Lifestyle Equities CV and another v Ahmed and another
[2024] UKSC 17
Equisafety Limited v Battle, Hayward and Bower Limited & Anor
21 July 2023
[2023] EWHC 1821 (IPEC)
High Court
Equisafety sued Battle for using their trademark. The judge decided Battle made about £24,000 profit from doing so, but Battle gets to subtract some costs. After considering what part of the profit was directly due to the trademark, Equisafety got around £12,500, plus interest for being kept out of their money.
Key Facts
- •Equisafety Ltd (Claimant) manufactures high-visibility equestrian products, selling a jacket under the "Mercury" trademark.
- •Battle, Hayward and Bower Ltd (First Defendant) sold products with the "HyVIZ Silva Mercury Reflective" label.
- •Following a trial, Battle was found liable for trademark infringement and passing off.
- •Equisafety elected for an account of profits.
- •The dispute concerns the accuracy of Battle's profit figures and the appropriate method for calculating the account of profits.
Legal Principles
A claimant in an intellectual property case must choose between an inquiry as to damages or an account of profits; they cannot have both.
Hollister Inc v Medik Ostomy Supplies Ltd [2013] FSR 24 at [54]-[56]
The purpose of an account of profits is to deprive the infringer of profits made by the infringement, not to compensate for the claimant's losses.
Hollister Inc v Medik Ostomy Supplies Ltd [2013] FSR 24 at [69]
In an account of profits, allowable expenses include costs solely associated with infringing acts and a proportion of general overheads, unless those overheads would have been incurred regardless of the infringement.
OOO Abbott v Design and Display Ltd [2016] FSR 27; Bei Yu Industrial Co v Nuby (UK) LLP and another [2022] EWHC 652 (IPEC) at paragraph 5
If infringement does not "drive" the sale, the overall profit should be apportioned between infringing and non-infringing elements.
OOO Abbott v Design and Display Ltd [2016] EWCA Civ 95 at [34]-[37]; Jack Wills Ltd v House of Fraser (Stores) Ltd [2016] EWHC 626 (Ch)
Interest is awarded to compensate claimants for being kept out of money, considering the position of persons with the claimants' general attributes.
Carrasco v Johnson [2018] EWCA Civ 87 at [17]
Outcomes
Battle's gross profit from infringement was £24,356.
The court accepted Battle's figures after considering challenges to their accuracy and resolving discrepancies in documentation.
Battle was allowed to deduct 14% for general overheads.
The court accepted Battle's argument that these overheads would have been incurred regardless of the infringement, and adopted the "sales revenue" approach to apportionment.
60% of the net profit was attributed to the infringement.
The court considered the factors driving sales and concluded the infringement was a significant factor but not the sole factor.
Interest was awarded at 2.5% above the average base rate for the relevant period, compounded annually.
The court considered the general presumption that a business would have borrowed less had it been paid the profits due.
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