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If you take court action against a party for infringement of your intellectual property (IP) and you are successful, a court may make orders awarding you a range of remedies. It is important to know what remedies may be available for IP infringement before commencing litigation. The different remedies could include:

  • damages; 
  • an account of profits;
  • delivery up;
  • injunctions; or 
  • payment of your legal costs. 

This article will explain what each of these mean.

Damages

If you suffer a loss as a result of an infringement of your intellectual property, the court may award you damages in compensation for that loss. This means that a court orders the party who has acted unlawfully to compensate you for losses you suffered which their conduct caused. The purpose of damages is to return you to the position you would have been in had the other party not committed the infringement. Accordingly, in order to determine this sum, the court will consider: 

  • any presumed licence fee the infringer could have paid to legally use the intellectual property;
  • any loss of profit suffered by you, the owner; or 
  • any reputational harm suffered. 

In special circumstances, the court can award additional damages if it believes additional damages are reasonable in the circumstances. 

In considering an award of additional damages, the court will look to see whether the wrongdoer has derived some benefit from the wrongdoing. This does not necessarily mean a financial benefit. They will also consider the: 

  • flagrancy of the infringement; 
  • need to deter similar infringements; 
  • conduct of the party that infringed after being informed of the infringement; and
  • other relevant considerations the court sees fit. 

Account of Profits

As an alternative to damages, you can seek an account of profits. This may be desirable where you are unable to prove that you have suffered losses as a result of the infringing conduct, but you become aware that the infringer has made considerable sums themselves as a result of misusing your intellectual property. 

An account of profits focuses on the profits the person who has infringed your IP has made, rather than the losses you have suffered. When seeking an account of profits, the rightful owner of the intellectual property claims the profits the infringer has made.

Damages and account of profits are mutually exclusive. This means that an intellectual property owner cannot claim both damages and an account of profits and must decide what remedy to seek from the court. It is worth noting that additional damages can only be awarded where damages are awarded, even in a nominal amount, and are not available where the intellectual property owner claims an account of profits.

Delivery Up or Destruction

An order can be sought requiring the infringing party to: 

  • deliver the infringing goods to the intellectual property owner; or
  • destroy all infringing products. 

Injunctions and Other Court Orders

While monetary orders are helpful, often the most important action is to simply get the infringer to stop misusing your IP. An injunction is an order of a court: 

  • compelling a person to do something; or 
  • restraining a person from doing something. 

An injunction can be sought on an interlocutory basis and a permanent basis. An interlocutory injunction is an order made by the court preventing one party from committing, repeating or continuing a wrongful act prior to final hearing or trial. The court will then decide after the hearing whether the order should be made permanently, thereby restraining the infringer from committing any further infringing conduct.

In special circumstances, parties may also obtain an Anton Piller order, which is a search order. This enables the intellectual property to search the infringer’s premises and seize items relating to the infringement. Also, in special circumstances, the court may award a Mareva order, which prevents the infringer from removing their assets. 

Costs

A costs order is where the court orders that one party pay some or all of the other party’s legal costs.

Legal costs generally include: 

  • the solicitor’s professional fees; and 
  • any other relevant expenses, such as barrister’s fees and other disbursements. 

The court will usually order the unsuccessful party to pay the successful party’s legal costs. This means that if you bring infringement proceedings against someone and you lose, you may have to pay the other party’s legal costs. However, if you are successful, that party may have to pay your legal costs. 

Obtaining a costs order does not necessarily mean that you will recoup 100% of your costs. You may only obtain 50% to 75% of the actual legal costs incurred. Each court has a set ‘scale of costs’, which limits what can be reimbursed.

In certain circumstances, a court can order a party to pay ‘indemnity costs’. Indemnity costs will usually be 85% to 100% of all legal costs. However, an order for indemnity costs is reserved for particularly unreasonable conduct and the court has discretion to decide what type of costs orders it will make in each case. 

Key Takeaways

There are a number of different types of relief available in litigation for IP infringement. However, whether you will obtain such relief will depend on the prospects of success of your case. If your case is unsuccessful, you could be stuck paying both your legal fees and the legal fees of the defendant. Court litigation is expensive, time consuming and emotional. As such, it is important to weigh up whether it is in your commercial and personal interests to proceed with litigation. If you need help dealing with litigation related to IP infringement, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.

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