Airconco UK Limited v DC Air Condition and Refrigeration Limited

In assessing damages for intellectual property infringement, the court may use the claimant’s established licensing income where the relevant licences provide a reliable indication of the royalty that would have been agreed. Previous licences must be sufficiently comparable with the hypothetical licence between the claimant and infringer. The willing licensor and willing licensee construct remains applicable even where actual licences followed threatened or concluded litigation, provided the circumstances do not materially undermine comparability. The broader evidential approach based on trade practice, expert evidence and other indications is ordinarily a fallback where no established royalty is available. An appellate court will not interfere with an evaluative damages assessment unless there is an error of law or principle, including a material failure of logic, consistency or consideration of relevant factors.

Airconco claimed copyright in promotional website text concerning domestic air-conditioning installation. The IPEC Small Claims Track found infringement and awarded the claim limit of £10,000, having assessed a notional licence fee by reference to Airconco’s advertised and previously charged rates.

DC Air did not challenge infringement. It sought permission to appeal out of time and challenged the damages assessment, arguing that the prior licences were affected by litigation, that damages should instead reflect the cost of commissioning non-infringing copy, and that evidence from two copywriters had been given insufficient weight.

1. Permission to appeal. The filing was 25 days late, but relief from sanctions was granted. The initial notice had been filed within time in the wrong court following uncertainty caused by the unusual IPEC Small Claims Track appeal procedure. DC Air’s solicitors had acted reasonably and without blame. Retrospective permission was given.
2. Approach to damages. The three approaches identified in General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Ltd [1975] 1 WLR 819 apply to intellectual property damages generally. Where the claimant has an established licensing practice, the second approach is ordinarily preferable. The court should use actual licences, assess their relevance and comparability, and consider other evidence only to the extent necessary.
3. Licences granted after threatened or concluded litigation were not automatically irrelevant. The relevant question was whether their circumstances materially differed from the hypothetical bargain. Airconco’s invoices, advertised rates and evidence of payments supported the finding that its standard rate was the best available indication of the sum a willing licensee would have paid.
4. The cost of commissioning non-infringing material, discussed in Peninsular Business Services v Citation plc [2004] FSR 17, did not displace the established royalty approach on these facts. The copywriters’ evidence would in any event have carried little or no weight because the witnesses had not attended for cross-examination.
5. The challenges to the District Judge’s evidential evaluation disclosed no error of law or principle. The appeal was dismissed. Applying the IPEC Small Claims Track costs rules, Airconco was awarded £47.50 for half a day’s attendance at the hearing.

• IPEC Small Claims Track: District Judge Johnson, on 9 October 2025, found copyright infringement and awarded Airconco £10,000 in damages.
• High Court (Intellectual Property List): permission to appeal was granted retrospectively, but the appeal against the damages award was dismissed.