White SW Computer Law
Intellectual Property, Information Technology & Telecommunications Lawyers
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White SW Computer Law Intellectual Property, Information Technology & Telecommunications Newsletter - March 2009

Damages payable for Trade Mark Infringement

If you sue a party for trade mark infringement, in order to be awarded damages, you must be able to prove to the court what loss and damage you suffered as a result of the trade mark infringement.

If you cannot prove your loss and damage, the court may decide to award you only nominal damages, which as seen in the matter of Nokia Corporation v Liu1) could be as low as $10.

Nokia alleged that Liu had imported into Australia and sold, mobile phones and accessories which bore one or more of Nokia’s trade marks or one or more trade marks which are substantially identical with or deceptively similar to Nokia’s trade marks and thereby infringed a number of Nokia’s registered trade marks.

Liu is alleged to have sold phones and accessories using his online store “Super-E-World”, which is located within the online auction website www.ebay.com.au.

Liu also imported into Australia a number of mobile phones and accessories, which were seized by the Australian Customs Service.

The Court was asked to assess the quantum of the damages suffered by Nokia as a result of Liu’s activities.

The Court ordered only nominal damages of $10. The Court stated that Nokia had not provided evidence of the money loss suffered by each time a sale of a mobile phone is not made, as a result of a sale by Liu. It was held that Nokia could have, for example, provided evidence of the gross profit on the wholesale sale of a particular phone. The Court considered that it was not possible for the Court to place a dollar value upon Nokia’s loss without this sort of information

The Court stated that whilst it may often be required to use broad estimations in assessing damages, it will not do so if the applicant is able to improve the accuracy of the evidence required for the calculation of damages, but has not done so.

In considering what damages to award, the Court took into account, amongst other things, the fact that the mobile phones seized by Customs were forfeited to the Commonwealth, and therefore Nokia did not lose any sales as a result of the importation of those mobile phones or have its reputation or standing damaged in any way.

One effect of the Federal Court ordering nominal damages, is that when the damages ordered to be paid are less than $100,000, the court can reduce the amount of costs payable by the unsuccessful party to the successful party by one third. This may result in the successful party being out of pocket despite being successful in the litigation.

When considering whether to commence legal proceedings, it is important to identify evidence of your loss and damages as early as possible to ensure that if you are successful, you are not awarded nominal damages as a result of the court’s inability to come up with a reasonable estimate of what your loss and damage might have been.

If you are the owner of a registered Australian trade mark, you should consider whether there is a risk that your trade mark may be infringed by unauthorised imports of goods bearing your trade mark or a trade mark which is similar to your own.

If such a risk exists, it may be prudent to lodge a notice of objection with the Australian Customs and Border Protection Service so that they can monitor imports for suspected infringing goods2).

If you choose not to lodge such a notice, you will need to watch your market place carefully to identify any such infringing activities.

If you would like to discuss your trade mark protection strategies, please contact our Steve White, who is a Registered Trade Mark Attorney.

1) [2009] FCA 20

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