Lufthansa Technik AG v Astronics Advanced Electronic Systems & Ors

In a split patent trial, a patentee may in principle raise unadjudicated infringement issues during an inquiry as to damages or an account of profits. That entitlement can be displaced by a later court order. The order must be construed from its natural and ordinary language in context, including its history, object and the reasons given for making it. Recitals and operative provisions may be read together where the order is unclear in isolation. A finding that issues have been abandoned, coupled with wording that they no longer require determination and no continuing liberty to apply, can preclude their revival in the quantum phase. A late appeal is subject to the Denton approach: serious and significant delay, no good reason and no compelling circumstances justify refusing relief.

Lufthansa brought patent infringement proceedings against Astronics, Safran and Panasonic. Following a liability judgment finding infringement, Morgan J directed an inquiry as to damages or an account of profits and made a consequential order concerning infringement issues previously adjourned with liberty to apply: [2020] EWHC 1968 (Pat); [2020] EWHC 2296 (Pat).

During the account, Lufthansa sought to amend its pleadings to advance the adjourned issues. Recorder Campbell held that Morgan J’s order prevented this, while allowing amendments concerning unresolved issues: [2023] EWHC 1136 (Pat). Lufthansa appealed and also sought permission to appeal Morgan J’s order out of time. The central questions were the meaning and effect of Morgan J’s order and whether relief from sanction should be granted.

Disposition. Permission to appeal against Recorder Campbell’s order was granted, but the appeal was dismissed. Relief from sanction and an extension of time to challenge Morgan J’s order were refused.

1. In principle, a patentee may raise additional infringement issues during an inquiry as to damages or an account of profits, although procedural circumstances may prevent this. The principle was stated by reference to Unilin Beheer BV v Berry Floor NV [2007] EWCA Civ 364.
2. A court order is construed by giving its words their natural and ordinary meaning in context, including the historical context and the order’s object. The reasons given for making the order are admissible and may be critical where the operative wording is unclear. Recitals and operative provisions may therefore be read together with the reasons. The approach in Sans Souci Ltd v VRL Services Ltd [2012] UKPC 6 was applied.
3. Mackenzie v Duke of Devonshire [1896] AC 400 was distinguishable. It concerned a clear trust deed whose recital could not alter the operative provision. Morgan J’s order was a court order, its operative wording was unclear in isolation, and the recital stated a basis on which the order was made.
4. Read with Morgan J’s reasons, the recital that the Adjourned Issues no longer needed determination meant that Lufthansa had abandoned them. The absence of a continuing liberty to apply discharged the earlier liberties and prevented Lufthansa from raising the issues on the account.
5. Under the Civil Procedure Rules 1998, the late appellant’s notice was subject to the Denton v TH White Ltd approach [2014] EWCA Civ 906, as explained in R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633. The breach was serious and significant because of the delay and its effect on proceedings. Lufthansa had no good reason for default, had not acted promptly, and identified no compelling factor justifying relief. Relief would have been refused even if the proposed appeal had a real prospect of success.

1. Court of Appeal (Civil Division) Permission to appeal against Recorder Campbell’s order was granted, but the appeal was dismissed. Relief from sanction for the late appeal against Morgan J’s order was refused.
2. High Court, Patents Court Recorder Campbell held that Morgan J’s order prevented Lufthansa from advancing the Adjourned Issues on the account, while permitting amendments concerning the Unresolved Issues: [2023] EWHC 1136 (Pat).
3. High Court, Patents Court Morgan J ordered an inquiry as to damages or an account of profits and held that the Adjourned Issues no longer needed determination: [2020] EWHC 2296 (Pat). The underlying liability judgment was reported at [2020] EWHC 1968 (Pat).