Sun Microsystems Inc. v Amtec Computer Systems Corporation Ltd
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE WARREN |
| Judgment Date | 30 January 2006 |
| Neutral Citation | [2006] EWHC 62 (Ch) |
| Date | 30 January 2006 |
| Court | Chancery Division |
| Docket Number | Case No: HC 05 C 01743 |
[2006] EWHC 62 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Warren
Case No: HC 05 C 01743
James Mellor (instructed by Messrs Nabarro Nathanson) for the Claimant
Andrew Norris (instructed by Messrs Lester Aldridge) for the Defendant
Hearing date: 21st December 2005
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is the application of the Claimant (" Sun") for judgment in default of defence, alternatively summary judgment, for relief in relation to the infringement by the Defendant (" Amtec") of various of Sun's registered trade marks. Amtec now accepts that it has been in breach. The issues before me relate to (a) the extent of the enquiry as to profits or damages which should be ordered as a result of the acknowledged infringements and (b) the extent of any injunctive relief to protect Sun from further infringement.
The facts
The case concerns parallel imports into the EEA. The Particulars of Claim identify 4 Sun Fire V240 servers. These servers were put on the market in Israel, and thus not in the EEA, in February 2005. Through a short chain of intermediaries, the servers were offered for sale to, and purchased by, Orion Business Services Ltd (" Orion"). This was a "trap" purchase and led to the present proceedings. The servers were supplied to Amtec by Kimbrer Systems a/s (" Kimbrer"), a Danish intermediary which in turn had been supplied by Caledonian Technology Ltd (" Caltech") in the UK. Amtec was not itself the importer of the servers into the EEA. The servers were not imported into the EEA, nor put on the market anywhere in the EEA, by Sun or with its consent. Although the "trap" purchase related to only 4 servers, it is common ground that there were 10 infringing servers acquired from Kimbrer.
Amtec's case in relation to its own acquisition is this. It regarded Kimbrer as a reputable European source of Sun products. It was a term of the contract between Amtec and Kimbrer that the servers were of EU origin; Amtec was happy to rely on that term as a guarantee that the servers were, in fact, of EU origin (which in fact they were). Kimbrer told Amtec that the servers had been bought from Caltech, which added strength to Amtec's belief that the servers had been sold by Sun, or a Sun-authorised reseller, within Europe. Amtec now accepts that it has infringed Sun's trade marks, but says that it did so innocently and reasonably thinking that it was allowed to do what it did.
The offer for sale of the 4 servers by Amtec to Orion was made on 10 March 2005, the sale contract was made on 7 April 2005 and delivery took place on 9 May 2005. The boxes containing the servers were labelled with a rubric containing the words "Origin: United Kingdom" and the servers themselves had UK serial numbers. Following service of the Particulars of Claim on 1 July 2005, Amtec did not immediately accept that it had infringed Sun's trade marks. Correspondence ensued between solicitors. During the course of that correspondence, Amtec's solicitors, Lester Aldridge, wrote on 20 July 2005, to Sun's solicitors, Nabarro Nathanson, saying that they would have expected to see certain documents disclosed which would show, for instance, that the servers had in fact physically reached Israel; they asserted that, without such documents, it would be difficult for Sun to show that the servers ever left the EEA (thus implying that the servers had been put on the market in the EEA by Sun or with its consent). They expressed their (incorrect) understanding of the rubric to mean that the goods were manufactured for sale within the UK. Although I was not taken to it, I understand that there is some evidence which suggests that there is a general understanding, in parts of the industry at least, that a product with a UK manufacture/serial number is regarded as available for sale in the UK: if that were right, then the servers would have been put on the market by Sun or with its consent, although, as I have said, Amtec no longer contests liability.
As well as the documents just referred to, Lester Aldridge required disclosure of a number of other documents, including contractual documents relating to the arrangement between Sun companies for the sale of the servers, being documents relevant to abuse of dominant position by Sun (although abuse of dominant position was not, in the end, alleged).
In their letter, Lester Aldridge also made the point that the servers were obtained from a supplier in Denmark (ie Kimbrer) who in turn had obtained them from another company within the EAA (ie Caltech) stating that
"Our client has always taken steps to ensure that the Sun products it sells are of EU origin……Indeed, our client's Terms of Purchase require that the goods supplied be of EU origin. Accordingly, it had an honest belief that they were of EU origin and at all times acted in accordance with honest commercial practices.
In addition, if the chain of sale ultimately leads back to one of Sun's authorised resellers (which our client believes is the case) then these goods must have been put on the market within the EEA with your client's consent…."
From that one can see that Amtec were far from accepting Sun's claim; rather, they were seeking to challenge it on a number of grounds. Indeed, towards the end of the letter, Lester Aldridge stated that
"…this is not a straightforward case of parallel importation of goods resulting in trade mark infringement as your correspondence and the Particulars of Claim allege….".
They ended by asking for an extension of time for filing a defence to allow for collection of evidence which was agreed to by Nabarro Nathanson.
Mr Norris, who appears for Amtec, complains that no response was given to the request for information to show that the servers were, in fact, exported out of the EEA. Accordingly, Amtec sought information and documentation from Caltech. A refusal by Caltech to produce that information provoked Amtec into making an application for third party disclosure against Caltech aimed at producing documents evidencing the purchase of the servers by Caltech from an unknown third party, which, according to the managing director of Amtec, Mr Warren Ayrton, Amtec believed at that time was a Sun company or Sun-authorised reseller. An order for disclosure was obtained but it has not, to date, been complied with.
The application now before me was issued on 27 October 2005. The evidence in support included material which was sufficient to persuade Amtec that it has no defence to the claim. However, there is only a grudging acceptance of that position. Mr Ayrton, in a second witness statement, says this:
"Given the uncertainty surrounding the ultimate source of the goods, I would submit that it is by no means absolutely certain that the goods were not put on the market within the EEA by Sun or with its consent. However, I admit that Amtec cannot prove this without the information Caltech should have provided under the [order for disclosure]."
In his first witness statement, Mr Ayrton also deals with some issues relating to Sun's hardware maintenance contracts and manufacturer's warranties. He states that in the last six years Amtec has sold 3,038 Sun computer systems and 318 Sun storage devices (including new and re-conditioned products). He states that 39 customers have been put on Sun Spectrum hardware maintenance contracts (between them accounting for 58 new or refurbished Sun systems or storage devices). I understood it to be suggested by Mr Norris that Sun would have known, through registration of products sold by Amtec, of Amtec's activities. However, Mr John Sanders, Business Controls Manger at Sun, has given a witness statement which addresses this point. He says that he has checked the maintenance contracts in relation to the 39 customers and says that none of them makes any reference to Amtec but all refer to a company called Single Source Computers Ltd. Since Sun did not associate Amtec with Single Source Computers Ltd, there is nothing in the point.
Mr Sanders also says that of the 58 systems or devices referred to, 2 related to software only: this evidence is not challenged. In relation to 5 of the remaining 56, the country where they were put on the market cannot now be established. Of the 51 where the country can be identified, 5 (ie almost 10%) were put on the market by Sun outside the EEA in the Czech Republic (before it became a Member State of the EU), in Israel and in the United States. It cannot, therefore, be suggested that there is no evidence of infringement except in relation to the 10 servers acquired from Caltech and that it is only supplies from that source that can be regarded as tainted. Of course, the fact that products were first put on the market outside the EEA does not mean that Sun has not subsequently consented to their being put on the market within the EEA; but that has not been shown to be so and Sun is certainly justified in thinking that there may have been infringements as a result of sales of these products by Amtec. However, Mr Ayrton, in his second witness statement, points out that no action was taken against Amtec until these proceedings and that it should therefore be inferred that there had been no previous infringement. I do not consider that there is anything in that suggestion and I reject it.
On 13 December 2005, with this hearing imminent and with no material obtained from Caltech on which to rely to show that the servers had been placed on the market in the EEA by...
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