Sean Investments Pty Ltd v MacKellar

[1981] FCA 174

Re: W.H. BRINE CO. and PAUL DOYLE
And: EANE RONALD WHITTON (Trading as ''SKOOLSPORTS EQUIPMENT'')
(1981) 55 FLR 440
VG No. 57 of 1981
Assessment of Damages - Damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Fox J.(1)

CATCHWORDS

Assessment of Damages - Several Heads - Trade Practices Act - Passing Off - Infringement of Copyright - Conversion - Inter-relation - Soccer Balls Carrying Marks Some Only of Which Were Property of Applicant - Reputation by Advertisement Only - Measure of Damages in Conversion.

Trade Practices Act 1974, Sects. 52, 55, 82

Copyright Act 1968 (Clth), Sects. 10, 115, 116

Copyright Act 1956 (Eng), Sect. 18

Copyright Act 1911 (UK), Sect. 7

Damages - Assessment - Unauthorized markings on soccer balls sold by respondent - Infringement of Copyright and Trade Practices Acts - Passing off - Conversion - What measure of damages - Trade Practices Act 1974 (Cth), ss. 52, 55, 82 - Copyright Act 1968 (Cth), ss. 10, 115, 116 (1) - Copyright Act, 1956 (Imp.), s. 18 - Copyright Act, 1911 (Eng.), s. 7.

HEADNOTE

The first-named applicant, W. H. Brine Co. (the applicant), was incorporated in the United States of America and manufactured, inter alia, soccer balls bearing distinctive markings of which it possessed the rights. It enjoyed a large market for these balls overseas. The respondent, a wholesaler in Australia of sporting goods including soccer balls, sold during 1980 a total of some 1,094 soccer balls bearing, inter alios, virtually the same markings as the soccer balls made by the appellant. The respondent had imported those balls from Korea where they had been manufactured by someone unconnected with the appellant. The identity of the markings was not discovered by the respondent until late 1980. In December 1980 the applicant became aware of the respondent's use of the markings in question but the appellant did not start to sell its soccer balls in Australia until May 1981. In April 1981 judgment was entered for the applicant for damages to be assessed under ss. 52, 55 and 82 of the Trade Practices Act 1974 and for infringement of copyright, conversion and passing off. The applicant later applied to the court for assessment of damages.

Held: (1) Damages for breaches of ss. 52 and 55 of the Trade Practices Act 1974 and for passing off must be minimal in the present case.

(2) The ball as a whole must be taken as the "infringing copy" within the meaning of that phrase in ss. 10 and 116 (1) of the Copyright Act 1968 (Cth) and the measure of damages for infringement of copyright and for conversion must be the value of the balls at the time of conversion.

Butler v. Egg and Egg Pulp Marketing Board (1966), 114 CLR 185; Healing (Sales) Pty. Ltd. v. Inglis Electrix Pty. Ltd. (1968), 121 CLR 584, applied.

Infabrics Ltd. v. Jaytex Ltd., (1981) 2 WLR 646, followed.

Caxton Publishing Co. Ltd. v. Sutherland Publishing Co., (1939) AC 178; Ash v. Dickie, (1936) Ch 655; Vivian Mansell & Co. Ltd. v. Harold Wesley Ltd., (1936-45) Macg Cop Cas 288; Ravenscroft & Herbert v. New English Library Ltd., (1980) RPC 193; Finn v. Pugliese (1918), 18 SR (NSW) 530, considered.

(3) In assessing damages under the Copyright Act 1968, s. 116 (1), the total value of the balls was to be taken into account and not an amount calculated by reference to the proportion of the applicants' copyright material in relation to the whole of the material upon the balls.

HEARING

Melbourne, 1981, May 6, 25, 26, 29; June 10, 12; October 19. #DATE 19:10:1981

APPLICATION.

Application to the Federal Court of Australia for assessment of damages.

J. McL. Emmerson, for the applicants.

S. M. Crennan, for the respondent.

Cur. adv. vult.

Solicitors for the applicants: Moule, Hamilton & Derham.

Solicitors for the respondent: Phillips, Fox & Masel.

E. F. FROHLICH

ORDER

1. Judgment be entered for the applicants for damages in the sum of $16,488.00.

2. The respondent pay the applicants' costs of these proceedings.

JUDGE1

Liability has been admitted in this matter, and it comes before me for assessment of damages. The first-named applicant, W.H. Brine Co., is a body corporate incorporated in the United States of America. It makes and sells a range of sporting equipment, particularly for lacrosse and soccer. It has a large market overseas for its soccer balls. Its best seller is its "International 32" ball, and on 4 February 1981 it applied for these words to be registered as a trade mark in Australia. It did not start to sell soccer balls in Australia until May 1981, after interlocutory judgment had been entered in this case. It had supplied and was supplying distinctive lacrosse equipment for sale here, and it had advertised its soccer balls here, including balls which were depicted with the same, or virtually the same markings as the particular ball the subject of these proceedings. One of the marks used on its lacrosse equipment, and shown in advertising material connected with it, is a stylised representation of a bearded King Neptune, with trident. Its soccer ball had this and several other distinguishing features, including the mark "International 32". The second applicant was the designer of a number of marks and devices used by the first applicant, which had acquired the rights thereto from him. I shall describe the first-named applicant as "the applicant".

The respondent has for many years sold sports gear in Australia and has a very large business in the sale, by wholesale, of soccer balls. Over the years, it has imported these from a number of sources. In response to an order or orders placed in 1979 with a South Korean manufacturer (Nassau Co. Ltd., which I will call "Nassau") two consignments of soccer balls were received in 1980, on which, as the respondent in due course found, were the Neptune mark and other marks of the applicant, used by it on balls of similar size. I take from the statement of claim the following list of marks and devices, said to be the property of the applicant and distinctive of its ball just mentioned, which appeared on the balls sold by the respondent:

(a) a stylised representation of a bearded king together with a trident (hereinafter referred to as "the Neptune trademark") incorporating inter alia the words "King of the Soccer World" in a particular distinctive script;

(b) the "International 32" with three globes between the word "International and the number "32";

(c) the "Crown Device Soccer ball" mark which incorporates 2 crowns identical in shape to that in "the Neptune trademark" one of which is inverted incorporating inter alia the words "Soccer ball" in a particular distinctive script;

(d) the "Known Around the World as the Best" mark which consists of a globe with three inwardly directed arrows all surrounded by the words "Known Around the World as the Best" in block lettering;

(e) the "International 32 with Crown Device" mark which incorporates inter alia a crown identical in shape to that in the Neptune trade mark together with the words inter alia "International 32";

(f) the "FIFA Approved" mark in a particular stylised script;

(g) the "NISA Approved and Endorsed" mark consisting of the National Institute for Soccer in America's two-shielded emblem, the words "National Institute for Soccer in America" and the words "Approved and Endorsed";

(h) a logo surrounding the soccer ball's valve consisting of 8 inwardly direct equiangular portions of a circle surrounded by the words "Moisten Needle Inflate 6 to 8 lbs.";

(i) the words "World's Only Soccer Ball Unconditionally Guaranteed for One Season".

The degree of distinctiveness of some of these is a matter with which I will deal later. A principal difference between the balls is that in the four places, all prominent, where the word "Brine" appears on the applicant's ball, the word "Buffalo" is marked on the offending balls.

It was in December 1980 that the applicant became aware of the use on balls sold by the respondent of the marks in question. The statement of claim and accompanying application were filed on 26 March 1981. On 6 April 1981 orders for perpetual injunctions were made by consent, and the two following orders were also made:

1. That there be judgment entered for the firstnamed Applicant for damages to be assessed under Sections 52, 55 and 82 of the Trade Practices Act 1974.

2. That there be judgment entered for the Applicants for damages for infringement of copyright and conversion and for passing-off, or, at the election of the firstnamed Applicant, an account of profits as sought in paragraphs 6 and 9 of the application.

Before me the applicants have sought damages:

(a) under s.82 of the Trade Practices Act, 1974 for breach of sections 52 and 55 of that Act;

(b) for passing off;

(c) for infringement of copyright; and

(d) for conversion.

The evidence has mainly been by affidavit, most of the affidavits having been prepared for interlocutory proceedings. Oral evidence has been given by Mr. Toomey for the applicant and by the respondent.

Since about 1977 the respondent has been importing soccer balls from Nassau. It appears that some at least of the Brine International 32 balls are also made in South Korea and the applicant's Brine International 32 ball in evidence bears on one panel a small gold stamp "Korea". The balls normally received by the respondent from Korea, in response to his orders, carry markings on a number of panels. These markings have varied slightly from time to time, but, except for the subject balls, have always included the words "Buffalo Sports" together with a buffalo device. Although the offending balls were clearly marked "Buffalo" (with other matter) on four panels, they were not marked "Buffalo Sports", nor did they have a buffalo device. This mark has been registered by the respondent as a trade mark in Australia, in appropriate classes.

Nassau did not have the authority of the respondent to use marks and devices distinctive of the applicant's soccer balls, or any more than an implied consent to vary slightly the respondent's usual markings, and in particular did not have his authority to use the King Neptune mark. The balls from Nassau normally arrived in cartons of 18 or so and these the respondent did not usually open. He did not open the cartons containing the shipments in question, and he did not see any sample of what they were to contain. His sale of soccer balls, of varying sizes, design and quality, was about 100,000 for the year prior to the hearing. While he supplied soccer balls bearing the applicant's distinctive marks during 1980, he did not become aware of the fact until November 1980, when a few were returned to him for repair. It was the Neptune mark which he related to the applicant. He then promptly took steps to endeavour to ensure that no more of the particular balls, showing the King Neptune mark, were sold. In fact, a few probably were sold by retail in 1981. Apparently none were returned to the respondent, except those which I have mentioned as being returned for repair. He was not then aware that the other marks distinguished the applicant's ball. The figure "32" represented the number of panels comprising the surface of his ball, as well as Brine's ball. He thought that "International" was descriptive of the nature of the sport, and the common use througout the world of the same or similar balls, and that the accreditation marks "FIFA" - Federation Internationale de Football Association - and "NISA" - National Institute for Soccer - were authorised and had been placed on the ball by Nassau with that justification. The respondent protested to Nassau in November 1980 and asked that there be no repetition of the wrongful supply.

While the respondent had known for some time of the applicant's reputation in Australia concerning lacrosse equipment, and of the use of the Neptune mark in connection therewith, he did not prior to February 1981 know of any reputation of the applicant in Australia concerning soccer balls or of its right to marks other than the King Neptune mark. In fact, all that the applicant had done prior to May 1981 was to advertise its balls in journals, including trade journals which had a circulation in parts of Australia, and, through Mr. Toomey (whose principal occupation was to conduct a retail store in Victoria) to issue some brochures referring to, and depicting, the Brine soccer ball. It was on the basis of a reputation thus gained that the respondent admitted liability. Maxims Ltd. v Dye (1977) 1 WLR 1155 and Metric Resources Corpn. v Leasemetrix Ltd. (1979) FSR 571 were referred to in this connection by his counsel.

The respondent had used some of the markings on earlier occasions on balls sold or advertised by him, but had not regarded those as distinctive of a product of the applicant, or as being its property. So far as reputation in Australia is concerned, he was probably right until about 1980, and counsel for the applicant has said that in March 1981 Mr. Whitton asked Mr. Kimm of Nassau whether he had authority to use the "FIFA" and "NISA" marks on the ball and was told he did. This was not accurate. While Nassau had the authority of FIFA to use that mark of accreditation in some balls produced by it, it seems that this may not, in terms at least, have extended to the particular ball produced for the respondent. There seems no doubt that the FIFA requirements concerning soccer balls had been satisfied. Nassau did not have authority to use the NISA mark. Some balls sold by the parties are all white, others have a pattern of coloured panels, - black, blue or red, but nothing turns on this circumstance. In the respondent's 1980/81 catalogue, which apparently was produced in about October 1980, there is an illustration of the ball now complained of, with the price $13.90 beside it. The use of this particular representation, which showed "Buffalo" clearly on it, was I think inadvertent and due to lack of care and is not an example of grossness of conduct on the part of the respondent. There was also an advertisement, published in March 1981 which offended in a similar way, and about which I make the same comment.

My view is that the respondent was the victim of what was done by Nassau in Korea. He had not previously had trouble of a similar nature with Nassau, and had no reason to suspect that the applicant's marks would be used. He says that because of the volume of his business, and the fact that he and his wife virtually ran it alone (a cousin looked after the showroom display), he did not carry out checks with each consignment of balls received. Possibly, he should have, and he should have taken more care concerning the preparation of his 1980/1981 catalogue and his 1980/1981 advertising material. He had enjoyed over many years a considerable reputation as a reliable supplier of soccer balls, and other sporting equipment. He was an accredited supplier to the Victorian Soccer Federation, and was recently given the exclusive right to use the words "Victorian Soccer Federation Approved Product" for a period of three years.

As the respondent's own records did not enable him to say, he inquired of Nassau as to the number of soccer balls bearing the applicant's marks, now in question, which Nassau had sent to him. He was told that in January 1980 a shipment of 144 size 5 balls "in assorted colours" had been sent to him, and that in April a further 950 balls had been sent, again in assorted colours, 400 being size 5 and 550 size 4. This makes a total of 1094 balls. The applicant has submitted that this number is probably inaccurate. The applicant's advisers have sought to determine the number of offending balls supplied, by taking from a catalogue of the respondent's the advertised price, $13.90, for a ball therein depicted and marked "Buffalo FIFA approved", which is treated as being the ball the subject of this action, and finding from the respondent's invoices during the relevant period the number of sales at this price. The respondent challenges this method of approach on a number of grounds which I think come to saying that there were or probably were other balls sold at that price, and that the catalogue, which was prepared in October 1980, did not necessarily govern the price of balls supplied during the period in question. While the research and calculations done for the applicant called for an explanation from the respondent, I think that his explanations are adequate, and that I should act on the figures supplied to him by Nassau. The conversation with Kimm is not challenged.

There is no evidence as to the number of soccer balls sold in Australia by the applicant in and from May, and the number it might have sold but for the wrongful conduct attributable to the respondent is completely speculative.

Particular matters raised in the submissions in relation to damages, excluding for a moment damages for conversion, included the following:

(a) That the quality of the offending ball was inferior to that of the true Brine ball. There is conflicting evidence on this matter. The applicant's evidence is to the effect that the outer panels of the respondent's ball were applied by hand, and not by machinery, the latter being, so it is said, a superior method. The respondent contends that he was the first to import balls laminated by machine, and not hand stitched, but this may not answer the applicant's particular criticism. Both balls are made of nylon wound construction. From a visual examination there is no obvious deficiency in the quality of the respondent's ball, but this is to the unpractised eye. They appear very similar. There is strong evidence to the effect that FIFA balls supplied by the respondent were of high quality, and I see no reason to doubt that the offending balls were of the same quality. The question is of course one of comparison between the applicant's ball and that of the respondent, but I am left quite unsatisfied that the alleged inferiority existed.

(b) The offending ball was sold at a relatively cheap price and would seem to be a cheaper ball, or type of ball. In so far as this circumstance affected or might affect the applicant's trade it should be taken into account, but we are only dealing with the sale of a relatively small number of balls well before the applicant commenced to trade. Assuming the fact, the consequences seem to be too indeterminate and speculative. According to the respondent he often sold balls at less than catalogue price, and may have sold some of the offending balls at less than the advertised $13.90.

(c) The life of a trade name or mark in the soccer ball market is limited, and the fact that the respondent had used marks distinctive of the applicant's goods for a period deprived the applicant of that proportion of the life of its marks. In the circumstances of this case this consideration is at the best very trivial, and I cannot give any meaningful effect to it. One matter which does occur to me, but about which I express no opinion, is the possible effect of the applicant, under s.116 of the Copyright Act 1968 being treated as owner of the offending balls.

(d) That the circumstances are sufficient to support a claim for "additional damages" under s.115(4) of the Act. For reasons which are already sufficiently apparent, I reject this submission.

(e) That the value to the applicant of its copyright was diminished by the respondent's infringement. This is a conjectural matter, but it seems to me that the utility of the marks might have suffered as a result of the intermingling with the Buffalo name. There is no evidence of actual confusion, but some can possibly be assumed. So far as appears, the applicant had and has very few Australian outlets. The respondent does not rely upon the "innocent infringement" provision in s.115(3). I think a case is laid for me moving into the area of conjecture and awarding a small amount of damages under this head.

(f) That while a reputation by advertisement can support an injunction to restrain passing off, it cannot support a claim for damages. In the present proceedings, I have to accept that there was a reputation, and one capable of being injured. I do not accept the submission as sound as a matter of law, but the fact is that any injury caused to the applicant's goodwill in Australia by the acts of the respondent was in my view very slight.

Section 82 of the Trade Practices Act, so far as material, is concerned with the consequences of misleading or deceptive conduct (s.52) or of conduct that is liable to mislead the public as to the characteristics of any goods (s.55). Damages under this head must be minimal, and can in this case be treated as the equivalent of those which can be awarded for passing off.

On the whole, I am of the view that the total amount of damages to be awarded under these heads is $1,500.

It is admitted by the judgment entered that the applicant was at the time in question entitled to copyright protection in Australia in connection with the marks already referred to. Conversion is dealt with by s.116(1) of the Copyright Act:

"Subject to this Act, the owner of the copyright in a work or other subject-matter is entitled in respect of any infringing copy, or of any plate used or intended to be used for making infringing copies, to the rights and remedies, by way of an action for conversion or detention, to which he would be entitled if he were the owner of the copy or plate and had been the owner of the copy or plate since the time when it was made."

The respondent does not rely upon s.116(2), which also deals with innocent infringers.

The term "infringing copy" is defined in s.10, the relevant part of which for present purposes is as follows:

"'infringing copy' means -

(a) in relation to a literary, dramatic, musical or artistic work - a reproduction of the work not being a copy of a cinematograph film of the work;

. . .

being an article the making of which constituted an infringement of the copyright in the work, recording, film, broadcast or edition or, in the case of an imported article, would have constituted an infringement of that copyright if the article had been made in Australia by the importer."

Section 116(1) is to the same effect as s.7 of the Copyright Act 1911, but in different terms. There was not in the 1911 Act any separate definition of "infringing copy" but one of "infringing" when related to copies (s.35(1)). Section 18(1) of the Copyright Act 1956 (Eng.) is in similar terms to s.116(1) of our Act, and the definition of "infringing copy" in s.18(3) of the English Act is, so far as material, in similar terms to the definition in our s.10.

In Caxton Publishing Co. Ltd. v Sutherland Publishing Co. (1939) AC 178, some copyright matter was printed by the defendant and bound into a larger volume, containing matter not the subject of the plaintiff's copyright. The plaintiff sued for infringement and in conversion under the 1911 Act. The House of Lords held that the causes of action were cumulative, but that overlapping of damages should be avoided; that the act of binding was the conversion, that the value was to be taken as at the date of conversion, and that, in the circumstances, a proper basis for assessment was to take a proportion of the sale price, corresponding to the part of the whole constituted by the infringing material, but making a qualitative assessment as well as a quantitative one.

In Ash v Dickie (1936) Ch. 655, the correctness of which was unsuccessfully challenged by counsel in the Caxton Publishing Co. case, there was a pirating by a newspaper of some articles in a published book. The articles comprised part only of the newspapers. The Court of Appeal held that a starting point was the value of the newspapers, which could be taken as their sale price, and that the value of the articles, as part thereof, had then to be assessed. Some "rusticum judicium" was necessary (p.664).

Mansell v Wesley (1936-45) Macg.Cop.Cas. 288 was a decision of Simonds J which dealt with infringement of copyright in the production of a cover on a cardboard container in which was packed a writing pad of fifty sheets. The cover was apparently sold as part of the writing pad. Damages for conversion were taken as one-tenth of the wholesale value of the composite whole.

The cases already referred to arose under the 1911 Act, which was in material respects expressed differently from the English Act of 1956, and the Australian Act of 1968, and which may therefore be regarded in a case such as the present as having distinctions of significance. Ravenscroft & Herbert v New English Library Ltd. (1980) RPC 193 was a case under the 1956 Act, and an apportionment was there made in relation to a literary work, not on the basis of volume or mass but on a value basis. The Infabrics case to which I will now refer, had not been decided in the Court of Appeal as at the date of the decision in the Ravenscroft case.

In Infabrics Ltd. v Jaytex Ltd. (1981) FSR 121, shirts had on them attractive drawings of three racehorses in a tight finish, repeated at intervals. The plaintiff owned the copyright in the drawings and sued for conversion. It was held by the House of Lords that the shirts themselves were infringing copies within the meaning of s.18(3) of the Act of 1956, and the measure of damages was their value.

Counsel for the respondent seeks to distinguish the Infabrics case on the basis that there were there no competing marks, some the property of one party, some the property of the other. It is true that the report makes no reference to marks other than those of the plaintiff. In the literary copyright cases, however, there was a mix of copyrighted material. This fact gives support to the submission for the respondent, because in those cases a proportion sum was done. In this case, counsel submits that having in mind the proportion of the applicant's copyright matter in relation to all the material on the ball, and making allowance for the prominence of the Buffalo name I should take two to four-tenths of the value of the ball as the measure of damages. It is not disputed that there has been conversion or that the respondent's sale price was $13.90 each.

The reasoning in the House of Lords proceeded, however, on the basis of finding, in a case of importation, what were the articles which were the infringing copies. Their Lordships had no doubt that this was the whole of the shirts. I cannot see that the result would have been different had the defendants also had some mark or marks on the shirts.

In the Infabrics case, the House of Lords agreed with the conclusion of the Court of Appeal on the present question. In that Court Buckley LJ said (1980) FSR 161, 176):

"We have heard some argument about the basis upon which the damages in respect of conversion should be assessed. It is possible to suggest cases in which this might be a difficult question. Suppose, for instance, that a manufacturer of motorcars were to incorporate a copyright design in the upholstery of expensive motorcars, or a silversmith were to incorporate a copyright design in the decoration of expensive silver cups or bowls. It would seem to me, as at present advised, to be extravagant to hold that damages could be recovered under section 18(1) as for the conversion of the motorcars or of the pieces of silver. Just so in the present case Mr. Everington submits that the damages under section 18(1) should not be measured by the value of the shirts, but only by reference to some part of that value, which he suggests should be the difference between the value of a shirt with the design on it and of the same shirt without the design. Alternatively he suggests that the damages should be measured by reference to a part of the value of the shirt proportionate to the extent which the substrate of the design, which I take to mean so much of the material of the shirt as actually bears the design, bears to the whole area of the shirt. This is a problem which I think must be solved in each case having regard to the particular facts of that case. However, it is I think worth noting that section 18(1) relates to notional conversion of infringing copies."

There is another way of looking at this matter. Section 116 provides for an alternative remedy by way of an action for the detention of the goods. In many jurisdictions (including England) an alternative to the return of the goods is judgment for their value. In this connection Copinger and Skone James (12 edn., para. 648) says:

"Where the defendant has mixed the plaintiff's work with work of his own, then, if it is physically possible to sever one from the other, the order for delivery up will apply only to the infringing material, see Warne & Co. v Seebohm (1888) 39 Ch.D. 73, where an appropriate form of order is set out; Nicols Advanced Vehicle Systems Inc. v Rees (1979) RPC 127, but where the parts are practically inseparable the order may go to the whole work, Stevens v Wildy (1850) 19 LJ Ch. 190. See discussion of similar problem in Salmond, Torts, (17th ed.), pp. 113, 114."

In reliance upon language to the same general effect in an earlier edition, and in an action for detinue, the New South Wales Full Court in Finn v Pugliese (1918) (18 SR 530) applied a test of whether the pirated portions were substantial and could be conveniently separated (in a film) from the innocent portions. Pursuant to s.7 of the 1911 Act (a precursor of s.116 of the 1968 Act) it upheld an order for delivery up of the whole. As a question of fact, it would in the present case be held that the infringing material was substantial, and certainly it is the fact that it cannot be conveniently separated from the rest.

The balls as a whole must I think be taken as the infringing copies. The Act does not permit of a construction which will enable something less to be treated as an infringing copy because the respondent's name appeared prominently on four panels. Under the Act, the applicant is deemed to become the owner on importation of the reproduction which is the article the making of which constituted the infringement. In the case of a soccer ball, this must, in my view, be the whole. Conversion is a wrong against the person entitled to possession, but it is clear that the "owner" in the section is regarded as being such a person.

I have been referred by counsel for the respondent to Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185, in which the High Court considered damages for conversion in a statutory context. It was held that where a producer sold eggs outside a marketing scheme, the Board in which the property in the eggs was vested could not recover from him the sale price of the eggs without deduction of the amount it would have had to pay him under the scheme for them. The fact that damages for conversion were intended to be compensatory was emphasised (see pp. 191, 192). The effect of this decision was stated by Kitto J in Healing (Sales) Pty. Ltd. v Inglis Electric Pty. Ltd. (1968) 121 CLR 584, 602). Menzies J (at p.192) said:

"The true rule is, I think, that stated by Bramwell B in Chinery v Viall (1860) 5 H. & N. 288 (157 ER 1192), viz. that the plaintiff is entitled to recover no more than the real damage he has sustained."

The action for which s.116 provides is however intended to acknowledge the copyright owners complete domain over the infringing copies. The Copyright Acts of 1709 and of 1814, which dealt with literary copyright, provided that infringing copies could be seized and placed in the hands of the copyright owner who was then obliged to "forthwith damask and make waste paper of them" (see the short historial account in Laddie, Prescott and Vitoria, the Modern Law of Copyright (1980)). In addition he had, under the 1814 Act (54 Geo. III c156, s.4) a "special action on the case" and the offender was liable to pay a penalty of three pence per sheet of infringing material, - one half thereof to go to the Crown. The later Act of 1842 gave rights to sue in detinue and trover as well as the special action on the case.

The respondent's ignorance of what was on the balls, or of the applicant's rights, is no defence and does not in this case assist him on damages. The measure of damages must be the value of the balls at the time of conversion in Australia. There is no need to inquire as to the precise moment, or moments, at which this occurred; it was presumably no later than the time the balls were set aside for delivery. They were sold ex the respondent's premises at $13.90 per ball. It is submitted that from this amount should be deducted inward freight costs of 90c per ball, and delivery costs of 20c per ball. The former expense, as I understand, was related to a time before conversion and is not deductible. The latter was an expense incurred after that time as a cost relating to the sale and should be deducted. The net value should then be taken as $13.70 per ball. The amount of damages under this head, to the nearest dollar, is therefore $14,988. I think this is an unreasonably excessive amount if the aim is simply to compensate the applicant for loss and damage he suffered. However, even a cursory examination of the history of copyright, and of the earlier Acts discloses that there was a penalty aspect in the remedies given. The fact that the existing statutory provisions can operate harshly was pointed out several times in the Infabrics case. Lord Scarman said (1981) FSR at p.277:

"If the possibility of excessive damages is to be eliminated, legislation will be needed: for the language of the subsection permits of no other construction."

I therefore order that judgment be entered for the applicants for damages in the sum of $16,488.00, and I order that the respondent pay the applicants' costs of these proceedings.