Tonga National Rugby League Incorporated Society v Paonga
[2024] NZHC 1380
•29 May 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-982
[2024] NZHC 1380
UNDER the Trade Marks Act 2002 BETWEEN
TONGA NATIONAL RUGBY LEAGUE INCORPORATED SOCIETY
Plaintiff
AND
VEILI PAONGA
First Defendant
NASITA PRODUCTIONS LTD
Second Defendant
Hearing: 15 February 2024 Counsel:
I M Tatá for Plaintiff
Judgment:
29 May 2024
JUDGMENT OF BREWER J
This judgment was delivered by me on 29 May 2024 at 11 am pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Iese Miti Tatá (Auckland) for Plaintiff
TONGA NATIONAL RUGBY LEAGUE INCORPORATED SOCIETY v PAONGA [2024] NZHC 1380 [29 May 2024]
Introduction
[1] Rugby league is a national passion in the Kingdom of Tonga and among Tongan expatriates in New Zealand. The Tonga National Rugby League Incorporated Society (the plaintiff in this case) governs and administers the game of rugby league in Tonga and internationally in support of the Tonga national rugby league team (TNRLT).
[2] The plaintiff has trade marks which are worn by the TNRLT and associated with Tongan rugby league. The first is the emblem “Mate Ma’a Tonga” (the literal translation is “Die for Tonga”). The second is a stylised dove, the Ha’amonga. Both are combined in the TNRLT’s badge or logo.
[3] The plaintiff was issued its logo trade mark in New Zealand on 1 February 2022. The deemed registration date is 30 July 2021. I reproduce the Certificate of Registration:
[4]The goods and services to which the trade mark applies are:
16: Photographs; printed material and stationery. 25: Clothing, footwear and headgear.
[5] The plaintiff’s emblem trade mark was issued in New Zealand on 25 March 2022. The deemed registration date is 4 August 2021. The goods and services to which the trade mark applies are the same as set out in [4]. I reproduce the Certificate of Registration:
[6] The plaintiff sues the defendants for infringement of its trade marks. The defendants have taken no steps. The plaintiff’s case went to a formal proof hearing. This judgment decides whether the plaintiff succeeds.
[7] Having read the affidavits of Mr William Clive Edwards in support of the plaintiff’s case, I am satisfied that the following (relevant) pleadings in the amended statement of claim are proved to the civil standard:
14.The Tonga National Rugby League claims that the Defendants have been using the Marks of the Plaintiff, in particular the “Mate Ma’a Tonga” Mark without the permission of the Tonga National Rugby League and has therefore committed an infringement of the rights of the Plaintiff in accordance with section 89 of the Trade Marks Act 2002.
15.The Defendants are manufacturing and/or selling clothing items to the public, which items display the “Mate Ma’a Tonga” Mark, where the Defendants are holding themselves out as a licensee authorized to sell apparel of the Tongan National Team where they have no permission to use the Marks belonging to the Plaintiff (the “Counterfeit Apparel”).
16.The Defendants in manufacturing, designing and/or selling these Counterfeit Apparel, the Defendants have manufactured, designed and have been selling the said Counterfeit Apparel for the purpose of selling apparel to the supporters of the Tongan National team who did play the New Zealand Kiwis on 25 June 2022.
17.Notice has been given to the Second Defendant, where the said letter was addressed to the First Defendant as Director, to desist and refrain from using the Mate Ma’a Tonga Mark of the Plaintiff, however, the Defendants have ignored the request made by the Plaintiff’s lawyer and they continue to assert that they have a right to use the Mark of the Plaintiff.
18.As a result of the Counterfeit Apparel in the market, the Plaintiff has suffered loss, in particular economic loss where the Counterfeit Apparel is made with the purpose of personal gain of the Defendants at the expense of the owner of the Mark.
[8]I will enter judgment for the plaintiff on the issue of liability.
[9] The more difficult issue is relief. The prayer in the amended statement of claim is:
a.Interlocutory relief in respect of the Counterfeit Apparel.
b.Damages.
c.An Order for the Defendant to account for all Counterfeit Apparel sold, with profits to be paid to the Plaintiff.
d.Additional damages.
e.Any further Order that this Honourable Court may deem just and equitable.
f.Costs.
[10]Section 106(1) of the Trade Marks Act 2002 (the Act) provides:
If an application is made to the court for relief, the relief that the court may grant includes—
(a)an injunction on any terms that the court thinks fit:
(b)either damages or an account of profits.
[11] Therefore, the Court cannot order both an award of damages and an account of profits. The plaintiff must elect which remedy it seeks, and that has not been done in this case.
[12] It is an established principle of the common law that mere proof of an infringement entitles the plaintiff to damages.1 However, where the plaintiff seeks more than nominal damages, it is necessary for an enquiry to be made to determine the appropriate quantum. The point of damages is to restore the trade mark owner to the position they would have been in had the infringement not occurred.2 There is no basis for a court to award damages, other than a nominal award, without knowledge as to the extent and quantum of loss.
[13] The problem for the plaintiff, as it acknowledges, is that it cannot quantify its losses due to the defendants’ infringing activities:
31. In Mr Edwards’ further affidavit, Mr Edwards admitted that the Plaintiff could not determine with any accuracy the losses sustained by the Plaintiff as a result of the Defendant’s infringement. Mr Edwards indicates in his affidavit that there are other entities and/or persons committing the same infringement with the unauthorized use of the Plaintiff’s marks in the New Zealand market.
[14] Further, the plaintiff has licensed its trade marks to its principal sponsor. Damages, therefore, would be assessed at the level of lost royalty. I have no evidence (and that is not a criticism; it is a result of the non-participation of the defendants) as to what the loss of royalty is and it may not be great. Generally, to justify an enquiry into damages, or account of profits, a plaintiff must show that it may recover a “substantial amount”.3
1 Blofeld v Payne (1833) 4 B & Ad 410 (KB); Ian Finch (ed) Intellectual Property Law in New Zealand (3rd ed, Thomson Reuters, Wellington, 2017) at 878.
2 Clive Elliott and others Intellectual Property Law: Patents and Trade Marks (looseleaf ed, LexisNexis) at 903,569.
3 At 903,569.
[15] Counsel for the plaintiff appreciates that obtaining an order for account of profits is problematic:
37. The Plaintiff admits that the relief sought presents a problem with respect to its claim. The Plaintiff accepts that the failure of the Defendant to participate in these proceedings makes it difficult to obtain an order to account.
[16] As I have said, a plaintiff must elect whether it seeks damages or an account of profits. That is because the remedies are inconsistent. However, a plaintiff is not required to make an election until it has received sufficient financial information from the defendant to be in a position to assess whether damages or account of profits is likely to produce a better result.4
[17] The problem for the plaintiff is that it has no financial information from the defendants at all.
[18] I now turn to the prayer for additional damages. Damages in this category can be awarded to reflect a defendant’s conduct more broadly and the flagrancy of the breach. Section 106(2) of the Act provides:
If an application is made to the court for relief, the court may grant such additional damages as the justice of the case requires, having regard to all the circumstances and, in particular, to—
(a)the flagrancy of the infringement; and
(b)any benefit accruing to the defendant by reason of the infringement.
[19] Here, the plaintiff pleads, and Mr Edwards deposes, that the defendants have been told of their breach but have continued to infringe.
[20]In the submissions dated 15 February 2024 the plaintiff notes:
28.… The letter from Mr Bowie advises the Defendants that the Plaintiff is the registered owner of the marks and that the Defendants are using the marks without authority. Despite service of the letter on the defendants, the Defendants have ignored the warning and continue to use the marks without authority.
4 Finch, above n 1, at 872; LED Builders Pty Ltd v Eagle Homes Pty Ltd (No 3) (1996) 36 IPR 293 (FCA).
29.The Defendants had responded to the letter and wrote and email to Mr Maka for the Plaintiff on 26 May 2022. Despite the email from the Defendants, the Defendants continue to use the Plaintiff’s marks without authority.
[21] Commentary on awarding additional damages for flagrant conduct in the context of copyright infringements is instructive. Section 121(2) of the Copyright Act 1994 has similar wording to s 106(2) of the Act and so cases decided under that provision have relevance, including:5
(a)In Wellington Newspapers Ltd v Dealers Guide Ltd the Court of Appeal found it impossible to establish the quantum of compensatory damages and instead awarded additional damages of $7,500 in the context of a copyright breach.6
The Court of Appeal considered the term “flagrant” and adopted the definition of Brightman J in Ravenscroft v Herbert:7
Flagrancy in my view implies the existence of scandalous conduct, deceit and such like; it includes deliberate and calculated copyright infringements.
The Court of Appeal went on to observe in Wellington Newspapers Ltd
that:
… additional damages… [are] to be awarded where the court is satisfied that the remedies otherwise provided by this section for an action brought under it do not provide effective relief… It is difficult to see what is contemplated by the additional damages unless it is something in the nature of punishment to the defendant for the hurt done to the plaintiff which the conventional remedies would not provide.
(b)In Electroquip the High Court refused additional damages on the basis that flagrancy goes beyond mere awareness of the transgression.8
5 See Finch, above n 1, at 492–496.
6 Wellington Newspapers Ltd v Dealers Guide Ltd [1984] 2 NZLR 66 (CA).
7 Ravenscroft v Herbert [1980] RPC [(Ch)].
8 Electroquip Ltd and Ors v Craigco Ltd and Ors HC Auckland CIV-2006-404-6719, 19 April 2010.
(c)Where a plaintiff elects to take an account of profits it will not be entitled to additional damages.9
Decision
[22] In my view the justice of the plaintiff’s case is apparent. This is not a case of one commercial enterprise pitted against another. It is a case of an essentially charitable organisation with limited ability to protect its rights being undermined financially by defendants who have infringed the plaintiff’s trade marks for profit. The Court should do what it can to give the plaintiff effective remedies in the circumstances.
[23] It is clear that I should make an order by way of injunction restraining the defendants from further infringing the trade marks. I will do so.
[24] But, the plaintiff also needs information on the extent of the infringements in order to decide what elections it should make. In effect, it needs relevant discovery. Therefore, I will make an order by way of mandatory injunction requiring the first defendant to provide an affidavit as to the nature and extent of the defendants’ infringing activities. This will be something less than, and will not be, an order for an account of profits.
[25]Accordingly:
(a)I enter judgment for the plaintiff.
(b)I make an order by way of injunction against the defendants prohibiting them from further infringing the plaintiff’s trade marks.
(c)I make an order by way of injunction against the first defendant requiring him, by 8 July 2024, to file and serve an affidavit deposing to:
9 Finch, above n 1, at 496; Redrow Homes Ltd v Bett Brothers Plc [1999] 1 AC 197 (HL); a plaintiff may not elect account of profits and seek additional damages under s 121(2) of the Copyright Act 1994: Tiny Intelligence Ltd v Resport Ltd [2007] 2 NZLR 263 (HC).
(i)The period during which the defendants, or either of them, have sold merchandise in breach of the plaintiff’s trade marks;
(ii)Descriptions of such merchandise;
(iii)The approximate sale price of each category of such merchandise;
(iv)The first defendant’s considered estimate of the total sums received by the defendants from the sale of each category of such merchandise.
(d)I reserve leave to the plaintiff to seek further orders of the Court once the affidavit has been received. To this extent, this is an interim judgment.
(e)I award the plaintiff costs against the defendants. The plaintiff’s memorandum of costs is to be filed and served by 8 July 2024.
Brewer J
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