Case: Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44 ; (2006) 149 FCR 569
Outcome: cited
way of preface I should note that up until final written submissions the case had been prosecuted by Hamilton on the basis that AMC, as Hamilton's fiduciary, held the two trademarks as constructive trustee for it, the marks having been obtained by it in breach of its fiduciary duty to Hamilton. The constructive trust claim and with it, seemingly, the allegation of breach of fiduciary duty were abandoned in Hamilton's written submissions. I say "seemingly" in relation to the fiduciary claim because it was scarcely addressed in submissions yet it is anything but non-contentious in the propositions it asserts: see Hospital Products Ltd ; Rickel v Schwinn Bicycle Co 192 Cal Reptr 732 (1983); Glover, Commercial Equity: Fiduciary Relationships , 3.48-3.51 (1995); and for the causes of contention in this area of the law see my "Fiduciary Principle" in Youdan (ed), Equity, Fiduciaries and Trusts , 1 (1989); see also Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44 ; (2006) 149 FCR 569 at [11] - [16] . I will return to this in the context of AMC's copyright ownership claim. The second possibility that copyright is jointly owned by Hamilton and Dr Keung: FAD para 32.3 seems to suggest, implausibly, that the works either are "works of joint authorship" which s 10(1) defines to mean ... a work that has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contributions of the other authors. or that, in some unexplained fashion, Keung had bound himself in preparing the artwork and product indications, to act in the joint interest of himself and Hamilton. Again I emphasise that the case has not been pleaded by any party on the basis that there was a joint venture in which, for some purposes at least, they agreed to advance their mutual as distinct from their several interests: cf Gibson Motorsport Merchandise at [11]-[16]. The third possibility ie Dr Keung is the owner: FAD para 32.4 is considered below: see "Consideration". Hamilton has pleaded that AMC was in a fiduciary relationship with Hamilton in virtue (a) of Dr Keung's authorisation to translate literally, his alleged representations and non-disclosures relating to the Chinese marks and literal translations and (b) of the trust and reliance placed on AMC by Hamilton and of its corresponding position of vulnerability: FAD para 17.5. Hamilton has gone on to plead that if intellectual property was created in the "Chinese Language Artwork" , AMC holds that on constructive trust for Hamilton: FAD para 28.4. I would emphasise that this claim is limited to the Chinese Language Artwork and does not extend to the English language product indications. A like claim to the trademarks was abandoned prior to final submissions. The written submissions on the above fiduciary relationship and consequential constructive trust claim are slight to the point of being perfunctory. Applicable principles It was open to Hamilton and AMC to cast their contractual relationship in a way which could, for certain purposes at least, have obliged AMC to act in Hamilton's interests alone or, distinctly, in their joint interests: cf Gibson Motorsport Merchandise at [7]-[16]. They chose to formalise their relationship as one of supplier and distributor, a type of relationship which characteristically is designed, subject to contractual limitations, to serve the several interests of the participants: see Hospital Products Ltd v United States Surgical Corporation ; Rickel v Schwinn Bicycle Co . The Distribution Agreement, and the parties conduct under in it in relation to the packaging was quite characteristic of this. Dr Keung was permitted to serve AMC's interests in selling products it acquired from Hamilton, by utilising artwork and language which he considered would facilitate the sale of those products in the area of the Agreement, so furthering AMC's own interests. Hamilton, in turn, would thereby have its own interests served to the extent that enhanced sales by AMC would be likely to lead to enhanced orders from Hamilton. While AMC was given latitude in the language so used, Hamilton in turn was able to protect its own interests in this matter. It retained for itself a right to approve all statements made on the packaging because of its exposure to product liability and it insisted that the two language versions had to match (to comply with requirements of the TGA scheme). There was nothing fiduciary in this arrangement though it doubtless required elements of trust, cooperation and reliance by the parties if it was to work effectively. But these element of themselves did not turn a non-fiduciary contractual relationship into a fiduciary and personal one outside of, and potentially inconsistent with, the contract itself: cf Gibson Motorsport Merchandise at [11].