Lufthansa Technik AG v Astronics Advanced Electronic Systems & Anor

On an account of profits for patent infringement, factual causation does not establish that all profits were derived from the infringement. The court must identify the inventive contribution and distinguish profits attributable to it from profits produced by other concurrent causes.

All profits are recoverable only where the infringing product or process would not otherwise have existed, or the invention was essential to the whole product or process. A differential-profits analysis using a non-infringing alternative may assist, but is not mandatory. Where neither route resolves the issue, the court should make a fair apportionment. A comparable royalty agreement may provide a sound evidential basis for that exercise.

An exclusive licensee is entitled to the share of infringing profits attributable to infringement of its exclusively licensed rights. Pre-judgment interest may be awarded on an account of profits from the infringement date.

Lufthansa Technik AG, proprietor of a patent for an aircraft-seat power-supply safety feature, obtained findings of infringement against Astronics, Safran and Panasonic. Following its election for an account of profits, Leech J quantified the recoverable profits, apportioned Astronics’ and Panasonic’s profits at 13%, awarded interest, and declined to make a provisional order concerning possible recovery in France and Germany.

The principal decision was [2025] EWHC 375 (Pat). Further judgments revised Safran’s figure and dealt with interest and double recovery: [2025] EWHC 940 (Pat) and [2025] EWHC 1034 (Pat).

Lufthansa appealed the account. The defendants appealed the interest and double-recovery rulings. Astronics and Panasonic also contended that KID held an exclusive licence under the 1998 Teaming Agreement, so that Lufthansa could not recover KID’s share of the relevant profits.

1. Lufthansa’s appeal was dismissed. The judge had not successively applied a differential-profits analysis and an apportionment. He had found factual causation after the defendants failed to establish their proposed non-infringing alternative, but he had not performed a differential-profits exercise.

   For an account under Patents Act 1977, section 61(1)(d), factual causation is insufficient. The court must identify profits derived from the inventive contribution, rather than profits merely arising on the occasion of infringement. The first question is whether the product or process would not have existed but for infringement, or whether the invention was essential to the whole product or process. If not, fair apportionment ordinarily distinguishes infringing from non-infringing contributions.

2. A non-infringing alternative is a potentially useful evidential tool, not a necessary stage in every account. Its absence does not entitle the patentee automatically to all profits. Here, the patent was necessary to market access, but regulatory compliance, product quality, power-management functions and commercial factors also contributed to the profits. The judge was therefore right to apportion.

3. The royalty in the 2014 Teaming Agreement was an available and permissible guide to the Patent’s relative contribution to net profits. A licence-based analysis may use the agreed royalty as evidence of the value attributed to the intellectual property within a profitable complex product. Lufthansa had not advanced a pleaded alternative methodology or percentage.

4. Astronics’ and Panasonic’s KID appeal was allowed. Applying German contractual interpretation principles, the 1998 Teaming Agreement gave KID exclusive responsibility for development, manufacture and marketing of the Advanced System. Its grant of an exclusive user’s right was therefore an exclusive licence within section 130(1) of the Patents Act 1977, notwithstanding Lufthansa’s retained installation and promotional roles.

   Under section 67, an exclusive licensee stands in the patentee’s position for profits derived from infringement of the licensed rights. There is one pot of infringing profits. Lufthansa could not recover the share attributable to KID’s exclusively licensed rights after KID had compromised its claim. The parties accepted that the practical reduction would be 50% for the relevant period.

5. The defendants’ appeals on double recovery and interest were dismissed. Potential double recovery in French and German proceedings was for those courts to address under their own laws. An English provisional award would improperly intrude upon that task. Equity and section 35A(1) of the Senior Courts Act 1981 authorised compensatory pre-judgment interest from the infringement date. Interest on US-dollar awards was properly assessed by reference to a US-dollar rate.

• Court of Appeal (Civil Division): Allowed Astronics’ and Panasonic’s appeal on KID apportionment, but dismissed Lufthansa’s account-of-profits appeal and the defendants’ appeals on interest and double recovery: [2026] EWCA Civ 964 .
• High Court, Patents Court: Leech J assessed the account of profits in [2025] EWHC 375 (Pat) , revised Safran’s figure in [2025] EWHC 940 (Pat), and awarded interest while refusing a double-recovery order in [2025] EWHC 1034 (Pat) .
• Earlier liability proceedings: Morgan J found infringement in [2020] EWHC 1968 (Pat) . The Court of Appeal dismissed the defendants’ appeal in [2022] EWCA Civ 20.