Champagne Louis Roederer (CLR) (Roederer) v J Garcia Carrion SA & Ors

In an account of profits for trade mark infringement, the court must make the best assessment reasonably supported by the evidence. Mathematical precision is unnecessary, but the court must not rely on assumptions contrary to the weight of the evidence or on speculation.

There is no automatic deduction for general business overheads. An infringer seeking such an allowance bears the evidential burden of showing that the overheads are properly attributable to the infringement. Likewise, an apportionment for value said to arise from non-infringing aspects of the product requires evidence capable of supporting a rational assessment. A broad-brush figure cannot simply be selected from the air.

The claimant had obtained judgment that the first defendant infringed its UK and EU trade marks for CRISTAL through the marketing and sale of cava under the name Cristalino. The claimant elected an account of profits.

The first defendant failed to comply with disclosure orders and did not participate in the account hearing. The court therefore assessed sales and profitability from the evidence obtained by the claimant, including evidence from other proceedings, retailers and an expert accountant. The central issues were the number of infringing sales, the appropriate profit per bottle, whether general overheads should be deducted, and whether profits should be apportioned to reflect non-infringing features or goodwill.

1. Assessment of sales. The court assessed the number of infringing bottles by evaluating the available invoices, retailer records, evidence from other proceedings and expert analysis. Non-compliance by the infringer justified appropriate evidential inferences, but did not permit assumptions contrary to the weight of the evidence or otherwise unlikely. Mathematical precision was impossible, so the court made the best realistic assessment supported by the evidence.
2. Profit calculation. The unchallenged expert evidence treated the defendant’s contribution margin as a proxy for gross profit. In the absence of evidence challenging the assumptions as to the constancy and application of that margin, the court adopted the resulting calculation.
3. General overheads. Following Hollister v Medik [2013] FSR 24, there could be no automatic deduction for general overheads. The defendant bore the evidential burden of showing that the relevant overheads were properly attributable to the infringing activity. That burden was not met, and no deduction was made. The court relied on the reasoning approved in Dart Industries Inc. v Decor Corp Pty Ltd [1994] FSR 567, and the equivalent observations in OOO Abbott v Design and Display Ltd [2016] FSR 27 and Woolley v UP Global Sourcing UK Ltd [2014] EWHC 493 (Ch).
4. Apportionment. The principle recognised in Jack Wills Ltd v House of Fraser Stores Ltd [2016] EWHC 626 and Hotel Cipriani SrL v Cipriani (Grosvenor Street) Ltd [2010] EWHC 628 requires apportionment where the evidence establishes that the whole profit did not arise from the infringement. Here, the earlier finding that consumer demand was generated by confusion caused by the infringing branding supported attribution of the relevant profits to the infringement. The defendant supplied no evidence supporting another basis for demand. Any further allowance would therefore have been speculative.
5. The recoverable profits were assessed at €1,332,844.64.

The judgment records an earlier decision by Rose J declaring the claimant entitled to an account of profits or an inquiry as to damages for trade mark infringement: [2015] EWHC 2760 (Ch). The present judgment determined the account of profits.