Case: Gerber Garment Technology Inc v Lectra Systems Ltd [1995] RPC 383
Outcome: cited
In relation to the assessment of damages for the infringement of patents, Jacob J set out a number of principles in Gerber Garment Technology Inc v Lectra Systems Ltd [1995] RPC 383 at 393 and following: 1. Damages are compensatory only. 2. The burden of proof lies on the plaintiff but damages are to be assessed liberally. 3. Where a patentee has licensed his patent, the damages are the lost royalty. 4. It is irrelevant that the defendant could have competed lawfully. 5. Where the patentee has exploited his patent by manufacture and sale, he can claim: (a) lost profit on sales by the defendant he would have made otherwise; (b) lost profit on his own sales to the extent that he was forced, by the infringement, to reduce his own price; and (c) a reasonable royalty on sales by the defendant which he would not have made. In the 13 th Edition of Kerly's Law of Trade Marks and Trade Names (London, Sweet &amp; Maxwell, 2001) p 18-144, the learned authors set out those principles and suggest that they are also applicable to trade mark infringement. Accepting the compensatory character of damages awarded under s 126 and the like formulation in s 122 of the Patents Act 1990 (Cth), I accept that the principles enunciated by Jacob J are relevant to the assessment of compensatory damages for trade mark infringement under the Australian Act. 35 In this case the applicants also seek exemplary damages. There is, however, no provision in the Trade Marks Act for exemplary damages to be awarded. Section 126 of the Act may be contrasted with s 115 of the Copyright Act 1968 (Cth). That makes provision for the recovery of damages under s 115(2) in terms similar to those used in s 126. Section 115 also makes provision for "additional damages" in s 115(4). There is no equivalent to that provision in the Trade Marks Act . The head of additional damages for infringement of copyright requires consideration of "flagrancy of the infringement" and "benefit shown to have accrued to the defendant" as well as other factors relevant to both aggravated and exemplary damages as understood at common law. No authority was cited for the proposition that exemplary damages are available for trade mark infringement. Nevertheless it was submitted that, having regard to the purpose of the Act, the absence of any express limitation in the language used in s 126 and the availability of exemplary damages in passing off actions, exemplary damages should be available under that provision. 42 I do not consider that it is a consequence of the principle enunciated in Adidas or Enzed that, where a basis for quantification of loss is entirely within the knowledge of the applicant and no evidence is adduced as to the quantum, the Court should make its own uninformed assessment of a royalty or licence fee that the applicant might have foregone by reason of loss of sales. Speculation and even guesswork may have a role to play where the relevant evidence is inaccessible to the applicant. That is particularly so where the inadequacy of the evidence is caused by a recalcitrant or uncooperative respondent or one who has kept no adequate records of dealings. In so saying, of course, it must be recognised that an applicant may apply to the Court for an order for the examination of the respondent in aid of the assessment of damages. Relevant to this issue, and incidentally that of exemplary damages, is the observation of Lord Wilberforce in General Tire &amp; Rubber Co v Firestone Tyre and Rubber Co Ltd [1976] RPC 197 at 212, quoted by Jacob J in Lectra (at 393): 'First the plaintiff's (sic) have the burden of proving their loss: second, that the defendants being wrongdoers, damages should be liberally assessed but the object is to compensate the plaintiffs and not punish the defendants.'