damages

Nappyland, Nappy Land and napplyland.com.au

Flick J has provided a timely reminder that a registered trade mark does not always trump common law rights in passing off or under the Australian Consumer Law, in finding that Nappy Land and nappyland.com.au passed off Nappyland’s rights in NSW.

Mr Ngo and Mr Ho (through his company Powerware) started off in business together in 1997 as Nappy Land in New South Wales. Mr Ho also incorporated National Australian Nappies in 1997.  Mr Ngo and Mr Ho fell out in 1999 and Mr Ngo seems to have bought out Mr Ho’s share in Nappy Land when Mr Ngo and his wife became the owners of the business name in NSW. They appear to have carried on the business in NSW through his company CI JI Family. At some point, CI JI Family started using the following (unregistered) trade mark:

get_tmi_image-1.pl

By late 2000, Mr Ho through National Australian Nappies had registered Nappy Land as a business name in Victoria and appears to have been trading throughout Australia except NSW. From February 2002, National Australian Nappies secured registration of TM 902900

get_tmi_image.pl

It seems like Mr Ngo and Mr Ho had very different views about who bought what when their partnership came to an end. Be that as it may, there doesn’t appear to have been any real dispute that Mr Ngo and CI JI Family were operating throughout the period in NSW as effectively Nappyland or that National Australian Nappies was operating outside NSW as Nappy Land.

At some point, it appears in or about 2013, however, National Australian Nappies, started attempting to enter the market in NSW. CI JI Family and Mr Ngo sued seeking interlocutory relief, but secured a speedy trial instead.

National Australian Nappies and Mr Ho sought to rely on their registered trade mark to fend off the action on the basis that s 20 of the Trade Marks Act confers on the owner the exclusive right to use the trade mark as a trade mark in Australia for the relevant goods/services. (Section 122(1)(e) also provides a defence to trade mark infringement.) However, s 238 s 230 (of course; thanks: Tim Golder) provides:

Passing off actions

             (1)  Except as provided in subsection (2), this Act does not affect the law relating to passing off.

             (2)  In an action for passing off arising out of the use by the defendant of a registered trade mark:

                     (a)  of which he or she is the registered owner or an authorised user; and

                     (b)  that is substantially identical with, or deceptively similar to, the trade mark of the plaintiff;

damages may not be awarded against the defendant if the defendant satisfies the court:

                     (c)  that, at the time when the defendant began to use the trade mark, he or she was unaware, and had no reasonable means of finding out, that the trade mark of the plaintiff was in use; and

                     (d)  that, when the defendant became aware of the existence and nature of the plaintiff’s trade mark, he or she immediately ceased to use the trade mark in relation to the goods or services in relation to which it was used by the plaintiff.

The fact of the trade mark registration therefore provided no protection against either the passing off or ACL claim. Despite aspects of the evidence being less than satisfactory, Flick J held there was sufficient evidence that the public in NSW was being misled or deceived and so s 18 of the Australian Consumer Law was contravened and there was a passing off.

His Honour went on to award damages of $25,000 as an exercise in “judicial estimation” rather than impermissible “imagination” with further orders to be decided at a later hearing. Presumably, unless bought out, CI JI Family will seek injunctions to stop further use in NSW of Nappy Land unless some form of disclaimer can be arrived out which prevents the misrepresentation. We shall have to wait and see.

CI JI Family Pty Limited v National Australian Nappies (NAN) Pty Limited [2014] FCA 79

Nappyland, Nappy Land and napplyland.com.au Read More »

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:

  1. made a declaration that Pacific Brands infringed;
  2. granted an injunction permanently restraining Pacific Brands from making or selling etc. 2 of the 3 shoes found to infringe;[1]
  3. awarded $20,000 damages; and
  4. 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.[2]

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) [2013] FCA 1335


  1. 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).

  2. 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.  ?

3 stripes v 4 stripes: the remedies Read More »

Turns out, damages were payable after all

The Full Court has upheld Insight SRC’s appeal that it was entitled to compensatory damages under s 115(2) of the Copyright Act.

When ACER committed the infringements by reproducing the SOHQ, Dr Hart, the owner of the copyright, exploited it through his Insight company as an informal licensee or licensee at will.[1] As is probably not uncommon with “family” companies, the terms of the licence were so unclear Besanko J could not ascertain them. In these circumstances, Besanko J had ruled at [118]:

it is necessary to consider what action Dr Hart could have taken immediately prior to the execution of the Deed on 12 May 2011 by way of a damages claim for infringement of the copyright in the SOHQ. The possibilities are general damages under subs 115(2) and additional damages pursuant to subs 115(4) of the Act. As to the former, the difficulty for the applicants is that Dr Hart was not personally conducting a business involving the use of the SOHQ between the beginning of 2006 and 1 October 2009 and it has been no part of their case before me that Dr Hart personally would have exploited any commercial opportunities with ISV. Furthermore, Dr Hart did not claim that he could recover any such loss as the major shareholder of Insight SRC and that the Court could lift the corporate veil. On the other hand, what Dr Hart did have as the copyright owner was a right to nominal damages for infringement of copyright and a right to claim additional damages under subs 115(4). ….

ACER had used the copyright infringements to obtain contracts with ISV. It appears to have been accepted by both sides on the appeal that ISV would have had to award the contracts to Insight to be permitted to use the copyright. Bearing in mind that damages under s 115(2) are compensatory, the Full Court considered Dr Hart had suffered loss in the form of being prevented from procuring for his company the contracts ACER obtained by its copyright infringements. At [23]:

it is safe to infer that Dr Hart’s damage was the value of the loss of his ability to cause Insight to enter into a contract with ISV that would have generated the profit of $130,000 for Insight as found by the primary judge. Neither party at the trial asked his Honour to assess, as an alternative, the value of the loss of a chance to make such a contract.

From here, things get tricky. The Full Court went on to say at [24] that Dr Hart’s loss was not the royalty he would have received through the licence arrangement or the dividend he might have been paid from Insight’s profits:

An important component of this identification of what Insight’s damage would have been, is that Dr Hart wanted Insight to benefit by receipt of the profit. That is different to the characterisation urged by ACER that his damage was what might be received by him after Insight, Insight Holdings and the interposed trusts had received and made sequential distributions. Dr Hart used his efforts in exploiting the copyright to benefit Insight.

The reasoning seems to have been influenced by the proposition that a donor of a gift is entitled to recover the replacement value of the gift if it is wrongfully destroyed by another before receipt by the intended donee. (Perhaps, the real problem was that the licence arrangement was so amorphous[2] that it was not really possible to identify what fee was payable for the use of the copyright.)

In an attempt to kill off the case once and for all, the Full Court then went on to say that Dr Hart was entitled to at least $130,000 and, if the parties didn’t accept that, maybe more.

The $130,000 figure is interesting. It is the amount of profit Besanko J found ACER made on the ISV contracts it obtained by infringing the copyright. Presumably, that is the damages that Besanko J would have awarded on the basis that Insight would also have made that much profit.[3] I’m not sure why that follows but, perhaps, the Full Court had in mind that, possibly, Insight’s profit may have been higher than ACER’s as it may have had lower overheads?

Wouldn’t things have been easier if the majority in Aristocrataristocrat had agreed with Rares J’s view (and that of the English courts) that a reasonable royalty could be awarded as compensatory damages?

Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Research Ltd [2013] FCAFC 62


  1. Insight did not become a formal, exclusive licensee until ACER’s infringements ceased. Bit more on the ownership, assignment and additional damages questions here.  ?
  2. The Full Court described it as “the informal, oral or bare licence that he granted it, or treated it as having had before the formal, exclusive licence [was] granted”. (emphasis supplied)  ?
  3. Damages under s 115(2) being an alternative to an account of profits must be the loss the copyright owner suffered, not the profits the infringer made which is the remedy obtained through an account. See e.g. Aristocrat and Rifai.  ?

Turns out, damages were payable after all Read More »

The Corbys have copyrights

Various members of Schapelle Corby‘s family, like most other people who take photographs, do own copyright in the photographs they have taken and Allen & Unwin, which published 5 of their photographs in The Sins of the Father, has to pay damages for the unauthorised use of those copyrights.

Buchanan J awarded:

  • between $500 and $5,000 compensatory damages pursuant to s 115(2) for each photograph; and
  • $45,000 by way of additional damages pursuant to s 115(4) for the deliberate and studied disregard of the applicants’ copyrights.

Allen & Unwin has also been ordered to remove the photographs from its existing stocks and not to reproduce them again.

The evidence disclosed that some 44,000 copies of the book had been sold up to March 2013, from several print runs, including print runs after the proceeding commenced. The larger amounts reflected his Honour’s perception of greater commercial significance largely indicated by the accompanying text in the book. The $5,000 award was for the last photograph of Ms Corby with her father in Australia and, in addition to being used in the book, was reproduced on the back cover with relevant text.

Given the (reported) content of the book, it might seem surprising that the main defence was licence. The photographs had been given to Fairfax, not Allen & Unwin, for publication in relation to one or another newspaper article. Buchanan J found at [85]:

whatever photographs had been given by any member of the Corby family to media organisations for some other purpose, photographs had never been given by any member of the family to the respondent to reproduce. [The respondent’s publisher] accepted that no member of the Corby family had granted permission to the respondent to reproduce the photographs. It is clear that the respondent had never sought any such permission.

There was no attempt to justify any publication through a fair dealing defence but, on the other hand, Buchanan J expressly rejected any insult to the Corby family as relevant to the calculation of additional damages:

120   In the present case, I do not regard as relevant to the assessment of additional damages any criticism of the Corby family, its individual members and its associates (actual or presumed) which is to be found in the book. Those damages will not be fixed to address any perceived insult to the Corby family or any of its members but will be fixed having regard to the seriousness, amongst other things, of the studied disregard of the regime of copyright protection established by the Copyright Act. In my view, the present case suggests a need to deter the respondent and others from conduct of a similar kind.

Contrast von Doussa J’s approach to personal and cultural harm in the Milpurrurru case from [146]ff.

The decision is also our third (?) moral rights case: the authors’ moral rights of attribution being infringed. Buchanan J, however, did not award damages for this having regard to s 195AZGG(3), the unlikelihood that any of the author’s would want to have been identified as participating in the production of the book and the damages awarded for copyright infringement.

Corby v Allen & Unwin Pty Limited [2013] FCA 370

The defamation action arising from the book’s publication is still making its way through the NSW courts.

The Corbys have copyrights Read More »

No damage for infringing copyright in questionnaire

Besanko J has awarded Insight SRC $32,510.00 for the infringements of its copyright in the School Organisational Health Questionnaire by the Australian Council for Educational Reseaarch (ACER). The award consisted of $10 nominal damages and $32,500 by way of additional damages. There are some interesting points about ownership, assignment and damages.

The questionnaire consisted of 57 questions arranged under 12 headings or modules. ACER reproduced some 25 of these questions from 5 modules between 2006 and October 2009 as part of a project with Independent Schools Victoria.

There was no dispute that copyright subsisted in the questionnaire or that ACER had reproduced a substantial part. Rather, ACER disputed Insight SRC’s title to the copyright and whether Insight SRC had suffered any damage.

Ownership

ACER’s basic point was that, as Dr Hart made the questionnaire in the course of his employment by the Victorian Department of Education, the Department (or the Crown) and not Dr Hart was the owner of the copyright pursuant to s 35 or the Crown Copyright provisions (here and here) of the Copyright Act 1968. If Dr Hart was not the original owner of the copyright, Insight SRC had no title since its rights depended on a chain of assignments starting with Dr Hart and not involving the Department (or the Crown).

Besanko J agreed with ACER that Dr Hart had created the questionnaire while employed by the Victorian Department of Education. However, his Honour found that Dr Hart and the Department (through Dr Hart’s superior) had agreed Dr Hart would retain ownership of the copyright and so s 35(6) and s 176 were excluded by the operation of s 35(3) and s 179.

The interesting point here is that the agreement between Dr Hart and his superior was purely oral but, as Besanko J pointed out, unlike the case with assignments pursuant to s 196 or s 197, there was no requirement for an agreement which excluded the operation of s 35(6) and s 176 to be in writing.

Besanko J did also find that s 176 would not have applied as Dr Hart, although an employee of the Department, was not acting under the control or direction of anyone in the Department in creating the questionnaire.

Assignment

Insight SRC claimed to be the owner of the copyright in the questionnaire by assignment. The assignment of copyright to it was made on 1 October 2009; that is, after ACER had ceased its infringing conduct.[1]

The main point of interest is that prior to 12 May 2011, none of the assignments – to Hart Cultural Lodges or Insight SRC – included the right to sue for past infringements. Deeds assigning the right to sue for past infringements from Dr Hart to Hart Cultural Lodges and then from Hart Cultural Lodges to Insight SRC were executed only on 12 May 2011.

After a review of the case law, including Trendtex and the High Court’s ruling in Equuscorp v Haxton, Besanko J accepted that Australian law now permitted the assignment of “bare” rights to litigation provided the assignee had a pre-existing genuine commercial interest in enforcing the claims of the assignor:

…. It must now be taken to be established in Australia that the circumstances in which a bare or mere right of action may be assigned include a case where the assignee has a pre-existing genuine commercial interest in enforcing the claims of the assignor.

While Besanko J was somewhat bemused why there was an assignment to Hart Cultural Lodges, his Honour considered that the ownership of the copyright in the questionnaire was a sufficient pre-existing genuine commercial interest to validate the late assignment of the right to sue for past infringements.

Damages

ACER generated some $213,000 in revenue from its infringing use of the questionnaire. Independent Schools Victoria in turn earned some $807,000 from supplying the questionnaire to its associated schools in infringement of the copyright.

Besanko J refused to award Insight SRC general damages; his Honour awarded nominal damages of $10 only.

The basis for this refusal to award general damages was that all Insight SRC obtained through the assignment of the right to sue for past infringements was whatever rights Dr Hart had to assign. Dr Hart himself had no right to general damages because:

118 …. Dr Hart was not personally conducting a business involving the use of the [questionnaire] between the beginning of 2006 and 1 October 2009 and it has been no part of their case before me that Dr Hart personally would have exploited any commercial opportunities with ISV. Furthermore, Dr Hart did not claim that he could recover any such loss as the major shareholder of Insight SRC and that the Court could lift the corporate veil. On the other hand, what Dr Hart did have as the copyright owner was a right to nominal damages for infringement of copyright and a right to claim additional damages under subs 115(4). An award of nominal damages is appropriate to vindicate the invasion of a copyright owner’s proprietary right….

That is, as Dr Hart was not himself in the business of selling the questionnaire, he could not claim the profits lost on the sales made by an infringing “competitor” – he was not in competition with ACER.

If general damages had been available, Besanko J would have assessed them at $130,000. Rather questionably (with respect),[2] his Honour started with the revenue earned by ACER and reduced that amount by its costs to reflect the profits it made.

Besanko J would not have made any allowance for the revenues made by Independent Schools Victoria as that was not how Insight SRC put its case. The judgment does not explain why Insight SRC did not pursue such a claim. Presumably, it would not have claimed a share of Independent Schools Victoria’s revenues if it [or its exclusive licensee, rather] had secured the contract instead of ACER.

Additional damages

Besanko J found that ACER’s infringement was flagrant and awarded $32,500 by way of additional damages pursuant to s 115(4). ACER had a permissions unit to secure copyright licences where necessary and well knew of its obligations not to use copyright for commercial purposes without an appropriate licence. The fact that the officer in charge of ACER’s program did acknowledge Dr Hart’s authorship in footnotes did not save ACER either.

The amount of any additional damages is highly discretionary and notoriously difficult to predict. Given his Honour’s finding that ACER made $130,000 profit[3] and the permissibility of taking into account that profit in assessessing the amount of additional damages,[4] the award may seem surprisingly low given his Honour’s characterisation of the infringement as flagrant.

Insight SRC IP Holdings Pty Ltd v The Australian Council for Educational Research Limited [2012] FCA 779


  1. The situation was rather more complicated: Dr Hart had assigned, or purported to assign, his copyright in the questionnaire to Hart Cultural Lodges (Dr Hart’s family trust) by two deeds, both dated 30 June 2009 and Hart Cultural Lodges in turn assigned its interests to Insight SRC by deed dated 1 October 2009. Dr Hart was the director and major shareholder of Insight SRC. To complicate matters further, Insight SRC granted an exclusive licence to another “Insight” company of which Dr Hart was also the director and major shareholder. That other Insight company having been the operating entity between 2006 and 2009, but not having a written agreement in place to qualify it as an exclusive licensee in terms of the Act.  ?
  2. See Aristocrat Technologies v DAP Services (Kempsey) [2007] FCAFC 40 at [3], [18]-[20].  ?
  3. At [190] in the face of ACER’s claim at [151] that it made no profits at all.  ?
  4. See Aristocrat Technologies v DAP Services (Kempsey) [2007] FCAFC 40 at [48]-[54] and Facton Ltd v Rifai [2012] FCAFC9 at [40]–42] and [48].  ?

No damage for infringing copyright in questionnaire Read More »

How much to pay for an infringement

Over at the Fortnightly Review, Ass. Pro. David Brennan takes issue with the economists who argued that Larrikin should not have been paid any damages for the Kookaburra infringements.

The economists’ argument seems to have been that Larrikin didn’t lose any sales as a result of Men at Works’ infringements and so suffered no loss.

Damages under s 115(2) of the Copyright Act are compensatory: that is, they are calculated to compensate the copyright owner for the loss suffered as a result of the infringement. One way to measure that may be the profit the copyright owner lost on sales which typically applies where the copyright owner and the infringer are competing in the same market. One problem with this is that the figure for lost sales must be discounted to reflect infringements by the infringer which would never have been sales made by the copyright owner. So for example in Autodesk v Cheung, the infringer gave the pirate copies away for free while the copyright owner’s genuine software programs sold for hundreds of dollars.

Another measure often used is the licence fee approach, particularly applicable where the owner exploits the copyright by licensing. So, Autodesk wanted the licence fees it would have been paid as if Cheung had taken out a distribution agreement like its other distributors. Wilcox J was not prepared to order damages at a reasonable royalty level because, as is typically the case, there was no way Autodesk would have licensed Cheung or, for that matter, that Cheung would have paid for a licence from Autodesk. In that situation, Wilcox J felt that the basis for a reasonable royalty — the price a hypothetical willing (but not overly anxious) licensor and a hypothetical willing (but not overly anxious) licensee would have struck — could not apply.

While some courts at first instance have been willing to use a ‘reasonable royalty’ as a basis, Wilcox J’s concerns have been endorsed by Black CJ and Jacobson J in Aristocrat.

It is interesting to contrast this approach with the way the courts in the UK have dealt with it. Relying on some “old” patent cases (including a House of Lords decision), the Court of Appeal in Blayney (trading as Aardvark Jewellery) v Clogau St David’s Gold Mines was willing to use a “notional royalty” as the measure of the damages. The foundation of this approach was a rejection of the idea that the only loss suffered by the copyright owner was lost profits. Thus, in Watson, Laidlaw & Co Ltd v Pott, Cassels and Williamson (1914) 31 RPC 104, Lord Shaw expressed the principle:

wherever an abstraction or invasion of property has occurred, then, unless such abstraction or invasion were to be sanctioned by law, the law ought to yield a recompense under the category or principle, as I say, of price or hire. If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say: “Against what loss do you want to be restored? I restore the horse. There is no loss. The horse is none the worse; it is the better for the exercise.

and applied it in the context of patent infringement:

If with regard to the general trade which was done, or would have been done by the Respondents within their ordinary range of trade, damages be assessed, these ought, of course, to enter the account and to stand. But in addition there remains that class of business which the Respondents would not have done; and in such cases it appears to me that the correct and full measure is only reached by adding that a patentee is also entitled, on the principle of price or hire, to a royalty for the unauthorised sale or use of every one of the infringing machines in a market which the infringer, if left to himself, might not have reached. Otherwise, that property which consists in the monopoly of the patented articles granted to the patentee has been invaded, and indeed abstracted, and the law, when appealed to, would be standing by and allowing the invader or abstractor to go free. In such cases a royalty is an excellent key to unlock the difficulty, and I am in entire accord with the principle laid down by Lord Moulton in Meters Ld. v Metropolitan Gas Meters Ld. (28 R.P.C. 163). Each of the infringements was an actionable wrong, and although it may have been committed in a range of business or of territory which the patentee might not have reached, he is entitled to hire or royalty in respect of each unauthorised use of his property. Otherwise, the remedy might fall unjustly short of the wrong.

The Meters case was referred to by Wilcox J, but it does not seem that Watson, Laidlaw was cited to his Honour.

Now, of course, the 19th century considerations of a horse owner and “borrower” seem “quaint” in the age of Gogle and P2P torrents. But is the principle really so different?

It appears that the third member of the Court in Aristocrat, Rares J, may well have been willing to adopt the Watson, Laidlaw approach, but the evidence failed to provide a basis for any “judicial” estimate.

How much to pay for an infringement Read More »

2003 Designs Act appeal

The Full Federal Court (Emmett, Besanko and Jessup J) has dismissed Elecspess’ appeal from Gordon J’s ruling that it had infringed LED Technologies’ registered design for combination LED lights used as rear lights for trailers, trucks, buses, caravans and other vehicles. I think this is the first substantive decision by a Full Court on the new regime introduced by the Designs Act 2003.

From a very quick skim, it seems that the approach taken in the Review cases (here and here) by Kenny J and Gordon J below appears to be largely endorsed but the decision runs for 447 paragraphs, with each Judge giving a separate judgment, so rather closer examination will be required. At least in respect of Elecspess and the corporate infringers, Jessup J agreed with Besanko J’s reasons; Emmett J also gave extensive reasons.

The vexed question of the liability for contributory infringement of individual officers or employees also receives extremely extensive consideration. Jessup J agreed with Emmett J’s reasons for finding that a Mr Keller was not individually liable as a joint infringer. Besanko J also found Mr Keller was not liable.  Jessup J agreed with Besanko J that a Mr Armstrong also was not jointly liable, but for different reasons.

Working out the ramifications of the differences between their Honours should prove quite diverting.

The Court also upheld Gordon J’s refusal to award damages, or an inquiry into damages, for infringing conduct between the date of trial and the making of final orders. This should not be a problem where an undertaking or injunction restraining the respondent’s conduct is in place pending trial.  Where no undertaking or injunction is in place, however, it would appear that the Court considers it imperative to establish at trial that the infringer is continuing their infringing conduct, notwithstanding the court action,  to provide a foundation

Keller v LED Technologies Pty Ltd [2010] FCAFC 55 (Emmett, Besanko and Jessup JJ)

2003 Designs Act appeal Read More »

boohoo.com v missboo.co.uk

Warren J has granted an interim injunction to Wasabi Frog restraining until trial the operation of an online clothing retailer.

Wasabi Frog has traded since 2006 as an online retailer of young women’s fashion at Boo Hoo and Boohoo.com. It also has CTMs for BOO HOO, BOOHOO.COM and BOO.

missboo.co.uk started up in September 2009 as an online retailer of women’s fashion, targetting the same demographic: 17 to 25 year olds.

His Lordship found a triable issue on likelihood of confusion on the basis of a number of factors. One involved another player in the fashion industry apparently mistaking the applicant for the defendant.

Interestingly, another was the inferences to be drawn by traffic that Wasabi Frog generated after purchasing the Google Ad Words “Miss Boo”. Other aspects considered included the similarities in the respective companies’ websites and the “very very savvy” target markets of both companies.

Damages were clearly not an adequate remedy for Wasabi Frog, all the more so as the defendant was impecunious.

Wasabi Frog Ltd v Miss Boo Ltd [2009] EWHC 2767 (Ch)

Lid dip: Peter A Clarke

boohoo.com v missboo.co.uk Read More »

Costs, (no damages) and IP cases

The Full Federal Court (Finn, Sundberg and Edmonds JJ) has clarified how FCR O62 r 36A operates in IP infringement cases.

FCR O62 r36A provides that the costs of a successful applicant which obtains an order for damages less than $100,000 will be reduced by one third, unless the Court otherwise orders.

Nokia had sued Liu for trade mark infringement arising from a customs seizure. The proceedings settled by consent, with injunctions and delivery up. Nokia pursued damages, but obtained only nominal damages as it was unable to obtain discovery of importation in significant quantities. The trial judge refused to allow Nokia any costs of the damages inquiry.

The Full Federal Court has allowed an appeal, awarding Nokia its (taxed) costs up to the consent judgment and completion of discovery about damages; thereafter costs were at the reduced rate.

The Full Court considered that costs of the trial up to and including the consent orders should be at the usual taxed rate, without the 1/3 reduction because it was common in IP cases for trials to be split – a trial on liability and (if successful) an injunction and a subsequent trial about damages (or an account) and  applicants were required to particularise only a single instance of infringement. The Full Court considered the remedy of injunction “indispensable”. It was also appropriate for the proceedings to be brought in one of the “prescribed courts”, customarily the Federal Court and it was not apparent that it would have been sensible for the matter to be referred down to the Federal Magistrates Court (unlike in copyright proceedings where the Federal Magistrates Court has direct jurisdiction).

Nokia was also entitled to costs of the damages inquiry at least until completion of discovery as it was legitimate and, until it had discovery, it could not have known of the futility. Once discovery was completed, it knew the risks it was running and, given the amount recovered, it was inappropriate to exercise the discretion not to limit the costs of that part of the proceeding by 1/3.

Nokia Corporation v Liu [2009] FCAFC 138

Costs, (no damages) and IP cases Read More »

Injunctions or damages?

This week’s Victorian Reports publish a 2007 decision in which the Court of Appeal (Dodds-Streeton JA, Ashley and Cavanough JJA agreeing) exhaustively reviewed the relatively limited circumstances in which equitable damages will be awarded in place of an injunction.

Now, the Court of Appeal was dealing with a question of trespass to land but, having regard to the House of Lords’ remarks in Fisher v Brooker, may be worth bearing in mind in intellectual property cases as, generally, an IP owner seeks an injunction when their rights are being infringed.

[135] The appellant’s reliance on an alleged divergence of principle in the applicable authorities was, in my view, ill-founded. The relevant authorities evince no fundamental difference of principle. They uniformly uphold the established view that an injunction is the prima facie remedy for trespass and that the alternative remedy of damages will be ordered exceptionally, as indicated by the working rule in Shelfer or by such other relevant considerations as may apply in a particular case. The authorities do not dictate or authorise the balancing of potential detriment to the parties on the basis of equivalent entitlement, or indicate that trespass may be negatived by undertakings to minimise its potential
20 VR 311 at 336
effect on future use. The tests embodied in the working rule of Shelfer are cumulative, and assume a significant inequality of entitlement between the parties (as the injury to the plaintiff from the trespass must ordinarily be small and the harm occasioned by an injunction to the defendant must be so disproportionate as to constitute oppression). Oppression in that context imports consideration of, inter alia, specific detriment, including disproportionate harm to the defendant relative to injury to the plaintiff, the deliberate or unintended quality of the trespass and all other relevant circumstances.
[136] The authorities’ consistent recognition that damages in this context may properly be assessed by reference to the advantage or gain to the defendant where the injury to the plaintiff is small facilitates an award of damages where that is otherwise appropriate, but does not disturb the traditional primacy of injunctive relief.

[135] …. [The relevant authorities] uniformly uphold the established view that an injunction is the prima facie remedy for trespass and that the alternative remedy of damages will be ordered exceptionally, as indicated by the working rule in Shelfer or by such other relevant considerations as may apply in a particular case. The authorities do not dictate or authorise the balancing of potential detriment to the parties on the basis of equivalent entitlement, or indicate that trespass may be negatived by undertakings to minimise its potential effect on future use. The tests embodied in the working rule of Shelfer are cumulative, and assume a significant inequality of entitlement between the parties (as the injury to the plaintiff from the trespass must ordinarily be small and the harm occasioned by an injunction to the defendant must be so disproportionate as to constitute oppression). Oppression in that context imports consideration of, inter alia, specific detriment, including disproportionate harm to the defendant relative to injury to the plaintiff, the deliberate or unintended quality of the trespass and all other relevant circumstances.

[136] The authorities’ consistent recognition that damages in this context may properly be assessed by reference to the advantage or gain to the defendant where the injury to the plaintiff is small facilitates an award of damages where that is otherwise appropriate, but does not disturb the traditional primacy of injunctive relief. (my emphasis)

Her Honour had earlier quoted the good working rule in Shelfer which (in part) was:

In my opinion, it may be stated as a good working rule that —

(1) If the injury to the plaintiff’s legal rights is small,

(2) And is one which is capable of being estimated in money,

(3) And is one which can be adequately compensated by a small money payment,

(4) And the case is one in which it would be oppressive to the defendant to grant an injunction:

then damages in substitution for an injunction may be given.

Doods-Streeton JA did immediately point out how limited this all was:

[46] While the factors potentially relevant to the exercise of the discretion cannot be exhaustively stated, Shelfer, in my opinion, correctly accorded primary importance to identifying a small injury to the plaintiff, and disproportionate hardship constituting oppression, to the defendant.

[47] In determining whether a substitution of damages for in specie relief is just, the interests of the parties are not of broadly equivalent weight. It will not suffice that the hardship entailed to the defendant by an injunction marginally outweighs the relief that the plaintiff will obtain thereby. Rather, the courts have typically required a significantly disproportionate damage to the defendant, reflected in the criterion of oppression in the Shelfer working rule.

This might be another area where US law is different, following eBay v MercExchange.

Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd [2007] VSCA 311

Injunctions or damages? Read More »