Additional damages are procedural …

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.  ?

Carving up an uncertified halal butcher

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.  ?