Three recent cases instituted by Review (an Australian clothing designer and retailer) against alleged infringers of its registered dress designs have shown how difficult it can be to deter would-be infringers. Although in each of the three cases (Review Australia Pty Ltd v Innovative Lifestyle Investments [2008] FCA 74; Review 2 Pty Ltd v Redbury Enterprise Pty Ltd [2008] FCA 1588; and Review Australia Pty Ltd v New Cover Group Pty Ltd [2008] FCA 1589) the respondent was found to have infringed Review’s registered designs, the damages awarded in each case varied widely and unpredictably.
In the Innovative case, the respondent argued it had not been ‘making or offering to make’ the infringing dresses, because the dresses were manufactured by an independent contractor and not an employee. Sensibly, Jessup J rejected this distinction and found that the word ‘make’ should be interpreted to include a person who ‘directs, causes or procures the product to be made by another’, whether or not the party engaged is employed by that person.
In assessing compensatory damages in all three cases, the Court was not prepared to conclude that every dress the respondents sold would have been a sale Review had lost, as clothing is a highly discretionary good. This approach makes sense, given that someone who buys a cheap knock-off dress is unlikely to have handed out the much higher asking price for the real thing. The courts therefore awarded Review damages based on harm to its reputation, which in each case was judged very differently, resulting in widely varying damages awards.
Review sought additional damages, which are discretionary and are awarded for flagrant infringement, pursuant to s 75(3) of the Designs Act. Although Review’s garment did carry swing tags stating “Review styles are registered designs”, which should have put the respondents on notice of their infringement, the tags were affixed prior to the designs actually being registered. Review was therefore not allowed to rely on its own misrepresentation.
Review was awarded additional damages in two of the cases (Innovative and New Cover), on the basis of continued infringement after one respondent had received a letter of demand from Review’s lawyers, and because of another respondent’s unsatisfactory conduct during trial.