Seizing counterfeit goods under the Trade Marks Act - a warning to pirates everywhere

Although rarely used, the seizure provisions of the Trade Marks Act are a useful weapon for trade mark owners in the war against intellectual property piracy, as demonstrated by the recent Federal Court case of Jemella Australia Pty Ltd v Vosiliatis [2010] FCA 331 (23 March 2010).

Background

Jemella is the exclusive licensee and distributor of the owner of the well-known trade mark "GHD". On 1 February 2010, it received a Custom seizure notice in relation to hairstyling products, bearing the GHD mark, that had been seized by the Australian Customs and Border Protection Service. Jemella responded to the notice by informing the designated owner, Mr Vosiliatis, that the goods were counterfeit.

Jemella was unable to reach an accommodation with Mr Vosiliatis and proceedings were commenced on 1 March 2010 against both him and Ms Molluso. It also sought orders to prevent the Chief Executive Officer of the Customs Service from releasing the goods.

Interlocutory injunctions - a prima facie case of infringement?

Jemella sought an interlocutory injunction restraining Mr Vosiliatis and Ms Molluso from importing, promoting, distributing, advertising, offering for sale, displaying or otherwise using counterfeit hairstyling products bearing the marks "GHD Hairstyling Iron", "GHD Styler", or "GHD", or otherwise infringing registered trade mark number 951664, which is the letters "GHD".

A third interlocutory order was sought against the Chief Executive Officer of the Australian Customs Service seeking to restrain him from releasing a consignment of counterfeit products described as "GHD branded hair styler kits" which had been seized under section 133 of the Trade Marks Act on 25 January 2010.

In deciding whether to grant the interlocutory injunction, the Court had to determine whether the cause of action satisfied the test of interlocutory relief - that is, was there a prima facie case of infringement or, alternatively, a seriously question to be tried?

In support of the case of infringement, there were photographs from the Australian Customs Service which showed that the products did not exhibit the verification numbers that are present on the genuine products. There were also affidavits deposing that the products were not genuine articles. For the purpose of interlocutory proceedings, Justice Greenwood was satisfied that a prima facie case had been established against Mr Vosiliatis that he had imported into Australia items to which the trade mark had been applied without the licence or authority of the trade mark owner or Jemella. Justice Greenwood also accepted that there were facts from which proper inferences could be drawn that Ms Molluso had a connection with the importation of the infringing articles.

Justice Greenwood also made an order directed to the Chief Executive Officer of the Australian Customs Service, restraining Customs from releasing the consignment of hair stylers.

Lessons to be learnt

This is one of the few cases where proceedings have been commenced against importers of products bearing infringing trade marks. Most recipients of seizure notices quickly agree to deliver up the infringing goods. However, this case demonstrates that the courts are prepared to act quickly to make orders restraining the release of counterfeit products, if an importer tries to ignore a seizure notice.