Tuesday, 3 August 2010

Caution chills interim damages pay-out

Once liability for infringement was established in Alan Nuttall Ltd v Fri-Jado UK Ltd and another (see here for details of earlier litigation), the Patents Court for England and Wales still had to sort out some damages issues. On 30 July 2010, at [2010] EWHC 1966 (Pat), Mr Justice Kitchin gave a ruling which might be said to reflect a degree of conservatism verging on caution.

Nuttall had a patent for a self-service display cabinet, Turboserve, in which food such as roasted chicken might be kept hot. This patent was held valid and infringed and Fri-Jado's appeal was dismissed. In an enquiry as to damages, it was found that Fri-Jado had made 1,104 sales of infringing cabinets, generating sales income of £3,123,738. Nuttall applied to court for interim payment of £1 million under the Civil Procedure Rules 1998, r 25.7(1)(b). Fri-Jado said this was excessive and offered instead to make an interim payment of just £70,000.

According to Kitchin J, on the proper construction of the Rules, an interim payment of more than a reasonable proportion of the likely amount of the final judgment should not be ordered. Usually, interim payment procedures were not suitable where the factual issues were complicated, or where difficult points of law arose -- but that did not prevent the court from making an award made even in respect of part of a complex claim, if that part could be identified as 'an irreducible minimum part' without venturing too far into the disputed area of fact or law.

In this case Nuttall was entitled to a payment on account of damages of £156,000, this being 5% of Fri-Jado's sales price and a sum which, it could safely be assumed, Nuttall would recover in any event.

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