Rock Solid Industries International (Pty) Ltd v Ozi 4X4 Pty Ltd

RSI’s evidence was that Ozi’s products and modified products looked identical to RSI’s SmartCap products, but were inferior in finish and materials and sold at substantially lower prices. RSI said this damaged its reputation for originality and exclusivity, created confusion in the market, and led to complaints from customers and dealers about knock-off products. The Court accepted that evidence because it was unchallenged.

Ozi’s non-participation was central to what happened next. Ozi did not appear on the return date, did not file the required address for service, and did not file a defence. Default judgment was entered on 9 April 2024. The Court made declarations that Ozi had infringed the registered designs and breached the settlement agreement. It also imposed broad restraints on making, importing or selling the relevant products and products substantially similar in overall appearance to the designs.

After liability was established, the Court made procedural orders requiring Ozi to provide detailed affidavit evidence and documents about the number of products manufactured, imported or purchased, the cost of goods, the number sold, sale prices, dates of sale, disposals, profits, overhead allocation methods, and stock on hand. That information would ordinarily be critical to assessing damages or an account of profits. The orders were later varied to include a penal notice. Ozi still did not comply.

Although an affidavit from its director was filed in July 2024, the Court said it did not contain any of the information required by the orders.

RSI then elected to seek damages rather than an account of profits. It filed written submissions and affidavit evidence in support of reputational damages and additional damages. Ozi filed no affidavits in response on damages and no submissions. The Court had previously ordered that the matter would be determined on the papers unless either party requested oral submissions. No party did so, so the damages assessment was decided on the papers.

The Court noted that Ozi was taken to have admitted, by reason of default, that it had made a profit from the infringing conduct and that RSI was entitled to additional damages as pleaded. But the Court still had to decide what amount should be awarded. The absence of sales data meant the Court could not calculate the real impact on RSI’s sales in the usual way. That did not end the inquiry.

The Court considered whether the evidence supported a separate award for damage to reputation and whether Ozi’s conduct was sufficiently flagrant, deliberate and uncooperative to warrant a substantial additional award.

The Court also accepted evidence that the harm extended beyond abstract brand value. RSI had developed a significant reputation with retailers and retail customers in Australia. Customers valued the products because they were exclusive. If copy products were available more cheaply, customers might no longer pay premium prices. Dealers might reduce orders or terminate distribution arrangements if similar products remained available at lower prices.

RSI had already received complaints from Australian dealers and complaints from customers about knock-off products, as well as instances of confusion between knock-off products and genuine SmartCap products. The Court assessed reputational damage at $50,000.

On additional damages, the Court found Ozi’s conduct flagrant. It emphasised that this was the second time RSI had brought proceedings against Ozi over the same designs, that the first proceeding had ended in a settlement under which Ozi undertook to cease sale of the Ozi Products, and that Ozi nevertheless continued to offer the Ozi Products and Modified Ozi Products for sale.

The Court also found that Ozi continued infringing after being put on notice of RSI’s claim and appeared to continue offering Modified Ozi Products for sale via its website even after default judgment, in breach of the Court’s orders. Screenshots suggested the products may even have been discounted, potentially to clear stock.

The Court further relied on Ozi’s lack of engagement with the proceeding, its failure to provide information about sales and profits, the unfair competitive advantage it gained by copying RSI’s designs without incurring the same design overheads, the apparent size of its business, and the need for both specific and general deterrence. RSI had sought $300,000 in additional damages, but the Court considered $200,000 appropriate in the circumstances.

The final award was therefore $250,000 in total, made up of $50,000 for reputational damage and $200,000 in additional damages. Interest was ordered from 9 April 2024, and Ozi was ordered to pay RSI’s costs of the damages assessment, with costs to be assessed on a lump sum basis if not agreed.

Settlement agreements also need to be treated as operational obligations, not just legal paperwork. Here, the Court treated the earlier settlement and the alleged continuation of sales afterwards as a major reason why the later conduct was flagrant. If a business settles an IP dispute and undertakes to stop selling a product, that usually means more than removing one listing.

It may require stock checks, website updates, dealer communications, marketplace takedowns, and internal sign-off that the product is no longer being offered for sale in any form that remains problematic.

Another practical lesson is record-keeping. Courts often need sales, stock and margin information to assess damages or profits. If your business does not keep those records, or does not produce them when ordered, that may stop the Court from calculating ordinary loss precisely. But it does not mean the case becomes cheaper. In this decision, the absence of records contributed to the seriousness of the conduct and supported a substantial additional damages award.

Businesses should also be cautious about assuming that a modified version of a product is safe. The judgment refers to both Ozi Products and Modified Ozi Products, and the restraints extended to products substantially similar in overall appearance to the registered designs. A superficial redesign may not remove the legal risk. If a complaint has been made, any redesign should be reviewed carefully before relaunch.

For design owners, the case is also useful. It shows that if the other side’s conduct makes precise lost-sales analysis impossible, the Court may still award damages for reputational harm and additional damages where the evidence supports that outcome. Evidence about exclusivity, premium pricing, dealer expectations, customer confusion and complaints can be commercially important.