Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd  FCA 1807 (22 November 2018)
Successful actions by Lumen including for copyright and trade mark infringement.
Lumen supplied trailer wiring harnesses to Frontline for many years. Frontline then sought alternative suppliers and, without the knowledge of Lumen, provided these alternative suppliers (the other respondents to the proceedings) with samples of the Lumen wiring harnesses, engineering drawings for the Lumen wiring harnesses and the installation instructions for the towbar kits including the Lumen wiring harnesses. The samples and engineering drawings were used to produce almost identical products (the substitute products) and the alternative suppliers also produced direct copies of the installation instructions. Frontline then supplied the substitute products and installation instructions to Mitsubishi and Mazda without disclosing they were substitutes and not genuine Lumen products. The installation instructions contained reference to the registered trade mark LUMEN in the image of a trailer socket.
Moshinsky J accepted that the circuit markings on the printed circuit boards of Lumen’s wiring harnesses were subject of copyright owned by Lumen and comprised artistic and literary works which were reproduced in the substitute products. Hence Frontline and the alternative suppliers had infringed this copyright. Defences under s115(3) and s77 were relied upon, but not made out by the alternative suppliers.
The engineering drawings comprised original artistic and literary works subject of copyright owned by Lumen but, due to the way this issue was argued, it was only necessary for his Honour to deal with infringement of a literary work which was found to have been substantially reproduced in the drawings created by the alternative suppliers. Again, Frontline had authorised this and his Honour found infringement by Frontline and the alternative suppliers. Further, defences under s115(3) and s77 were relied upon, but not made out by the alternative suppliers.
The installation instructions comprised original artistic and literary works subject of copyright owned by Lumen which were reproduced and infringed by Frontline and the alternative suppliers. Again, the defence under s115(3) was relied upon, but not made out by the alternative suppliers.
Passing off and contravention of the Australian Consumer Law
These claims were brought by Lumen only against Frontline and admitted by Frontline. The relevant misrepresentations by Frontline arose from supplying the substitute products without disclosing there were not genuine Lumen products and not obtaining approval of the substitute products under the relevant production part approval process.
Breach of confidence
This claim was brought by Lumen only against Frontline and admitted by Frontline. The documents containing technical information were supplied by Lumen to Frontline in circumstances where Frontline knew, or ought to have known, that an obligation of confidence applied to the information. Frontline breached its obligation of confidence by providing this information to its alternative suppliers.
Breach of contract
This claim was brought by Lumen only against Frontline and admitted by Frontline.
Trade mark infringement
The relevant LUMEN trade mark registration was owned by Lumen International and used by Lumen Australia with its authority. It covered class 12 goods for the automotive after market including parts and accessories for trailers. The relevant use of the LUMEN trade mark by Frontline concerned the inclusion of this registered trade mark in the image of a trailer socket in the installation instructions supplied with the substitute products to Mitsubishi and Mazda. This use was in relation to goods (instruction manuals) which were similar to the registered class 12 goods. The defence under s120(2) was relied upon, but not made out by Frontline because it could not show that its conduct was not likely to deceive or cause confusion. Although LUMEN was rendered in small font it was readable and indicated a connection in the course of trade between the wiring harness and Lumen. This was likely to cause confusion in circumstances where copies of the relevant installation instructions were provided with towbar kits that included the substitute wiring harness rather than the Lumen wiring harness.
Lumen also relied on claims under the Circuit Layouts Act but failed because Moshinsky J considered the circuit relied upon by Lumen was not an integrated circuit within the meaning of this Act. The active and passive elements were not “integrally formed in or on a piece of material” as required by the definition of “integrated circuit”.
Compensatory damages were calculated based on net profit associated with lost sales in the amount of $140, 750.30 plus interest payable by Frontline and the other respondents jointly and severally (but see below under cross-claim for Frontline having to indemnify the other respondents for this amount). Frontline was also ordered to pay exemplary or additional damages for passing off in the amount of $500,000. In light of this, his Honour did not consider it necessary or appropriate to order any additional damages for copyright or trade mark infringement.
The only claim made out against the alternative suppliers concerned copyright infringement, but his Honour did not consider it appropriate to order them to pay any additional damages for this. Unlike Frontline’s conduct, the alternative suppliers’ conduct did not involve a deliberate and calculated infringement or a calculated disregard for Lumen’s rights.
Cross-claim by alternative suppliers against Frontline
The alternative suppliers alleged that, at all material times, Frontline falsely represented that it was the owner of the relevant IP rights and Moshinsky J upheld this and found that Frontline’s conduct was misleading or deceptive under the Australian Consumer Law in respect of the drawings, circuit markings and installation instructions. His Honour ordered Frontline to compensate the alternative suppliers for their losses and to indemnify them for the amount of compensatory damages payable to Lumen.
Cross-claim by Frontline against alternative suppliers
Moshinsky J dismissed Frontline’s cross-claim seeking contribution from the alternative suppliers for damages payable by it to Lumen.