Aggravated, Exemplary and Restitutionary ... - Law Commission

The classic statement in an English case of the purpose of an account of profits
was made by Slade J in My Kinda Town Ltd v Soll, 212
in which the plaintiffs claimed
that the defendants were passing off their chain of restaurants as the plaintiffs’.
Slade J said, “The purpose of ordering an account of profits in favour of a
successful plaintiff in a passing off case ... is to prevent an unjust enrichment of the
defendant”. 213
1.21 In Colbeam Palmer Ltd v Stock Affiliates Pty Ltd, 214
an infringement of trade mark
case, Windeyer J said the following:
The distinction between an account of profits and damages is that by
the former the infringer is required to give up his ill-gotten gains to the
party whose rights he has infringed: by the latter he is required to
compensate the party wronged for the loss he has suffered. The two
computations can obviously yield different results, for a plaintiff’s loss
is not to be measured by the defendant’s gain, nor a defendant’s gain
by the plaintiff’s loss. Either may be greater, or less, than the other. If
a plaintiff elects to take an inquiry as to damages the loss to him of
profits which he might have made may be a substantial element of his
claim ... But what a plaintiff might have made had the defendant not
invaded his rights is by no means the same thing as what the defendant
did make by doing so ... [T]he account of profits retains the
characteristics of its origin in the Court of Chancery. By it a defendant
is made to account for, and is then stripped of, profits he has made
which it would be unconscionable that he retain. These are profits
made by him dishonestly, that is by his knowingly infringing the rights
of the proprietor of the trade mark. This explains why the liability to
account is still not necessarily coextensive with acts of infringement.
The account is limited to the profits made by the defendant during the
period when he knew of the plaintiff’s rights. So it was in respect of
common law trade marks. So it still is in respect of registered trade
marks ... I think that it follows that it lies upon a plaintiff who seeks an
account of profits to establish that profits were made by the defendant
knowing that he was transgressing the plaintiff’s rights. 215
1.22 Turning to the statutory intellectual property torts, it is laid down in statute that an
account of profits may be ordered for infringement of a patent, 216
infringement of
copyright, 217
infringement of design right, 218
and infringement of performer’s
property rights. 219
Statutory provisions further lay down that the standard of fault
211 Gillette UK Ltd v Edenwest Ltd [1994] RPC 279.
212 [1982] FSR 147, reversed on liability [1983] RPC 407.
213 [1982] FSR 147, 156. See also Potton Ltd v Yorkclose Ltd [1990] FSR 11 (infringement of
copyright).
214 (1968) 122 CLR 25 (HCA).
215 (1968) 122 CLR 25, 32, 34-35.
216 Patents Act 1977, s 61(1)(d)
217 Copyright, Designs and Patents Act 1988, s 96(2).
218 Copyright, Designs and Patents Act 1988, s 229(2).
219 Copyright, Designs and Patents Act 1988, s 191I(2).
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