Remedies for IP rights infringement: delay and injunction

Remedies for IP rights infringement in Australia include monetary compensation, whether in the form of damages or an account of profits, and injunctions. An injunction to restrain infringement is a powerful remedy and is sought as relief in many infringement cases.

Ordering an injunction involves a complex balancing of considerations to effect the most just relief for both the plaintiff and the infringer. One important consideration flows from delay in seeking an injunction. If an injunction is sought as relief, it is essential that the plaintiff acts expeditiously – subject to civil procedure considerations aimed at settling proceedings without resort to the court.

If a plaintiff waits until the defendant has generated significant business, even if it involves infringement, the court will weigh the defendant’s business success as a consideration when ordering the injunction. An extreme example arose in Knott Investments Pty Ltd v Winnebago Industries Inc ([2013] FCAFC 59). The Federal Court of Australia found that Winnebago Industries Inc had waited 25 years before litigating to enforce its rights in the Winnebago brand for motor homes, among other related products. 

While the primary judge ordered an injunction subject only to a stay to enable re-branding by Knott Investments Pty Ltd, this remedy was held inappropriate on appeal. All of the judges of the Full Federal Court found that 25 years' delay in taking action was too long for an unconditional injunction to be ordered. An injunction was not the fairest remedy because it failed to take into account Knott’s lawful contribution to the building of a successful business. Rather, Knott would be allowed to continue using the Winnebago brand subject to a disclaimer of any relationship between Knott’s business and the US-headquartered Winnebago.

This is an extreme example, but the lesson applies to many circumstances. The remedy for infringement can be conditioned to take account of the plaintiff’s conduct, whether or not that conduct reaches the level of a complete defence. Delay is an obvious example and its effects could become apparent in a much shorter period of time than in Winnebago. Enforcement of IP rights should not be delayed; such delay could come with significant costs to the plaintiff, including loss of the most valuable relief.