September 27, 2022

Volume XII, Number 270

Advertisement

September 26, 2022

Subscribe to Latest Legal News and Analysis
Advertisement

Developers Denied Double Dipping Damages

The rule against double recovery, which operates to ensure plaintiffs are not compensated twice in respect of the same loss, is well-known and generally arises for judicial consideration where there are joint and several tortfeasors. The recent decision of Look Design and Development Pty Ltd v Edge Developments Pty Ltd & Flaton [2022] QDC 116 by Judge Long SC of the District Court of Queensland considered the rule against double recovery in the context of separate proceedings against different defendants. This case confirms that where damages for copyright infringement are compensatory, the fact that a plaintiff has already received an amount of damages from one infringer will serve to reduce the damages payable by the other.

Background

In May 2015, homeowners Fiona and Philip Flaton (collectively, the Flatons) were provided a copy of the Byron 214 house plan by plaintiff Look Design and Development (Look Design), which had been significantly amended from the display property to accord with the Flatons’ specific preferences (Revision B Plan).1

In June 2015 the Flatons entered discussions with Edge Developments (Edge), a new project homebuilder who was also a ‘family friend’. Without consent or licence, the Flatons shared the Revision B Plan with Edge to illustrate their desired layout. Edge reassured the Flatons they were only required to vary the plan by 10 per cent to avoid infringement arising from duplication,2 a common misconception in relation to copyright and design infringement. Consequently, Edge substantially reproduced the Revision B Plan in the form of a house plan and a constructed house.

Decision

His Honour held that copyright subsisted in the Revision B Plan,3 and that production of the two dimensional plans and three dimensional house infringed this copyright.4 His Honour further found that by sharing the Revision B Plan with Edge, the Flatons authorised the substantial reproduction of the Revision B Plan, and thus, the infringement.5

Relief

Compensatory Damages

Look Design argued that had it not been for the infringement, the Flatons would have selected Look Design to build their house. Accordingly, it sought AU$40,000 in compensatory damages for the value of the loss of opportunity to profit from the construction of the house.

However, Look Design had previously brought a claim against Edge in relation to its conduct in the same matters, and settled that claim for AU$30,000.

His Honour considered that the avoidance of duplication of damages principle explored in past case law, including the idea that compensation recovered from a builder reduces a plaintiff’s need for compensation, is relevant to the assessment of damages against a home owner.6

His Honour evaluated whether there had been a lost opportunity for profit, and if so, what value could be attributed to that lost opportunity.7 His Honour considered the familial connection between the Flatons and Edge, and Look Design’s reluctance to provide for the Flatons’ requests regarding exclusion of electrical work and the use of a traditional slab. His Honour concluded that these factors supported a finding that there was no likelihood the Flatons would have contracted with Look Design to build their house, and therefore no proof of causation of any damage in the nature of lost commercial opportunity.8

In assessing damage suffered as a result of the infringement, Long SC determined that the earlier settlement achieved with Edge served as substantial and adequate vindication of Look Design’s proprietary rights. However, His Honour considered this previous settlement amount could be supplemented by an award of nominal damages against the Flatons,9 determining the appropriate amount to be AU$500.

Additional damages

Look Design also sought an award of additional damages of AU$10,000 pursuant to s 115(4) of the Copyright Act 1968 (Cth).10 This type of an award of exemplary or punitive damages is generally in punishment of ‘conscious wrongdoing in contumelious disregard of another’s rights’.11

His Honour determined that the available evidence did not demonstrate requisite knowledge by the Flatons of taking unfair advantage of Look Design’s work. His Honour particularly noted Edge’s claim that infringement could be avoided through minimal amendments, and the strong sense of reliance by the Flatons on this representation.12 Accordingly, there was no foundation for an award of additional damages on the basis of flagrancy of copyright infringement, and additional damages were consequently refused.

Key Takeaways

In seeking to avoid duplication of damages, the effect of arriving at a settlement with one defendant will be relevant in the assessment of compensatory damages in separate proceedings brought against another. Where damages flowing from the same infringement are sought to be recovered from multiple defendants, a separate determination and settlement between the plaintiff and one defendant is likely to reduce the damages available in subsequent proceedings. Further, different remedies are available against joint copyright infringers, and a plaintiff may recover additional damages against only one of two joint infringers, or alternatively an account of profits against one and damages against another.

Harlee Bolger also contributed to this article.



ENDNOTES

1 At [3].

2 At [34].

3 At [30].

4 At [45].

5 At [56].

6 Carlisle County Homes Pty Ltd v Brown and Residential Developments Mackay Pty Ltd [1999] QDC 284 at pp. 30.

7 At [62], considering Henley Arch Pty Ltd v Lucky Homes Pty Ltd [2016] FCA 1217.

8 At [67].

9 At [74].

10 At [75]; Copyright Act 1968 (Cth) s 115(4).

11 At [82].

12 At [81].

Copyright 2022 K & L GatesNational Law Review, Volume XII, Number 193
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Jonathan Feder IP Lawyer Australia K&L Gates
Practice Area Leader: Intellectual Property

Mr. Feder leads the Australian intellectual property group. He has experience in a broad range of legal areas relating to intellectual property, including registration of trade marks and designs, trade mark and design enforcement, copyright protection and enforcement, trade practices and licensing of intellectual property rights.

Mr. Feder acts for a range of well-known brands and has a particular specialty in protecting and enforcing the intellectual property of many well know and leading Australian and overseas fashion houses. Mr. Feder manages and enforces a...

+61.3.9640.4375
Talia Le Couteur Scott Intellectual Property Attorney K&L Gates Melbourne, Victoria
Partner

Talia Le Couteur Scott is a lawyer in the Melbourne intellectual property team and focuses on IP procurement and portfolio management. 

Talia began with the firm as part of the graduate program and worked in the labour, employment, and workplace safety; financial services (asset management and investment funds); and IP teams.

61 3-9640-2074
Advertisement
Advertisement
Advertisement