Important implications for preliminary discovery applications 3 min read
Luxury shoe brand Manolo Blahnik sought preliminary discovery from designer outlet store Estro Concept (Estro) to determine whether it had a right to obtain relief for trade mark infringement and misleading conduct.
- Be clear in preliminary discovery applications why the particular documents sought are relevant to the applicant.
- If a party is only partially successful in its application, it will not be entitled to recover the entirety of its costs.
In 2019 Manolo Blahnik was contacted by a customer questioning the quality of a pair of Manolo Blahnik shoes purchased from an Estro outlet for $1,051.65. Manolo Blahnik identified that the shoes did not meet its standard authenticity indicators.
To determine whether to commence proceedings against Estro or its supplier, Manolo Blahnik filed an application to examine Estro's proper officer and seeking preliminary discovery pursuant to r 7.22 and r 7.23 of the Federal Court Rules 2011 (Cth). Manolo Blahnik sought discovery of documents that relate to:
- the relationship between Estro and its suppliers;
- the style, colour-way, size, quantity and unit price of the 'disputed products' (which included shoes purchased from Estro and subsequent 'trap' purchases) that Estro received from its suppliers;
- the style, colour-way, size, quantity and unit price of the disputed products that Estro sold to its customers;
- the style, colour-way and size of the disputed products in Estro's possession, custody or control; and
- the style, colour-way, size and quantity of the disputed products that Estro returned to its suppliers.
Federal Court decision
Manolo Blahnik was unsuccessful in its application to examine Estro's proper officer. Importantly, Estro provided the name of its supplier at the commencement of the proceeding and there was no proper basis to reject this evidence.
Manolo Blahnik was partially successful in its application for preliminary discovery. Estro was required to give discovery of categories two and three, as set out above. Documents going to the quantity, style and price of goods received from the supplier and then sold by Estro were relevant to Manolo Blahnik's consideration of whether to commence proceedings against Estro.
Estro was not required to give discovery for the other proposed categories for the following reasons:
- Estro had identified the supplier, and Manolo Blahnik had not specified how documents relating to Estro's relationship with that supplier were relevant to its decision whether to commence proceedings.
- Evidence indicated there were no disputed products on display at Estro's stores or on its website. Documents that related to disputed products in Estro's possession, custody or control were not relevant as to whether Manolo Blahnik should commence proceedings.
- It was also unclear how documents going to the style, colour-way, size and quantity of the disputed products returned to the supplier could be relevant.
Manolo Blahnik was only successful in relation to two of its five proposed categories for preliminary discovery. Manolo Blahnik was also unsuccessful in its application for examination of Estro's proper officer. Further yet, the court ruled that Manolo Blahnik could only recover 30% of its costs in the application.