Friday, December 29, 2017

Liu on Accountings of Profits Under U.K. Law

I hope to publish a post on Judge Selna's opinion in Ericsson v. TCL sometime next week; meanwhile, Professor Jorge Contreras's analysis of the opinion on Patently-O is quite thorough and highly recommended.  Meanwhile, to close out the year, for readers interested in the remedy of accountings of profits (that is, awards of the infringer's profits, sometimes referred to as disgorgement of profits) Professor Deming Liu has recently published two articles in the European Intellectual Property Review (EIPR) on the topic:  Reflecting on an Account of Profits for Infringement of Intellectual Property Rights, 39 EIPR 686 (2017), and  What costs are deductible in accounting for profits for infringement of intellectual property rights? The Court says, "not all of them!", 39 EIPR 749 (2017).  The articles are available on Westlaw.  Here are the abstracts of the two articles, respectively:
The article debates on the changes the EC Intellectual Property Enforcement Directive brings about for the law of an account of profits in the UK. It also examines case law to establish how the courts take the account and what methods they use in allocating the profits. Inter alia, it criticises the court’s approach toward remuneration for the infringers’ skills and labour. Furthermore, it argues against the UK court’s refusal to change the principle of election between an account of profits and damages. It yet again takes issue with some courts’ approach to apportioning profits.
The Court of Appeal in Hollister Inc Dansac AS v Medik Ostomy Supplies Ltd and Design & Display Ltd v Ooo Abbott visited the issue of what proportion of general overheads can be deducted in accounting for profits. The court held that such a proportion of the general overheads as attributable to the infringement can be deducted; in making such a calculation, the court adopts the concept of the opportunity cost. To what extent is that test correctly applied by the lower courts, and what techniques do the courts employ in apportioning the overheads in practical terms? The article discusses these questions.

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