Trade mark owner successfully runs a claim for additional damages up the pole

Peter Heerey AM, QC, Tom Cordiner & Alan Nash
Correspondents for South Australia, Victoria and Western Australia

Note: Where any of the barristers were involved in a case reported below and the matter is still running, or potentially so, the other correspondents have taken the role of reporting that case.

Vertical Leisure Limited & Anor v Skyrunner Pty Ltd & Anor [2014] FCCA 2033 5 September 2014

Trade marks – counterfeit pole-dancing poles – damages – additional damages – quantum

Earlier this year, Perram J in Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614 handed down the first decision in which additional damages for trade mark infringement were awarded. In that case, additional damages of just over $90k were quantified effectively by reference to the amount the respondents otherwise would have had to pay for use of a certification mark.

In Vertical Leisure Limited & Anor v Skyrunner Pty Ltd & Anor [2014] FCCA 2033 (5 September 2014), the Federal Circuit Court has extended the record by awarding $300k in additional damages for infringement of Vertical Leisure’s X-POLE mark registered for pole-dancing poles. Vertical Leisure is the Australian and international market leader in respect of such products.

The respondents did not participate in the proceedings, so Vertical Leisure’s claims for lost profit of $48k and $50k for damage to reputation were unchallenged. The was no need to stretch to find that additional damages also were appropriate: the respondents’ conduct was flagrant (they took the trouble to also copy Vertical Leisure’s instructional DVD); there were safety issues (given that the X-POLE is exercise equipment and inferior, counterfeit poles may be dangerous); and the respondents decided to hang tough despite repeated notice being given of Vertical Leisure’s rights.

Nevertheless, the case is a useful pointer as to the courts’ approach to additional damages in trade mark cases, and may well make a splash among counterfeiters.

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