A Timely Reminder About Calculating Compensation Claims in IP Infringement Cases

IN BRIEF

Recently, the Full Court of the Federal Court of Australia handed down its decision in Facton Ltd v Rifai Fashions Pty Ltd involving the importation into Australia and sale of counterfeit G-STAR branded clothing and accessories.1

The case provides a useful discussion on the law of damages for counterfeit goods and is a timely reminder of the importance of carefully drafting any claims for damages, and carefully assessing which claims for compensation are likely to produce the most beneficial result.

Initial trial At first instance, the respondents admitted all claims of offending conduct and so the Court made declarations that both respondents had infringed the applicants' trade marks, infringed the applicants' copyright and engaged in passing off and misleading and deceptive conduct. The respondents were ordered to pay the compensatory damages under section 115(2) of the Copyright Act of $9,213 (to reflect the damages suffered by reason of the sale of the counterfeit goods) and additional damages under s115(4) of the Copyright Act of $11,000 (to reflect the profits made by the respondents in the sale of the counterfeit clothing).

However, the Court did not award any damages for loss of reputation, holding that the applicants failed to identify the value of the reputation or goodwill concerned and the damage...