Proving damages in IP infringement claims

In the recent decision of Facton Ltd v Mish Mash Clothing Pty Ltd [2012] FCA 22 (27 January 2012), G-Star International CV established trade mark and copyright infringement, yet failed in its claim for damages.

There was insufficient evidence to establish damages. Jessup J identified the following types of evidence needed to establish damages:

  • the retail circumstances under which the respective goods were sold
  • the category of consumer who might be interested in the goods
  • expert evidence about the tendency for consumers to make choices by reference to labels or trading names rather than by fabric, quality, style, comfort or other characteristics of particular garments
  • matching particular garments with those sold by the infringers to determine what a consumer would have done in the absence of the brand owner’s label
  • evidence of the applicants’ wholesale margins on the types of garments in issue

Jessup J considered that an account of profits might have been a more appropriate remedy in the circumstances.

The important message from this decision is that where an applicant has not done all it reasonably can to quantify its loss, such as by providing the types of evidence outlined above, the court will not engage in “guesswork” to assist in quantifying damages.