ON APPEAL FROM CHANCERY DIVISION
PATENTS COURT MR JUSTICE FLOYD
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE PATTEN
SIR ROBIN JACOB
| SCHÜTZ (UK) LIMITED
|- and -
|WERIT UK LIMITED & ANR
Simon THORLEY Q.C. and Thomas MITCHESON (instructed by Hogan Lovells International LLP) for the Respondent
Hearing dates: 22nd June 2011
Crown Copyright ©
Sir Robin Jacob (giving the first judgment at the invitation of Ward LJ):
(1) Member States shall ensure that the competent judicial authorities, on application of the injured party, order the infringer who knowingly, or with reasonable grounds to know, engaged in an infringing activity, to pay the rightholder damages appropriate to the actual prejudice suffered by him/her as a result of the infringement.
When the judicial authorities set the damages:
(a) they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the rightholder by the infringement;
(b) as an alternative to (a), they may, in appropriate cases, set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.
2. Where the infringer did not knowingly, or with reasonable grounds know, engage in infringing activity, Member States may lay down that the judicial authorities may order the recovery of profits or the payment of damages, which may be pre-established.
Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this."
Effect on non-registration on infringement proceedings
68. Where by virtue of a transaction, instrument or event to which section 33 above applies a person becomes the proprietor or one of the proprietors or an exclusive licensee of a patent and the patent is subsequently infringed, the court or the comptroller shall not award him damages or order that he be given an account for the profits in respect of such a subsequent infringement occurring] before the transaction, instrument or event is registered, in proceedings for such an infringement, [the court] or comptroller shall not award him costs or expenses unless –
(a) the transaction, instrument or event is registered within the period of six months beginning with its date; or
(b) the court or the comptroller is satisfied that it was not practicable to register the transaction, instrument or event before the end of that period and that it was registered as soon as practicable thereafter.
The portions in italics are the original form of s.68, those in bold the form after amendment. It was necessary to do something about s.68 to comply because Art. 13 of the Directive makes the award of damages mandatory.
The Policy behind s.68
The purpose of s 68 is to ensure that "the people who own the monopolies get on the register" per Jacob J in LG Electronics v NCR Financial Solutions Group Ltd  FSR 24 at ; see also Molnycke v Proctor & Gamble  RPC 49 at 109 per Morritt J.
"90. The first clue is of course the Banks Committee report. That report, which led ultimately to the enactment of the 1977 Act, is admissible on a question of statutory interpretation in relation to any implanted recommendation to show the mischief to which s. 68 is directed. It is self-evident that Parliament in adopting the Banks Committee's recommendation set out above intended s. 68 to be, so far as possible, all-embracing and not to have obvious lacunae. The strong recommendation of the Banks Committee which led to s. 68 mandates a purposive reading of s. 33(3) to give effect to the mischief it identified, if that can be achieved."
The Rival Contentions
(a) Schütz is not entitled to financial compensation for any infringement occurring prior to 29 April 2006 (the date of amendment of s.68);
(b) it is not entitled to costs at all.
(a) it is too late for Werit to take a s.68 point at all;
(b) if it is not too late then it accepts that no damages are payable prior to the date of the amendment of the section but it says it is entitled to costs.
The True Construction of Section 68