Australia: The assessment of damages for flagrant infringement of the Halal-certified Trade Mark under the new section 126(2) of the Trade Marks Act in Halal Certification Authority Pty Limited v Scadilone Pty Limited  FCA 614
The Halal Trade Mark is a seal used by the applicant to certify,
for reward, those businesses that used halal practices in the
preparation of goods and services in accordance with the Islamic
The Halal Trade Mark is registered in respect of Class 35:
Personal and social services, and Class 42: scientific and
technical services: issuing halal certifications to business and
individuals for goods and services if religious and technical
requirements are met. The applicant alleged that the three
respondents had been using the Halal Trade Mark without its
permission to indicate that kebab meat products used were
Perram J found that there was evidence of infringement since the
kebabs, when sold under the halal certificate, were closely related
services of providing halal certification for the purposes of
Section 120(2) of the Trade Marks Act 1995 (TMA), namely
they were closely related to the services in respect of which the
Halal Trade Mark is registered.
In considering appropriate damages, Perram J made clear
distinctions between the infringements of each respondent.
In respect of the retailers, the first and second respondents,
the Court noted that the kebab shops were not interested in seeking
halal-certification for their premises, but were only interested in
seeking halal-certification from Quality Kebabs for the kebab meat
supplied. This was a significant distinction given that the
applicant was relying on the licence-fee approach for assessing
damages as in the copyright case of Autodesk Australia Pty Ltd
v Cheung Pty Ltd (Autodesk) where it was important that the
infringer would have paid for a licence if faced with a choice
between payment and not using the copyright work at all.
Thus, the damages were likely to be more in the nature of
diminution in the reputation of and goodwill in the Halal Trade
Mark. However, this would also require proof that the food served
was not halal and that the public became aware of this. No evidence
was led by the applicant to this effect and as such His Honour
rejected diminution damages based on reputational harm to the Halal
Trade Mark. His Honour therefore concluded that only nominal
damages were payable by the first and second respondents. The sum
of nominal damages awarded was $10.
There was however a further claim by the applicant for
"additional damages" under Section 126(2) of the Trade
Marks Act which provides that additional damages can be awarded for
"flagrancy of the infringement" or to "deter"
similar infringement by others.
Section 126(2) is fairly recent, being incorporated into the
Trade Marks Act by the 2012 "Raising the Bar" amendments.
Perram J held that "additional damages," whilst broader
than exemplary damages were not compensatory in nature. Referring
to the Parliament's Second Reading Speech His Honour concluded
that the damages were intended to deter from infringement. Taking
into account the "arrogant attitude" of Quality Kebabs in
its defence, as for example Quality Kebab's attempt to blame a
former employee, His Honour found that an award of "additional
damages" was appropriate here. The quantum of damages could
not equal the value of the certificate as this would equate to a
"use now, pay if you get caught approach". Thus, a 50%
increase on the certification fee was imposed yielding a total of
$91, 015.00 for two years of infringement.
The applicant also managed to secure an injunction restraining
Quality Kebabs from using the Halal Trade Mark as well as an order
for corrective advertising in leading Islamic newspapers to inform
the public of the misuse.
The decision thus serves as an important reminder to trade mark
holders seeking to litigate that, unlike injunctive relief for the
protection of trade mark interests, compensation does not flow
freely without particular proof of loss.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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