Nokia monitoring borders but Court hangs up
In the recent Federal Court case of Nokia Corporation v Liu [2009] FCA 20 (21 January 2009) the applicant (Nokia) sought damages in a situation where infringing goods had been seized by Customs and never reached the marketplace. They got ten bucks.
Nokia also sought to avoid the operation of Order 62 Rule 36A of the Federal Court Rules which under certain circumstances including when a party is awarded judgement for less than $100,000 in damages requires an award of costs to be reduced by one third. They failed. Corrs Chambers Westgarth acted for Nokia. The respondent failed to appear.
Background
In February 2008, pursuant to Section 133(2) of the Trade Marks Act 1995, a delegate of the Chief Executive Officer of Customs seized goods bearing marks that infringed various trade marks owned by Nokia (the Nokia trade marks). On 4 June 2008 the Court made orders by consent which amongst other things included an order that the respondent pay the applicant damages for infringement of the Nokia trade marks. Proceedings for the assessment of such damages were fixed for 11 December 2008.
The decision - damages
Counsel for the applicant made submissions to the effect that the loss and damage suffered by Nokia was in the region of $50,00 to $100,00 as a result of the respondent having been engaged in the importation and sale of counterfeit Nokia mobile phones.
Justice Jessup did not accept the applicant’s arguments, not simply because they had not provided any evidence of Nokia’s business including the money lost when a sale is missed, but because the mobile phones seized by customs officials never found their way to the respondent. More specifically, the Consent Orders made on 4 June 2008 include findings against the respondent for importation of the counterfeit goods but include no findings that there had been infringement of the Nokia trade marks. As such, the damages that may be claimed are limited to those arising from the unlawful conduct constituted by the importation. Since the goods were seized by customs officials, Nokia never lost any sales nor could their reputation have been tarnished.
Nominal damages in the sum of $10 were awarded.
The decision - costs
The applicant sought an order avoiding the operation of Order 62 Rule 36A of the Federal Court Rules (the rule) which provides for an award of costs to be reduced by one-third if either:
- a party is awarded judgement for less than $100,000 on a claim for a money sum or damages; or
- the court declares that a proceeding could be more suitably have been brought in another court or tribunal.
Justice Jessup rejected the Applicant’s submission that the rule is not appropriate in intellectual property cases and pointed to various cases that discussed the appropriateness of commencing copyright cases in the Federal Court. Clearly, it is not just a moot point.
In the case where an award of damages is less than $100,000 the court retains a discretion to order that costs not be reduced in accordance with the rule and it was this discretion that Nokia was attempting to invoke. Justice Jessup noted that a large part of the remedies sought by the applicant were not economic: namely injunctions, declarations and delivery up, all of which were secured by consent almost immediately. Justice Jessup noted that these “non-money aspects” of Nokia’s claim were the more substantial ones. Moreover, he did not find the case to involve a degree of complexity or to relate to a complicated set of facts. Such findings did not support a request that operation of the rule be avoided.
Nokia was obviously pleased that its Notice of Objection successfully assisted Customs in detecting the counterfeit goods and detection should assist in deterring others importing like goods. However, $10 is unlikely to cover insurance against theft and loss for the average mobile handset.
