Link Up Mitaka Ltd (t/a Thebigword) v Language Empire Ltd & Anor

Damages for trade mark infringement and passing off are compensatory, not punitive. The claimant bears the burden of proving loss, but damages may be assessed liberally where the defendant’s wrongdoing makes precise quantification difficult. The court must compare what would probably have happened without the wrong with what actually happened. Causation is determined on the balance of probabilities. Where the evidence is incomplete or deliberately obscured, the court may use the best available evidence, extrapolate from a reliable sample and apply a justified uplift, provided the award remains compensatory.

The claimant obtained judgment in default against the defendants for trade mark infringement and passing off concerning websites using signs connected with the claimant’s translation and interpretation business. An inquiry into damages was ordered.

The inquiry concerned whether enquiries generated by the websites had led to sales, whether those sales deprived the claimant of business, and the appropriate assessment of damages, including any reasonable royalty or additional sum for unfair profits. The court also considered the reliability of the defendants’ evidence and the evidential consequences of incomplete disclosure.

1. Liability and sales. The court found that the defendants’ websites operated for 34 months, generated substantially more enquiries than the defendants disclosed, and that the defendants converted enquiries into significant sales. The document relied on by the defendants was a cherry-picked and constructed sample rather than a complete record.
2. Loss and causation. Applying the principles adopted from SDL Hair Ltd v Next Row Ltd [2014] EWHC 2084 (IPEC), the claimant was entitled to compensation putting it in the position it would have occupied absent the wrongdoing. The claimant proved causation on the balance of probabilities. The websites had been designed to capture customers searching for the claimant or comparable specialist services, and the court inferred that the lost sales would otherwise have been made by the claimant.
3. Quantification. Precise calculation was impossible because the defendants had withheld or obscured relevant evidence. The court therefore used the available 38-enquiry sample, assessed its estimated value, applied the claimant’s profit rates, and extrapolated the result across the 34-month operating period. This produced lost profits of £106,533.
4. Uplift. The sample understated the number, quality and value of the enquiries and failed fully to reflect repeat business from new customers. A 33% uplift was justified. The court emphasised that the uplift remained compensatory and must not become punitive. Damages were therefore assessed at £142,044.
5. The claimant did not pursue a separate award for unfair profits after receiving the uplift, so that issue was not determined.

The claimant obtained judgment in default on 4 May 2017, with an inquiry as to damages or an account of profits. The present first-instance judgment determined the inquiry and assessed damages at £142,044.