Last year I wrote about a protracted dispute between Leah Madden and Seafolly – both Australian swimwear designers (Madden v Seafolly Pty Limited  FCAFC 30 (24 March 2014)). This article, entitled What you say on social media is not just social, appeared in LawTalk 847, 1 August 2014, p 24.
Ms Madden thought Seafolly had copied her designs and made comments and posted photos on her personal Facebook page about it. Ms Madden also contacted various media outlets about the alleged copying. Seafolly then made press releases in response and accused Ms Madden of being malicious.
Before the Full Court of the Federal Court
Both sued each other for, inter alia, misleading and deceptive conduct and defamation.
The Full Court of the Federal Court found that Ms Madden had defamed Seafolly, but Seafolly had not defamed Ms Madden.
The Full Court also found that Ms Madden had engaged in misleading and deceptive conduct when she posted on Facebook accusing Seafolly of copying. Ms Madden was wrong as a matter of fact about the copying and therefore her postings were misleading and deceptive.
The Full Court of the Federal Court, overturning the Federal Court’s finding on this issue, also found that Seafolly had engaged in misleading and deceptive conduct when it said that Ms Madden acted maliciously in accusing Seafolly of copying.
The most interesting part of that case was the finding that although Ms Madden had posted to her personal Facebook page, her postings were found to be “in trade or commerce” which made her liable under the Trade Practices Act 1974 (Cth) (now the Australian Competition and Consumer Act), the equivalent New Zealand legislation being the Fair Trading Act.
The Full Court awarded Seafolly AU$20,000 in damages as well as Ms Madden having to pay nearly all of Seafolly’s appeal costs. The Full Court also sent the matter back to the Federal Court for a damages assessment in relation to the finding that Seafolly had engaged in misleading and deceptive conduct when it said that Ms Madden acted maliciously in accusing Seafolly of copying.
Back to the Federal Court
In September 2014, the Federal Court issued its damages assessment (Seafolly Pty Ltd v Madden (No 4)  FCA 980 (12 September 2014)). The Federal Court awarded Ms Madden AU$40,000 and reserved costs until the parties had read and considered the judgment.
In coming to the AU$40,000 figure, the Federal Court took into account the serious nature of the allegations and the fact Ms Madden’s business was in its infancy and was therefore vulnerable to adverse publicity. Although Ms Madden could not point to a loss of sales as a result of the Seafolly’s press release, the Federal Court found that she had suffered damage by way of hurt and offence from the misrepresentation.
Depending on the outcome of the costs decision from the Federal Court, the tally currently stands at AU$20,000 to Ms Madden in damages, but a hefty costs bill in the Full Court of the Federal Court having been mostly unsuccessful there.
As I commented on in my earlier article, the legal costs so far would have been eye watering. Given the way the parties have pursued every issue to the death thus far, it would not be surprising if one or both of them appeal the damages finding and the eventual costs decision.
Kate Duckworth is a partner of Catalyst Intellectual Property. She is both a barrister and solicitor and a registered patent attorney. She is passionate about resolving disputes over intellectual property.