Background
Toyota Jidosha Kabushiki Kaisha owns Australian trade marks including TOYOTA, HILUX, and LAND CRUISER, and Toyota Motor Corporation Australia Limited is their authorised Australian user. OZI4x4 Pty Ltd, an aftermarket four-wheel-drive accessories business, sold counterfeit tail lights bearing HILUX and armrests bearing LAND CRUISER. It also advertised aftermarket products online using Toyota names and marks.
Toyota alleged trade mark infringement, misleading or deceptive conduct and false representations under the Australian Consumer Law, passing off, and breach of an agreement settling earlier litigation. OZI4x4 had entered liquidation before trial, and neither it nor its sole director, Huss Safi, appeared. Toyota nevertheless proved its claims through admissions, sales records, trap purchases, and witness evidence rather than seeking judgment merely by default.
The Court’s Holding
Justice Wheelahan held that OZI4x4 infringed Toyota’s registered marks by importing and dealing in counterfeit HILUX tail lights and by offering and selling products through advertisements using TOYOTA and HILUX. The LAND CRUISER marks on armrests delivered directly from an overseas supplier did not constitute infringement by OZI4x4 because the relevant course of trade had ended before the goods reached Australian consumers. The company nevertheless contravened the Australian Consumer Law and engaged in passing off through its sales of counterfeit products. Its advertising attracted nominal trade mark damages, but no passing-off damages because Toyota did not prove that the advertising caused damage.
The Court found Safi was not sufficiently personally involved to be jointly liable for trade mark infringement or passing off. He was, however, knowingly concerned in OZI4x4’s Australian Consumer Law contraventions, except those involving the counterfeit HILUX tail lights, and was jointly liable for breach of the earlier settlement agreement. Judgment was entered for Toyota against OZI4x4 for A$171,180 and against Safi for A$21,180, each figure including A$4,800 in prejudgment interest. The company’s award included compensatory and nominal damages, A$100,000 in additional trade mark damages, and A$100,000 in exemplary passing-off damages, with A$50,000 of the punitive awards treated as concurrent.
The Court permanently restrained Safi from involvement in specified false representations about Toyota products, approval, affiliation, or manufacturing standards. It declined to impose a trade mark injunction on him or order delivery up, but ordered both respondents to pay Toyota’s costs, with indemnity costs limited to the wasted preparation of a hard-copy court book for Safi.
Key Takeaways
- An Australian intermediary does not necessarily infringe a mark affixed to goods shipped directly from overseas if the relevant course of trade has ended before the goods reach the consumer.
- The same conduct may support trade mark, consumer-law, passing-off, and contractual liability, but overlapping compensatory and punitive awards must be treated concurrently to prevent double recovery.
- A director may escape joint-tortfeasor liability for infringement and passing off yet remain liable as an accessory under the Australian Consumer Law and as a contracting party.
Why It Matters
The decision draws an important boundary around trade mark “use” in cross-border fulfilment arrangements while confirming that consumer-law and passing-off liability may still reach sales of counterfeit goods even where statutory infringement is not established. It also illustrates the substantial additional and exemplary damages available when counterfeit sales continue despite prior enforcement action and a settlement undertaking.
For directors and online retailers, the case shows that incomplete personal involvement in particular sales may defeat joint-tortfeasor liability without insulating a director from accessory liability, contractual damages, or a permanent consumer-law injunction.