“54 A claimant who has succeeded in an action for infringement is entitled to damages as of right. If it seems the claimant may have suffered more than nominal damage then he will generally be entitled to an inquiry, the central purpose of which is to ascertain the extent of his losses and so restore him to the position he would have been in if the infringement had not been committed. 55 Alternatively, a successful claimant may seek an account of the profits made by the infringer. This is an equitable remedy and the court has a discretion whether to order it. It may be refused if, for example, the infringer was entirely innocent or the trade mark owner has delayed in bringing proceedings. The purpose of an account is very different from an inquiry as to damages. It is to deprive the infringer of the profits he has made by the infringement. He is treated as if he has conducted the infringing business on behalf of the claimant. The losses the claimant has suffered by reason of the infringement are therefore not relevant.”
“I must first deal with the relevant legal principles. By contrast with joint liability as tortfeasors for damages, including damages calculated on a royalty basis, an account of profits operates against each defendant separately, requiring him or it to disgorge such profits as are shown to have been derived by that defendant from the relevant infringements. In that respect, there is no difference between trademark infringement and passing off, even though the basis of liability for one is statutory and, for the other, based on the common law… The measure of liability is the profit derived by the defendant from the infringement.”
“1600. I can see that it makes sense for a dishonest assistant to be jointly and severally liable for any loss which the beneficiary suffers as a result of a breach of trust. I can see also that it makes sense for a dishonest assistant to be liable to disgorge any profit which he himself has made as a result of assisting in the breach. However, I cannot take the next step to the conclusion that a dishonest assistant is also liable to pay to the beneficiary an amount equal to a profit which he did not make and which has produced no corresponding loss to the beneficiary. As James LJ pointed out in Vyse v. Foster (1872) LR 8 Ch App 309: “This Court is not a Court of penal jurisdiction. It compels restitution of property unconscientiously withheld; it gives full compensation for any loss or damage through failure of some equitable duty; but it has no power of punishing any one. In fact, it is not by way of punishment that the Court ever charges a trustee with more than he actually received, or ought to have received, and the appropriate interest thereon. It is simply on the ground that the Court finds that he actually made more, constituting moneys in his hands "had and received to the use" of the cestui que trust.” 1601. I was not referred to any authority binding me so to hold; and I decline to do so.”
“It has also been submitted on the defendants' behalf that before the court can make an order for the payment of profits it would have to ascertain the person or firm who actually received them and make the order only against the actual recipient. But this submission ignores the nature of the relief now being considered. An order for an account of profits and their payment is an equitable remedy, given in lieu of an order for the payment of damages. Just as an order for the payment of damages can be a joint and several liability imposed on all wrongdoers who have contributed to a wrong so also can an order for the payment of profits be made against all persons who have been involved in the same tortious act of copyright infringement.”
“54. It is, I think, important to keep in mind that, at the relevant times, Mr Young did not hold office as a director of CRL. The judge described him, at paragraph 185 of this judgment, as “Holdings” nominee director, albeit only a de facto or shadow director”
“19. 22. The acid test, then, is whether the putative tortfeasor is exercising control through the constitutional organs of the company. If he does no more than vote at board meetings, then he will be exercising control through the constitutional organs of the company. The constitution of the company may of course have delegated authority to officers of the company without the need for formal board meetings; and in that event I would not rule out the possibility that an individual doing no more than exercising that properly granted authority would escape personal liability.”
“Even if the Appellants were jointly liable for D11’s torts, the learned Judge erred in law in that (a) he failed to take into account that it was a matter of discretion as to whether or not to order an account, and that the Respondents had no right to the same; (b) he failed, in the exercise of that discretion, to take into account the matters referred to in ground 1 above (i.e. the Appellants acted as directors and employees and in good faith); and (c) he concluded that it would be appropriate to order an account of profits, when in fact, by reason of those matters, it was wholly inappropriate to order such an account against them. Therefore, for this reason too the claim as put against them (for an account of profits) should be dismissed.”
“100. I regret to say I do not believe Mr Ahmed has repaid that money. If he had done so, it would have been an easy thing for [him to] prove using his own personal records, but he has not done so. Nor has he even explained what the loan was for, if not for something to do with the infringement. The burden of proof was upon him since all the Claimants knew was that he had received the loan in the first place, which was not disputed. 101. In those circumstances I find for the Claimants. Mr Ahmed is therefore liable to account for the£635 789.”