Polyaire Pty Ltd v K-Aire Pty Ltd & Ors [2012] SASC 75 (10 May 2012)
Infringement – remedies – account of profits – whether managing director of infringing company is required to account for salary paid during period of infringing conduct
In the latest episode in a case that has been running since 1996, the Supreme Court of South Australia has ruled that a successful plaintiff in a design infringement case cannot claim a portion of a company director’s salary after electing to receive compensation in the form of an ‘account of profits’.
This decision arises out of two recurring features of intellectual property litigation in Australia, and the reasoning and outcome are presumably applicable to patent, trade mark and copyright cases, as well as to cases – such as this – involving infringement of registered designs.
The two relevant factors are:
When an account of profits is elected, the infringing company is clearly liable for all sales of infringing products or services. But what about a company director? Are there ‘profits’ accruing to an individual as a result of the infringement which must be accounted in addition to the company’s profits on sales? Here, the South Australian court has said ‘no’.
Infringement – remedies – account of profits – whether managing director of infringing company is required to account for salary paid during period of infringing conduct
In the latest episode in a case that has been running since 1996, the Supreme Court of South Australia has ruled that a successful plaintiff in a design infringement case cannot claim a portion of a company director’s salary after electing to receive compensation in the form of an ‘account of profits’.This decision arises out of two recurring features of intellectual property litigation in Australia, and the reasoning and outcome are presumably applicable to patent, trade mark and copyright cases, as well as to cases – such as this – involving infringement of registered designs.
The two relevant factors are:
- a successful plaintiff in an IP infringement action is generally entitled to elect compensation in the form of damages or an account of profits, but not both; and
- it is common for a plaintiff to bring proceedings not only against a company that may have been providing infringing products or services, but also against any company managers or directors who may be deemed to have controlled the activities of the company.
When an account of profits is elected, the infringing company is clearly liable for all sales of infringing products or services. But what about a company director? Are there ‘profits’ accruing to an individual as a result of the infringement which must be accounted in addition to the company’s profits on sales? Here, the South Australian court has said ‘no’.
Tags: Account of profits, Designs, Infringement, Remedies
