Amphibious boat builder Sealegs International has been served with a $6.8 million damages claim following a long-running legal case it lost on appeal.
Sealegs, owned by Future Mobility Solutions, originally won a copyright injunction against rival companies Orion Marine and Smuggler Marine preventing them producing or marketing their boats.
That decision was overturned by the Court of Appeal in August 2019 and Sealegs was unsuccessful in applying for leave to appeal to the Supreme Court.
Orion and Smuggler said today they had served papers on Sealegs seeking damages of $6.8m “plus a further amount to be quantified” for reputational damage.
A statement of claim, obtained by the Herald argues that Orion and Smuggler had suffered loss of profit, reputational damage from media reports and public statements issued by Sealegs, loss of staff and know-how, inability to invest in R&D, design validation or plant and equipment and damage to relationships with suppliers.
Being excluded from the market for two and a half years meant Orion had lost its “market leader position” in relation to design innovations.
Orion director Darren Leybourne said a defamation claim would also be filed next year seeking compensation, a retraction and an apology from Sealegs for statements made by its director David McKee Wright.
“Prior to filing the papers we proposed an out of court settlement to Sealegs which to date remains unanswered despite expecting a response by early December 2020,” Leybourne said, adding that he expected the total of all claims to be approximately $10.5m.
McKee Wright was not available for comment and did not respond to email.
The damages claim arose out of Sealegs’ allegations in 2016 that Smuggler, Orion, Stryda Marine, and a Chinese company linked to Orion’s owner breached copyright for a three-legged amphibious vessel system.
The High Court found that former Sealegs employees had breached copyright over the design and manufacture of amphibious kits for boats.
However, the Court of Appeal lifted the restraint in August 2019, after finding there were no visual similarities between the leg assembly arrangements of Sealegs and Orion.
The Supreme Court then refused to grant Sealegs leave to appeal in December 2019, saying the penultimate court had made no error of principle.
In May Sealegs made a payment of $400,000 in court costs to Orion Marine.
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