This was the most significant account of profits in a patent infringement action to come before the higher courts in recent years. The case concerned mains voltage power supplies in passenger airline seats.
The appeal engaged three important issues of law.
First, the Court of Appeal decided the proper approach to causation in an account of profits under s.61(1)(d) Patents Act 1977, by answering the question how does one ascertain the profits derived from the infringement? The Court held that apportionment is normally the appropriate approach ([111]; [159]), but that a ‘differential profits’ approach may in some cases be a useful tool [160]. In either approach, the Court held, contrary to the interpretation placed upon the House of Lords’ decision in United Horse Shoe and Nail Co v Stewart by Laddie J in Celanese International v BP Chemicals, that it is permissible for the court to consider whether there were any non-infringing alternative courses of action by which the defendant could, in the counterfactual, have made some or all of the profits it actually made [101].
Second, the Court of Appeal considered the question of the award of interest on a sum payable on an account of profits, holding that simple interest was available from the date on which the profits were accrued both under the court’s equitable jurisdiction [290], and under s.35A(1) Senior Courts Act 1981 [302].
Third, the Court considered the proper interpretation of s.67 Patents Act 1977 and the rights of an exclusive licensee to recover an infringer’s profits. The Court held that insofar as a defendant carries out acts of infringement of the rights of an exclusive licensee as such, then it is the exclusive licensee, not the patentee, who is entitled to claim the infringer’s profits derived from those infringements, and that in a case brought by a patentee under s.61(1)(d) the court must take into consideration the rights of any exclusive licensee ([257]-[258]).
Hugo Cuddigan KC and Christopher Hall acted for the patentee, Lufthansa. Iain Purvis KC and Piers Acland KC acted for the defendants, Astronics, Safran and Panasonic.
[2026] EWCA Civ 964
