Viscount Plastics Limited v Lamnei Plastics Limited

High Court, Auckland, CIV 2005-404-3452, 13 September 2005, Gendall J

In a number of interlocutory injunction cases in recent years based on registered designs, the New Zealand Courts appear to have given substantial weight to the registered design - even when the defendant has been able to demonstrate a strong case for invalidity. A high water mark example of this in 2004 was the decision of Heath J in Permanent Promotions Pty Limited v Independent Liquor (NZ) Limited (HC Auckland, CIV 2004-404-2419, 10 June 2004) (see IP Forum Issue 58 September 2004). Here Heath J granted an interlocutory injunction despite finding that the defendant’s argument that the design was void for functionality was “strongly arguable”.

A different approach was taken by Gendall J in the Viscount Plastics case. Here the plaintiff sought to restrain the defendant from manufacturing and selling plastic bread crates which allegedly infringed its registered design and copyright.

Gendall J noted that there are unreported New Zealand decisions (including Permanent Promotions) to the effect that any invalidity of a registration is not relevant in assessing whether there is a serious question to be tried. The judge noted, however, that there is ample authority to the effect that if a defendant makes out a strong case for invalidity, then an interlocutory injunction is liable to be refused, recognising, of course, that this is simply one of the factors to be taken into account. In this case, the judge concluded that there were substantial issues for argument on both the plaintiff’s claim for infringement and on the defendant’s counterclaim for invalidity of the registered design.

The judge also noted that in some New Zealand design cases, a factor in granting an interim injunction has been that (if an injunction is refused) the plaintiff would lose “the ability to manage [its] practical monopoly situation”:  Handitags Limited v Warburton - 12 December 2001, Glazebrook J and BEP Marine Limited v Aquatech Marine Limited - 20 December 2002, O’Regan J. The judge felt that while “management of the monopoly” was a factor to be waived, it could not be elevated to the sole factor or a rigid rule so as to determine balance of convenience issues.  This was particularly so where (as here) damages were capable of being adequately assessed.

On the balance of convenience and bearing in mind delay on the part of the plaintiff in bringing its case, an interlocutory injunction was refused.