The Federal Circuit Court of Australia has handed down its decision in a case (Vertical Leisure Limited & Anor v Auz Origin Pty Ltd & Anor [2016] FCCA 2372) finding liability for IP infringement (causes of action for copyright infringement, trade mark infringement, passing off and liability for misleading and deceptive conduct) in relation to counterfeit dance poles.

The Applicants Vertical Leisure Limited (UK) and Dance4me Pty Ltd (Australia) produce and distribute the world’s leading dance pole brand, X-POLE.  The X-POLE products are highly engineered, providing safety for consumers.  The Respondents’ products were found to lack these safety features.

The corporate veil is pierced – again.

This is the Applicants’ second round with Respondent Mr Huirong (Bill) Chen.  On 5 September 2014 the Federal Circuit Court of Australia (Vertical Leisure Limited v Skyrunner Pty Ltd [2014] FCCA 2033) (the First Decision) awarded the Applicants nearly $400,000 in damages for infringement of intellectual property rights in their dancing poles, logos, photographs, instructional manuals and DVDs.  In that case Mr Chen was held to be personally liable including liability for additional damages of $300,000. On the issue of flagrancy, the Court thought appropriate to award a substantial award of additional damages to mark the Court’s recognition of the opprobrium attached to the Respondent’s conduct.

The current proceedings involve continued infringing sales by Mr Chen and new corporate entities.  However, the corporate veil was of limited value to Mr Chen in this case in that the Court found that Mr Chen authorised, directed or procured or had a close personal involvement in the acts of the various corporate entities involved in the infringing activity and that he is thus personally liable as a joint tortfeasor.

Remaining issues are a hearing on damages for the IP infringement and liability of Respondent Mr Chen for Contempt of Court (the penalties of which may involve a fine or jail) in relation to breach of the Court orders of the First Decision.

Gestalt Law is pleased to have assisted the Applicants with protection of their intellectual property.

The decision is available here.

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