Archive for the ‘Trade marks’ Category

Zima is a registrable trade mark

Thursday, September 25th, 2014

Mastronardi applied to register ZIMA as a trade mark in class 31 for tomatoes. The Registrar refused the application on the grounds that it was not inherently adapted to distinguish. Gordon J has now upheld Mastronardi’s appeal and directed the trade mark be registered.

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ZIMA sofar as anyone knows is an invented word; it has no meaning at all. Apparently, however, it is only ever used in relation to one “variety” of tomato. The Registrar refused the application on the basis that:

“the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and that the trade mark “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used”.

As the trade mark had not been used in Australia before the date of the application to register it, therefore, it failed.

The question fell to be determined under the old form of s 41 (although it should be the same under the (it is hoped, more clearly expressed) new form. Thus, a sign is registrable as a trade mark if it is “inherently adapted to distinguish”. Both Mastronardi and the Registrar accepted on the appeal that, even under the old form of s 41, a sign is presumed to be inherently adapted to distinguish unless the Registrar (or the Court) is (positively) satisfied it is not.

A sign would not be inherently adapted to distinguish if other traders in such products would legitimately wish to use it to refer to those products even if they were not the applicant’s products. The issue turns on:

the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.[1]

Consequently, Gordon J explained there were two questions that needed to be addressed:

(1) how would ZIMA be understood as at 25 July 2011[2] by ordinary Australians seeing it for the first time used in respect of tomatoes; and

(2) how likely is it that other persons, trading in tomatoes and being actuated only by proper motives, will think of the word ZIMA and want to use it in connexion with tomatoes in any manner which would infringe a registered trade mark granted in respect of it?

As it was an wholly invented word, with no meaning, the answer to the first question was easy: it wouldn’t convey any meaning.

The Registrar argued on the second question that ZIMA was in fact, and was treated by other traders, as the name of a particular variety of tomato. The expert evidence before the Court, however, disclosed that “variety” in the context of tomatoes was a very rubbery (no pun intended?) term and, while there were a few varieties of tomato registered under the Plant Breeder’s Rights Act, thousands were not.

More directly, Mastronardi’s evidence was that it did not source its ZIMA brand tomatoes from just one variety. In Australia, there are apparently 50 different cultivars of orange grape tomatoes; Mastronardi used only six of these and only two were supplied to it exclusively. Moreover, when it launched its product in Australia, it had been very careful in its usages referring to its ZIMATM golden grape tomatoes or sweet orange grape tomatoes or golden snacking tomatoes.

So, it followed that other tomato suppliers had a range of terms they could use to describe their own sweet orange/golden grape tomatoes and, therefore, ZIMA was inherently distinctive.

Her Honour’s decision highlights the importance of careful use of trade marks, particularly if there is a risk the trade mark may become the commonly accepted term for a variety or type: the trade mark should be used as an adjective and not as a noun (or verb). This is a problem that practices in the pharmaceutical industry have had to grow up to develop – a different name for the active ingredient to the “brand” name[3] – but, as this case shows, of potentially much wider application.

It is also interesting that her Honour has directed that the trade mark be registered rather than accepted and advertised.[4]

Mastronardi Produce Ltd v Registrar of Trade Marks [2014] FCA 1021


  1. Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514.  ?
  2. The date of Mastronardi’s application to register its trade mark in Australia.  ?
  3. See also s. 25.  ?
  4. Which in some cases carries the risk of opposition.  ?

auDRP Overview

Monday, August 25th, 2014

You probably know that the auDRP is the dispute resolution policy for the .au domain name space. You may not know that there have been about 330 decisions in its roughly 12 years of operation.

Prof Andrew Christie, with a helping hand from James Gloster, Jeffry Kadarusman and Daniel Lau, has prepared an “Overview” outlining how the decisions have treated the various issues arising under the auDRP. And he is launching the auDRP Overview at a Workshop on Wednesday 27 August at 9:15 am to 10:45. Venue the Crown Promenade.

Details here.

Prof Christie is the Professor of Intellectual Property at the University of Melbourne a very experienced domain name panelist, having amongst other things written the seminal decision Telstra v Nuclear Marshmallows D2000-0003If you find yourself with a dispute over a domain name registered in the .au domain name space, I anticipate you will find your first stop being this overview. Given the influence of UDRP decisions on auDRP decisions, although there are some important differences, you will also probably find it helpful in the context of the UDRP too. Make sure you read it.

The WIPO Overview to the UDRP version 2.0 here.

Additional damages are procedural …

Wednesday, August 13th, 2014

In June, Perram J awarded the Halal Certification Authority $10 nominal damages and $91,005.00 by way of additional damages for trade mark infringement pursuant to s 126(2).

Section 126(2) was inserted in the Act by the Raising the Bar Act and commenced operation on 15 April 2013.

The conduct which attracted the award of additional damages, however, occurred between August 2012 and September 2013. So, Quality Kebabs came back to argue that the award should be reduced to (about) $35,000; arguing that the Court could only award additional damages for the period from 15 April 2013.

Noting that the right to seek damages had been in place throughout the period and viewing s 126(2) as affecting the quantum only, Perram J rejected this argument. His Honour considered the situation was more like those cases where the amendment was treated as ‘procedural’ rather than ‘substantive’ and so could apply to all the conduct.

His Honour did note, however, that Quality Kebabs made no argument that additional damages were punitive in nature and so should be treated as a penal law – which would presumably not be permitted to have retrospective effect.

Hmm …. additional damages (at least in the context of copyright) are (at least in part) intended to punish the defendant and deter others from engaging in similar conduct.[1] So this debate may well arise again.

The reasons also have a short determination on the form the corrective advertising for contravention of the ACL should take.

Perram J was able to entertain Quality Kebabs’ application because, the corrective advertising order not having been finalised, the decision was still interlocutory and not final.

Halal Certification Authority Pty Limited v Quality Kebab Wholesalers Pty Limited (No 2) [2014] FCA 840


  1. See the discussion in Facton v Rifai [2012] FCAFC 9 at [33] – [37] (Lander and Gordon JJ) and Vaysman v Deckers Outdoor Corporation [2014] FCAFC 60 at [23] – [31] (Besanko J). Of course, s 115(4) of the Copyright Act does have all those “extra” paragraphs, but they are probably equally applicable to the Trade Marks Act and the Patents Act too.  ?

On the problems of descriptive names

Tuesday, July 29th, 2014

The Full Federal Court has dismissed Kosciuszko Thredbo’s appeal from the dismissal of its claims against ThredboNet.

Kosciuszko Thredbo (KT) runs the Thredbo ski resort. Amongst other things, one of its subsidiaries promotes the range of activities available at Thredbo from a website having the domain name: thredbo.com.au. ThredboNet leases some of the accommodation at Thredbo from KT and hires it out to prospective skiers, partygoers and the like. Indeed, the terms of its lease from KT obliged it to hire out, or at least offer for hire, the leased premises. ThredboNet had the, er, gall to promote its accommodation, amongst other things, from websites having “thredbo” in their domain names including “thredbo.com”.

KT contended that this conduct was passing off its reputation in “Thredbo” and misleading or deceptive conduct contrary to s 18 of the Australian Consumer Law.

The Full Court agreed with KT that the trial Judge had erred in requiring KT to demonstrate it had acquired sufficient secondary meaning in Thredbo, the name of the place, that KT had the exclusive right to use the name. This did not help KT in the end:

31. In the end, the word “Thredbo” is a geographical name of a location in New South Wales. The appellants’ resort and businesses are located there and they hold (and their predecessors in title held) the head lease over the land on which the village and resort complex are located. But others also operate businesses, as sublessees, in the physical location known as Thredbo. The real issue was not whether the appellants had established a monopoly over the right to use the word “Thredbo” but whether they had established that the respondents’ conduct in using that word was likely to lead ordinary or reasonable consumers seeking accommodation or services in Thredbo into believing that the respondents’ business or the accommodation or other services that the respondents were offering was or were that or those of the appellants: Campomar 202 CLR at 87 [105]; Office Cleaning 63 RPC at 42. The more significant issue, then, is whether the primary judge erred in his conclusions on the question whether the respondents’ conduct was misleading or deceptive (or likely to be so).

The trial judge didn’t.

There were a number of strands to the Full Court’s reasoning. The Full Court recognised that some degree of confusion must be accepted where 2 traders use descriptive words otherwise one would be given an unfair monopoly.

In this case, the evidence from Google search results showed that there were a number of businesses that advertised with “Thredbo” in their name and/or domain names. ThredboNet’s website looked sufficiently different to KT’s websites and was limited only to the limited range of accommodation it provided. After the proceeding commenced, ThredboNet had included a disclaimer on its website. There was an initial form and a second, more explicit form. Either was sufficient:

We are not satisfied that a consumer who went to any of the respondents’ websites would reasonably have associated the operator of the website with the appellants. The respondents’ domain name www.thredbo.com was very similar to that of KT, namely www.thredbo.com.au. A consumer might easily be led to the former website thinking it was that of the appellants when doing an internet search. But in today’s society the ordinary or reasonable consumer seeking accommodation, or other goods or services, on the internet will frequently click on a result in a web search thinking it is a link to a particular site, only to find when his or her browser is directed to the selected site that it is not the site of the supplier or business that the consumer wanted. The ordinary, reasonable consumer who came upon the home page of www.thredbo.com would have seen, depending on when he or she accessed it, the first or second disclaimer in the middle of the page. Each disclaimer appeared under a recognisable, distinctive heading “About Thredbo.com”. It did not have the appearance, as asserted by the appellants, of being “buried in the text”.

This is not an endorsement of the initial interest confusion theory.

In the course of reaching their conclusion, the Full Court at [43] endorsed the proposition that:

…. Ordinarily, most people searching for a term or information will look at the first page of search results and then select the most apparently appropriate link or links from that page before they would move to a second or subsequent page of search results. Indeed, they would be unlikely to see any need to go to a second or subsequent page of search results unless they had not found some satisfactory site or sites on the first page.

There was a third issue: clause 4.3 of ThredboNet’s lease from KT appeared to forbid the use of “Thredbo”:

4.3 NO USE OF ‘THREDBO’

The Sublessee must not use or permit the use of the word ‘Thredbo’ in connection with any business carried on by the Sublessee, without the prior written consent of [KT].”

(Emphasis added by Full Court)

Because ThredboNet was required by the lease to hire out the accommodation for at least 26 weeks of the year, cl 4.3 could not mean ThredboNet could not use “Thredbo” in connection with that business. At a minimum, it must have been contemplated by both parties that ThredboNet would be able to tell its customers and potential customers the address of the properties. Further, the Full Court pointed out that the restraint was not a restraint in respect of the land on which the leased properties had been built. The restraint operated quite independently and separately from the land. Finally, KT did not provide evidence, or sufficient evidence, that a restraint of this kind was commonly accepted in such contracts as a normal incident of the arrangement. Accordingly, cl. 4.3 was invalid at common law as an unreasonable restraint of trade and operated so far outside any permissible scope that it was not capable of being read down under s 4 of the NSW Restraints of Trade Act.

Question: would it have made any difference if KT had a registered trade mark?

Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2014] FCAFC 87 (Siopis, Rares and Katzmann JJ)

 

Lid dip: Sue Gatford

More contempts

Monday, June 23rd, 2014

Bob Jane and his trading companies were found to be infringing the BOB JANE and JANE FLEET trade marks and had, amongst other things, injunctions ordered against them to stop, to change the various company names and transfer two domain names.

They didn’t.

This time, Besanko J has imposed fines of $25,000 and $15,000 on Mr Jane for his contempts, $25,000 and $15,000 on Bob Jane Global Tyre Corporation (Hong Kong) Limited, $20,000 on Bob Jane Southern Motors Pty Ltd and $2,000 fines on corporate respondents for other contempts. The respondents were also ordered to pay 80% of the applicants costs on an indemnity basis.

Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2014] FCA 637

Carving up an uncertified halal butcher

Wednesday, June 18th, 2014

Perram J has awarded $10 nominal damages for trade mark infringement against each of Scadilone, White Heaven and Quality Kebabs, but $91,015 additional damages against Quality Kebabs.

The Halal Certification Authority does just that: it certifies that food has been prepared according to the relevant Islamic (halal) requirements. It has a registered trade mark for the use of which, like other such schemes, you pay appropriate licence fees and comply with the standards set.

TM 1005647

TM 1005647

Quality Kebabs makes and sells at wholesale meat products. It supplied some of its products to 2 kebab houses: Scadilone and White Heaven. The employee/sales rep. also provided them with certificates bearing HCA’s trade mark. Unfortunately, Quality Kebabs was not certified by HCA and it had not paid the licence fees.

HCA had sought compensatory damages based on its lost licence fees: about $5000 for a year’s licence from each of the kebab shops and roughly $60,000 from Quality Kebabs because its conduct occurred over parts of 2 different annual licensing periods. Accepting that a lost royalty or licence fee could be appropriate, Perram J refused this.

Damages under s 126(1) are compensatory. There was no likelihood that any of the infringers would have contemplated entering into a licence at those prices so there were no “lost” licence fees. The kebab houses did want assurance that the meat was halal, but that did not necessarily mean they wanted to promote their shops, as opposed to the meat, as halal certified. Perram J found that, if Quality Kebabs had known HCA’s trade mark was registered and licence fees were payable, it would not have used the trade mark. Instead, it would have copied someone else’s certificate. Therefore, there was no basis to infer that HCA had been deprived of its licence fee.

There was also no order for damages for reputational damages. The signs were displayed in only 2 shops for limited periods. There was no evidence that anyone had seen them or even whether or not the meat was in fact halal.

Perram J considered that the additional damages contemplated by s 126(2) were intended to have a deterrent effect.

Scadilone, White Heaven and their principals escaped liability for additional damages as they were innocent infringers. They had simply put up the certificates they were given and removed them, more or less promptly, when complaint had been made.

Quality Kebabs was a different case, however. Having reviewed the factors set out in s 126(2),[1] Perram J held this was an appropriate case for an award of additional damages:

…. If the damages were to be fixed at the level of the applicant’s wholesale licence fee this would strip Quality Kebabs of the benefit it has received of using the trade mark without having to pay for it but it would not, in my opinion, be a sufficient deterrent. It would mean that an infringer could acquire, in effect, a compulsory licence to use a trade mark subject only to paying for it. It would create a ‘use now’ and ‘pay later’ state of affairs. That situation would eliminate the capacity of the trade mark owner to control who used its trade mark.

To achieve the deterrent effect and having regard to the other factors, Perram J increased the damages by a factor of 50% over the applicable licence fees. Thus, about $60,000 for the licence fees that should have been paid for the two years in which the infringements occurred plus a further $30,000.[2]

There was no award for damages under the ACL. Although the conduct was plainly misleading, Perram J found there was no evidence that HCA’s reputation had suffered any damage.

Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614

Lid dip: James McDougall


  1. S 126(2) is in similar, but not identical, terms to s 115(4) of the Copyright Act 1968.  ?
  2. … the applicant’s fee in those years was an annual one of $27,090 and $33,580 respectively. Although Quality Kebabs only used the trade mark for the 13 month period between August 2012 and September 2013 I do not think that these fees should be subject to a pro rata reduction. Had Quality Kebabs followed the correct path of obtaining the applicant’s permission it would have had to have paid both annual fees in full.  ?

2 years gaol for contempt

Monday, May 26th, 2014

The Full Federal Court has reduced Mr Vaysman’s punishment for contempt from 3 years to 2 years imprisonment for repeatedly breaching injunctions not to infringe trade mark and copyright.

In 2003, Deckers Outdoor Corporation (the owner of the UGG Australia trade mark) sued Mr Vaysman, members of his extended family and various companies they operated through for infringing its trade mark and copyright. Those proceedings were settled by consent. Injunctions against trade mark infringement and copyright infringement had been ordered.

In 2004, Deckers Outdoor Corporation again sued Mr Vaysman, members of his family and the companies through which they operated for breach of the terms of settlement reached in 2003. Those proceedings were also settled by consent.

In 2007, Deckers Outdoor Corporation sued Mr Vaysman, members of his family, their companies and a number of others for the third time: for infringement of its trade marks and copyright and breaches of the prior terms of settlement.

Essentially, notwithstanding the two sets of earlier proceedings, the undertakings not to infringe and the injunctions against infringement, Mr Vaysman et al. had continued with their infringing activity making counterfeit UGG boots unabated at all. The proceedings involved two main aspects: the civil claims for infringement of trade mark and copyright and contempt charges for breaches of court orders made in both the earlier proceedings and also the 2007 proceedings (e.g. continuing the infringing activity in defiance of an interlocutory injunction).

Before the contempt charges were heard and the punishments handed down, there had been judgment against the Vaysman parties on the civil claims for infringement including an order for the corporate vehicle and Mr Vaysman jointly and severally to pay $3 million in compensatory damages and for the corporate vehicle to pay $3.5 million in additional damages pursuant to s 115(4) of the Copyright Act. (The corporate vehicle was by this stage being wound up.)

In relation to the most serious contempt, charge 18, the trial judge had found:

Charge 18 – Between December 2005 and (at least) November 2007 Mr Vaysman caused and encouraged the use of a factory in Roper Street Moorabbin for manufacturing and selling counterfeit footwear.  He did so contrary to consent orders to which he was a party which were made by the Court on 12 March 2004.  During this period, as I found in Deckers Outdoor Corporation Inc. Farley (No 5) [2009] FCA 1298 (“Deckers (No 5)”) at [84]-[92], over 30,000 pairs of counterfeit boots were sold with the profit on those sales amounting to over $3 million.

As Mr Vaysman was found to be in overall control of the whole operation, the trial judge sentenced him to 3 years’ imprisonment for this contempt. (Other charges of contempt were also established, but received much lighter punishments to be served concurrently with the punishment on charge 18.

By the time the contempt charges came to be heard in 2010, Mr Vaysman was no longer in Australia.

After the punishments for contempt were imposed, Mr Vaysman’s father, a 74 year old in ill-health and found by the Court to be of previously unblemished character, successfully appealed a sentence of a term of 18 months’ imprisonment. Gray and Bromberg JJ, considering imprisonment very much a last resort, imposed a fine of  $50,000, but ordered that the roughly 2 months or so he had already served in prison stand in lieu of the fine. Besanko J agreed that the sentence needed to be reduced, but would have reduced the sentence to a term of 12 months.

Mr Vaysman returned to Australia in June 2013. He was imprisoned pursuant to the contempt order. He sought leave to appeal (a long time out of time).

Besanko J, with whom Siopis J agreed, granted leave and considering the 3 year sentence manifestly excessive having regard to other sentences for contempt, ordered the sentence be reduced to two years. Besanko J did not consider that Federal Court sentencing practices needed to be adjusted for consistency with State court sentences. Nor did his Honour think any discount should be made having regard to the award of additional damages.

Dowsett J took a different approach.

His Honour considered that, to the extent that Federal Court sentences for contempt, were more lenient than comparable State courts, the Federal Court standard should be lifted. Focusing on the punitive nature of awards of additional damages, however, his Honour considered there an element of double counting or double jeopardy in not taking into account the additional damages award when fixing the contempt penalty. Dowsett J would have reduced the prison sentence from 3 years to 2 years and 3 months.

Vaysman v Deckers Outdoor Corporation Inc [2014] FCAFC 60

Plain Packaging: WTO dispute panel appointed

Monday, May 12th, 2014

Five countries have brought WTO Complaints against Australia’s plain packaging rules for tobacco products.

On 25 April 2014[1], the Dispute Settlement Body under the Dispute Settlement Understanding established panels to determine the complaints brought by Cuba, the Dominican Republic, the Ukraine, Honduras and Indonesia.

On 5 May[2], the Director-General formally announced the 3 member Panel who will hear the disputes:

In addition to the 5 complainants, some 25 other polities have “reserved their third party rights”:

Argentina, Brazil, Canada, Chile, China, the European Union, Guatemala, India, Japan, Korea, Malaysia, Mexico, New Zealand, Nicaragua, Norway, Philippines, the Russian Federation, Singapore, Chinese Taipei, Thailand, Trinidad & Tobago, Turkey, the United States, Uruguay and Zimbabwe

Typically, there should be a decision within 6 months (but there is also an appeal process). Typical timeline


  1. Not sure if that is an auspice.  ?
  2. Another date freighted with history.  ?

Major sporting events

Monday, April 28th, 2014

Did you know there was a Major Sporting Events (Indicia and Images) Protection Bill 2014? (From which you may deduce that I didn’t). It was introduced into Parliament on 26 March 2014.

It is designed to provide protections for certain indicia associated with the upcoming:

  • Asian Football Championships to be held in Australia in 2015;
  • the ICC World Cup to be held in Australia and New Zealand in 2015; and
  • the 2018 Commonwealth Games on the Gold Coast,

against ‘ambush marketing’. As the EM states:

The Event owners have sought a commitment from the government to protect against the unauthorised commercial use of certain indicia and images associated with the respective events to help them secure and maintain event sponsorship.

If sponsors do not have certainty that they are the only businesses that can directly benefit from association with the Events, they may withdraw their sponsorship or decide not to support the Events. A decrease in sponsorship revenue could increase the need for financial assistance from the Australian Government and/or state and territory governments to stage the events.

The Bill has been modelled on the (now repealed) legislation for the protection of the Sydney Olympic games in 2000 (here and here) and the Melbourne Commonwealth Games in 2006.

As the Simplified Outline explains in clause 15:

Generally speaking, a person cannot use a major sporting event’s 5 protected indicia or images for commercial purposes during the 6 event’s protection period, unless the person is an official user for 7 the event (that is, either an event body or an authorised person for 8 the event).

The remedies provided include injunctions, damages, corrective advertising and a regime for Customs seizure.

Clause 14 explains that:

Doing any of the following is not alone sufficient to suggest the existence of a sponsorship arrangement, or the provision of other support, for the purposes of paragraph 12(1)(c):

(a) using protected indicia or images for the primary purpose of criticism or review;

(b) using protected indicia or images for the primary purpose of providing information, including through reporting news and 14 presenting current affairs.

Major Sporting Events (Indicia and Images) Protection Bill 2014

Explanatory Memorandum

How much did Bugatchi get Bugatti-ed?

Wednesday, April 9th, 2014

Last October, Tracey J found that Shine Forever had infringed Bugatti’s registered trade mark (for BUGATTI) by selling clothing and accessories under the trade mark BUGATCHI and BUGATCHI UOMO. Now Tracey J has ordered that Shine Forever pay Bugatti $551,159.39 plus costs on an indemnity basis.

Apart from the magnitude of the amount, the decision illustrates the onus the court places on an infringer, once found to infringe, and the latitude afforded a trade mark owner confronted by a recalcitrant infringer.

In addition to an injunction to stop the infringing conduct, like most intellectual property statutes, the relief one can get for infringement of a registered trade mark includes damages or, at the trade mark owner’s option, an account of profits.[1]

To assist Bugatti in choosing between these two options, Shine Forever was ordered to provide an affidavit deposing to how many goods it had sold bearing the infringing trade mark, the price(s) they were sold for, the costs incurred in acquiring and selling the goods and the estimated profit it made.

Shine Forever was dilatory in complying with this order and there were serious doubts about the genuineness of its compliance. For example, it was claimed in Shine Forever’s “election” affidavit that the total sales were $198,407.39 worth of goods “through the BUGATCHI UOMO branded store” while total outgoings were $157,680 so that, after adjustments, there had in effect been no profit. However, in the course of the liability proceedings, Shine Forever had filed a profit and loss statement for the first 8 months of the infringing period showing total sales of $370,440.10. This profit and loss statement had been audited and certified by Shine Forever’s external accountants.

Shine Forever did not seek to explain the disparity between these two sets of figures. In fact, it failed to turn up to the hearing for the account at all.

Bugatti pointed out that the audited figures for only 8 months of the 24 month period of infringement far exceeded the amount admitted for the whole period in the “election” affidavit. The audited figures showed sales of $46,000 per month. If it were assumed that Shine Forever continued to make sales of $46,000 per month for the whole infringing period, total sales would have been $1,129,440.10. Bugatti then applied a series of assumptions and discounts, including using the costs estimated in the “election” affidavit (not the certified profit and loss statement) to arrive at the figure $551,159.39.

Tracey J recognised that Bugatti’s approach was far from ideal, but was prepared to adopt it as the best available course given the limited and imperfect information available – information which only Shine Forever could supply and which it had manifestly failed to do:

20 This process of calculation is far from ideal. It is beset by many difficulties. These include the need to make assumptions because business records which should have been produced by Shine Forever, pursuant to Court order, were not provided. Of particular concern is that …. This concern is alleviated, to some extent, by the applicant’s willingness to make a number of allowances in Shine Forever’s favour in other aspects of the calculations. ….

21 The evidence before the Court does not enable me to determine, with precision, the actual profit which Shine Forever derived from its infringement of the applicant’s marks. It is to be borne in mind that the difficulties to which I have adverted have, in large measure, been created by the failure of Shine Forever to comply with the Court’s orders and its failure to appear and make submissions on the amount to be awarded as an account of profits. The applicant should not be prejudiced by these failures.

22 The applicant has proposed a plausible method of calculating sales revenue during the relevant period by assuming that the average monthly sales figure in the first eight months of the period continued for the next 16 and a half months. In the absence of audited figures for the latter period this approach is not unreasonable and may be regarded as the best available option. Once the sales revenue figure was established, Shine Forever bore the burden of persuading the Court, by evidence, what costs should properly be deducted in order to determine the profit which it made from selling clothing and accessories bearing the infringing marks. This, Shine Forever has manifestly failed to do. ….

His Honour then awarded Bugatti its costs on an indemnity basis because of Shine Forever’s dismal failure to comply with its obligations to the Court.

Bugatti GmbH v Shine Forever Men Pty Ltd (No 2) [2014] FCA 171


  1. The two are alternatives: damages compensate the trade mark owner for the loss it has suffered as a result of the infringement; an account of profits strips the infringer of the profits it has made by reason of the infringement.  ?