Komesaroff v Ketcorp Pty Ltd

[1991] FCA 935

IN THE FEDERAL COURT OF AUSTRALIA)

VICTORIA DISTRICT REGISTRY	) NO. VG 139 of 1988
GENERAL DIVISION	1

Between:  ILONA KOMESAROFF
Applicant

and: KETCORP PTY LIMITED & ORS

Respondents

EX TEMPORE JUDGMENT

Einfeld J Melbourne 11 Februarv 1991

There are six respondents to the current claim by the applicant under an amended application and statement of claim. None of them has appeared before me so the claim has proceeded undefended. The applicant's case is that she, as the registered proprietor of letters patent of 22 May 1986, is the author and owner of copyright in an artistic work marketed by her as Moving Sand Pictures. The allegation made by the applicant is that the respondents infringed the patent and her copyright in the particular invention by the production and sale of other forms of moving sand pictures generally marketed under the name of Rainbow Sand Pictures. It is said that these respondents marketed their product in New Sought Wales, Queensland and Victoria and converted them into significant profits at the expense of the applicant.

produced their moving sand pictures for considerably less cost	than those being marketed by the applicant with the
consequence that they seized a large market substantially at her expense. I have seen in evidence examples of the applicant's product and those of the respondents and it is clear why the respondents' product was produced for significantly less cost as it is significantly less competent and attractive. However, it is sufficiently similar to the product of the applicant to create confusion in the minds of the commercial public, and it appears from the evidence that the applicant herself received a number of complaints about the quality of these goods even though they were not hers. The consequence of these events for the applicant over a period of a little more than a year is that she has effectively lost her whole business.
The evidence shows that the fourth, fifth and sixth respondents acted as selling agents for the first, second and third respondents, and I am informed by the solicitor for the applicant here today that the claims of the applicant against those respondents have been settled by agreement between the
been reached, I strike out the claims against the fourth, parties. In accordance with the settlement which he says has fifth and sixth respondents and their cross claims against the
applicants and make no order as to costs.
With regard to the first, second and third respondents, they claim not to be appearing before the Court because of their impecuniosity. If that claim is correct, then the applicant appears likely not to achieve a great deal from these proceedings. However, on the advice of her legal representatives, she has decided to press on with the action in its undefended form and I am required to give judgment accordingly. I shall refer to these remaining respondents merely as the respondents.
The amended application which was filed on 8 February 1990 seeks injunctive relief in the first instance. I am satisfied that the applicant is entitled to the protection of an injunction from further attempts by the respondents to manufacture and market moving sand pictures. I do not think that the injunctions in their various forms as set out in the amended application are quite necessary in such detail, because they tend to be repetitive, but I am certainly prepared to make an order by way of injunction against the remaining three respondents, restraining them from manufacturing, promoting, producing, distributing and marketing moving sand pictures of the kind that have been produced in evidence. Counsel may produce a form of a single
The second element of the claim is damages. It appears that injunction which I shall pronounce in due course. some documents have been produced by or from the respondents
giving an indication of the nature of sales which they made between approximately March 1987 and February of 1990. The applicant has made some estimate of the sales which she claims to have lost and on the basis of the sales which the respondents made. I am told that allowance has been made for the cost of producing the goods and for agents' commission and other appropriate deductions from the figures given.
The applicant's estimate is that in New South Wales the profit lost was of the order of $205,000, in Queensland the same and in Victoria approximately $18,000. In total the applicant claims that the profit she has lost is of the order of $428,000 in the period of consideration. However, with no primary evidence to found such a claim but merely a summary of her review of some receipt books, it is difficult for me to ascertain what the loss is.
It proceeds upon the basis, amongst other things, that the applicant herself would have achieved the sales which the respondents actually achieved. This of course would have required considerable marketing in New South Wales and Queensland in particular. In Queensland the respondents' marketing went as far north as Port Douglas whereas in New South Wales it appears to have been more closely confined to
the Sydney metropolitan area. On the other hand, the applicant's own profits in her early period in business give support to a finding that her business was likely to be
significantly successful. I am not in a position to estimate with any degree of precision how successful she might have been, but for someone who started a new business and was marketing what was apparently a new or relatively new product, she certainly seems to have been able to achieve a significant turnover in a very short period.
My observation of her own product suggests to me that it would have considerable appeal to many people seeking comparatively inexpensive gifts or display pieces. Again, I cannot bring any significant expertise to bear on how this could have been converted into profits but I think that I can say from observation that, if the respondents were able to make substantial profits from their inferior product, it is likely that the applicant would have made even more profit from her substantially superior product, notwithstanding the fact that the cost of her product was somewhat greater.
I take into account that in estimating the profit which the respondents made in the period under review, the applicant says that she has been quite conservative. I also take into account the evidence that the respondents appeared to make much in the relevant industry of an allegation that the applicant did not possess a valid patent for this particular product. This contention has never been made good although it has also been made since the commencement of and during the
which the respondents' products were marketed and their pleadings in this action. This, together with the way in apparent inferior quality, has effectively destroyed the
applicant's reputation as a marketer of quality material.
With all these things in mind, I must make some form of reasonable estimate of the loss, notwithstanding the fact that there is some lack of precision in the evidence which has been tendered on that issue. Doing the best I can in all the
circumstances and balancing out the favourable and unfavourable portents in relation to profit-making, I award the applicant damages in the sum of $450,000. The respondents will pay the costs of the proceedings.

The evidence before me is that the first three respondents

I certify that this and the <	l
preceding pages are a true copy of the
Reasons for Judgment herein of his Honour 1	i

Justice Einfeld

I Dated: I \