In Australian Football League & ESP Merchandise Pty Ltd v Hard On Sport Pty Ltd & David Sumiga  VSC 475, the Supreme Court (Vickery J) was considering an application to set aside an Anton Piller order, relating to the open sale by the defendants of AFL football merchandise without AFL authority.
The AFL and its licensee (ESP) claimed that the defendants in selling AFL merchandise without AFL authority:
- infringed the AFL’s copyright in AFL photographs;
- infringed the AFL’s trade mark rights in unauthorised AFL memorabilia, including guernseys, shorts, boots, names (including “AFL”, AFL club names, club nicknames, logos, images of the AFL premiership cup, the Brownlow medal, and the Norm Smith medal), posters, cards, photographs, etc;
- knowingly (or in a recklessly indifferent manner) induced AFL players to sign memorabilia without the AFL’s authorisation such that those players were breaching their contractual obligations to the AFL (and, in some instances, to ESP);
- misrepresented that unauthorised AFL memorabilia was, in fact, authorised by the AFL;
- were passing off unauthorised AFL memorabilia as authorised by the AFL.
No defence was made in relation to the copyright claim. (Section 10 of the Copyright Act 1968 (Cth) includes a photograph as “artistic work” whether the work is of artistic quality or not.
No defence was made in relation to the trade marks claim under Section 20 and 120 of the Trade Marks Act 1995 (Cth). The defendant, however, referred to Arsenal Football Club PLC v Reed . In that case, an unauthorised vendor sold Arsenal memorabilia outside the Arsenal ground. At trial, the court had found the vendor’s use of trade marked items as not being an indication of the origin of the goods sold, but rather, being a sign depicting club loyalty or affiliation. That decision, His Honour noted, was, however, overturned on appeal. Vickery J noted that the point remained arguable in Australia, but any defendant would face the persuasive precedent of the UK Court of Appeal.
The plaintiffs claimed that the defendants, breach of Section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) misrepresented that unauthorised AFL memorabilia was, in fact, authorised by the AFL. His Honour concluded, on the evidence as it stood when the Anton Piller order was made, was “sufficiently compelling” to make the order. Similarly, His Honour concluded that case in relation to the defendants passing off unauthorised AFL memorabilia as authorised by the AFL, the evidence as it stood when the Anton Piller order was made was, also, sufficiently strong to make the order.
In relation to the inducing breach of contract claim, His Honour concluded that, in this instance, the evidence was not sufficiently strong (on this basis) to justify the issue of a search order, noting:
- the gravamen of the tort of inducing breach of contract is intention;
- in relation to the knowledge of the relevant contract, the question will always be whether the alleged wrongdoer had sufficient knowledge of its terms to appreciate that his conduct, if acted upon, would result in an interference with the contractual rights of the other party to the contract.
His Honour further noted that there was some argument in relation to the interpretation of the player’s obligations under the CBA in this respect.
Vickery J, in deciding whether AFL had made sufficient disclosure in obtaining the original order, reviewed the legal principles underlying the grant of Anton Piller order, noting the court’s emphasis, in Anton Piller KG v Manufacturing Processes Ltd, to the effect that such an order was at the “extremity” of the court’s powers, and that “such orders would rarely be made, and only where there was no alternative way of ensuring that justice was done to the applicant”. His Honour observed that it was “in recognition of the extraordinary nature of this remedy” that certain protections were built into the court’s Practice Note, the standard of proof, and the common law supporting the order.
His Honour reviewed the authorities in relation to the obligation on the plaintiff seeking an ex parte remedy to disclose all matters relevant to the exercise of the court’s discretion. In this instance, the defendants said that the plaintiff had not given full, frank disclosure in relation to:
- the plaintiff’s examination of the defendant’s Facebook page;
- the open, public, nature of the defendants’ business;
- signed items (approx 120-130) by the AFL Chairman (Vickery J concluded that would be potentially relevant to the inducing breach of contract claim);
- the AFL memorabilia market being widespread (approx 30-50 participants, over 20,000 items for sale on eBay);
- the plaintiff’s affidavit evidence being based on information from a commercial competitor of the defendants;
- arguments that (relating to inducing breach of contract claim) that there is no explicit prohibition on players signing memorabilia, and/or past players not being party to the current Collective Bargaining Agreement (Vickery J concluded that would be potentially relevant to the inducing breach of contract claim).
Ultimately, however, His Honour did not conclude that the omissions should lead to the Anton Piller order being discharged altogether, but rather, it should be discharged only in relation to those items based on the inducing breach of contract claim alone.
His Honour considered the following in relation to whether to extend the injunction and the balance of convenience:
- There was a strong prima facie case in relation to the causes of action pressed by the plaintiffs.
- Release of signed grand final jumpers into the market would have a devastating effect on the likely revenues to be gained from the AFL’s Premier memorabilia Program. Official AFL Memorabilia would be affected indirectly, the presence of unauthorised AFL memorabilia in the market would harm sales and revenue which ought to flow to the plaintiffs, and AFL clubs. AFL supporters buying memorabilia, knowing that funds will go back to the game and their AFL club are misled when they purchase unofficial memorabilia. Consumers do not easily recognise unauthorised AFL memorabilia. The unauthorised AFL memorabilia products would turn up on eBay, etc, sales of these products would likely be undocumented, evidence against the defendants would be lost. Accordingly, if an injunction was not granted, the plaintiffs would be at risk of serious damage that could not be compensated by damages.
- On the evidence, the defendants would be likely to continue to infringe the property rights of the plaintiffs if not restrained.
- Against this, the defendants would lose profits from supplying merchandise in the lead up to Christmas. Further, the defendants would be unable to compete with competitors.
- The trial is set down for speedy hearing, commencing on 3 December 2012. In combination with the plaintiffs’ undertaking as to damages, the defendants would be protected.
On this basis, His Honour extended the injunction restraining the defendants from selling AFL memorabilia until further order.