Ahiida Pty Ltd (“Ahiida”) has prevailed in its fight against JB Trading Group Pty Ltd (“JB Trading”) in connection with its “burkini" swimwear. According to Ahiida’s lawsuit, which it filed in federal court in Australia in October 2013, it holds several registered designs in respect to articles of clothing, specifically, “modest swimwear.” JB Trading allegedly imported Chinese copies of the swimwear, offered it for sale and sold it in violation of Ahiida’s rights.
As of late last year, the Federal Circuit Court of Australia determined that Ahiida had not suffered any damages due to infringement of its registered designs by JB Trading. However, the court awarded the company $20,000 in “additional damages,” holding that JB Trading’s conduct was “cavalier.” The award is meant to reflect the seriousness of JB Trading’s infringement and to deter other would-be infringers.
This marks a relative loss for Ahiida, as the company had asked the court for an array of damages, including: $187,000 in lost profits ($100 for each of the 1,260 imported burkinis and 610 other garments that JB Trading allegedly sold); $50,000 for loss of reputation; and $150,000 in “additional damages” stemming from JB Trading’s “continued infringement after being put on notice of [Ahiida’s registered] designs.”
According to Brett Doyle, the head of Australia firm Clayton Utz’s Trademark and Brand Protection Group, “Ahiida's problem was that it could not show that buyers would have bought Ahiida's burkini swimwear if JB Trading's products had not been available. The court, therefore, held that no lost profit had been established.”
Additionally, Ahiida was unable to prove that JB Trading had diminished the reputation of Ahiida’s registered designs, or tarnished Ahiida’s brand. The court held that there was “no evidence … that the products embodying the applicant’s designs were so well known that the respondent’s products would be thought to be the applicant’s products simply because they are swimming costumes for Muslim women.” Moreover, the court held that there was no evidence of confusion between the brands among consumers.
The case is a noteworthy one for a few reasons, one of which stems from more than a dozen French cities, along with some towns in other European countries, banning the burkini this summer in a move that French authorities said aimed “to protect women's freedoms.” The "burkini ban,” which was initially issued in Cannes, has since been overturned by a French court on the basis that it is a violation of fundamental liberties.
The Push for Punitives
From a technical perspective, the case proves interesting as it sheds light on courts’ increased willingness to award additional damages (or what are otherwise known as punitive or exemplary damages) for infringement of copyright, trademarks, patents and registered designs (the latter of which refers to UK/EU protections afforded to a configuration, pattern, or ornamentation, which when applied to a product gives the product a unique appearance). Such damages can, in many cases, heavily outweigh the damages awarded for actual loss. Or in the case at hand, exist entirely without the award of actual damages.
Earlier this year, a ruling from the Court of Justice of the European Union (“EU”) – the European Union’s highest court – made headlines in holding that EU law does not prevent the award of punitive damages in intellectual property cases. While such awards are well-known in the U.S., this type of damages is not – or better yet, was not – nearly as prevalent in Europe, where a party’s relief was typically limited to the actual damages suffered.
In the same case, the Court of Justice held that EU law does not preclude "national legislation, such as that at issue in the main proceedings, which provides that the holder of economic rights of copyright that have been infringed may require the person who has infringed those rights to compensate for the loss caused by payment of a sum corresponding to twice the amount of a hypothetical royalty."
* The case is Ahiida Pty Ltd v JB Trading Group Pty Ltd  FCCA 3146.