Damages for passing off must restore the plaintiff to their original position without unjust enrichment, emphasizing the need for careful assessment based on actual loss and the defendant's conduct.

Introduction

[1] On 18 May 2022 after a full trial, Justice Mohd Radzi Bin Harun J gave judgment in favour of the Plaintiff against all of the Defendants jointly and severally, for having passed off its counterfeit goods as the Plaintiff's. In that Judgment, he ordered, inter alia, the following damages to be assessed, with interest thereon at the rate of 5% per annum from the date of the writ until full settlement:

(i) Special damages (including prospective damages);

(ii) General damages; and

(iii) Punitive and/or additional damages.

[2] Radzi Harun J also ordered the costs to be paid by the Defendants jointly and severally to the Plaintiff (on a solicitor-client basis) and to the Third Parties for dismissing the Defendant's third party claims against them to be assessed.

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

Some Principles

[4] 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 Benetfink & Co Ltd; Juggi Lal-Kamlapat and Juggilal-Kamlapat Mills of Cawnpore v. Swadeshi Co Ltd (1928) 46 RPC 74; Prince Manufacturing Inc and another v. ABAC Corporation Australia Pty Ltd and another). It depends on the facts of each case. It is 2011 MarsdenLR 526; [2018] supp MLJ 312 at 321; 2011 MarsdenLR 3726 basically facts driven. However, in assessing damages it is also necessary to exclude those customers of the defendant who were not misled in making their purchases. Otherwise the claimant would be overcompensated. Damages may also be awarded for loss of business reputation and goodwill resulting from the infringement and passing off."

[5] In paragraph [17] of his Judgment in Schwan-Stab