Ifejika v Ifejika & Anor

In an account of profits for unregistered design-right infringement, the court may adopt a broad-brush assessment where the evidence does not permit precise calculation. The recoverable profit must be confined to profit attributable to the infringing feature, assessed by reference to both its physical and functional importance. Where a licence of right is available, the statutory cap applies only if the defendant undertakes to take such a licence. An undertaking may be given before the final order, and the court may treat the proceedings as if it had been given where that produces no different result.

The claimant had previously succeeded in establishing infringement of UK unregistered design rights in contact-lens cleaning products marketed by the second defendant. An inquiry, or alternatively an account, was ordered in relation to the AMO product. The present hearing concerned the profit attributable to one infringing feature, the undercut aspect, after the other relevant design-right feature had expired.

The court determined the number of infringing products sold, the defendants’ net profit, the proportion attributable to the undercut feature, and the effect of the availability of a licence of right under the Copyright, Designs and Patents Act 1988.

1. Account assessed. The court found that approximately 510,000 infringing AMO products had been sold. Applying the evidence on purchase prices and tooling charges, gross profit was assessed at £803,000. After allowing £12,350 for additional packaging, net profit was rounded down to £790,000.
2. Attribution. The proportion of net profit attributable to the undercut feature could not be assessed precisely. Physical size alone was not an appropriate measure. Functional importance was also relevant. On the available evidence, 2% was the appropriate broad-brush apportionment, producing £15,800.
3. Licence of right. Licences of right were available under section 237 of the Copyright, Designs and Patents Act 1988. Under section 239(1)(c), the statutory limit would matter if the defendant had undertaken to take a licence. Section 239(2) permitted the undertaking before the final order. The judge treated the proceedings as if the undertaking had been given, but concluded that there was no realistic prospect that the Comptroller would settle a licence at less than 1% of net profits. The statutory limit therefore made no difference.
4. Order. The second defendant was ordered to pay the claimant £15,800.

This was a first-instance account of profits following an earlier judgment in the same proceedings, in which infringement had been established and an inquiry or account ordered in relation to the AMO product.