3 stripes v 4 stripes: the remedies
4 stripes 3 stripes now the remedies
Following the decision a couple of months back that 3 of 12 Pacific Brands’s shoes had infringed adidas’ 3-stripes trade mark, Robertson J has now:
- made a declaration that Pacific Brands infringed;
- granted an injunction permanently restraining Pacific Brands from making or selling etc. 2 of the 3 shoes found to infringe;
- awarded $20,000 damages; and
- ordered Pacific Brands to pay 30% of adidas’ costs.
The amount of damages was resolved between the parties. There are a couple of points of interest in the terms of the injunction and the costs order.
First, in relation to the injunction, adidas had sought an injunction which restrained Pacific Brands both in relation to the specific shoes found to infringe and also “from otherwise infringing” the 3-stripes trade mark. Robertson J refused this wider injunction. The practical reality of 9 styles either abandoned or found not to infringe served a telling warning against the injunction sought:
because, as these proceedings have shown, such an order would lack sufficient clarity and definition and the Court should not make an order in relation to conduct where a person would not readily know whether or not its proposed conduct breached the order. What is the appropriate relief must depend on the facts and on the underlying dispute and I do not derive much assistance from the form of relief granted in trade mark cases which concerned primarily words because infringements by words are generally clearer than by designs.
His Honour also refused to include one of the 3 infringing styles in the order because the shoe had been taken off the market 7 years earlier and there was no sufficient risk of its reintroduction. While the other 2 infringing shoes had been taken off the market in 2009, an injunction was warranted. First, no unconditional undertaking had been given in relation to them. Secondly, while a broad undertaking had been given, his Honour considered the sale of these 2 styles after that undertaking was in place breached it. His Honour also considered that the evidence that Pacific Brands’ Global Trading division – the “division” which had sold the shoes – had been closed down was not “sufficiently cogent” to persuade him that there was no sufficient further risk of infringement.
Thirdly, the terms of the injunction extend also to authorising, directing or procuring other to make or sell the infringing shoes.
On the costs question, Robertson J considered the “old” rules which included an automatic one third reduction to the costs where less than $100,000 was recovered were applicable as the action started before the new, 2011, rules came into force. However, his Honour exercised his discretion not to apply that rule. The Federal Court was an appropriate forum to have brought the action in and damages were not the primary relief being sought. The costs were reduced, however, to reflect the degree of adidas’ success, particularly bearing in mind it had pursued 12 styles of shoe as part of an overall strategy to obtain broad injunctive relief. The little weight accorded to the survey having regard to the substantial amount of evidence it involved, in the face of Pacific Brands’ objections, was also a factor in the reduction of costs.
Adidas AG v Pacific Brands Footwear Pty Ltd (No 4)  FCA 1335
- The terms of the injunction were: ?
The respondent, whether by its servants, agents or otherwise, be permanently restrained from:
(a) manufacturing, procuring the manufacture of, importing, purchasing, selling, offering to sell, supplying, offering to supply or distributing footwear in the form depicted in any of Exhibits K or L in these proceedings, being the footwear depicted in Annexures B and C to these Orders;
(b) authorising, directing or procuring any other company or person to engage in any of the conduct restrained by sub-paragraph (a).
- This may be contrasted with the typical injunction in a patent case that thou shalt not infringe the patent; leaving the infringer to run the gauntlet. ?