Damages sought for infringement, passing off, breach of Australian Consumer Law
Australia’s Federal Court has deemed it appropriate to order the applicant in a trademark infringement case to pay 80 percent of the first respondent’s costs, given its abandoned claims for tort and breach of the Australian Consumer Law (ACL).
In Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd (No 3), [2025] FCA 624, the applicant was the registered owner of three trademarks called the plain word mark, the fancy word mark, and the red man logo. Each mark incorporated the word “mercato” relating to certain goods and services.
The first respondent, Mercato Centrale Australia Pty Ltd, used or planned to use specific marks including the same word in connection with the same or similar goods and services.
The applicant brought an application requesting relief for infringement of its three marks under the Trade Marks Act 1995 (Cth) (TMA). It also asked for damages for breach of the ACL and under the general law of passing off.
Later, during the trial, the applicant abandoned its tort and ACL claims, as well as its claims for relief against the second respondent in his personal capacity.
Mercato Centrale cross-claimed for the cancellation of the plain word mark and the fancy word mark and a limitation of the red man logo’s registration.
The Full Court ruled that two marks used or intended for use by Mercato Centrale were deceptively similar to the applicant’s plain word mark. The Full Court held that cancelling the plain word mark meant the applicant’s originating application for infringement should fail.
The Full Court accepted Mercato Centrale’s arguments on the appropriate interpretation of s 62(b) of the TMA. The Full Court rejected the applicant’s arguments regarding the alleged infringement of its fancy word mark and red man logo.
The Full Court’s orders dismissed the applicant’s originating application, allowed Mercato Centrale’s cross-claim, and entirely cancelled the plain word mark.
The Full Court remitted the question of costs to the Federal Court. The applicant alleged that it was liable for only 50 percent of Mercato Centrale’s costs.
The Federal Court of Australia ordered the applicant to pay the following amounts, potentially subject to taxes:
The Federal Court acknowledged that it ordinarily would have granted the applicant the 50-percent apportionment it requested, based on the Full Court’s outcome and the time Mercato Centrale spent addressing the distinctiveness and ownership issues.
However, in deciding the proper apportionment, the Federal Court considered it appropriate to order the applicant to pay 80 percent of Mercato Centrale’s costs, given its abandoned claims against Mercato Centrale and the wasted costs associated with such discontinued claims.
