Last Friday, the Federal Court of Australia issued a judgment that did two interesting things:

• gave us some guidance on what website disclaimers are (and are not) required when a business uses a name similar to a competitor; and
• took the rare step of ordering indemnity costs against a party that had rejected a Calderbank settlement offer. According to our research, this was the first time the Court had done that since 2021.

Background

The dispute concerns the name JACKSON for art and craft products.

There were four related corporate respondents: a UK parent company, an Australian operating company that was at the heart of the action, and two more Australian companies who owned shares in the operational one on behalf of the UK parent.

The Court previously found that the first and second respondents contravened sections 18 and 29 of the ACL and engaged in passing off. They did that by operating an Australia-specific website and making representations likely to mislead consumers into believing that there was an association between them and the applicant, which is a well-established Australian art supplies business.

Website Disclaimers

In this new decision, the Court made detailed orders about the form and placement of a website disclaimer to prevent further consumer deception. It considered expert evidence on user attention and website design. It rejected both parties’ preferred approaches:

• Pop-Up Disclaimer: A disclaimer must appear in a pop-up each time a user visits the website in a new browser session. It must be clear, prominent, and require acknowledgment before access. This was most likely to capture attention and reduce ongoing deception.
• Footer Disclaimer: The disclaimer must also appear at or near the bottom of every page, in a font no smaller than body text, but not as a sticky header or banner, which the Court considered likely to be ignored due to banner blindness.
• No Hyperlink Requirement: The Court declined to require a hyperlink to the applicant’s website, finding it unnecessary for consumer protection and potentially counterproductive by increasing perceived association.
• No Requirement for Other Media: No disclaimer is required in other media, such as telephone or social media channels, as the contravening conduct was limited to the website.

Costs

Oh yeah, disputes drag on. Long after the thrill of litigation is gone.

The costs outcome turned on the parties’ relative success and whether the applicant acted reasonably in rejecting settlement offers. These included a Calderbank offer and formal offers of compromise under the Federal Court Rules. Both were designed to have costs consequences if rejected.

• First and Second Respondents: The applicant established contraventions against these respondents. That was a bad start for the respondents’ offer. But the applicant did not obtain all the relief sought against them. Rejecting the Calderbank offer was not unreasonable. Doing that would not have delivered the key consumer protection relief ultimately ordered. Costs were awarded to the applicant on a party-party basis, with a 15% discount to reflect its partial failure against these respondents.
• Third and Fourth Respondents: The applicant’s claims against these respondents were completely unsuccessful. The applicant unreasonably rejected formal offers of compromise that would have resulted in dismissal with no order as to costs. Because the end-result was worse for the applicant than that, these respondents were awarded their costs on a party-party basis up to a specified date, and on an indemnity basis afterwards.

Key Differences in Costs Outcomes

The distinction lay in the reasonableness of rejecting settlement offers. The applicant was not penalised for rejecting the first and second respondents’ Calderbank offer, as it was not clearly superior to the outcome at trial. By contrast, rejecting the third and fourth respondents’ offers was unreasonable given the weakness of those claims, justifying indemnity costs from the dates of the offers.

You could be forgiven for thinking outcome for the third and fourth respondents is natural an deserved. It probably was. But the interesting thing about it is that indemnity costs orders following rejected settlement offers remain rare in IP matters. The most recent example we found was from November 2021: Ross, in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias (No 2) [2021] FCA 1334.

Conclusion

Depending on how this decision ages under the pressure of critical review, it looks useful for practitioners whose job it is to help traders stay out of trouble. It provides re-usable guidance on the design of website disclaimers to address misleading conduct.

And practitioners might as well continue to get excited about making Calderbank offers, even though they only occasionally flower.

For those interested in this new case, the case citation is Jacksons Drawing Supplies Pty Ltd v Jackson’s Art Supplies Ltd (No 2) [2025] FCA 1127.