Damages for trademark infringement must be compensatory, restoring the claimant's position pre-infringement, and are assessed based on actual losses, including business profits and goodwill.

[1] The Plaintiffs' action against the Defendants is for damages and other relief for trademark infringement and passing off by the Defendants, arising from the Defendants' importing, supplying, distributing, selling and/or offering for sale counterfeit goods which bore a mark identical or similar to the Plaintiff's Marks (collectively, "Counterfeit Goods").

[2] The Plaintiff's Application for summary judgment of its claims was dismissed by the High Court on 8 December 2021 ("the High Court Order"). However, on 3 November 2022, the Court of Appeal in Civil Appeal No: W-02(IM)(IPCV)-2456-12/2021 allowed the Plaintiff's appeal against the High Court Order, and entered summary judgment in the Plaintiffs' favour against the Defendants.

[3] In ordering summary judgment in favour of the Plaintiffs against the Defendants, the Court of Appeal further ordered damages to be assessed.

[4] Under Court directions, the assessment of damages was to be by affidavit and written submissions. The Plaintiffs have done so, but the Defendants have not filed any affidavit or written submissions, not even to respond to the affidavit and written submissions filed by the Plaintiffs. They are thereby deemed to not dispute the Plaintiff's allegations as to the losses it has suffered.

[5] Nevertheless, as the Plaintiffs still bore the burden of proving its losses, the Plaintiffs' evidence of its damages was still examined and scrutinized to ascertain what damages should be ordered.

[6] This Judgment is on the damages and costs payable by the Defendants jointly and severally to the Plaintiffs.

Some General Principles

[7] As to the principles for awarding damages, guidance is indeed gratefully taken from the decision of the Federal Court in Taiping Poly (M) Sdn Bhd v. Wong Fook Toh & Ors 2011 MarsdenLR 526 ; [2018] MLJ (Supp) 312; 2011 MarsdenLR 3726 in which Richard Malanjum CJ (Sabah & Sarawak) (later CJ) said:

"Consistent with the established principle of law in award of damages, it is compensatory, that is, to put the plaintiff in the same position he would have been had the wrong not been committed (see: Livingstone v. Rawyards Coal Co [1880] 5 App Cas 25). Put in another way it is '... to approach the assessment of damages in this case, in my view, is to compare the position in which the applicants might have been expected to be if the misleading conduct had not occurred with the situation they were in as a result of acting in reliance on that conduct (see Esso Petroleum Co Ltd v. Mardon [1976] 2 All ER 5; [1976] QB 801. This is the same (as), or analogous to, the general principle respecting the measure of damages in tort' (see: Brown and another v. Jam Factory Pty Ltd and another [1981] 35 ALR 79).

Damages for the infringement of intellectual property rights are tortious in nature. Their objective is to restore the claimant to the position he would have been in had the defendant not infringed. Thus, where the claimant is in the business of manufacturing goods, so that they are in competition with the defendant, then the measure of damages will be lost profits. However, it should be noted that damages is to be assessed liberally (see: General Tire and Rubber Co v. Firestone Tyre and Rubber Co Ltd [1976] RPC 197). And while it is quite easy to state the general principle the mechanics of ascertaining damages actually sustained by the plaintiff are not simple to determine.

There is no hard and fast rule to follow which is foolproof and universally accepted (see: Spalding (A G) & Bros v. A W Gamage Ltd and Benetf