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

In Rock Solid Industries International (Pty) Ltd v Ozi 4X4 Pty Ltd [2025] FCA 334, the Federal Court assessed damages after default judgment had already been entered for infringement of two registered designs and breach of a settlement agreement. The applicant, RSI, owned designs used in its SmartCap vehicle canopy products. The respondent, Ozi, did not properly participate in the case and did not provide the financial information the Court had ordered for the damages phase.

That procedural history shaped the result. Because Ozi did not provide sales and profit data, the Court said it could not assess ordinary compensatory damages on a lost-sales basis. Even so, the Court accepted unchallenged evidence that RSI’s reputation and the commercial value of its designs had been harmed by the sale of identical-looking but inferior and cheaper products. It also found the conduct flagrant enough to justify additional damages. The Court awarded $50,000 for reputational damage and $200,000 in additional damages, plus interest from 9 April 2024 and costs.

RSI sued Ozi over two registered designs and over breach of a settlement agreement made on 9 May 2023. The judgment makes clear that this was not the first dispute between the parties. RSI had already brought proceedings against Ozi in 2022 for infringement of the same designs, and those earlier proceedings ended in settlement. In the later case, RSI alleged that Ozi had not honoured that settlement and had continued to offer infringing products for sale.

The products at the centre of the dispute were part of RSI’s SmartCap range. The Court accepted evidence that RSI’s flagship products were stainless-steel modular vehicle canopies for trucks and utility vehicles, sold under the SmartCap name, including the SmartCap Evo Sport and SmartCap Evo Adventure. RSI had sold these products in Australia since 2017 through its own website, a showroom in Burleigh Heads, and a dealer and retailer network. The Court accepted that RSI had built a significant reputation in Australia for exclusive and well-designed products.

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 main issue in this judgment was not whether Ozi had infringed the designs. That had already been resolved by default judgment and declarations. The question for Anderson J was how damages should be assessed where the respondent had defaulted, had not complied with orders to provide financial information, and the applicant had elected damages rather than an account of profits.

That raised two practical questions. First, had RSI proved a compensable form of reputational damage caused by the infringement? Secondly, were the circumstances serious enough to justify additional damages under the Designs Act 2003 (Cth)? The Court approached those questions by looking at the evidence RSI had filed, the admissions taken to arise from Ozi’s default, and the broader principles from earlier intellectual property cases dealing with reputational harm and additional damages.

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 accepted that Ozi had wilfully engaged in infringing conduct and wrongfully profited from RSI’s valuable designs, causing significant damage to RSI. It found that Ozi had been offering the Ozi Products and Modified Ozi Products for sale since at least November 2021, being around three years. However, because Ozi had not complied with the order requiring detailed financial information, the Court said there was no basis on which it could assess the real impact on RSI’s sales or calculate direct compensatory damages on a lost-sales basis.

Even without that data, the Court accepted RSI’s claim for reputational damage. It held that RSI’s reputation had been damaged by the ongoing infringement over a substantial period, particularly through the diminution of the ongoing value of the designs and RSI’s reputation as a supplier of products with exclusive and novel designs. The Court accepted unchallenged evidence that RSI invested heavily in design, that exclusivity and originality were central to its brand, that Ozi’s products looked identical but were inferior and cheaper, and that this had damaged RSI’s image in the marketplace.

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.

This case is a practical warning for businesses that compete through product appearance. Registered designs can protect the visual appearance of a product in a commercially meaningful way. If your product strategy depends on a distinctive look, the law may protect more than just your logo or brand name. Equally, if you launch a lookalike product, the risk is not limited to being told to stop. The Court may accept that copy products damage exclusivity, pricing power, dealer confidence and customer perception, especially where the original supplier has built a premium brand around originality.

The decision also shows that litigation conduct matters. Ozi’s failure to engage with the proceeding did not create a tactical advantage. It had the opposite effect. The Court accepted RSI’s evidence because it was unchallenged, treated Ozi’s non-compliance as an aggravating factor, and awarded substantial additional damages. If your business is accused of infringement, silence and poor compliance can make the damages outcome worse.

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.

The judgment was delivered on 8 April 2025 by Anderson J in the Federal Court of Australia. The proceeding was determined on the papers for the damages phase because neither party indicated that it wished to make oral submissions. The orders required payment of damages, interest from 9 April 2024, and costs of the damages assessment.

The published reasons are a damages decision following earlier default judgment and declarations. They do not reproduce every underlying pleading, annexure or settlement term in full, so readers should treat this page as a practical case note rather than a substitute for the court record.