Flagrant trade mark infringers to pay additional damages

Previously under the Trade Marks Act, the monetary compensation that a trade mark registration holder was entitled to, if infringement was established, was either:

  • a monetary sum which represented the damage suffered by the trade mark registration holder due to the conduct of the infringer; or
  • payment by the infringer of the profit it gained by engaging in that conduct.
The trade mark registration holder could only choose one of the above types of monetary relief. It could not double dip.

Recent changes (April 2013) to the Trade Marks Act, now also allows a court to award punitive damages in addition to award of normal damages or account of profits. To make this type of award, a court can take into consideration a number of factors, including:

  • the flagrancy of the trade mark infringing conduct
  • a public policy consideration of whether there is need to deter similar types of infringement in future
  • the conduct of the trade mark infringer after it was put on notice of its infringement taking in consideration
  • what benefit was gained by the infringer as a result of its conduct

This change brings the Trade Marks Act in line with ‘flagrancy’ damages already available under the Copyright Act and Designs Act. It is a welcome provision for brand owners and can provide a potential opportunity in the right circumstances for the recovery of further monetary compensation, particularly in the case of professional counterfeiters. The risk of additional damages we have found can also be a useful strategy to negotiate a stronger and more favourable settlement in trade mark disputes for brand owners.

Blatant trade mark infringers beware!
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