G-Star jeans damages claim fades

The owners and distributors of the “G-star” brand of jeans (collectively, “G-Star”) have developed a reputation in Australia not only as sellers of fashionable jeans, but also for being willing to take court action against infringers.  This trend continued in the recent case Facton Ltd v Mish Mash Clothing Pty Ltd [2012] FCA 22.

G-Star took action against a company called Mish Mash Clothing P/L (“Mish Mash”).  Unlike recent cases brought by G-Star, the jeans in question in this case were not counterfeit “G-star” products.  Some of Mish Mash’s jeans bore the trade mark “M-Mash”, together with other elements of one of G-Star’s Australian trade mark registrations, the composite “logo” trade mark shown below.  G-Star brought proceedings for trade mark infringement and infringement of copyright in its logo.

The court found that two labels used by Mish Mash on its jeans infringed G-Star’s logo trade mark registration.  These two labels are shown below.

The court also found that the infringed G-Star trade mark logo was a copyright work, and Mish Mash had infringed that copyright.

Although G-Star was successful in both trade mark and copyright infringement claims in this case, it was not awarded any monetary compensation.  Thus, this case provides a good guide as to what sort of evidence the court might need if it is to award damages for trade mark or copyright infringement.

In this case, 266 pairs of jeans bearing the infringing trade mark and copyright work had been sold before Mish Mash received a letter of demand.  Two days after receiving a letter of demand from G-Star, Mish Mash withdrew all the remaining allegedly infringing products from sale.

G-Star sought damages rather than an account of profits for the infringing sales.  G-Star said every sale of a Mish Mash jean was a lost G-Star sale and sought damage for each Mish Mash sale.  However, in support of its claim G-Star did not provide any evidence of:

retail circumstances in which both brands were sold, such as proximity to each other, and types of consumers who purchase the brands;

evidence on the tendency of consumers to make buying choices by reference to brand names, rather than other things like comfort, fabric or style;

any actual confusion that the Mish Mash jeans were G-Star jeans.  In contrast, the court looked at Mish Mash jeans in evidence, noted that the brand “Mish Mash” appeared prominently on the jeans, and thought it was quite improbable that a consumer would think they were G-Star jeans; or

G-Star’s own profit per sale of G-Star jeans.

The court found that the gap in the evidence was too wide to be crossed by the drawing of an inference that every Mish Mash sale was a lost G-Star sale and, in circumstances where no information about G-Star’s profit margin had been put in evidence, the court could not hazard an estimation of loss.

G-Star also sought damages for loss of reputation.  The court rejected this claim on the basis that the infringing logo was not a conspicuous part of the Mish Mash jeans, and also because G-Star did not provide evidence that the logo was associated with a reputation for exclusivity or creativity.

G-Star sought additional damages under section 115(4) of the Copyright Act, and that claim was rejected too.  It was relevant that Mish Mash’s conduct did not amount to flagrant infringement: Mish Mash derived the logo from its Turkish supplier, and there was no evidence Mish Mash itself had any knowledge that the logo had been copied from G-Star’s logo.  That Mish Mash had withdrawn their stock from sale promptly after receiving G-Star’s demands was also relevant.

A decision on whether declaratory or injunctive relief should be awarded against Mish Mash was deferred at Mish Mash’s request.  We will watch for any further decisions, including any decision about liability for costs of the litigation, with interest.