Hearsay ... the Journal of the Bar Association of Queensland
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Issue 15: December 2006
Intellectual Property and Joint Tortfeasors Print E-mail

main_07IntProperty.jpg On 7 November 2006, Dowsett J handed down judgment in Louis Vuitton Malletier SA v Toea Pty Ltd [2006] FCA 1443 , a case that concerned whether the operator of a market where counterfeit goods were sold by the stallholder was liable as a joint tortfeasor for the tortious acts of that stallholder. In this article, Dimitrios Eliades examines the decision.

The Facts

T he first respondent (Toea) was the owner of the land upon which certain markets operated (the Carrara Markets). The second respondent (Mr Rosenlund) was the full time manager, responsible for operating, supervising and controlling the market for Toea.

There were approximately 400 stalls at the Carrara Markets. Toea granted stallholders a license to occupy designated areas pursuant to a written agreement for a fee.

Over a period of about 18 months, the applicant (Louis Vuitton), through its investigators, made trap purchases of illegal items bearing one or more of the Louis Vuitton trademarks or marks which were deceptively similar thereto. Louis Vuitton did not seek relief from the infringing stall holders, but rather from the market operators, to whom the documented results of the illegal activities were given.

The Issue

Toea and Mr Rosenlund did not essentially dispute the infringements by the stallholders, but disputed whether in the circumstances, either or both of them, infringed the trademarks by their conduct.

Louis Vuitton’s Methodology

Louis Vuitton manufactured merchandise including handbags, luggage and accessories, utilising its registered trademarks in the design. Its products were only available through its own retail outlets. Save for the second hand market, it was and is not possible to purchase a new Louis Vuitton item through the usual retail outlets. The products are of extremely high quality and priced at the upper end of the market (the reasons at [4]).

Control of the Markets

The Carrara Markets, the largest on the Queensland Gold Coast, attracted between 18,000 – 23,000 customers each weekend. Stallholders had continuous access to their stalls and were either:

  • permanent stallholders, who could erect signage and secure permanent structures; or
  • casual stallholders, who had no rights to erect structures nor to require the identical stall to be allocated to them. In practice, the rules were relaxed for long term casual stall members.

Toea provided ATM facilities, issued newsletters and notices to the stallholders, suggesting marketing strategies on how they might operate more profitably. Toea also arranged bus services to attend other retail complexes and pick up patrons, who wanted to shop at the Carrara Markets.

Toea and Mr Rosenlund exercised some control over the type of goods sold and the location of certain stalls. For example, they would consciously separate stalls, which dealt in similar products.

In addition, it was a characteristic of the market that some stalls (usually long term), were sold in the same way as businesses are sold outside of the market environment. These sales were conducted through Toea. Mr Rosenlund would interview prospective buyers and upon the sale of a permanent stall, Toea received a 10% commission on the sale price. Sales were recorded for up to $400,000.00.

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