Brooks Sports, Inc v Paul's International Pty Ltd (No 1) [2011] FCA 999 (11 July 2011)

Last Updated: 1 September 2011

FEDERAL COURT OF AUSTRALIA

Brooks Sports, Inc v Paul’s International Pty Ltd (No 1) [2011] FCA 999

Citation:		Brooks Sports, Inc v Paul’s International Pty Ltd (No 1) [2011] FCA 999
Parties:		BROOKS SPORTS, INC v PAUL'S INTERNATIONAL PTY LTD (ACN 128 263 561), PAUL'S RETAIL PTY LTD (ACN 114 419 242), PW TRADING PTY LTD (ACN 103 736 027) and ST. GEORGE WHOLESALE DISTRIBUTORS PTY LTD (ACN 000 435 030)
File number:		VID 752 of 2011
Judge:		DODDS-STREETON J
Date of judgment:		11 July 2011
Catchwords:		TRADE MARKS – Application for search order – Allegations that counterfeit footwear sold under applicant’s trademarks – Whether prima facie case of infringement – Whether potential for significant loss and damage – Whether real possibility that respondents may destroy evidence or cause it to be unavailable
Legislation:		Federal Court Rules O 25B Trade Marks Act 1995 (Cth) ss 120(1) and 126
Date of hearing:	11 July 2011
Date of publication of reasons:	30 August 2011
Date of last submissions:	11 July 2011
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	34
Counsel for the Applicant:	Mr T Cordiner
Solicitor for the Applicant:	Griffith Hack

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 752 of 2011

BETWEEN:	BROOKS SPORTS, INC Applicant
AND:	PAUL'S INTERNATIONAL PTY LTD (ACN 128 263 561) First Respondent PAUL'S RETAIL PTY LTD (ACN 114 419 242) Second Respondent PW TRADING PTY LTD (ACN 103 736 027) Third Respondent ST. GEORGE WHOLESALE DISTRIBUTORS PTY LTD (ACN 000 435 030) Fourth Respondent

JUDGE:	DODDS-STREETON J
DATE OF ORDER:	11 JULY 2011
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:
INTRODUCTION

1. (a) The application for this Search Order (comprising this paragraph and paragraphs 2 to 27 below) is made returnable immediately.

(b) The time for service of the Application, Statement of Claim and affidavits filed in support of the application for this Search Order is abridged and service is to be effected by 4.30pm, Tuesday 12 July 2011.

2. Subject to the next paragraph, this Search Order has effect up to and including Thursday, 21 July 2011 (‘the Return Date’). On the Return Date at 10.15am there will be a further hearing in respect of this order and an initial hearing of the application for interlocutory relief set out in paragraph (i) of the Application, before Justice Dodds-Streeton.
3. You may apply to the Court at any time to vary or discharge this order; including, if necessary, by telephone to the judge referred to in the immediately preceding paragraph (phone No. 03 8600 3690) or to the Duty Judge (phone No. 03 8600 3347).
4. This Search Order may be served only between 9 am and 2 pm on a business day.

5. In this order:

(a) ‘applicant’ means the person who applied for this Search Order.

(b) ‘independent computer expert’ means any and all of the persons identified as an independent computer expert in the search party referred to in Schedule A to this Search Order.

(c) ‘independent solicitor’ means the person identified as the independent solicitor in the search party referred to in Schedule A to this Search Order.

(d) ‘listed thing’ means any thing referred to in Schedule A to this Search Order.

(e) ‘premises’ means the premises identified in Schedule A to this Search Order, including any vehicles and vessels that are under any respondent’s control on or about the premises.

(f) ‘search party’ means the persons identified or described as constituting the search party in Schedule A to this Search Order.

(g) ‘thing’ includes a document.

(h) ‘you’, where there is more than one of you, includes all of you and includes you if you are a corporation.

(i) any requirement that something be done in your presence means:

(A) in the presence of you or of one of the persons described in (6) below; or

(B) if there is more than one of you, in the presence of each of you, or, in relation to each of you, in the presence of one of the persons described in (6) below.
6. This Search Order must be complied with by you by:

(a) yourself; or

(b) any director, officer, partner, employee or agent of yourself; or

(c) any other person having responsible control of the premises.

7. This Search Order must be served by, and be executed under the supervision of, the independent solicitor.

ENTRY, SEARCH AND REMOVAL

8. Subject to paragraphs 10 to 20 below, upon service of this Search Order you must permit members of the search party to enter the premises so that they can carry out the search and other activities referred to in this Search Order.

9. Having permitted members of the search party to enter the premises, you must:-

(a) permit them to leave and re-enter the premises on the same and the following day until the search and other activities referred to in this order are complete;

(b) permit them to search for and inspect the listed things and to make or obtain a copy, photograph, film, sample, test or other record of the listed things;

(c) disclose to them the whereabouts of all the listed things in each respondent’s possession, custody or power, whether at the premises or otherwise;

(d) disclose to them the whereabouts of all computers, computer disks and electronic information storage devices or systems at the premises in which any documents among the listed things are or may be stored, located or recorded and cause and permit those documents to be printed out;

(e) do all things necessary to enable them to access the listed things, including opening or providing keys to locks and enabling them to access and operate computers and providing them with all necessary passwords;

(f) permit the independent solicitor to remove from the premises into the independent solicitor’s custody:

(i) the listed things or things which reasonably appear to the independent solicitor to be the listed things and any things the subject of dispute as to whether they are listed things; and

(ii) the copies, photographs, films, samples, tests, other records and printed out documents referred to above; and

(g) permit the independent computer expert (if there is one) to search any computer and make a copy or digital copy of any computer hard drive and permit the independent computer expert (if any) or the independent solicitor to remove any computer hard drive and computer from the premises as set out in paragraphs 20 and 21 below.
RESTRICTIONS ON ENTRY, SEARCH AND REMOVAL

10. This Search Order may not be executed at the same time as a search warrant (or similar process) is executed by the police or by a regulatory authority.
11. You are not required to permit anyone to enter the premises until:

(a) the independent solicitor serves you with copies of this Search Order and any affidavits referred to in Schedule C (confidential exhibits, if any, need not be served until further order of the Court); and

(b) you are given an opportunity to read this Search Order and, if you so request, the independent solicitor explains the terms of this Search Order to you.

12. Before permitting entry to the premises by anyone other than the independent solicitor, you, for a time (not exceeding two hours from the time of service or such longer period as the independent solicitor may permit):-

(a) may seek legal advice;

(b) may ask the Court to vary or discharge this Search Order;

(c) (provided you are not a corporation) may gather together any things which you believe may tend to incriminate you or make you liable to a civil penalty and hand them to the independent solicitor in (if you wish) a sealed envelope or container; and

(d) may gather together any documents that passed between you and your lawyers for the purpose of obtaining legal advice or that are otherwise subject to legal professional privilege or client legal privilege, and hand them to the independent solicitor in (if you wish) a sealed envelope or container.

13. Subject to paragraph 22 below, the independent solicitor must not inspect or permit to be inspected by anyone, including the applicant and the applicant’s solicitors, any thing handed to the independent solicitor in accordance with subparagraphs 12(c) and (d) above and the independent solicitor must deliver it to the Court at or prior to the hearing on the Return Date.

14. During any period referred to in paragraph 12 above, you must:

(a) inform and keep the independent solicitor informed of the steps being taken;

(b) permit the independent solicitor to enter the premises but not to start the search;

(c) not disturb or remove any listed things; and

(d) comply with the terms of paragraphs 25 and 26 below.

15. Any thing the subject of a dispute as to whether it is a listed thing must promptly be handed by you to the independent solicitor for safekeeping pending resolution of the dispute or further order of the Court.
16. Before removing any listed things from the premises (other than things referred to in the immediately preceding paragraph), the independent solicitor must supply a list of them to you, give you a reasonable time to check the correctness of the list, and give you and the applicant’s solicitors a copy of the list signed by the independent solicitor.
17. The premises must not be searched, and things must not be removed from the premises, except in the presence of you or of a person who appears to the independent solicitor to be your director, officer, partner, employee, agent or other person acting on your behalf or on your instructions.
18. If the independent solicitor is satisfied that full compliance with the immediately preceding paragraph is not reasonably practicable, the independent solicitor may permit the search to proceed and the listed things to be removed without full compliance.
19. The applicant’s solicitors and the independent solicitor must not allow the applicant in person to inspect or have copies of any thing removed from the premises nor communicate to the applicant information about its contents or about anything observed at the premises until 4:30pm on the return date or other time fixed by further order of the Court other than to permit the applicant and Rajeev Jain, director Texas Peak Pty Ltd, to inspect any shoe or pair of shoes removed from the premises that bear both of the words “Brooks” and “Adrenaline” including the packaging of such shoes.

COMPUTERS

20. (a) If it is expected that a computer will be searched, the search party must include a computer expert or experts each of whom are independent of the applicant and of the applicant’s solicitors (‘the independent computer expert’).

(b) Any search of a computer must be carried out only by the independent computer expert.

(c) Any one or more of the independent computer experts may make a copy or digital copy of the computer hard drive and remove that copy or digital copy from the premises.

(d) Any one or more of the independent computer experts may search the computer or the copy or digital copy of the computer hard drive at the premises and/or away from the premises for listed things and may copy the listed things electronically or in hard copy or both.

(e) The independent computer experts must as soon as practicable and, in any event, prior to the hearing on the return date, deliver the copy or digital copy of the computer hard drive and all electronic and hard copies of listed things to the independent solicitor, together with a report of what the independent computer experts have done including a list of such electronic and hard copies.

(f) The independent solicitor must, at or prior to the hearing on the return date, deliver to the Court all things received from the independent computer experts and serve a copy of the latter’s report on the parties.

21. (a) This paragraph (21) applies if you are not a corporation and you wish to object to complying with paragraph 20 on the grounds that some or all of the information required to be disclosed may tend to prove that you:

(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii) are liable to a civil penalty.

(b) This paragraph (21) applies if you are a corporation and all of the persons who are able to comply with paragraph 20 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 20 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii) are liable to a civil penalty.

(c) You must:

(i) disclose so much of the information required to be disclosed to which no objection is taken; and

2. prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and

(iii) file and serve on each other party a separate affidavit setting out the basis of the objection.
INSPECTION

22. Prior to the Return Date, you or your solicitor or representative shall be entitled, in the presence of the independent solicitor, to inspect any thing removed from the premises and to:

(a) make copies of the same; and

(b) provide the independent solicitor with a signed list of things which are claimed to be privileged or confidential and which you claim ought not to be inspected by the applicant.
PROVISION OF INFORMATION
23. Subject to paragraph 24 below, you must:

(a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing as to:

(i) the location of the listed things;

(ii) the name and address of everyone who has supplied you, or offered to supply you, with any listed thing;

(iii) the name and address of every person to whom you have supplied, or offered to supply, any listed thing;

(iv) details of the dates and quantities of every such supply and offer;

(v) the name of the entity or entities that own the retail business called “Paul’s Warehouse”, if any, at each of the following locations:

A. 4 Roseberry Street, Balgowlah, NSW;

B. Blaxland Road, Campbelltown, NSW;

C. 253 Princes Highway, Carlton, NSW;

D. 537-551 George Street, Sydney, NSW;

E. 85 Great Western Hwy, Emu Plains, NSW;

F. 127 Parramatta Road, Homebush, NSW;

G. 573 The Kingsway, Miranda, NSW;

H. 563 Church Street, North Parramatta, NSW;

I. 24 Rowood Road, Prospect, NSW;

J. 356 Manns Road, West Gosford, NSW;

K. 854 Hunter Street, Newcastle, NSW

L. 77 Wright Street, Sunshine, VIC;

M. 15 Main Road, Moonah (Hobart), TAS;

N. Canberra.

O. 518 High Street, Penrith, NSW;

P. 36-38 First Avenue, Blacktown, NSW;

Q. Castlereagh Street, Sydney, NSW;

R. 218 Queen Road, Campbelltown, NSW;

S. Westfield Parramatta, Parramatta, NSW;

T. Henry Lawson Centre, 67-69 Henry Street, Penrith, NSW; and

U. 153 Mann Street, Gosford in New South Wales.

(b) by 4.30pm on Monday 18 July 2011, make and serve on the applicant an affidavit setting out the above information.

24. (a) This paragraph (24) applies if you are not a corporation and you wish to object to complying with paragraph 23 on the grounds that some or all of the information required to be disclosed may tend to prove that you:

(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii) are liable to a civil penalty.

(b) This paragraph (24) also applies if you are a corporation and all of the persons who are able to comply with paragraph 23 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 23 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii) are liable to a civil penalty.

(c) You must:

(i) disclose so much of the information required to be disclosed to which no objection is taken; and

(ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and

(iii) file and serve on each other party a separate affidavit setting out the basis of the objection.
PROHIBITED ACTS

25. Except for the sole purpose of obtaining legal advice, you must not, until 4:30pm on the Return Date, directly or indirectly inform any person of this proceeding or of the contents of this Search Order, the Application, the Statement of Claim or the supporting affidavits, or tell any person that a proceeding has been or may be brought against you by the applicant.
26. Until 4:30pm on the Return Date you must not destroy, tamper with, cancel or part with possession, power, custody or control of the listed things otherwise than in accordance with the terms of this Search Order or further order of the Court.

COSTS

27. The costs of the application for this Search Order are reserved to the Judge hearing the application on the Return Date.

SCHEDULE A

Premises
The premises located at 125-127 Parramatta Road Homebush in the State of New South Wales including any vehicle or vehicles under any respondent’s control on or about those premises.
Listed Things

Note: The term “records” below includes electronic data located either on the premises or accessible through the Internet or Network from the premises and any backups of that data whether held under any respondent’s control or by a third party on behalf of any respondent.

1. Any shoe or pair of shoes that bear both of the words “Brooks” and “Adrenaline” (an Adrenaline shoe) including any box and other packaging containing such shoes.

2. Records of each and every supply of an Adrenaline shoe by any respondent including:

(a) when the supply occurred;

(b) from which premises the supply occurred;

(c) to whom the supply occurred including all known contact details of that person;

(e) where and when the shoe was manufactured and who it was manufactured, supplied and/or imported by; and

(f) the product code, style, name and any other identifier of the Adrenaline shoe.
3. Records of each and every receipt of an Adrenaline shoe by any respondent including:

(a) when the receipt occurred;

(b) at which premises the receipt occurred;

(c) from whom the receipt occurred including all known contact details of that person;

(e) where and when the shoe was manufactured and who it was manufactured, supplied and/or imported by; and

(f) the product code, style, name and any other identifier of the Adrenaline shoe.

Search Party

1. The independent solicitor: Miriam Stiel, Level 28, Deutsche Bank Place, 126 Phillip Street, Sydney NSW 2000.

2. The applicant’s solicitors:

(a) Sally Nicolson, Special Counsel, employed by Griffith Hack Lawyers, Level 3, 509 St Kilda Road, Melbourne Vic 3004.

(b) Ben Mawby, Trainee Lawyer, employed by Griffith Hack Lawyers, Level 3, 509 St Kilda Road, Melbourne Vic 3004.
3. Other members of the search party:

(a) Nigel John Carson, Korda Mentha, Level 5, Chifley Tower, 2 Chifley Square, Sydney NSW 2000 in the capacity of independent computer expert.

(b) Timothy Peter Myers, Korda Mentha, Level 5, Chifley Tower, 2 Chifley Square, Sydney NSW 2000 in the capacity of independent computer expert.

SCHEDULE B
UNDERTAKINGS GIVEN TO THE COURT

Undertakings given to the Court by the applicant:-

(1) The applicant undertakes 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) affected by the operation of the Search Order.

(2) The applicant will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this Search Order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.

(3) The applicant will not inform any other person of the existence of this proceeding except for the purposes of this proceeding until after 4:30pm on the Return Date.

(4) The applicant will:

(a) within 5 business days, cause a written irrevocable undertaking to pay in the sum of $100,000 to be issued from a bank with a place of business within Australia, in respect of any order the Court may make referred to in the undertaking as to damages contained in paragraph (1) above; and

(b) immediately upon issue of the irrevocable undertaking to pay, cause a copy of it to be served on the each respondent.
Undertakings given to the Court by the applicant's solicitors

(1) The applicant’s solicitors will pay the reasonable costs and disbursements of the independent solicitor and of any independent computer expert.

(2) The applicant’s solicitors will provide to the independent solicitor for service on each respondent copies of the following documents:

(a) this Search Order;

(b) the Application and Statement of Claim;

(c) the following material in so far as it was relied on by the applicant at the hearing when the Search Order was made:
(i) affidavits (or draft affidavits)
(ii) exhibits capable of being copied (other than confidential exhibits);
(iii) any written submission; and
(iv) any other document that was provided to the Court.

(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court.

(3) The applicant's solicitors will each answer to the best of his or her ability any question as to whether a particular thing is a listed thing.

(4) The applicant’s solicitors will each use his or her best endeavours to act in conformity with the Search Order and to ensure that the order is executed in a courteous and orderly manner and in a manner that minimises disruption to the respondent.

(5) The applicant’s solicitors will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this Search Order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.

(6) The applicant’s solicitors will not inform any other person of the existence of this proceeding except for the purposes of this proceeding until after 4:30pm on the Return Date.

(7) The applicant’s solicitors will not disclose to the applicant or its exclusive distributor (Texas Peak Pty Ltd) any information that the solicitor acquires during or as a result of execution of the Search Order, other than to permit the applicant and Rajeev Jain, director of Texas Peak Pty Ltd, to inspect any photograph or description of any shoe removed from the premises that bear both of the words “Brooks” and “Adrenaline” (Adrenaline shoes) including the packaging of such shoes, without the leave of the Court.

(8) The applicant’s solicitors will use best endeavours to follow all directions of the independent solicitor.

(9) The applicant’s solicitors will advise the independent solicitor, within 2 business days of inspection of the premises, which of any Adrenaline shoes removed from the premises they, the applicant or Rajeev Jain are of the reasonable belief is a shoe made with the authority of the applicant (the genuine Adrenaline shoes).

Undertakings given to the Court by the independent solicitor

(1) The independent solicitor will use his or her best endeavours to serve the respondent with this Search Order and the other documents referred to in undertaking (2) of the above undertakings by the applicant’s solicitors.

(2) Before entering the premises, the independent solicitor will:-

(a) offer to explain the terms and effect of the search order to the person served with the order and, if the offer is accepted, do so; and

(b) inform the respondent of his or her right to take legal advice.

(3) Subject to undertaking (4) below, the independent solicitor will retain custody of all things removed from the premises by the independent solicitor pursuant to this Search Order until delivery to the Court or further order of the Court but may permit the applicant’s solicitors to inspect those things (other than those things sealed in accordance with the Orders) and may permit the applicant and Rajeev Jain, director of Texas Peak Pty Ltd, to inspect the Adrenaline shoes (unless those things are sealed in accordance with the Orders).

(4) The independent solicitor will return to the Respondents at the premises any genuine Adrenaline shoe referred to in undertaking (9) of the above undertakings by the applicant’s solicitors within one business day of being advised in accordance with that undertaking.

(5) At or before the hearing on the Return Date, the independent solicitor will provide a written report on the carrying out of the Search Order to the Court and the return of any genuine Adrenaline shoes in accordance with the preceding undertaking and provide a copy to the applicant's solicitors and to the respondent or the respondent’s solicitors. The report will attach a copy of any list made pursuant to the Search Order and a copy of any report received from an independent computer expert.

(6) The independent solicitor will use best endeavours to ensure that members of the search party act in conformity with the Search Order and that the Search Order is executed in a courteous and orderly manner and in a manner that minimises disruption to the respondent, and will give such reasonable directions to other members of the search party as are necessary or convenient for the execution of the Search Order.

(7) The independent solicitor will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this Search Order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.

(8) The independent solicitor will not inform any other person of the existence of this proceeding except for the purposes of this proceeding until after 4:30pm on the Return Date.
Undertakings given to the Court by the independent computer experts

(1) The independent computer experts will use his or her best endeavours to act in conformity with the Search Order and to ensure that the Search Order, so far as it concerns the independent computer experts, is executed in a courteous and orderly manner and in a manner that minimises disruption to the respondent.

(2) The independent computer experts will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this Search Order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.

(3) The independent computer experts will not inform any other person of the existence of this proceeding except for the purposes of this proceeding until after 4:30pm on the Return Date.

(4) The independent computers expert will use best endeavours to follow all directions of the independent solicitor.

SCHEDULE C

AFFIDAVITS RELIED ON
1. Affidavit of Leanne Gai Smith made 6 July 2011.
2. Affidavit of Vicki Munn made 6 July 2011.
3. Affidavit of Lisa Michelle Simonds made 7 July 2011.
4. Affidavit of Rajeev Jain made 8 July 2011.
5. Affidavit of Mary Elizabeth Curtin made 8 July 2011.
6. Affidavit of Peter Humphrey made 8 July 2011.
FURTHER EXHIBITS RELIED ON
1. Exhibit A1, ABN Search, tendered on 11 July 2011.
2. Exhibit A2, Printout from website known as paulswarehouse.com.au, tendered on 11 July 2011.

NAME AND ADDRESS OF APPLICANT'S SOLICITORS
The Applicant’s solicitors are:
Griffith Hack Lawyers, Level 3, 509 St Kilda Road, Melbourne Vic 3004.
Reference: L72601:WMC:SAN:KLH
Phone [phone] Fax [phone]
Out of hours: 0417 100 225.

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 Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 752 of 2011

BETWEEN:	BROOKS SPORTS, INC Applicant
AND:	PAUL'S INTERNATIONAL PTY LTD (ACN 128 263 561) First Respondent PAUL'S RETAIL PTY LTD (ACN 114 419 242) Second Respondent PW TRADING PTY LTD (ACN 103 736 027) Third Respondent ST. GEORGE WHOLESALE DISTRIBUTORS PTY LTD (ACN 000 435 030) Fourth Respondent

JUDGE:	DODDS-STREETON J
DATE:	11 JULY 2011
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 11 July 2011, I made, on the ex parte application of Brooks Sports Inc. (“Brooks”), a company incorporated in Washington, an Anton Piller order (as set out above) pursuant to Order 25B of the Federal Court Rules, against the respondents, Paul’s International Pty Ltd (“International”), Paul’s Retail Pty Ltd (“Retail”), PW Trading Pty Ltd (“Trading”) and St George Wholesale Distributors Pty Ltd (“St George”).
2. My reasons for making the order are set out below.

ANTON PILLER ORDER

3. The application for the Anton Piller order was supported by written submissions dated 8 July 2011 and the affidavits (and exhibits thereto) of:

(a) Leanne Smith made on 6 July 2011;

(b) Vicki Munn made on 6 July 2011;

(c) Lisa Simonds made on 7 July 2011;

(d) Rajeev Jain made 8 July 2011;

(e) Mary Curtin made on 8 July 2011; and

(f) Peter Humphrey made on 6 July 2011.

BACKGROUND

4. By an application and a statement of claim dated 8 July 2011, Brooks alleged pursuant to s 120(1) and 126 of the Trade Marks Act 1995 (Cth) (“the Act”) that its trade marks had been infringed by the respondents. Brooks alleged that it is the designer and wholesaler of footwear bearing one or more of a number of Australian trademarks of which Brooks is the proprietor, registered in relation to, inter alia, footwear, shoes, athletic shoes, sports footwear, clothing and athletic clothing including, particularly, footwear bearing the names “Brooks” and “Adrenaline” (“the trademarks”).
5. Brooks alleged that International is the registered proprietor of the NSW Registered Business Name “Paul’s Warehouse” which has had, since August 2008, a principal place of business at 127 Parramatta Road, Homebush, NSW, and a number of other places of business, especially in New South Wales, but also in Canberra, Tasmania and in Sunshine, Victoria. Alternatively, Brooks alleged that Retail is the proprietor of the retail store at Parramatta Road, Homebush, and further (or alternatively) is the proprietor of each of various other retail stores operating under the name “Paul’s Warehouse”.
6. Brooks alleged that from a time unknown to Brooks but since at least 1 July 2011, International or Retail has caused or procured the manufacture, import or distribution of, or sold or offered for sale at each of the retail stores, in Australia, footwear to which the word “Adrenaline” and one or more of the trademarks were affixed, without Brooks’ licence or authority, thereby infringing s 120(1) of the Act.
7. By reason of the infringements, Brooks claimed it has and will suffer loss and damage and International or Retail has made profits.
8. Further, Brooks alleged that Trading or St George is the proprietor of a website and online store, and, since at least 1 July 2011, has caused or procured the manufacture, importation, distribution, sale or offering for sale of shoes with the word “Adrenaline” and one or more of the trademarks, without Brooks’ licence or authority, thereby infringing the trademarks pursuant to s 120(1) of the Act, by reason of which Brooks has suffered and will continue to suffer loss and damage, and Trading or St George has made profits.

EVIDENCE IN SUPPORT OF APPLICATION

9. Mary Curtin, an employee of Griffith Hack, the solicitors for Brooks, deposed to purchasing two pairs of Brooks Adrenaline GTS 10 shoes from the Paul’s Warehouse online store on 27 May 2011.
10. Leanne Smith, a licensed inquiry agent, deposed to purchasing, on 11 June 2011, from Paul’s Warehouse retail store in Parramatta, a pair of Brooks Adrenaline GTS 10 shoes for $199 and receiving one pair of Brooks “Nova” shoes free with her purchase. Ms Smith noticed that the Brooks Adrenaline shoes were mainly stored in a private area of the store with very few on public display.
11. Ms Smith also deposed to her purchase, on 13 June 2011 from the Paul’s Warehouse Homebush store, of a pair of Brooks Adrenaline GTS 10 shoes for a discount price of $139. She saw only one pair of Adrenaline shoes on public display. Ms Smith observed that Adrenaline shoes were obtained from a storage area.
12. Vicki Munn, a licensed inquiry agent, deposed that on 15 June 2011, she purchased a pair of Brooks Adrenaline GTS shoes from the Paul’s Sunshine store for $219 and received a pair of Brooks “Defyance” shoes free with the purchase. Only one pair of men’s and one pair of ladies’ Adrenaline shoes were on public display. The sales assistant stated that the Adrenaline shoes were “only kept out in the back of the store” but that other sizes were available and more stock was coming in the “next shipment”.
13. Ms Munn did not see any sign on the Sunshine store or building indicating which Paul’s entity operated the store.
14. Ms Simonds, a solicitor employed by Griffith Hack, deposed to her company searches of the four respondent corporations and associated business names and numbers. Ms Simonds’ search revealed that:

(a) Paul Dwyer was the sole director and company secretary of all of the respondent companies. All were incorporated in New South Wales and all had their registered office and principal place of business at 125-127 Parramatta Road, Homebush, NSW; and

(b) the Business Name “Paul’s Warehouse” was registered in New South Wales with the same principal place of business (Homebush), and the company currently carrying on business under it was apparently International.

15. Although Ms Simonds deposed that the ABN shown on receipts given to Ms Smith and Ms Munn by Paul’s Warehouse Homebush and Sunshine was not a correct ABN, before me, counsel for Brooks acknowledged that it was, in fact, an ABN for an entity known as The Trustee for Paul’s Warehouse Discretionary Trust.
16. Ms Simonds further deposed to her search of the website, www.paulswarehouse.com.au. The website is stated to be copyright to a company called Paul’s Warehouse Pty Ltd, which had since changed its name to Trading. Paul Dwyer is the registrant to the website.
17. Rajeev Jain, the General Manager and a Director of Texas Peak Pty Ltd (“Texas Peak”), the exclusive Australian distributor of shoes manufactured by or for Brooks, deposed that Texas Peak has imported and distributed about four million pairs of Brooks branded footwear over the last 19 years.
18. Mr Jain deposed that the Brooks shoes are highly engineered and of high quality. They are directed to the premium end of the athletic shoe market and designed for serious athletes. They are sold by retailers who analyse customers’ feet, sometimes using sophisticated machinery.
19. Mr Jain deposed:

Texas Peak has imported and distributed Brooks branded footwear for the last nineteen years. The total number of Brooks Branded footwear Texas Peak has imported during that period would be approximately 4 million pairs of shoes. Throughout that period I have been aware that Brooks branded footwear is highly engineered and meticulously designed and manufactured. All the Brooks branded shoes that Texas Peak has sold over the last nineteen years were required to comply with Brooks’ specifications. I have only had to return or reject significantly less than 11% of Brooks branded shoes because they did not meet those specifications.

Brooks branded footwear is directed at the premium end of the athletic shoe market and is specifically designed for people who are serious athletes. Each style of footwear is designed and built to suit a specific kind of foot so that a suitably qualified retailer can analyse the customer’s foot, sometimes with sophisticated machinery, and advise the customer which style of shoe will best suit the customer. Purchasers of Brooks branded shoes and high quality running shoes generally, have an expectation that Brooks branded footwear will perform reliably in the course of vigorous exercise, especially running. If the shoe does not in fact fit and perform properly there is a greater risk that the wearer may be injured.

20. Mr Jain also deposed to the trademarks.
21. Mr Jain deposed that he was very familiar with the design and production standards required for Brooks footwear. He was also very familiar with the Adrenaline GTS 10, one of Texas Peak’s most popular styles. The Adrenaline was first produced in 1995 and there has since been a number of versions incorporating successive style improvements. Texas Peak has sold an estimated 500,000 pairs of Adrenaline shoes, including 55,000 in the last financial year, for a recommended retail price of $219.95, which is at the premium end of the market.
22. Mr Jain deposed to his attendance at Griffith Hack where he examined seven pairs of shoes (including five pairs of “Adrenaline” shoes) purchased from Paul’s Warehouse stores, physical and online, in order to compare them with genuine Brooks shoes. Mr Jain concluded that:
    1. The Homebush shoe was not genuine.
    2. The Internet shoe No. 1 was not genuine.
    3. The Internet shoe No. 2 was probably genuine.
    4. The Sunshine shoe was not genuine.
    5. The Parramatta Adrenaline shoe was not genuine.
    6. The Defyance Brooks shoe purchased at Sunshine was probably genuine.
    7. He was unable to form a view as to whether the Nova shoe purchased at Parramatta was genuine.
23. Mr Jain deposed that a construction feature of the Brooks shoes known as the Progressive Diagonal Rollbar (“PDRB”) was significant and its absence could lead to foot injuries.
24. Mr Jain deposed that he first became aware of the possibility of non-genuine Brooks shoes being sold by Paul’s Warehouse in May 2011, and gave instructions for investigations.
25. Mr Jain deposed to potential damage to Brooks as follows:

As I have indicated above, the Brooks Adrenaline shoe has been sold in Australia in very considerable quantities by Texas Peak for over fifteen years. The Adrenaline is a highly engineered and sophisticated shoe which incorporates a number of design features which work together in order to support the wearer’s feet and protect them from injury during vigorous exercise. The selection and purchase of a Brooks Adrenaline shoe by a consumer would usually be done in an environment where the consumer’s feet had been analysed and the Brooks Adrenaline shoe selected to match those feet. Once a purchaser has had their foot fitted to the Brooks Adrenaline, they may be inclined and often do continue to purchase that shoe without being fitted again. From my own experience of visiting a Paul’s Warehouse store I am aware that the Respondents do not offer any of the expert fitting equipment or advice which would normally accompany the purchase of Brooks branded footwear. As a consequence, I am concerned that customers will purchase inappropriate shoes, or will purchase the non-genuine Respondents’ “Adrenaline” shoe in the mistaken belief that it will meet the performance criteria of the Brooks Adrenaline shoe, when this is not the case.

The Respondents are offering their “Adrenaline” shoe for sale at a retail price which ranges from $199.99 (for two pairs of shoes under a “Buy One Get One Free” offer) to $139.99. As I have indicated above, the genuine Brooks Adrenaline shoe has a recommended retail price of $219.95. The genuine Brooks Adrenaline shoe has a reputation which has been earned over many years for a premium quality product for which a premium price is paid. The non-genuine Respondents’ “Adrenaline” shoe is a very good copy. It would not be readily apparent to most consumers that it is not a genuine Brooks Adrenaline shoe. I am therefore concerned that the continued sale of the non-genuine Respondents’ “Adrenaline” shoe will compromise the integrity of the genuine Brooks Adrenaline shoe and the ability to maintain its current recommended retail price.

26. Mr Jain concluded that a genuine Brooks shoe was highly engineered, specialised and had protective design features. It was usually expertly fitted for the purchaser. If customers bought inappropriate shoes, believing them to be Brooks shoes, Brooks’ reputation would be damaged. The non-genuine shoes examined by Mr Jain were very good copies, which would compromise the integrity of the genuine Brooks shoe and its ability to maintain a premium recommended retail price.
27. Peter Humphrey, the Vice President of Research and Development for Brooks in the USA, deposed that since 1999, he has led the team which has designed every version of the Adrenaline GTS series shoe, including the “GTS 4” launched in 2003 with the PDRB feature.
28. Mr Humphrey deposed that in order to maintain quality control, Brooks allowed only a limited number of manufacturers, who must comply with a specification process, to manufacture its footwear. Brooks footwear was directed at the premium end of the athletic shoe market and is specifically designed for runners, and to maintain quality control, sub-standard shoes were not sold as first quality. All “seconds” were sold through a single outlet in the USA. The Adrenaline GTS 10 shoe, which was manufactured through a single factory, had won an award from Runner’s World. It was widely recognised as the best stability shoe in the market.
29. Mr Humphrey deposed to his examination of two pairs of shoes purchased by Texas Peak from Paul’s Warehouse in Australia. On the basis of his examination, he was confident that the shoes did not have the special PDRB feature and could not be genuine Brooks Adrenaline GTS shoes. He deconstructed one of the shoes, which confirmed that view.
30. Mr Humphrey, having read Mr Jain’s affidavit and examined the photographs exhibited thereto, concluded, on the basis of his 12 ½ years as a Brooks developer and designer, that the Homebush shoe, the Internet shoe, the Sunshine shoe and the Parramatta shoe could not be genuine Brooks Adrenaline GTS 10 shoes, due to the faults described in the Jain affidavit and evident from the photographs. Mr Humphrey stated that the faults were not simply aesthetic, but fundamental to the construction of the shoes and hence would adversely affect their performance in exercise, even when compared with a genuine Brooks “second”. The PDRB was always integral to Brooks shoes. The Homebush, Internet 1, Sunshine and Parramatta shoes did not have the PDRB and thus were not sub-standard genuine Brooks shoes. The non-genuine shoes showed poor craftsmanship and could lead to injury and irritation, thereby compromising performance.

DISCUSSION

31. I was satisfied that the applicant had established a very strong prima facie case of infringement of the trademarks pursuant to s 120(1) of the Act, with no apparent basis for defence. The applicant also established the potential for significant loss or damage should a search order not be made, by reason of the sale of apparently sub-standard counterfeit shoes under the applicant’s trademarks and names, which were difficult to distinguish from the applicant’s shoes, but could adversely affect athletic performance or lead to injury.
32. There was also sufficient evidence to establish that the respondents possessed evidentiary material, which there was a real possibility they may destroy or cause to be unavailable for use in a civil proceeding. As the applicant submitted, the affidavits provided evidence that:

(a) The Respondents do not stock the Adrenaline shoes in the public areas of their retail stores, unlike every other Brooks’ shoe for sale, but instead have those Adrenaline shoes concealed in a private area of each store;
(b) The Respondents do not apparently distinguish between counterfeit and genuine Adrenaline shoes in their promotional material or upon sale; and
(c) The Respondents’ sales receipts and promotional material do not accurately record or identify the proper name of the proprietor of the stores (online and physical) in question.

33. Appropriate undertakings were offered.
34. The exceptional circumstances and criteria required to exercise the extraordinary jurisdiction on which an Anton Piller order is predicated were thus, in my view, established.
    

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.

Associate:

Dated: 11 July 2011