Ruling on interlocutory motions in Ford Case issued

In Ford Motor Company of Australia Ltd v Jefferson Ford Pty Ltd, the Federal Court of Australia has ruled on interlocutory motions filed in a dispute between Ford Motor Company and its Australian and Canadian subsidiaries (Ford), and Melbourne-based Ford distributor Jefferson Ford (Jefferson) concerning the use by Jefferson of the trademarks FORD and MOTORCRAFT.

Ford alleged that Jefferson used the FORD and MOTORCRAFT trademarks in respect of parts not manufactured or approved by Ford and has thereby:

• infringed Ford's trademark registrations;
  
  
• engaged in deceptive and misleading conduct in breach of Sections 52 and 53 of the Trade Practices Act 1974; and
  
  
• breached certain provisions of Jefferson's dealer agreement.

In its defence, Jefferson denied any breach, alleging consent by Ford, and cross-claimed against Ford for:

• breach of the dealer agreements;
  
  
• unconscionable conduct; and
  
  
• breach of an applicable industry code.

Jefferson claimed that Ford had procured the Australian federal police to search Jefferson's premises and seize allegedly counterfeit goods to the value of A$500,000. It further alleged that Ford had systematically sought to disrupt its business and to intimidate, harass and bully its employees. Jefferson contended that the marks had been applied by, or with the consent of Ford, or alternatively that it used the marks in good faith to indicate the intended purpose of the parts, and their characteristics and suitability for this intended purpose. In addition, Jefferson cross-claimed against three senior Ford executives and against an investigation agency engaged by Ford (FBIS) and the agency's chief executive, Claudio Minsini.

Ford filed notices of motion seeking:

• to strike out paragraphs of the defence alleging consent by Ford to the use of the marks;
  
  
• summary judgment in relation to the cross-claim allegations of unconscionable conduct and breach of the industry code, and
  
  
• to strike out paragraphs of the cross-claim relating to allegations of breach of contract.

FBIS and Minsini also moved to strike out the paragraphs of the cross-claim relating to them.

Ford was successful in its motion to strike out the paragraphs relating to allegations of unconscionable conduct and the accessorial liability of its three executives. FBIS and Minsini were similarly successful in their motions. However, the motions relating to the paragraphs alleging consent and breach of contract were denied.

Further progress of this case will be watched with interest in relation to Jefferson's allegations of consent by Ford and of use in good faith to indicate the purpose and characteristics of the parts.

Desmond J Ryan, Davies Collison Cave, Melbourne