A mobile phone reseller has been found in contempt of court for continuing to trade as Crazy Ron's after that name was ruled to infringe a rival's trademark.
Mobileworld Communications, the owner of Crazy John's mobile phone stores and trademarks 'Crazy John' and 'Crazy John's', successfully sued Crazy Ron's in October 2003 for trademark infringement.
Victoria-based Mobileworld Communications argued the name would confuse customers and allow Crazy Ron's to benefit from Crazy John's success.
Crazy Ron's had kept using the name and was found in contempt of court this morning, 15 September.
Brendan Fleiter, a director at Crazy John's, said the Federal Court of Australia in Melbourne had fined Crazy Ron's owners $50,000 for continuing to use the name.
"There's been a couple of hearings about it all last week and a decision was handed down this morning that they had been breaching the order that was made last year," Fleiter said.
The Federal Court upheld an appeal in August against last year's ruling. But Fleiter said the injunction against using the name Crazy Ron's still stood.
Court documents reveal that Crazy Ron's was ordered to stop using the terms Crazy Ron, Crazy Ron's, www.crazyrons.com.au or any names "substantially identical with or deceptively similar thereto" anywhere except near Crazy Ron's original home base, around the Gold Coast and south-eastern Queensland.
However, Fleiter said Crazy John's was "satisfied" with the overall resolution. "The main aim of the proceedings was to protect the Crazy John's brand throughout Australia," he said.
Fleiter said customers had seen TV advertisements for Crazy Ron's and confused that company with Crazy John's. One had given evidence that they had called Crazy Ron's about support for a product but had not received a reply. Then they had called Crazy John's to complain, thinking they were the same company, Fleiter said.
"It's not about deliberate trading off of our name. It's about confusion in the mind of the customer, and we had direct evidence of that," he said.
Fleiter said Crazy John's had been using that name since 1992. The Crazy Ron's name had first appeared in 1996, on a Q&Q Global Enterprise mobile phone shop in Queensland's Mermaid Beach -- just two stores away from Crazy John's.
Soon after that, the Crazy Ron's brand had started appearing on other outlets belonging to that company, including six mobile phone resellers in Melbourne and four in Sydney, Fleiter said.
Court documents reveal that Crazy John's asked Crazy Ron's to cease using that name several times before it resorted to legal action.
"The respondents asked Mr Bakir in December 1996 to refrain from using the name 'Crazy Ron's', but he refused," the appeal judges wrote in August.
Crazy Ron's solicitor Morgan Conley had argued that the first judge had erred. Using words similar to 'Crazy John' alone could not have infringed the 1995 trademark. That trademark also included a logo, a particular font and way of printing the words, the lawyers said.
The appeal judges said 'Crazy John's' and 'Crazy Ron's' sounded so similar that consumers could well be confused. Ample evidence had been produced in the initial claim supporting that claim, based on the 1999 trademark, they said.
However, the 1999 trademark was invalid, because it was based on incorrect details that were later amended, the appeal judges noted.
Crazy Ron's has been ordered by the court of appeal to pay 70 percent of Crazy John's costs for the original trial, including the cross-claim. However, Crazy John's has now been ordered to pay all Crazy Ron's appeal costs.
"The appeal concerned only relatively minor issues dealt with at the trial. It remains true that [Crazy John's] was substantially successful," the judges said.
Fleiter said Crazy John's wouldn't "get much change out of $1 million" from fighting the court battle but it had been worth it, despite the "complicated arrangement" regarding court costs payment, which he said the lawyers were still nutting out.
"At the end of the day, they'll be paying us money," Fleiter said.
Crazy Ron's founder Ron Bakir was contacted for comment via the headquarters of the company -- now trading as Mad Ron's -- but had not replied at press-time.
The original Crazy Ron's operated as several entities variously acquired after Bakir and his partner Jean Doueihi split up, known as Q&Q Global Enterprise, BHL Group, Crazy Ron's Communications, CR Communications and Crazy Ron's Communications Australia.
Bakir remained as an employee of BHL Group, a company with some 15 stores in Melbourne, south-east Queensland and Sydney trading as Mad Ron's. However, not long after the split, Doueihi ceased using the name Crazy Ron's for her part of the business.