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2025 MarsdenLR 6079
HIGH COURT MALAYA KUALA LUMPUR
NAILI HOLDINGS SDN BHD – Appellant
Versus
SABELLA HOLDINGS SDN BHD – Respondent
[Suit No: WA-22IP-84-12-2020]
The assessment of damages for infringement requires proof of actual loss or a reasonable royalty, with speculative claims being inadmissible; punitive damages may be awarded for deliberate infringement.
Headnote:(A) Industrial Designs Act 1996 - Section 35(1) - Assessment of damages for infringement - Plaintiff entitled to compensation for loss of profits or account of profits due to infringement of registered design - Defendant infringed design resulting in financial losses and reputational harm due to similarity and mass production of garments. (Paras 20, 21, 36)
(B) Damages principles - Plaintiff must prove actual loss sustained due to infringement; speculative losses are inadmissible. (Paras 27, 29, 48)
(C) Calculation of damages - Court determined compensation based on reasonable royalty of 15% of defendant's revenue, reflecting a fair licensing arrangement. (Paras 33, 34)
Facts of the case:
The plaintiff, Naili Holdings Sdn Bhd, registered an industrial design for garments. The defendant, Sabella Holding Sdn Bhd, introduced similar designs without permission, leading the plaintiff to claim damages. (Paras 2, 3)
Findings of Court:
Awarded RM209,293.65 in damages, detailing general, aggravated, and exemplary damages based on defendant's sales and conduct. (Paras 52)
Issues: Did the plaintiff prove actual loss, how is compensation calculated, and should aggravated and exemplary damages be awarded? (Paras 9)
Ratio Decidendi: The plaintiff failed to link loss of profits directly to infringement; however, the defendant's deliberate actions warranted punitive measures reflected in exemplary damages. Court emphasized the need to deter future infringement. (Paras 46, 50)
Result: Defendant ordered to pay plaintiff RM209,293.65 with interest and costs.
| Table of Content |
|---|
| 1. assessment of damages in design infringement. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. plaintiff's arguments for substantial damages. (Para 10 , 11 , 12 , 13 , 14 , 15) |
| 3. defendant challenges plaintiff's claims. (Para 16 , 17 , 18) |
| 4. court's analysis of actual loss and damages. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 5. determination of fair royalty for damages. (Para 32 , 33 , 34) |
| 6. aggravated and exemplary damages analysis. (Para 36 , 37 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51) |
| 7. total damages awarded and costs. (Para 52) |
Introduction
[1] This judgment concerns the assessment of damages in encl 64, following the Court's decision in favor of the plaintiff in an industrial design infringement claim. At its core, the case raises a fundamental question: to what extent should a party that has invested time and effort in creating a unique design be compensated when another unjustly benefits from its work?
Background Facts
[2] The plaintiff, Naili Holdings Sdn Bhd., is a company engaged in the art and business of designing garments, particularly batik-style clothing. Recognizing the value of its creation, it took steps to secure legal protection for its design, duly registering it under Industrial Design No MY20-00070-0101 on 31 January 2020. The design was not merely ornamental; it was the product of careful thought, intricate craftsmanship, and a desire to bring something novel to the marketplace. The plaintiff proceeded to commercialize this design under the name "Coral Orchid", launching its sales in February 2020.
[3] Some months later, in September 2020, the defendant, Sabella Holding Sdn Bhd, a well-established garment manufacturer, introduced three clothing products, eerily similar to the plaintiff's registered design. These garments, labelled as Cherry Floral, Navy Floral, and Yellow Floral, found their way into the marketplace, bearing the same artistic elements for which the plaintiff had sought protection. The defendant did not stop at mere production; it actively advertised, marketed, and sold these garments across multiple platforms, including online stores and social media.
[4] The plaintiff, upon discovering this, turned to the courts for redress. A full trial ensued, and on 10 October 2023, Justice Dato' Mohd Radzi Harun ruled in favor of the plaintiff (See: Naili Holdings Sdn Bhd v. Sabella Holdings Sdn Bhd [2025] MLRHU 223 (HC)). In essence, my predecessor held that the defendant had infringed the plaintiff's registered industrial design, thereby violating its exclusive rights. As a result, a permanent injunction was granted, forbidding the defendant from further use of the design.
[5] The plaintiff subsequently filed for assessment of damages in accordance with a notice issued under O 37 r 1 of the Rules of Court 2012 ('the Rules'), wherein it sought the sum of RM1,908,000.00 which includes general damages as well as aggravated and exemplary damages. This is based on para (iv) of my predecessor's Judgment which reads as follows:
"iv. Satu siasatan ke atas gantirugi atau di atas pilihan Plaintif, satu akaun keuntungan yang dibuat oleh Defendan akibat pelanggaran Pendaftaran Reka Bentuk Perindustrian Malaysia No MY20-00070-0101 dan bayaran mana- mana jumlah yang mungkin didapati hasil siasatan tersebut kepada Plaintif"
[6] Following an assessment of damages, I granted the total sum of RM209,293.65 along with assessment costs of RM8,000.00, in favour of the plaintiff. My decision encompasses the following:
(a) General damages in the sum of RM59,293.65;
(b) Aggravated damages in the sum of RM50,000.00; and
(c) Exemplary damages in the sum of RM100,000.00.
[7] In addition to the foregoing, the plaintiff proposed, and the defendant agreed, to the sum of RM20,000.00 as costs for the full trial of the main claim. Accordingly, this amount is recorded as such, in addition to the RM20,000.00 previously awarded by my predecessor for the dismissal of the defenda
