IPEC damages cap of £500,000 does not apply separately to each defendant in an action where there are multiple defendants

Author:Ms Caroline Bass
Profession:Field Fisher Waterhouse
 
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Summary

In the case of Abbott and another v Design & Display Ltd and another  [2014] EWHC 3234 (IPEC), 10 October 2014, Mr Justice Birss ruled that the IPEC damages cap of £500,000 as set out in CPR 63.17A is to apply to all defendants in a single action and not in relation to each defendant. Under CPR 45.30(2)(a) the court has no discretion to lift this cap unless the parties have expressly agreed to it. In this combined action for patent infringement brought by Abbott against two defendants, the judge refused to interpret CPR 63.17A to mean that damages of up to £500,000 could be sought from each of the defendants even though one of the defendants revealed at a late stage (having already made a Part 36 offer which had been accepted) that it had grossly underestimated the extent of its infringing sales.

Facts of the case

Abbott brought a single action in the IPEC against two separate parties (1) Design & Display ("Design") and (2) Eureka Display ("Eureka"). Abbott alleged that both defendants sold inserts and slatted panels which infringed its patent. Although the defendants' products were different in some regards, Abbott decided to bring just one, combined action as the nature of both its claim and the defendants' respective counterclaims were sufficiently similar.

Following the trial on liability, Mr Justice Birss held the patent to be valid and to have been infringed by both defendants. Abbott elected for an account of profits and following the CMC, Abbott accepted a part 36 offer made by the second defendant, Eureka. To ensure the easy resolution of any apportionment of costs that may be needed between the defendants, Abbott and Eureka agreed to postpone the matter of costs against Eureka until the account against Design had been determined.

Shortly after the hearing of the account against Design, Eureka came forward with further information that revealed the extent of its relevant sales to be far greater than it had initially indicated and indeed allowed for in its part 36 offer that had been accepted by Abbott. This Part 36 was accordingly set aside and the agreed stay of proceedings was set aside.

In light of the full extent of Eureka's sales, it became clear that Abbott, but for the IPEC's cap of on damages, would be entitled to recover considerably more than £500,000 from the two defendants. To ensure that it got what it was properly owed, Abbott asked the judge to interpret CPR 63.17A to mean that the cap of £500,000 should...

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