Written by: John Greenhalgh
In litigation disputes, liability is only one aspect, the other is damages.
Damages is the monetary compensation awarded to a party who has suffered harm, loss, or injury as a result of another party’s wrongdoing or breach of legal duty.
Case Study
The court’s ability to award damages varies significantly depending on the cause of action. An interesting case is Winnebago Industries Inc v Knott Investments Pty Ltd (No 4), a matter heard in the Federal Court.
Knott Pty Ltd, an Australian company, sought to use the marketing of Winnebago, in the Australian market. Winnebago is an American company producing motor homes, in the U.S, Canada and the UK however, Winnebago had no presence in Australia. Knott began using the Winnebago name, logo and promotional material in Australia, without the initial knowledge or permission of Winnebago. Winnebago was successful in its action against Knott, but what loss did it suffer? The company didn’t sell its products in Australia and based on the evidence, they never intended to. Nor would it ever have licenced Knott to do so on its behalf, therefore Winnebago made no financial loss. Whilst it was raised, the argument that an inferior product may have damaged its reputation was not pursued. Consequently, the court has found in Winnebago’s favour, but with no grounds for a damages claim.
However, an argument was raised by Winnebago, based on old English law giving rights to damages against a person crossing another land. In short, it is called the user pay principle and a successful party is entitled to recover, by way of damages, a reasonable sum from the person who has wrongfully used their property. There may have been no actual loss from the use and the wrongdoer may not have derived actual benefit. Nevertheless, under the principle, a reasonable sum is to be paid, sometimes described as a reasonable rent, hiring fee, endorsement fee, licence fee or notional royalty, depending on the property involved and the nature and circumstances of the wrongful use. In this case, that principle was applied and the court, court-ordered Knott to pay Winnebago 7 million dollars.
The adoption of out-of-the-box thinking can be the real difference.
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Disclaimer:
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.
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