Dolby makes some noise to prevent importation of DVDs bearing its marks

In Dolby Laboratories Licensing Corporation v Kamil ([2013] FCCA 1326, September 11 2013), the Federal Circuit Court of Australia has made orders restraining the Australian Customs Service from releasing 6,600 DVDs imported into Australia bearing trademarks that were substantially identical with, or deceptively similar to, Dolby Laboratories Licensing Corporation's registered trademarks. This is an example of the successful implementation of the customs notice procedure under the Australian Trademarks Act 1995 (Cth).

Dolby Laboratories is recognised worldwide as an innovator of sound and imaging technologies. It is the owner of a number of registered trademarks in Australia, including DOLBY, DOLBY DIGITAL and the Dolby 'double-D' logo (depicted below) in Class 9 of the Nice Classification.

Under Australia's customs seizure scheme, embodied in Part 13 of the Trademarks Act, Dolby Laboratories had in place customs 'objection notices' in respect of a number of Australian registered trademarks for the Dolby marks (known as 'notified marks' under the scheme).

Pursuant to Section 133 of the act, Customs must seize any goods imported into Australia that have a notified trademark applied to them if those goods are goods in respect of which the notified trademark is registered, unless Customs is satisfied that there are no reasonable grounds for believing that the notified trademark is infringed by the importation of the goods. Customs must then give notice of the seizure to the importer of the goods, in this case Mr Najeeb Kamil, and the objector, in this case Dolby Laboratories.

As Kamil did not consent to forfeiture of the goods and instead sought their release, Dolby Laboratories applied to the court seeking an interim injunction to restrain the release of the seized DVDs by Customs. Under Section 136D(4) of the act, Customs must release the seized goods if:

• the importer has made a claim for the release of the goods;
• an action for infringement of the notified goods has been instituted; and
• at the end of a period of 20 working days from the date the action was commenced, there is not in force an order of the court restraining the release of the goods.

Under Australian law, in seeking interlocutory relief, the applicant must first make out a prima facie case, in the sense that there is a probability that at a final hearing the applicant would be entitled to relief. The applicant must then show that the balance of convenience lies with the applicant, in that the loss the applicant would be likely to suffer if an injunction was refused would outweigh damage to the respondent if the injunction was granted.

On the prima facie case question, the court found that Kamil was not entitled to use the Dolby marks, and that the marks appearing on the seized DVDs were substantially identical with, or deceptively similar to, the Dolby marks. The court considered that the DVDs contained a number of spelling, grammatical and formatting errors, and did not reflect Dolby's official wording, all indicating that the Dolby marks had been applied without Dolby Laboratories' authority.

On the balance of convenience issue, the court considered that if the DVDs were to be released to Kamil that there was a real risk that he would dispose of the DVDs. The court noted that Kamil had not given any undertakings concerning the DVDs, and that the size of the consignment indicated that this was a deliberate and significant commercial transaction.

The court granted orders restraining Customs from releasing the DVDs and restraining Kamil from manufacturing, importing, selling, advertising or otherwise providing goods bearing the Dolby marks, pending a final determination in the matter.

Natalie Hazel and Lisa Ritson, Ashurst Australia, Sydney