INTELLECTUAL PROPERTY DEVELOPMENT CORPORATION AND ANOR V PRIMARY DISTRIBUTORS NEW ZEALAND LIMITED (TRADING AS PRIMARY SALES AND MARKETING) AND ORS HC AK CIV-2006-404-004695

INTELLECTUAL PROPERTY DEVELOPMENT CORPORATION AND ANOR V PRIMARY DISTRIBUTORS NEW ZEALAND LIMITED (TRADING AS PRIMARY SALES AND MARKETING) AND ORS HC AK CIV-2006-404-004695

The court held that passing off remained a live and proven cause of action and that the middleman doctrine applies to both passing off and trademark infringement in these circumstances so no apportionment was required; defendants (PDNZ) and the participating directors (Graham and Jones) were jointly and severally...

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Citation
openlaw-d2c70393_bb4b_4e0b_9a3e_b290eb92359d.pdf
Parties
First Plaintiff: Intellectual Property Development Corporation Pty Limited; Second Plaintiff: Hefty NZ Limited; First Defendant: Primary Distributors New Zealand Limited (trading as Primary Sales and Marketing); Second Defendant: Donald Johnstone Graham; Third Defendant: Robert John Jones
Court
High Court
Jurisdiction
New Zealand
Judgment Date
9 December 2010
Procedural Posture
Trademark Infringement and Passing Off Account of Profits / High Court Judgment on Remittal for Account of Profits (post Court of Appeal)
Outcome
Judgment for plaintiffs in the sum of NZD 125,524.16 representing profits attributable to the sale of Hefty-labelled products; defendants jointly and severally liable; interest awarded at 7% per annum from date of filing; costs reserved
Legal Topics
Account of Profits, Apportionment, Middleman Doctrine, Goodwill and Assignment, Directors' Liability for Torts, Deduction of Overheads, Interest, Costs
Intellectual Property Trademark Law Passing Off Equitable Remedies Company Law Account of Profits Apportionment Middleman Doctrine +5 more

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Parties

Intellectual Property Development Corporation Pty Limited

First Plaintiff

Hefty NZ Limited

Second Plaintiff

Primary Distributors New Zealand Limited (trading as Primary Sales and Marketing)

First Defendant

Donald Johnstone Graham

Second Defendant

Robert John Jones

Third Defendant

Procedural Posture

Trademark Infringement and Passing Off Account of Profits / High Court Judgment on Remittal for Account of Profits (post Court of Appeal)

Legal Issues

  1. 1 Whether passing off remained a live cause of action and whether IPDC owned the goodwill
  2. 2 Whether apportionment of profits was required or whether the middleman doctrine applied
  3. 3 Whether the middleman doctrine applies to trademark infringement as well as passing off

Ratio Decidendi

The court held that passing off remained a live and proven cause of action and that the middleman doctrine applies to both passing off and trademark infringement in these circumstances so no apportionment was required; defendants (PDNZ) and the participating directors (Graham and Jones) were jointly and severally liable; allowable deductions include only general overheads fairly attributable to the infringing activity while storage/destruction costs and post-undertaking overheads are not deductible; compound interest denied, simple interest at 7% awarded.

Court Disposition

Judgment for plaintiffs in the sum of NZD 125,524.16 representing profits attributable to the sale of Hefty-labelled products; defendants jointly and severally liable; interest awarded at 7% per annum from date of filing; costs reserved

Orders

  • Defendants jointly and severally liable to pay NZD 125,524.16 to the plaintiffs representing profits from sales of Hefty-labelled products as specified in judgment (sales acquired from Cartigny NZ in March 2005 and sales imported between 21 April 2005 and 13 July 2006)
  • Interest on NZD 125,524.16 at 7% per annum from date of filing until payment