Federal Court rules against cosmetics company for misleading conduct and trademark infringement

The company defaulted by not complying with court orders and failing to participate in proceedings

Federal Court rules against cosmetics company for misleading conduct and trademark infringement

The Federal Court has ruled that cosmetics company AFI Cosmetic Pty Ltd and director Shikai Han engaged in misleading and deceptive conduct by using the trademark "HEALTHERIES."

The court's judgment included findings of trademark infringement, copyright violations, and passing off, resulting in significant financial penalties and injunctions.

The case started when Vitaco Health initiated proceedings with an urgent request for interlocutory injunctive relief to stop the online publication of two websites that allegedly infringed and misleadingly represented Vitaco’s trademarks.

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Vitaco Health sought several declarations and orders. They claimed that the respondents, AFI and Han, had infringed Vitaco’s Australian registered trademarks, infringed Vitaco’s copyright in specific artistic works, violated sections 18(1) and 29(1)(g) and (h) of the Australian Consumer Law (ACL), and engaged in the tort of passing off.

The Federal Court found that the respondents had defaulted by not complying with court orders and failing to participate in the proceedings. The court determined that AFI Cosmetic and Shikai Han used the "HEALTHERIES" marks to promote their products, thereby infringing Vitaco’s registered trademarks.

Furthermore, the court found that the respondents reproduced and published Vitaco’s copyrighted artistic works online without authorisation and made misleading representations, suggesting a false association with Vitaco, thereby breaching the ACL and engaging in passing off.

The court granted several forms of relief. It issued declarations confirming the respondents' infringement of trademarks and copyrights, their violation of the ACL, and their engagement in passing off. The court issued injunctions to stop the infringing activities and ordered the transfer of the infringing domain names to Vitaco.

The court awarded $280,000 in damages, including $30,000 for reputational loss and $250,000 in additional damages for the flagrant infringement and misleading conduct. The court also cancelled the second respondent’s trademark registration under s. 88 of the Trade Marks Act 1995 (Cth).

The court emphasised the respondents' deliberate and flagrant infringement of Vitaco’s intellectual property rights and their misleading conduct towards consumers. The judgment aims to deter such conduct and protect Vitaco’s reputation and trademarks. The court ordered the respondents to bear the costs of the proceedings.

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