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Labels diffuse dangerous deception

In Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd [2009] FCA 1049, the Court refused to grant an interlocutory injunction to restrain breaches of the Trade Practices Act as well as patent and trade mark infringement in light of undertakings given by the alleged infringer.

The applicants (“Schutz”) sought an injunction on an interlocutory basis to restrain the respondents (“VIP”) from offering for sale or otherwise exploiting reconditioned Composite Intermediate Bulk Containers (“Composite IBCs”), consisting of an outer metal frame and an inner container of a different material such as plastic.  IBCs are used to transport a range of materials including dangerous liquids provided they are appropriately certified.

Schutz, a provider of new Composite IBCs as also engaged in the reconditioning of used IBCs and having them recertified.  VIP had entered the reconditioning market and sold “Cross-bottled” Composite IBCs, being IBCs having a Schutz outer case and a VIP inner container.  The exterior casing of the reconditioned Composite IBCs sold by VIP continued to bear Schutz’s trademark and in some instances Schutz’s original UN certification (UN model regulations require Composite IBCs to be tested to ensure that they meet a certain standard.  Only those Composite IBCs that have passed the mandatory tests are certified for use in the transport of dangerous goods and they must bear standardised labelling).Schutz alleged that VIP’s conduct was misleading and deceptive and therefore in breach of sections 52 and 53 of the Trade Practices Act in that consumers could be misled into believing there was an affiliation between Schutz and VIP or that the cross-bottling of the Composite IBC was authorised by Schutz.  The Court accepted that consumers may have been so misled.

Schutz also argued that VIP’s conduct gave rise to a further misrepresentation that the Composite IBC’s supplied by VIP were of the same quality and standard as the Schutz product and continued to comply with UN certification.

The Court found that Schutz’s concerns, as well as concerns that consumers may mistakenly believe that the reconditioned products were suitable for the transport of dangerous goods, were negated by VIP providing undertakings:

a) not to sell the goods as being suitable for this purpose and

b) to affix a warning label on the goods which also explained the nature of Schutz’s and VIP’s connection with the goods and that the goods were not for the storage or transport of dangerous goods.

On the basis of those undertakings, the Court refused to grant interlocutory relief.

The case illustrates that where the issue of potential unrepairable harm can be minimised by practical measures such as corrective labelling, this can stymie an Applicant’s claim for interlocutory relief.

This entry was posted by Chris Schlicht on Friday, October 2nd, 2009 at 4:07 pm and is filed under Australian Patents, Australian Trademarks. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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