Otter Products, LLC v Haydon

[2021] FCCA 2019

Trade marks – summary judgment – infringement – respondent participated intermittently – no reasonable prospects of successfully defending claim – additional damages

This case involved an action against Mr Haydon for trade mark infringement in relation to his sale of phone covers on which the Otter Products trade marks appeared.  Sale occurred through three retail premises in Queensland.

Mr Haydon filed a notice of appearance.  But despite an order to file a defence and an affidavit disclosing purchases and sales, Mr Haydon filed nothing more.

Otter Products sought summary judgment or, in the alternative, default judgment.  Otter Products sought damages or an account of profits and additional damages under section 126(2) of the Trade Marks Act 1995 (Cth).

Judge Baird set out in detail the principles for granting summary judgment, including as set out in her earlier judgment in PositiveG Investments Pty Ltd as Trustee for the PositiveG Trust v Li [2020] FCCA 2548 at [19]-[24] in the context of infringement of intellectual property rights.  While it was not necessary for a defence to be hopeless or bound to fail for it to have no reasonable prospect of success, no defence had been filed.

There were trap purchases and Judge Baird found the evidence was overwhelming that Mr Haydon had offered for sale and sold mobile phone cases that infringed the Otter Products trade marks.  Otter Products was therefore entitled to injunctive relief and a declaration of infringement.

There was no evidence of the quantum of any compensatory damages claimed, or of any profits made by Mr Haydon.  Judge Baird therefore ordered an inquiry as to damages or an account of profits.

On additional damages, Judge Baird adopted what Bromwich J said in Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63 at [82] that additional damages may be seen as encompassing broad concepts not always readily amendable to precise measurement or quantification.  This includes having regard to capturing aspects of loss that have not been able to be ascertained because of the imperfect nature of litigation and evidence gathering in reflecting all aspects of wrongdoing and the total damaging effect of infringing or contravening conduct.  It also entails giving a dollar figure to otherwise intangible consideration of punishment, giving effect to judicial disapproval and sanction and future-looking considerations of specific and general deterrence. 

Judge Baird assessed additional damages at AU$15,000.  This took into consideration Mr Haydon’s intermittent participation in the proceeding, the fact that he was in the course of going into bankruptcy, and that Otter Products did not ask for a specific amount.

Following the handing down of the decision, Judge Baird corrected the decision, deleting the order for additional damages.  Judge Baird noted that she had slipped into error, prematurely awarding additional damages when the Court’s power to make such award had not yet been enlivened.  This was because: (a) Otter Products was yet to make an election between an account of profits and damages; and (b) if it chose damages, an inquiry as to damages was yet to be undertaken; and (c) the Court was yet to undertake the assessment of any damages.

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