Counterfeiting case highlights practical solutions


The case of GSM (Trademarks) Pty Ltd v Shao is illustrative of the practical solutions available to trademark owners when dealing with an importer of counterfeit products who takes deliberate steps to avoid detection and, once cornered, denies his own existence, identity and whereabouts.

The case came before the Federal Court of Australia following the seizure of almost 3000 imported mobile phone covers which had the trademark BILLABONG applied to them without the authority of the owner - GSM (Trademarks) Pty Ltd. The defendant, David Wei Shao, attempted to avoid service of the court documents. In order to effect service, GSM turned to Order 7, Rule 10 of the Federal Court Rules, which provides that:

"Where for any reason it is impractical to serve a document in the manner set out in the rules, but steps have been taken to bring the document to the notice of the person to be served, the court may order that the document be taken to have been served on that person on a date specified in the order."

An order to that effect was made and the matter set down for trial. Although Shao filed a notice of appearance, he failed to attend the trial at the appointed time. In such circumstances, Order 32, Rule 2(1)(d) of the Federal Court Rules provides that:

"If, when a proceeding is called on for trial, any party is absent, the court may … proceed with the trial generally or so far as concerns any claim for relief in the proceeding."

Accordingly, the court proceeded to hear the case in the absence of Shao and ordered that:

  • the seized goods be forfeited;

  • Shao deliver up all goods, documents and other materials in his possession, custody or control which bear any one or more of the BILLABONG trademarks;

  • GSM be permitted to destroy or otherwise dispose of such goods, documents and/or other materials; and

  • Shao pay GSM's legal costs (although, perhaps a little surprisingly, not on an indemnity basis but on the traditional 'party and party' basis allowing a discount of 20% from the costs in fact incurred).

The practicalities of enforcing one's trademark rights can sometimes be demanding, but this case also shows that the 'wheels of justice' can move relatively quickly and deliver a positive outcome. Customs seized the phone covers on August 10 2006 and these final orders were made on November 29 2006. In the circumstances, this can be considered an expeditious result.

Julian Gyngell, Julian Gyngell, Wahroonga

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