Cour d'Appel de Paris Awards 25% of Infringer's Profit

The case is Carrera SARL et Texas de France SAS v. Muller et Cie, PIBD No. 1163, III, 1 (Cour d'Appel de Paris, May 11, 2021), full text of the decision available here.  I've blogged about earlier proceedings in, and commentary on, this case before (see here, here, and here).  To make a long story short, plaintiff Muller is the owner of European Patent 1,067,822 for a "Heating element manufacturing process for heating or cooking apparatus, such heating element and apparatus incorporating it."  Muller is a patent holding company that had licensed the patent on a royalty-free basis to six affiliated companies.  In its lawsuit against Carrera and Texas de France, Muller prevailed on liability and sought to recover an award of the defendants' profits rather than a reasonable royalty.  In 2019, the Cour de Cassation ruled that L. 615-7 of France's I.P. Code confers upon the injured party a choice among damages remedies, and that "the existence, for the patent holder, of an economic prejudice resulting from patent infringement is not contingent upon the patent holder itself engaging in the exploitation of the patent" (my translation).  As I wrote in one of my previous posts, it was "not entirely clear to me . . . from the text of the decision . . . whether this means that the patent holder is entitled to recover all of the profits realized by the infringer as a result of the infringement, or only [that] the court should take those profits into consideration in crafting an appropriate compensatory damages award (which, perhaps, could be for less than the entire profits realized as a result of the infringement)."  Anyway, on remand to the Cour d'Appel that court has now held that article 615-7 does not require the confiscation of the defendants' entire profit; and that on the facts presented, in which the patented process is not a "determinative element of consumer choice" (my translation), the benefits realized from the infringement should be estimated as being, at most, about (environ) 25%.  The plaintiff is entitled to this (approximately) 25% as compensation (amounting to €120,000 against one defendant, and €130,000 against the other).  So, if I am understanding this correctly, at the end of the day the court does award the plaintiff the entire profit attributable to the infringement, but not the entire profit on sales of infringing articles. 

The court also concludes that the defendants are not entitled to deduct their fixed costs from their turnover to determine their profit margin, since they would have incurred those costs anyway.  The issue of the deductibility of fixed costs is one that different courts throughout the world have considered on other occasions, see, e.g., here.