Designs For Life: Remedies

• Published date: 24 November 2022
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Gowling WLG
• Author: Mr John Coldham and Kate Swaine

Designs are key assets for many businesses and there are several aspects that are vital to success. In this guide from our Designs for Life series, we take a look at remedies.

Damages

It is important to consider what damages one could either claim from an infringer or could be expected to pay if found to have infringed another's rights. Damages payments are sometimes very significant, while other times there is a risk that they can be dwarfed by the costs of the litigation (which depends both on the damages at stake, as well as the way the case has been fought).

General principle - damages are compensatory

1. Damages awards by the English courts are generally compensatory, intended to put the party who has been injured, or who has suffered, in the same position as they would have been in if they had not suffered the wrong. The claimant is entitled to recover loss that was foreseeable, caused by the wrong, and not excluded from recovery by public or social policy. It is rare (but not impossible) for a claimant to be awarded "punitive" damages, namely those which are purely intended to punish the defendant for its wrongdoing regardless of the claimant's loss.
2. There are two different ways of assessing the level of recompense: damages; or an account of the defendant's profits The winning claimant has the option to elect which they would like and generally the court will order a certain level of disclosure from the defendant before the election needs to be made.

Assessing damages

1. Within the damages head, there are two ways to assess the amount due. One is loss of profits, and the other is a reasonable royalty.
2. If the claimant can prove that a sale made by the defendant to the design represents a sale that would otherwise have been made by the claimant, then the defendant is likely to be ordered to pay an amount equivalent to the profit that the claimant would have made on that sale. This is sometimes referred to as the "substitution principle".
3. It may, however, be difficult to prove that the defendant's sales have caused the claimant to lose sales. For example, if the claimant's products were more expensive than the defendant's infringing products, not all the sales by the defendant necessarily represent a lost sale for the claimant. Some of the defendant's customers might not have bought the item at all at the claimant's price.
4. In such circumstances, the court may adopt an alternative approach, that of the "reasonable royalty". It will calculate what...