Tonnex was found to have infringed Dynamic’s copyright in its printer cartridge compatibility chart. That finding was upheld on appeal. Now, Yates J has ordered Tonnex to pay Dynamic $150,001.00 in damages. The damages are comprised of compensatory damages under s115(2) of $1.00 and $150,000 by way of additional damages under s115(4).

The $1.00 nominal damages was agreed by the parties before the hearing. Interestingly, Yates J did not comment on this.[1]

Dynamic had argued for an award of additional damages of $400,000; Tonnex, while denying any award should be made, argued for an amount in the “tens of thousands”. Yates J arrived at $150,000 in the exercise of his Honour’s evaluative judgment.

Yates J’s reasons contain a useful summary of the applicable principles for the court to decide whether it is appropriate to award additional damages at [37] – [53].

Recognising that flagrancy is not required before an award of additional damages can be made, his Honour nonetheless found that the infringement was deliberate and studied. Although Tonnex’ directors denied knowledge of the copying and gave evidence that they had specifically instructed there was to be no copying,[2] the knowledge and acts of the employees involved – who included the National Marketing Manager – were at [101] relevantly the acts and knowledge of Tonnex. Further, Tonnex’ position throughout had not just been reliance on legal advice that copyright could not subsist in such a compilation. It had hi-handedly denied any copying at all.

Yates J also noted that, even if the directors were innocent of infringing knowledge, the situation should have changed after detailed particulars of infringement had been served (albeit late in the picture). Those particulars appear to have identified mistakes and other typographical peculiarities in the Tonnex catalogue which were really consistent only with copying from Dynamic. In other words, the directors were put on inquiry.

Instead, Tonnex sent out 38,000 emails with links to its infringing catalogue after Dynamic notified its infringement claims to it; only stopping just before the liability trial:

…. The cessation of Tonnex’s conduct was taken at a time of its own choosing, without regard to Dynamic’s rights. Regardless of Mr Solomon’s and Mr Kozman’s state of knowledge in that period, by reason of Mr Rendell’s knowledge, Tonnex must be taken to have known the true position regarding its copying of Dynamic’s Compatibility Chart. With that knowledge, it undoubtedly took commercial advantage of its wrongful conduct.

Tonnex did introduce an approvals process to vet material before it was published in future. Yates J was not particularly satisfied by this. His Honour was also concerned that Tonnex’ witnesses did not really exhibit appropriate contrition, but rather saw the litigation as a tactic by Dynamic rather than vindication of its rights.

The need to mark the court’s disapproval of Tonnex’ conduct and signal to the community that it was not alright to copy others’ property with impunity (i.e. deterrence) also played roles.

Dynamic Supplies Pty Limited v Tonnex International Pty Limited (No 3) [2014] FCA 909

  1. Contrast the apparent questioning of the practice raided by French and Kiefel JJ in [Venus Adult Films v Fraseride][venus] at [94].  ?
  2. it is fair to say his Honour expressed a degree of scepticism towards this evidence at esp. [102] and [103].  ?