the parties made oral submissions, based upon their outlines of argument filed 28 November 2008.
Injunctive Relief
3 In written submissions the applicant submitted that, in accordance with s 7(4) and s 120(1) Trade Marks Act 1995 (Cth) ("the Act"), the injunction should read as follows:
The Respondents are restrained by injunction from using as a trade mark a sign comprising the word bing, or any other sign that is deceptively similar to Trade Mark 836622, upon, or in physical or other relation to goods or services in respect of which the trade mark is registered. ("the applicant’s preferred wording of the injunction")4 The applicant submitted that the reasons for its preferred wording of the injunction were that:
• The undertaking given in Court was vague.
• The injunction should be based on the language of the Act.
• The Court has found that the first respondent’s marks were deceptively similar to the applicant’s registered trade mark, and the order should acknowledge that fact.
• For trade mark infringement under s 120(1) all that is relevantly required is that the use must be "in relation to" goods or services in respect of which the trade mark is registered.
• It is clear from the evidence that bing was used on the website of the first respondent "in relation to" software, including by direct descriptions such as "bing Mailroom" as well as other references (for example "bing can handle any documents, even PDF’s from any software platform...").
• There is no evidence that all of these references have ceased, and any order made must be worked to ensure it covers trade mark infringement in relation to use of the trade mark on the software, in specific and direct descriptions of the software, and "in relation to" the software.
5 The applicant submitted that, in the alternative and if the Court proposed to adopt the strict wording of the undertaking, the injunction should be worded as follows:
In relation to all references to software in the course of the first respondent’s business, the respondents are restrained by injunction:a. from using the word "BING!" when directly referring to software in any documentation, on websites, or otherwise;
b. from referring to software itself as BING! or any other combination of words using the word "BING!";
c. where there is a reference to software from referring to it as BING! software, or BING! mailroom software or any other combination of words using the name BING!.
("the alternative wording of the injunction")
6 Although in written submissions the respondents had advanced proposed wording of an injunction, at the hearing it was clear that the respondents supported the alternative wording of the injunction submitted by the applicant. Mr Crowe SC submitted that the respondents were concerned about the terms of the applicant’s preferred wording of the injunction because:
• in my judgment I had made it clear that the first respondent was entitled to continue to call itself "Bing" provided that it complied with the undertaking as to references to software, and the alternative wording of the injunction reflected the undertaking;
• should I make an order in terms of the applicant’s preferred wording of the injunction, there is a risk that, in the future, a purchaser of the applicant’s business could claim that the first respondent was using the trade mark "BING!" in relation to software, distribution of software, and updating software simply by the first respondent calling itself "bing".
7 In considering the form of the injunctive relief I give little weight to the possibility of a hypothetical purchaser of the applicant’s business commencing litigation against the first respondent in ignorance of the reasons for judgment in Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760. However on balance, and after considering the submissions of the parties, I consider it appropriate to make an order in terms of the alternative wording of the injunction proposed by the applicant. I have formed this view because:
• I found in Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760 that compliance by the first respondent with its undertaking meant a cessation of conduct infringing the applicant’s trade mark, and that injunctive relief in terms of that undertaking was appropriate. In my view the alternative wording of the injunction more accurately reflects that undertaking than the applicant’s preferred wording of the injunction.
• The alternative wording of the injunction addresses the applicant’s concerns with respect to such products as BING! mailroom.
• In relation to the applicant’s concerns relating to statements on the first respondent’s website such as "bing can handle any documents, even PDF’s from any software platform...", I do not consider that such a statement would breach either the first respondent’s undertaking or the injunction I propose to make provided that it was clear that in doing so the first respondent was using the word "bing" to describe itself rather than software it supplies as part of its service.
• I do not consider that it is necessary to make reference in the order to "or any other sign that is deceptively similar to Trade Mark 836622". As the applicant submitted, and as I found in my judgment, the applicant has an exclusive statutory monopoly to the trade mark "BING!" in relation to the goods and services in respect of which the trade mark is registered. The judgment dealt exclusively with the fact that the first respondent used the word "bing", and found that in doing so it had infringed the applicant’s trade mark. Whether any other sign of the first respondent (or anyone else, for that matter) is "deceptively similar" to Trade Mark 836622 for the purposes of s 10 and s 120 of the Act would require a separate determination by the Court.
• In relation to the applicant’s concern that not all references by the first respondent to software as "bing" have ceased, in my view the applicant is in no stronger position as to enforcement of an injunction should the injunction be in the terms preferred by the applicant than if the injunction were to be crafted in the alternative wording proposed by the applicant. If conduct of the respondents breaches the injunction, appropriate remedies are available to the applicant.
• While as a general proposition I accept that injunctive relief framed in the language of the Act is desirable, I do not consider that the applicant is in any way prejudiced by the drafting of the injunction in the alternative manner it proposes.
8 The respondents have also submitted that, to avoid the potential for any further dispute as to the width of the injunction, it could be accompanied by the following declarations:
It is declared that the use by the first respondent of the word "bing" to describe, name or refer to software utilised by it or its customers was an infringement of the applicant’s trade mark no 836622. It is declared that the first respondent’s conduct trading under and by reference to a name which includes the word "bing" does not infringe the said trade mark.9 These declarations accord with my reasons for judgment and I accept the respondents’ submission that they would avoid the potential for further dispute. Accordingly I consider it appropriate that these declarations also be made.
Costs: Notice of Motion filed 16 May 2008
10 The applicant submitted that, as the notice of motion was dismissed (Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 2) [2008] FCA 1761), there was no reason why the normal rule should not apply, and that costs should follow the event. The respondents made no submissions specifically referable to this notice of motion.
11 The Court has an unconfined discretion within s 43(2) Federal Court of Australia Act 1976 (Cth) to award costs and there is no automatic rule that costs always follow the event (Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 241 ALR 32 at 39-40, Probiotec Ltd v The University of Melbourne (2008) FCAFC 5 at [46]). In this case however, in the interests of fairness, and in the absence of misconduct of any kind by the applicant, I consider that costs should follow the event (cf comments by McHugh J in Oshlack v Richmond River Council [1998] HCA 11; [1998] 193 CLR 72 at [67]- [70]). The appropriate order is that the respondents pay the applicant’s costs in relation to the notice of motion filed 16 May 2008.
Costs: Application
12 There is, however, more dispute as to the award of costs in the primary proceedings.
13 The parties filed detailed submissions as to costs, and made oral submissions at the hearing on 3 December 2008.
14 In summary, the applicant submitted that:
• All claims before the Court were based on the same evidence of conduct by the respondents, namely the use of the trade mark "bing".
• This was not a case where a considerable part of the trial was taken up in determining separate and distinct issues upon which a party failed.
• It was not unreasonable or inappropriate that the applicant made claims pursuant to the Trade Practices Act 1974 (Cth) ("TPA") or passing off.
• The applicant has succeeded in proving infringement and has been held entitled to an injunction to restrain that infringement, and the fact that ancillary orders were not granted should not deprive the applicant of its costs.
• The undertaking given by the respondents during the trial should have no impact on the applicant’s entitlement to costs because it was given during the second day of the trial; it was loosely-worded; it was not accompanied by any offer to pay costs; there was no period for consideration as would normally apply in an offer of settlement under the rules or in a Calderbank offer; and the applicant has achieved a measure of success beyond what it would have achieved by acceptance of the undertaking at the time, namely entitlement to an injunction.
15 In turn, the respondents submitted in summary:
• The applicant was partially successful on only one issue, namely trade mark infringement, but lost in relation to every other issue litigated.
• The applicant continued its case after the first respondent gave the undertaking on 11 March 2008 because the applicant wanted more – namely an order preventing the first respondent using the word "bing" in any way, and in particular as part of its trading name.
• The applicant was unsuccessful in relation to all relief sought other than injunctive relief, in which it had only partial success.
• The Court in exercising its discretion can apportion costs in terms of the percentage allowed and in respect of periods of time. Each of the applicant and the respondents should have 50% of their costs up to and including 11 March 2008 (when the undertaking was given) and that the respondents should have all their costs from 12 March 2008.
16 Consideration of an award of costs in relation to the primary proceedings in this case is inevitably more complex than in respect of the notice of motion because the applicant in the primary proceedings was only partially successful in relation to the claims the applicant was able to substantiate and the relief it sought. The Courts have observed on numerous occasions that where a litigant has succeeded only upon a portion of the claim the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed, and indeed a successful party who has failed on certain issues may not only be deprived of the costs of those issues, but may be ordered as well to pay the other party’s costs: Hely J in Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at 497, cf Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136. However it is equally clear that the Court should not resort too readily to disallow costs simply because a party has failed upon an issue, unless it be quite a separate and distinct issue from the issues in respect of which it succeeded or unless there be some element of unreasonableness or inappropriate conduct in relation to that issue: Dr Martens Australia v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [54], Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at 497, Verna Trading Pty Ltd v New India Assurance Pty Ltd [1991] 1 VR 129 at 152-154.
17 In considering the exercise of my discretion to award costs under s 43(2) Federal Court of Australia Act in the primary proceedings, I consider the following issues relevant.
18 First, although the applicant was not successful in relation to its TPA and passing off claims, nonetheless it was successful in establishing that both respondents had engaged in conduct infringing the applicant’s registered trade mark in breach of the Act. In relation to this point I accept Mr Franklin SC’s submission that it is usual in cases of this nature to plead not only trade mark infringement, but TPA and passing off causes of action. Circumstances potentially giving rise to trade mark infringement also potentially give rise to claims of misleading and deceptive conduct and passing off.
19 Second, and following on from this point, I agree with the applicant that the factual and evidentiary matrix in support of the TPA and passing off claims was the same in these proceedings as that in respect of the trade mark infringement claim. No separate evidence was lead in relation to the failed TPA and passing off claims.
20 Third, the parties have not quantified the time and effort spent specifically on preparing and meeting the TPA and passing off claim of the applicant as distinct from the trade mark infringement claim. I observe however that so far as concerned the TPA and passing off claims to the exclusion of issues relating to trade mark infringement, minimal time was spent at the hearing. There were, however, detailed written submissions made in relation to claims of misleading and deceptive conduct. The same observation may be made in relation to the pecuniary and ancillary relief sought by the applicant in relation to which the applicant was not successful.
21 Fourth, I note that an undertaking was given by the first respondent on the second day of the trial but that the trial continued past the provision of the undertaking for one more day. The respondents have identified the provision of the undertaking as a watershed in relation to the award of costs, and claimed that after 11 March 2008 they should be entitled to all their costs. Relevant factors for consideration in this context are:
• The injunctive relief eventually ordered was based upon that undertaking, and it is implicit in the submissions of the respondent that the trial could have ceased at the point that the undertaking was given and no further trial costs incurred.
• The fact that the undertaking was not a Calderbank offer which would have allowed the applicant a reasonable period of consideration (an issue raised by the applicant in submissions) is in my view of no relevance. Indeed the undertaking of the first respondent was not an offer at all – as evidence before the Court demonstrated, the first respondent proceeded to immediately act to give effect to the undertaking, requiring no agreement or otherwise from the applicant.
• However:
o I agree with Mr Franklin SC that the undertaking was loosely worded. Indeed the loose wording of the undertaking was such that I sought further submissions from the parties as to the final form of injunctive relief and costs; and
o the undertaking was given, in Court, at a time well into not only the proceedings, but the trial itself. The undertaking made no mention of the substantial costs which had already been incurred by the applicant to that point.
22 Fifth, as the applicant submitted, it had to come to court and incurred all the costs associated with the matter to achieve what it achieved. The matter had had a substantial history prior to the hearing including numerous directions hearings and an unsuccessful mediation. In relation to this issue, Mr Crowe SC submitted (in summary) that the relevance of such history in a matter is minimal because otherwise no party could ever succeed at the end of the trial in having costs apportioned by the Court where there has been partial success and partial failure of claims (TS 15 ll 35-38). However I consider that the history of a matter is relevant in the exercise of the Court’s discretion as to award of costs and the manner in which the costs are apportioned.
23 Sixth, while I found that the applicant was not entitled to the full extent of relief sought, nonetheless as a general proposition the applicant succeeded in establishing that it was entitled to injunctive relief to protect its statutory monopoly in its registered trade mark. However advancing this matter further, Mr Franklin SC submitted that the case before me is on all fours with New South Wales Dairy Corporation v Murray Goulburn Co-operative Company (1989) 14 IPR 75. Mr Franklin SC directed my attention to comments of Gummow J in that case as follows:
That brings me to the question of costs. As is apparent both from the reasons for judgment and these reasons, the case presented a number of issues and neither the applicant nor the first respondent succeeded on all of them. Much of the evidence was directed to several issues. Thus, the body of evidence as to whether MOO was substantially identical to or deceptively similar with MOOVE (trade mark issues upon which the applicant succeeded) was used also upon the different legal issues arising upon the first respondent’s claims for contravention of s.52 of the Trade Practices Act 1974 ("the TP Act") and passing-off (issues upon which the applicant failed). The first respondent also pointed to the substantial body of evidence going to the issues discussed in the reasons for judgment under the heading "The Conduct of the First Respondent", issues upon which the first respondent succeeded. Given the outcome of circumstances of this complex litigation in which varied relief was sought by the applicant and by the first respondent, upon a range of grounds, the first respondent submitted that the applicant should be entitled only to a proportion of its costs. The applicant submitted that costs should follow the "event" in the sense that the "event" in a commercial sense had been the effort by the applicant to stop further use by the first respondent of "MOO" upon its flavoured milk product. That is an objective the applicant will have achieved by this litigation, upon the coming into effect of the rectification of the Register, and the consequent operation of the injunction to restrain trade mark infringement. In all the circumstances, in my view, the appropriate order should be that the first respondent should pay the costs of the applicant. (at 79)24 While New South Wales Dairy Corporation (1989) 14 IPR 75 is helpful I do not think it is on all fours with the case before me. It is true that the applicant in these proceedings has obtained an injunction, however looking more closely at the application it is clear that the applicant did not achieve all that it sought in its application or indeed the injunction it sought. This is not a case where, to paraphrase the language of the Full Court in Australian Trade Commission v Disktravel [2000] FCA 62 at [4], the applicant succeeded completely in terms of the final orders it secured. I am not persuaded on the basis of New South Wales Dairy Corporation (1989) 14 IPR 75 that this is not a case where some apportionment of costs may be warranted.
25 As the Full Court observed in Dodds Family Investment Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272:
Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation.26 In summary, this case represents a mixed outcome in which the applicant
has been, to a degree, successful. That the applicant
was obliged to institute
legal proceedings to obtain an injunction and its success in obtaining a limited
injunction are significant
factors in relation to the exercise of the
Court’s discretion under s 43(2) Federal Court of Australia Act. No
separate evidence was lead in respect of the TPA and passing off claims and
there was extensive commonality of issues raised
in relation to the successful
trade mark infringement claims and the applicant’s unsuccessful claims. In
relation to the undertaking,
it was offered two days into the trial after
several months of directions and an unsuccessful mediation, and was loosely
worded with
no reference to costs. I do not think this is a case where the
applicant should be liable for any of the respondents’ costs.
However
detailed submissions were made in respect of the failed TPA and passing off
claims as well as the failed claims for pecuniary
and ancillary relief. Further,
a small amount of time was taken up at the trial in relation to the failed
claims, and more time in
relation to the relief in respect of which the
applicant was unsuccessful and which was clearly an important aspect of the
applicant’s
case. On balance I consider the applicant is entitled to its
costs, subject to a discount to reflect the only limited success of
the
applicant in relation to both its claims and relief. In the circumstances of
this case I consider justice will be done as between
the parties if I order the
respondents to pay 80% of the applicant’s costs of the
proceedings.
Associate:
Dated: 10
December 2008
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Solicitor for the Applicant:
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Bennett & Philp
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Counsel for the Respondents:
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Mr A Crowe SC
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Solicitor for the Respondents:
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Holding Redlich
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