Fabio Perini SPA v LPC Group Plc & Ors

In a patent damages inquiry, the inquiry is ordinarily confined by the originating order and the causes of action established at trial. A claimant cannot use it to reopen a pleaded issue already determined, or to introduce a substantively new cause of action where doing so would be unfair or inconvenient. Damages for infringement are compensatory and may include lost profit on convoyed goods where that loss is not too remote. For a patented process, the ordinary inference that infringement diverted sales may establish causation, subject to contrary evidence. The claimant may recover for a substantial chance of obtaining a contract, assessed globally by reference to the hypothetical market without the infringement.

The judgment concerned the inquiry as to damages following the patent infringement decision in Fabio Perini SpA v LPC Group Plc & Ors, [2009] EWHC 1929 (Pat), and the dismissal of the appeal, [2010] EWCA Civ 525. The claimant sought damages against PCMC and LPC for infringement of Patent 929.

The issues included whether further supply and user cases could be advanced in the inquiry, the scope of recoverable loss, causation, loss of chance, convoyed goods and the assessment of profits. The central questions were whether the proposed issues were within the inquiry and what losses were caused by the established infringing use.

1. Scope of inquiry. The inquiry was confined to LPC’s infringement by use, for which PCMC was jointly liable, and to PCMC’s liability as joint tortfeasor for comparable infringing use by Georgia-Pacific. The supply case against PCMC concerning LPC had already been determined and was res judicata. Alternatively, reopening it would have been an abuse of process because the relevant material was available at trial and the claimant had made a tactical decision not to advance the case fully. The inquiry could not be used to revisit that decision.

2. A patent inquiry concerns the relief arising from established causes of action. In appropriate cases, fairness and convenience may permit additional examples of the same type of infringement to be considered. The court should address any proposed new cause of action at the outset. A new supply cause of action could not be introduced here by reference to a different customer.

3. Causation. Damages restore the patentee to the position it would have occupied absent the infringement. The legal burden remained on the claimant. However, where a manufacturer exploits a patent through products or a process, the court may infer that infringement diverted sales from the patentee. The infringer may rebut that inference. The assessment must use commercial common sense and recognise the patent monopoly. No distinction in principle applied between product and process patents.

4. The relevant question was whether, without the infringing product or process, the patentee would or might have secured the infringer’s contract. It was not necessary to prove why the infringer obtained the actual contract. The claimant could recover for a substantial chance of making the sale, even where the hypothetical conduct involved a customer who was a party to the proceedings.

5. Convoyed goods and assessment. The recoverable chance extended to the whole converting line, not merely the patented tail sealer, because commercial reality showed that customers bought complete lines from one supplier. Additional equipment and after-sales were ancillary and were not too remote in principle. Perini was awarded damages on a 65% chance of selling two lines to LPC and a 25% chance of selling the speculative line to Georgia-Pacific, with after-sales subject to further assessment. The court declined to decide the alternative royalty issues.

The judgment determined the inquiry as to damages following the infringement decision in [2009] EWHC 1929 (Pat) . An appeal against the order was dismissed by the Court of Appeal in [2010] EWCA Civ 525 .