Case: Celanese International Corp v BP Chemicals Ltd [1999] RPC 203
Outcome: distinguished
Counsel also said that it was necessary to look at the business as a whole, to the extent it engaged in infringing activities, and not at separate product lines. The analysis, he said, should take into account GMCA's business activities which infringed both patents. The infringer is treated as if he conducted his business on behalf of the patentee. He relied on the decision of Laddie J in Celanese International Corp v BP Chemicals Ltd [1999] RPC 203 and in particular a passage at [36] where his Lordship said: An account of profits is very different [from damages]. Instead of looking to the harm inflicted on the plaintiff it considers the profit made by the infringer. The defendant is treated as if he conducted his business and made profits on behalf of the plaintiff. A number of consequences flow from this. One of them is that the maximum payment which can be ordered is the total profit made by the defendant. It may be that that figure far exceeds the damage suffered by the plaintiff as was pointed out in Colburn v. Simms [1843] EngR 542 ; (1843) 2 Hare 543. The hope of obtaining more is the normal reason why plaintiffs elect an account in those comparatively rare cases in which they do so. Furthermore there is only one profits "pot". If different plaintiffs seek accounts in respect of different infringing activities of a defendant within a single business, the totality of the profits ordered to be paid should not exceed the total profits made by the defendant in that business. 10 Celanese involved an account of profits for infringement of a patent for an improved method for the manufacture of acetic acid with reduced iodide content. The infringer used the patented process in two separate factories, with profit in one but not the other (see at [32]). The main dispute in the case was that the infringer argued for an "incremental" approach, ie the difference between the profits in fact made and the profits, if any, that would have been made if a non-infringing process were used (at [16]). The patentee argued for an "apportionment" approach in which all profits are recoverable, subject to apportionment of those profits between those to which the infringement contributes and the remainder (at [25]-[28]). 11 Laddie J, in a very detailed discussion of principle and authority (at [35]-[54]), adopted the apportionment approach. His Lordship then discussed the application of the apportionment approach to the facts of the case (at [77]-[130]). 12 The facts in Celanese are quite different from the present case where no apportionment based on infringing and non-infringing parts of T1 or T2 is claimed. The passage quoted at [9] above deals with the situation of different infringing activities within a single business, but only to make the points that the maximum payment is the total profit made and that if there are several plaintiffs they are limited to the one "pot" of profit. The present case does not raise such issues. What is relevant to the present case is a passage at [33] where Laddie J said: The general proposition that nothing is payable to the plaintiff if the defendant's business is loss-making ignores the possibility of a case in which those loss-making activities can realistically be treated as a sequence of separate and self-contained businesses where profits made on one are obliterated by losses on others so that, looked at as a whole, the profits attributable to infringement are hidden. In such a case it may be possible to disentangle the profits made on the infringing business and order them to be paid to the plaintiff notwithstanding the losses made elsewhere. It was not suggested that any such analysis was possible on the facts of this case. 13 The present case is a straightforward one and consistent with the hypothetical example discussed by Laddie J. GMCA made a profit on some infringements but a loss on others. It should disgorge the profits it made. It would be ironic in the extreme if GMCA could take the benefit of its own infringing conduct in respect of T2 by setting off the losses made in such activity against the profits on the T1 infringements which it is required to disgorge to Black &amp; Decker.