Case: Dart Industries Inc v D&eacute;cor Corporation Pty Ltd [1993] HCA 54 ; (1993) 179 CLR 101
Outcome: cited
In Dart Industries Inc v D&eacute;cor Corporation Pty Ltd (1993)179 CLR 101 at 121 Mason CJ, Deane, Dawson and Toohey JJ cited with approval what was said by Windeyer J in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50 ; (1968) 122 CLR 25 at 42-43: The true rule, I consider, is that a person who wrongly uses another man's industrial property patent, copyright, trade mark is accountable for any profits which he makes which are attributable to his use of the property which was not his... If one man makes profits by the use or sale of some thing, and that whole thing came into existence by reason of his wrongful use of another man's property in a patent, design or copyright, the difficulty disappears and the case is then, generally speaking, simple. In such a case the infringer must account for all the profits which he thus made. Windeyer J had earlier (at 37) drawn a distinction between patent and trade mark infringement (the instant case being the latter). If a patent infringer sells an article made wholly in accordance with the invention and thereby obtains more than it cost him to acquire or make it, he is accountable for the difference as profit because he has "infringed the patentee's monopoly right to make, use, exercise and vend the invention" (that being the statutory test of infringement then applicable). However, the profit for which a trade mark infringer is accountable is not the profit from selling the article itself but the profit from selling it under the trade mark. 13 Dart itself was a case of patent infringement, the patent being for press button seals used to seal plastic kitchen canisters. The trial judge had allowed for the whole profit on the basis that sales of the canisters were attributable to the invention. The Full Court of the Federal Court reached the same result, reasoning that "what characterised the infringing product was the press button lid, without which this particular canister would neve have been produced at all". The High Court majority (at 121) noted that there was "some divergence" between the trial judge and the Full Court but considered nevertheless the "overall approach" of both was correct. 16 While doubtless Mr Wallz made use of his own knowledge and experience in relation to tender responses when he conducted the Reed workshop, he would not have been able to take up the opportunity to do so had it not been for his use of the Original Manual. That use was fundamental to the presentation of the workshop. The case is similar in that regard to Dart and Peter Pan . The gross revenue received by him should be the starting point for the calculation of profit. 17 In Dart at 112 the majority cited a lengthy passage from the judgment of Harvey CJ in Eq in Leplastrier &amp; Co Ltd v Armstrong-Holland Ltd (1926) 26 SR (NSW) 585 at 593 which commences: Under no circumstances can (the patent infringer), in my opinion, deduct interest on his capital employed in the business. Under no circumstances can he claim any remuneration to himself, nor under any circumstances can he claim in my opinion any director's fees for carrying on the business. His Honour goes on to say that the only expenses to be deducted are those "solely referrable to the manufacture of the [infringing] machines". The majority in Dart at 115 et seq discuss this latter part of the statement by Harvey CJ in Eq and point out, referring to a number of United States authorities, that the statement does not take account of opportunity cost suffered by an infringer in certain circumstances, as for example, where there is no excess capacity and the infringer would have been able to manufacture alternative products. In the circumstances which arose in Dart the majority at 119-120 held that some proportion of overheads attributable to the manufacture of the infringing products should be taken into account. 18 However, nothing that the majority said in Dart casts doubt on the opening part of Harvey CJ in Eq's statement quoted above. It would be wrong in principle to allow Mr Wallz a deduction for the time he had spent working up his presentation with the aid of Tenderwatch's Original Manual. This would be tantamount to making a copyright owner pay an infringer for the time and effort spent in infringement. As was said in Sheldon v Metro-Goldwyn Pictures Corp 106 F 2d 45 (1939) at 51, "a plagiarist may not charge for his labour in exploiting what he has taken". 19 For the purpose of an account of profits an infringer can only claim costs in fact incurred (including costs attributable to the infringing work: Dart ). The infringer cannot claim costs not actually incurred, even though they might reasonably have been incurred. Thus in LED Builders Pty Ltd v Eagle Homes Pty Ltd (1999) 44 IPR 24 the infringer company had paid salaries to its directors but submitted a report of a consultant purporting to set out a "fair remuneration", which was in the order of three times that actually paid. Lindgren J at [178] rejected this claim, pointing out that the plaintiff must take the business of the infringer as it is.