When infringing a 4x4 design results in 4x additional damages: how the conduct of parties impacts the award of damages in design infringement proceedings
By Timothy Seton, Michael Nurse and Sophie Knox
In intellectual property claims, compensatory damages can be difficult to establish. Where there are grounds to do so, a claimant will often seek additional damages to supplement the award of compensatory damages.
Introduction
The case of Rock Solid Industries International (Pty) Ltd v Ozi 4x4 Pty Ltd [2025] FCA 334 (Rock Solid) illustrates a situation in which the Court awarded general damages and a substantial sum in additional damages, based, at least in part, on a party's response (or lack thereof) to a claim brought against them.
Background
Rock Solid Industries International (Pty) Ltd (RSI) and Ozi 4x4 Pty Ltd (Ozi) are both manufacturers of accessories for 4x4 vehicles. The designs at the centre of this dispute were for truck caps—accessories installed over the tub of a ute—described by RSI as "the world’s first modular stainless steel truck cap system".
In 2022, RSI commenced proceedings against Ozi for infringement of two of its registered truck cap designs. That dispute was resolved by a settlement agreement.
However, on 18 October 2023, RSI commenced fresh proceedings in the Federal Court of Australia, alleging that Ozi had continued to use the disputed designs in breach of the 2022 agreement.
Ozi did not participate in the proceedings. RSI subsequently obtained default judgment. Registrar Luxton made declarations that Ozi had contravened section 71 of the Designs Act 2003 (Cth) and breached the prior settlement agreement between the parties. As a result of the default judgment, the matter proceeded to an inquiry as to damages on the basis that infringement had occurred, without RSI needing to prove infringement. Had Ozi contested the claim, it is possible that a finding of infringement may not have been made.
Registrar Luxton ordered Ozi to produce evidence regarding the benefit derived from the infringement, such as sales figures and the number of infringing products sold. Ozi failed to comply with that order.
In the interim, RSI alleged that Ozi continued to infringe by selling products incorporating the truck cap designs.
In light of Ozi’s conduct, RSI sought $50,000 in general damages for reputational harm, as well as $300,000 in additional damages.
How are damages usually determined in design infringement proceedings?
Compensatory damages are designed to put the claimant in the position they would have been in had the infringement not occurred. They may include lost profit or damage to reputation. In intellectual property cases, which relate to intangible assets, it can be difficult to demonstrate compensable loss in the traditional way.
However, the Court has the discretion to award additional damages. These are designed to be punitive in nature, as opposed to the compensatory nature of general damages. The Court must consider "the flagrancy of the infringement and all other relevant matters" when determining whether additional damages are awarded.
There is no formula to determine this amount; each case must be assessed based on individual facts and circumstances. Because the requirements for additional damages are almost identical in the Trade Marks Act 1995 (Cth), Copyright Act 1968 (Cth) and Patents Act 1990 (Cth), courts can be guided by previous decisions across a range of intellectual property infringement matters.
Some factors which have previously been considered include whether the infringement was deliberate, the defendant showed remorse, the defendant’s post-infringement conduct, and the need for specific and general deterrence.
How were damagers determined in Rock Solid?
General damages
RSI presented unchallenged evidence (which Anderson J accepted) that its reputation was based on the exclusivity of its design, which had been damaged due to Ozi's conduct. RSI also gave evidence that Ozi's infringing product negatively impacted its relationships with dealers and customers.
Due to the "significant and ongoing" reputational impact RSI faced as a result of Ozi's conduct, Anderson J awarded RSI $50,000 in general damages.
Additional damages
Anderson J was satisfied that Ozi's infringement was flagrant, based on the repeated use of RSI's designs throughout both sets of infringement proceedings. Ozi’s conduct enabled it to obtain a significant financial benefit by avoiding the cost of engaging a designer. This meant Ozi could either achieve higher profit margins or sell products at a lower price.
When considering the intersection between general and additional damages, Anderson J explained that Ozi’s non-compliance with court orders impacted his assessment of general damages. Because Ozi did not provide evidence of the financial benefit gained from its infringing conduct, general damages could only be assessed on the basis of reputational harm, rather than lost profit.
Due to these factors, as well as the need for deterrence, Anderson J awarded a "substantial" amount of $200,000 in additional damages.
What are the key takeaways?
This case shows that the conduct of the infringing party is highly influential in the calculation of damages. In this case, it resulted in Ozi paying 5 times more in damages than they may have otherwise.
It perhaps goes without saying that parties should not deliberately infringe the intellectual property rights of a competitor.
If you find yourself in receipt of a demand, it is important that you:
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engage with any demands in a bona fide way, even if the claim is baseless you should not just ignore it;
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if you determine that there has been some infringement, cease the conduct immediately;
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make appropriate concessions and provide undertakings prior to proceedings being commenced; and
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participate in any court proceedings commenced against you.
Please contact our Intellectual Property team if you need assistance on defending an infringement matter or any other intellectual property dispute.