+ Damages for Breach of Copyright

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Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd [2009] FCA 633

In this case the Federal Court found that the Respondent breached the Applicant¿s copyright in the "New Deal" design.

The court noted that amongst other things, damages are to compensate for the loss suffered as a result of the infringement, not to punish the respondent. As a measure of damages is to be that sum which will put the Applicant in the same position as it would have been in if it had not suffered the wrong, the Applicant bears the onus of proving loss.

The Court said that the appropriate measure of damage was summarised by Finkelstein J in TS & B [2007] FCA 151 as follows: The claim is not for loss or revenue but for loss of profits. The profits to be calculated are the lost net profits. By net profits I mean revenue less all costs including variable and direct costs, but not including income tax. Care must be taken to ensure that costs savings are brought to account. If a plaintiff sells less of his products he will have less cost and that should be treated as a gain to be offset against the lost revenue which forms the basis of the computation of lost profits. The plaintiff is also entitled to recover indirect loss (such as damage to goodwill) as long as the cause is the infringement, the loss is foreseeable and is not unduly speculative.

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