Gerber Garment Technology Incorporated v Lectra Systems Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 18 December 1997 |
| Date | 18 December 1997 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Staughton, Lord Justice Hobhouse and Lord Justice Hutchison
Patents - infringement - damages
There was no rule of law which limited the damages recoverable by a patent holder against an infringer to the profits which would have been earned in activities for which the patent provided a monopoly. The judge was entitled to make no findings as to what actual sales the patent holders would have achieved, and instead to award a percentage of profits which might, but not necessarily would have been made by the patentees' empire.
Damages could also be awarded for loss of profit for patents which were endorsed licences of right by virtue of paragraph 4(2)(c) of Schedule 1 to the Patents Act 1977 and damages were not limited to the basis of a reasonable royalty.
The Court of Appeal so held in a reserved judgment in an appeal brought by the defendant infringers, Lectra Systems Ltd, against the amount of damages awarded by Mr Justice Jacob on March 20, 1995 to the plaintiff patentees, Gerber Garment Technology Inc for infringement of their patents.
In addition, the Court of Appeal held (Lord Justice Staughton dissenting on the facts) that although in principle the parent of a wholly owned subsidiary could recover damages in respect of the parent's loss by reason of the subsidiary's misfortune when the subsidiary had no cause of action and the parent did, in the present case those losses had not been proved.
Mr Geoffrey Hobbs, QC and Mr Iain Purvis for the infringers; Mr Christopher Floyd, QC and Mr Mark Vanhegan for the patent holders.
LORD JUSTICE STAUGHTON said that the invention for which the two patents were granted was a machine or process for the automatic cutting of fabric, known by the acronym CAM, computer assisted manufacturing. The appeal could be dealt with under four heads.
1 What was the scope of recovery for infringement of a patent?
The rights which a patent conferred were demonstrated by section 60 of the 1977 Act. Mr Hobbs submitted that the damages which a patent holder could recover from an infringer by way of loss of profits were limited to the profits that would have been earned in activities for which the patent provided a monopoly.
In other words, any activities of the infringer that did not in themselves constitute infringements could not form part of a claim for lost profits. For the purpose of...
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