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You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Lufthansa Technik AG v Astronics Advanced Electronic Systems & Anor (Re Interest) [2025] EWHC 1034 (Pat) (30 April 2025)
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Cite as: [2025] EWHC 1034 (Pat)

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Neutral Citation Number: [2025] EWHC 1034 (Pat)
HP-2017-000085 and HP-2019-000019

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT

30 April 2025

B e f o r e :

MR JUSTICE LEECH
____________________

BETWEEN:

LUFTHANSA TECHNIK AG
(a company incorporated under the laws of Germany)
Claimant
– and –

(1) ASTRONICS ADVANCED ELECTRONIC SYSTEMS
(a company incorporated in the state of Washington USA)
(2) SAFRAN SEATS GB ZODIAC SEATS UK LIMITED)
Defendants

AND BETWEEN:

LUFTHANSA TECHNIK AG
(a company incorporated under the laws of Germany)
Claimant
– and –

PANASONIC AVIONICS CORPORATION
(a company incorporated in the state of Delaware USA)
Defendants

____________________

MR HUGO CUDDIGAN KC, MR CHRISTOPHER HALL and MS MIRUNA BERCARIU (instructed by Jones Day) appeared on behalf of the Claimant in both claims with further written submissions from MR JAMES WALMSLEY
MR IAIN PURVIS KC, MR PIERS ACLAND KC, MR MILES COPELAND and MR JEREMY HEALD appeared on behalf of the Defendants in both claims (instructed by Hogan Lovells International LLP in Claim No. HP 2017 000085 and Pinsent Masons LLP in Claim No. HP 2019 000019)

Hearing Date: 20 March 2025

____________________

HTML VERSION OF APPROVED JUDGMENT (INTEREST)
____________________

Crown Copyright ©

    Mr Justice Leech:

    I. Introduction

  1. On 21 February 2025 I handed down judgment after the trial of an account of profits in this action: see [2025] EWHC 375 (Pat) (the "Principal Judgment"). In this judgment, I adopt the defined terms and abbreviations which I used in the Principal Judgment and where I refer to individual paragraphs below, I intend to refer to that judgment unless I state otherwise.
  2. In the Principal Judgment I made two provisional findings in relation to the calculation of profits. First, I provisionally held that the appropriate royalty rate was 13%: see [613] to [617]. Secondly, I held that Safran was liable for profits of US $81,800 although I left it open to Lufthansa to argue that it was entitled to profits of US $567,800 and to Safran to argue that it was not liable for any profits at all. The determination of this issue turned on whether it was appropriate to deduct all overheads or incremental profits only and, if the former, whether it was appropriate to set off losses which Safran had incurred in other years (assuming that Safran was entitled to deduct all overheads).
  3. I listed a one day hearing for 20 March 2025 to determine these matters and to deal with any other consequential matters other than costs and permission to appeal. Both parties submitted detailed Skeleton Arguments from which it became clear that there were three issues for determination: (1) the provisional findings, (2) interest and (3) potential double recovery in parallel proceedings in Germany and France. At the hearing Mr Cuddigan and Mr Copeland made oral submissions in relation to the provisional findings, Mr Cuddigan and Mr Purvis dealt with interest and Mr Hall and Mr Acland addressed double recovery.
  4. The parties agreed my provisional finding in relation to the royalty rate of 13% and this is reflected in the Order which I made on 3 April 2025. Having heard argument on Safran's liability, I delivered an ex tempore judgment reversing my original finding and deciding that it was only appropriate to deduct incremental overheads with the consequence that Safran was liable for US $567,800 and, in the circumstances, had not suffered losses in other years which could be set off against this sum: see [2025] EWHC 940 (Pat). This ruling was also reflected in the Order which I made on 3 April 2025.
  5. I heard detailed argument on interest and double recovery. Despite lengthy Skeleton Arguments, it became clear that Lufthansa had not been prepared for an argument that there was no equitable jurisdiction to award interest on profits at all and that the Defendants had not been prepared for an argument that the Court could award interest on profits under section 35A of the Senior Courts Act 1981 ("S.35A"). I permitted the parties to file further written submissions within 14 days, i.e. by 3 April 2025. It was 5 pm by the time that I had dealt with the parties' submissions on double recovery and I also permitted Mr Purvis to file short written reply submissions in place of his oral reply (which he did on 28 March 2025). I deliver this judgment having read and considered all of those submissions.
  6. II. Interest

    A. Jurisdiction

    (1) Equity

  7. The editors of Civil Procedure (2025 ed) state that the Court had (and still has) an equitable jurisdiction to award interest as ancillary relief in respect of equitable remedies such as specific performance, rescission and the taking of an account: see Vol 1, 16AI.5 (p.503). This statement of principle has a long pedigree. It was taken almost verbatim from the speech of Lord Brandon in President of India v La Pintada Compania Navigacion SA [1985] AC 104 at 116A-B and the passage from his speech was quoted with approval by Lord Browne-Wilkinson in Westdeutsche Landesbank Girocentrale v Islington BC [1996] AC 669 at 702A-D and by Lord Mance in Sempra Metals Ltd v Inland Revenue Commissioners [2008] AC 561 at [213].
  8. Lord Brandon cited no authority for this statement of principle but it is likely that he had in mind the Law Commission's Report on Interest 1978 (Cmnd 7229): see Lord Woolf in Westdeutsche at 726B-G and Males LJ in Granville Technology Group Ltd v LG Display Co Ltd [2023] EWCA Civ 980, [2024] KB 179 at [60]. Indeed, it is clear from that report that the Law Commission regarded the position as settled by 1978 and that Lord Woolf also agreed with it. I quote the entire passage from his dissenting speech in Westdeutsche at 724B-G:
  9. "In Law of Contract: Report on Interest (Law Com. No. 88) (1978) (Cmnd. 7229), the Law Commission decided not to make any recommendations for change as to the equitable jurisdiction. It is, however, interesting to note the following paragraphs of the report:
    "10. Thirdly, there is the equitable jurisdiction. Interest may be awarded as ancillary relief in respect of equitable remedies such as specific performance, rescission or the taking of an account. Furthermore, the payment of interest may be ordered where money has been obtained and retained by fraud, or where it has been withheld or misapplied by an executor or a trustee or anyone else in a fiduciary position. . . ."
    "(a) The equitable jurisdiction
    "21. The equitable jurisdiction to award interest and to fix the rate at which it should be paid is extensive. It includes, for example, the power to order the payment of interest where money has been obtained or withheld by fraud or where it has been misapplied by someone in a fiduciary position. In such cases the court has an inherent power to order the payment of interest at whatever rate is equitable in the circumstances and may direct that such interest be compounded at appropriate intervals. Our view is that it would not be appropriate to impose statutory controls upon the exercise of the equitable jurisdiction to award interest, beyond those controls that are already in existence. We invited criticisms of this view in our working paper but no one disagreed with us. Accordingly, we make no recommendations for change in relation to the equitable jurisdiction."
    From what I have said already it is clear that I agree with the statements in those paragraphs in so far as the equitable jurisdiction to award interest is regarded as "ancillary relief" but not in so far as they suggest that it is only equitable remedies in relation to which there can be the ancillary jurisdiction to award interest. The paragraphs are perfectly satisfactory as long as they are not regarded as exhaustive. It has to be remembered that the Law Commission were not intending to make any recommendations as to equitable interest."
  10. Mr Cuddigan cited Docker v Soames (1834) My & K 655 as authority for the proposition that the equitable jurisdiction was long-established. He also cited Accidia Foundation v Simon C Dickinson Ltd [2010] EWHC 3058 at [97] (Vos J) as authority for the proposition that the Court continues to exercise that jurisdiction against a defaulting fiduciary. Mr Purvis did not challenge the historic foundation of the jurisdiction or that the Court had power to award interest when an account of profits is taken against a fiduciary. However, he argued that the jurisdiction was available only in "certain limited circumstances" where the defendant had abused a position of trust and that it did not extend to an account of profits taken after the infringement of a patent.
  11. In support of his argument Mr Purvis relied on a very old first instance decision, Quarrell v Beckford (1816) 56 ER 100. In that case a mortgagee was ordered to account for the profits which he had earned from wrongfully refusing to deliver up the secured property. Sir Thomas Plumer V-C rejected an analogy with a claim for mesne profits against a trespasser on the basis that a mortgagee was more closely analogous to a trustee and held that the Court had jurisdiction to award interest. For present purposes, however, it is important to set out the very broad way in which Sir Thomas Plumer framed the Court's power:
  12. "If there be no fixed rule of the Court; if there be no authority in which the point was ever decided, one way or the other; if all the general principles that govern a Court between a trustee and cestui que trust lead to one conclusion; if justice and equity lead to the same conclusion; viz., that one party is not to keep another out of possession for twenty years, applying to his benefit large balances, due to another, that other, embarrassed with debts, without paying interest, what is there of authority, principle, reason, justice, or equity, that should induce a Court not to say that that conclusion must follow? Upon these principles it is, I am of opinion, upon the first question that the mortgagor is in this case entitled to charge the Defendant with interest; and that it must be sent to the Master to compute that interest."
  13. Mr Purvis also cited Boddam v Riley (1785) 2 Bro CC and the dissenting judgment of Oliver LJ in Techno-Impex v Gebr Van Weelde Scheepvaartkantoor BV [1981] 1 QB 648 as authority for the proposition that the Court could only award interest in equity on an account stated and Wallersteiner v Moir (No 2) [1975] QB 373 in support of the argument that the no profit rule provided the justification for an award of interest on an account of profits against a fiduciary.
  14. Mr Purvis had to concede that the Court has awarded interest on the sum due after taking an account of profits for infringement of an intellectual property right on at least four occasions: see Hotel Cipriani SRL v Cipriani (Grosvenor Street) Ltd [2010] EWHC 628 (Ch) at [27] (Briggs J), Bizzard Entertainment SAS v Bossland GmbH [2019] EWHC 1665 (Ch) at [88] to [91] (Deputy Master Bowles), Bei Yu Industrial Co v Nuby (UK) LLP [2022] EWHC 652 (IPEC) at [45] to [48] (Nicholas Caddick QC) and Equisafety Ltd v Battle, Hayward and Bower Ltd [2023] EWHC 1821 (IPEC) at [51] to [53] (Recorder Amanda Michaels). But he argued that to the extent that the Court relied on the equitable jurisdiction in these cases, then they were decided per incuriam because the point had never been raised and argued (even though he had appeared for the successful patentee in Cipriani).
  15. I reject Mr Purvis's argument that the Court has no equitable jurisdiction to award interest on an order for the payment of a specified sum after the Court has taken an account of profits under section 61 of the Patents Act 1977 or that Cipriani and the other decisions which I have cited above were decided per incuriam. It might well have been enough to reject the argument on the basis that Quarrell v Beckford provides no authority for the proposition that the equitable jurisdiction is a limited one or that the general principle stated in the White Book and by Lord Brandon in La Pintada are not qualified in any way. However, out of deference to the detailed arguments advanced by the parties I set out my detailed reasons for reaching the conclusion that the Court does have jurisdiction to award interest in equity on an account of profits under section 61:
  16. (1) There was no dispute that the Court has a jurisdiction to grant relief (including an award of interest) where that relief is required in aid of other remedies in its equitable armoury. It may well be that the Court's jurisdiction to award interest extends very much further than this: see Westdeutsche (above) at 723F-724A (Lord Woolf). But it is unnecessary to explore the extent of the jurisdiction here.

    (2) Put another way, a court of equity has always had jurisdiction to grant relief on terms in order to fashion the remedy which best does justice between the parties. Mr Cuddigan cited as an example Re Metropolitan Coal Consumers' Association (Karlsberg's case) [1892] Ch 192 where the Court of Appeal upheld the decision of Kekewich J to order rescission of an allotment of shares but also awarded interest at 4% per annum. The report states at 208:

    "The Court held, that where a contract was rescinded, interest on money actually paid under it ought to be allowed, not by way of damages, but on the ground that the parties were to be restored as far as possible to their original position."

    (3) The parties were agreed that the purpose of an account of profits for the infringement of a patent is to put the infringer back in the same position financially as if no infringement had taken place: see Lifestyle Equities CV v Ahmed [2024] UKSC 17, [2024] 2 WLR 1297 at [155] and [156] (which I cited in the Principal Judgment at [315]). In that passage, Lord Leggatt described the remedy as a form of restitution rather than as a punitive or compensatory remedy. Mr Purvis argued that it would be inconsistent with this purpose to require an infringer to pay interest as well as disgorging the profits. I disagree. The infringer has had the use of the profits since they were generated by the infringement of the patent and the patentee has lost the use of those funds in the meantime.

    (4) It may well be that it is unnecessary to award interest in many cases where the infringement is recent and continuing. But there is no obvious reason why an infringer should not be required to pay interest where the infringement is historic. Take a simple example. An infringer secretly exploits the invention of a patent to generate profits for a business which they later sell generating both capital and income profits. A few days before the limitation period expires the patentee discovers the infringement and issues proceedings later electing for an account of profits. There is no reason in principle why the infringer should not be required to disgorge both the income and capital profits made from the infringement and also to pay interest for the use of the funds in the meantime.

    (5) Furthermore, it makes no real difference in my judgment whether one characterises an award of interest on an account of profits as a separate element of the substantive remedy because the infringer has had the use of the patentee's profits either to invest in their business or to defray expenses like the mortgagee in Quarrell v Beckford or as compensation for the loss of the use of the money in the meantime which the Court awards in the exercise of its ancillary jurisdiction. Since Sempra Metals the Court has fully recognised the time value of money and it would be entirely artificial to carve out of the La Pintada principle a limitation for an account of profits for patent infringement based on eighteenth and nineteenth century cases where the Court was far more reluctant to award interest.

    (6) In particular, there is no reason in principle to distinguish between an account of profits for patent infringement and an account of profits taken against a defaulting fiduciary. For example, in Recovery Partners GP Ltd v Rukhadze [2025] UKSC 10, [2025] 2 WLR 529 Lord Leggatt JSC recently articulated the principle that both accounts of profits had the same underlying justification at [104] to [106]:

    "104. Thus, where, as between a principal (P) and fiduciary agent (A), P has the exclusive right to use and control the use of information, and A without the consent of P uses the information for A's own benefit, the law provides similar protection to that afforded when tangible property is used without the owner's consent. This protection includes imposing a liability on A to surrender to P any benefit derived from using the information. The liability may be enforced by ordering an account of profits. This remedy may be awarded when confidential information is misused: see eg Peter Pan Manufacturing Corpn v Corsets Silhouette Ltd [1964] 1 WLR 96 and Attorney General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 The same principle applies to the misuse of protected "intellectual property". A patent, trademark or copyright confers an exclusive right to exploit the patented invention, trademark or copyrighted work. If another person does so without the consent of the owner of the right and makes a profit from doing so, that person may be ordered to account for the profit by paying it over to the owner of the right.
    105. In the context of a fiduciary relationship, information about a relevant business opportunity is treated as property in the same sense. As between the parties to the relationship, the principal has the exclusive right to use the information so that the fiduciary may use it only for purposes authorised by the principal; and if the fiduciary makes use of it for other purposes, so as to make a profit, he or she may be ordered to account for the profit.
    106. The rationale for making an account of profits available in all these cases is linked to the nature of right which the law is seeking to protect. If P has an exclusive right as against A to exploit the use of the object in question (whether it be a physical object or an intangible asset), and A without P's consent uses the object for A's own purposes, the law cannot undo A's wrongful use. But it can do the next best thing of requiring A to surrender to P the benefits obtained by A from A's use and in that way making it as if the wrong had not occurred. Such a remedy is justified even if A's use did not prevent P from using the object or if P would have made no use of it anyway. The reason is that P's right is not just a right that A must not interfere with P's use of the object; it is a right that A will use the object only for P's benefit. A violation of the right that A must not interfere with P's use of the object can be remedied by requiring A to compensate P for any loss which A's wrongful interference has caused to P. But this does not by itself provide an adequate remedy for a violation of the right that A will use the object only for the benefit of P. To put P in an equivalent position to that which P would have been in if the wrong had not occurred, the law treats benefits obtained from A's use as if they had been obtained on behalf of P."

    (7) Mr Purvis also argued that if an award of interest is treated as an element of the substantive remedy, it should have been incorporated into the account and resolved at trial on the basis of direct evidence about the Defendants' use of their trading profits. I reject this argument. The time to take this point was at the trial itself and the Defendants failed to do so. In my judgment, it is far too late to take it now.

    (8) But in any event, the argument is misconceived. From a procedural perspective, an account is a flexible remedy. It was always open to the Court to order further accounts or inquiries once an account was taken if it was necessary to do so before a final order could be made or, by contrast, to move to an order for payment or other relief immediately if it was clear that an account was unnecessary: see Libertarian Investments Ltd v Hall [2013] HKCFA 93, 17 ITELR 1 at [168] (Lord Millett NPJ). Furthermore, Mr Purvis cited no authority for the proposition that it was necessary to conduct a detailed factual inquiry to establish precisely what use the fiduciary or infringer had made of the money before the Court could award interest. Indeed, it is clear that the Court has been prepared to award interest on general principles and without factual evidence: see, e.g., Karlsberg's case (above) and Wallersteiner v Moir (No 2) (above) at 388E-H (Lord Denning MR).

    (9) I also take comfort from the fact that in Teledyne Industries Inc v Lido Industrial Products Ltd (1982) 68 CPR (2d) 204 the Federal Court of Canada awarded interest under the ancillary equitable jurisdiction and that this decision has been cited by a number of textbooks with approval: see Gurry on Breach of Confidence 2nd ed (2012) at 20.10 and Roughton, Johnson and Cook on Patents 5th ed (2022) at 8.152.

    (10) Finally, I dismiss the argument that interest can only be awarded where an account has been stated. I agree with Mr Cuddigan's submission that Boddam v Riley was concerned with a different type of account in equity, namely, accounting for debts rather than an account of profits: see Snell's Equity 35th ed (2025) at 20—004. There is no hint of such a limitation in any modern authority dealing with an account of profits and, in any event, the editors of Snell's Equity consider that the jurisprudence governing this form of account is now obsolete.

    (2) S.35A

  17. Given my decision in relation to the equitable jurisdiction it is unnecessary for me to decide whether the Court can also award interest under S.35A. However, because the point was fully argued I briefly express my views on this issue. S.35A is headed "Power of High Court to award interest on debts and damages" and subsection (1) provides as follows:
  18. "Subject to rules of court, in proceedings (whenever instituted) before the High Court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as rules of court may provide, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and — (a) in the case of any sum paid before judgment, the date of the payment; and (b) in the case of the sum for which judgment is given, the date of the judgment."
  19. In BP Exploration Co (Libya) Ltd v Hunt (No 2) [1983] 2 AC 352 the House of Lords held that the words "any debt or damages" in section 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934, which was the statutory predecessor of S.35A, extended to any sum recoverable by one party or another at common law or in equity or under statute and also that Robert Goff J had power to order interest on a sum found to be due under section 1(3) of the Law Reform (Frustrated Contracts) Act 1943. Lord Brandon (with whom all of the other members of the House agreed) stated as follows at 373C-F:
  20. "The power of the court to order the payment of interest on principal sums adjudged to be payable by a defendant to a plaintiff is conferred on it by section 3 (1) of the Law Reform (Miscellaneous Provisions) Act 1934. That subsection provides:
    "In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment ..."
    There then follow three provisos which are not relevant to the present case. On the first question, whether Robert Goff J. had power to order the payment of interest on the principal sums awarded by him at all, it was submitted by Mr. Alexander that sums recoverable under the Act of 1943 were of a very special character indeed, and because of that did not come within the expression "any debt or damages" as used in section 3 (1) of the Act of 1934 set out above.
    I do not accept that submission. In my opinion the words "any debt or damages," in the context in which they occur, are very wide, so that they cover any sum of money which is recoverable by one party from another, either at common law or in equity or under a statute of the kind here concerned. In this connection I adhere to the view with regard to the scope of section 3 (1) which I expressed in The Aldora [1975] QB 748, 751. I hold, therefore, that Robert Goff J. had power to order the payment of interest on the principal sums awarded by him."
  21. In Sempra Metals (above) Lord Nicholls cited this passage with approval and made it clear that this interpretation applied to S.35A itself: see [109]. Mr Purvis mounted an ambitious argument that Lord Brandon could only have intended to extend S.35A to sums payable under a statute which could be "properly called a 'debt' or 'damages'" and did not extend to an account of profits for infringement. This argument was primarily based on the use of the word "indebted" by Lawton LJ in the Court of Appeal (see [1981] 1 WLR 232 at 245) and the reference to The Aldora (above) in which Brandon J (as he then was) had held that interest was payable on a quantum meruit claim for salvage.
  22. I reject that argument. It is clear that eminent counsel for the Appellant argued exactly the same point before the House of Lords submitting that the statutory just sum payable under the 1943 Act was of a special character and fundamentally different from a claim for a quantum meruit: see [1983] 2 AC 352 at 359A-D. It is also clear from the passage which I have quoted that Lord Brandon rejected that argument.
  23. Moreover, if a just sum payable under section 1(3) of the 1943 Act falls within S.35A, it is very difficult to see why a sum payable under section 61 of the Patents Act 1977 should not also do so. The statutory just sum is not an award of damages. It is a sum which the Court considers just having regard to "all the circumstances" and the editors of Goff & Jones's Unjust Enrichment 10th ed (2022) are clear that the 1943 Act was not intended to codify the common law of restitution or that it was exclusively intended to reverse unjust enrichment: see the passages at 15—14 and 15—41. It cannot, therefore, be equated to a quasi-contractual liability.
  24. Finally, I see no difficulty in characterising any sum due from the Defendants once an account of profits is struck as a statutory debt. Indeed, on the day on which the parties filed their supplementary written submissions I made the Order in which the Defendants submitted to judgment for payment of the relevant sums following my ex tempore ruling in [2025] EWHC 940 (Pat). Further, once the claim for infringement had succeeded and Lufthansa had elected for an account of profits, the amount which the Defendants were required to pay was a statutory liability in the same way as the payment of a just sum under section 1(3) of the 1943 Act.
  25. Mr Purvis relied on the decision of the Court of Appeal in Agbaje v The Robert Frew Medical Company Ltd [2023] EWCA Civ 702 as authority for the proposition that the scope of S.35A was not unlimited and that it was not sufficient simply to demonstrate that the Defendants had become liable to Lufthansa following the account of profits. The claim in that case involved the transfer of shares under a bad leaver provision in a shareholders agreement. The shareholder refused to participate in the contractual process and disputed the value of his shares. The judge held that he was entitled to recover the price fixed by the single joint expert and made an order for payment. He also ordered the payment of interest under S.35A.
  26. The Court of Appeal allowed the company's appeal against the order for the payment of interest because the shareholder's claim was not a claim for the recovery of a debt: see [76] to [83]. However, Arnold LJ (with whom Singh LJ and Sir Launcelot Henderson agreed) reached this conclusion on the basis that no debt was ever owed under the shareholders agreement and the shareholder was not entitled to an order for payment. He stated this at [81] and [82]:
  27. "81. The reason why Dr Agbaje was an unwilling participant in the process was that he did not accept the Transfer Price determined by RFMCL of £24,000. RFMCL offered to pay Dr Agbaje this sum less what it said he owed the Partnership on 28 June 2011 and to pay the full sum on 18 May 2016, but he held out for a higher sum. Dr Agbaje was not even prepared to accept RFMCL's proposal of 1 July 2020 that he cash the cheque for £24,000 and pursue a claim for the difference. In the end the logjam was broken by the judge's decision, which resulted in a lower valuation of £21,188. Although paragraph 3 of the judge's order of 17 June 2022 ordered RFMCL to pay Dr Agbaje the sum of £21,188, strictly speaking that was not an order which the judge had power to make, as opposed to an order that RFMCL should pay Dr Agbaje the sum of £21,188 upon delivery up by Dr Agbaje of his certificate. RFMCL did not oppose the making of the order which the judge made because it had never disputed that Dr Agbaje should be paid the correct sum.
    82. The proper analysis of Dr Agbaje's claim is therefore that it was not a claim for recovery of a debt, because no debt was ever owed to Dr Agbaje by RFMCL. As framed in the Amended Particulars of Claim, Dr Agbaje's claim was a claim for specific performance of the Agreement. Furthermore, as presented at trial, the claim was purely for the determination by the court of the correct value for his shares in circumstances where Dr Agbaje's unwillingness to accept either the Transfer Price determined by RFMCL or the payments offered and tendered by RFMCL were the only obstacles to his receiving the money. It follows that the court has no jurisdiction to award interest under section 35A(1) of the 1981 Act."
  28. In my judgment, Agbaje (above) is distinguishable. In the present case, the Defendants became liable to account for the profits which they made from the infringement of the Patent when Lufthansa elected for an account of profits under section 61. True it is that section 61 does not spell out in terms that once the account was struck, Lufthansa was entitled to an order for payment. But there was no issue that the Court was entitled to make such an order and, as I say, the Defendants submitted to an order for payment on the day on which Mr Purvis filed his submissions on S.35A. Once it is accepted that Lufthansa is entitled to claim interest on those sums, S.35A is explicit about the period for which the Court may award interest. It confers a discretion to award interest "for all or any part of the period between the date when the cause of action arose" and either judgment or payment.
  29. B. Discretion

    (1) General

  30. Mr Purvis advanced what was substantially the same argument in relation to the exercise of discretion. He argued that an award of interest was contrary to the principle articulated in Lifestyle Equities and required the Defendants to pay a greater amount than the profits which they had earned from infringing the Patent:
  31. "24. First, as we have seen, s35A interest is intended to compensate the Claimant. However, having elected to seek and be paid D's profits, what can he be claiming to be compensated for? The whole point of electing to take D's profits is because C will expect to receive a sum that exceeds his loss. If C is obtaining more money on the account than he ever lost as a result of the infringement, he has no need for 'compensation'.
    25. Second, the inevitable result of 'compensating' D by awarding an extra amount on top of the profits is that the fundamental principle behind an account explained in Lifestyle Equities CV v Ahmed [2024] UKSC 17 at [156] {LHTA/7/52} and Design & Display Ltd v OOO Abbott [2016] EWCA Civ 98 at [7] {DEFA/17/7} would be breached. These judgments make clear that a Defendant must not, as a result of the taking of an account, be placed in a worse position than they would have been, had it not been for the infringement. The Court can only proceed at this stage on the assumption that the sum found due on the account comprised all D's profits accruing as a result of the infringement. By switching attention to the Claimant under s35A (or the equitable jurisdiction) and making a further award to be made based on C's notional losses, the logical conclusion must be that the total award against Ds will exceed their profits.
    26. Thirdly, prior to the election there was no basis on which Ds could sensibly have made the payments on which interest is now sought, because they could not know that an election for profits would be made. In BP v Hunt (No. 2) at first instance, Goff J quotes Lord Wilberforce on the subject of discretionary interest awards in an IP case in General Tire v Firestone {DEFA/30/64}: 'In a commercial setting, it would be proper to take account of the manner in which and the time at which persons acting honestly and reasonably would pay.' It is hard to see how it could be said that Ds in this case could be expected to have 'paid' over their profits, at least before the election was made."
  32. I also reject those submissions. As Mr Cuddigan pointed out in his Skeleton Argument, an infringer is entitled to be treated as if he was conducting the infringing business on behalf of the claimant: see Lifestyle Equities at [156] and Rukhadze at [106] (above). It follows, therefore, that once the Defendants had earned the relevant profits they must be treated as holding them for the benefit of Lufthansa until they are disgorged (pursuant to the Order which I have made). In the meantime, Lufthansa is entitled to recover the time value of those profits. As I say, whether this is treated as an integral element of the equitable remedy or compensation for the loss of the use of the money under S.35A seems to me to be a barren dispute (at least in the present case). On either basis Lufthansa is entitled to recover interest.
  33. Mr Purvis also relied on the fact that in BP v Hunt (No 2) [1979] 1 WLR 783 Robert Goff J awarded interest from the date on which Mr Hunt first became aware of the claim not the date on which he could quantify the just sum. However, it is clear from his judgment that this decision was in part based on the very unusual nature of the claim. It is also clear that the judge refused to disallow certain periods for the delay in bringing or prosecuting the claim. He stated as follows at 848A-H:
  34. "Next, I have to consider the period for which it should be awarded. In cases of restitution, the date of loss is generally identical with the date of accrual of the cause of action; because by that date the defendant will have received the benefit in respect of which the plaintiff claims restitution. That was certainly so in the present case. Mr. Alexander, however, submitted that if interest should be awarded at all, it should only be awarded from the date of the service of the writ (viz. May 1975), because until that date Mr. Hunt had no knowledge that any claim was being made against him, and could not therefore have paid any claim before that date. As to this, I am satisfied, on the evidence before me, that at a meeting held on June 14, 1974, B.P. made clear to Mr. Hunt's representatives B.P.'s intention to advance a claim against him. The claim was expressed as a claim for cash, namely £17,000,000 in lieu of reimbursement oil, and there is no evidence that it was spelled out as a claim under the Law Reform (Frustrated Contracts) Act 1943, though it was stated to be a claim under English law and I have no doubt, on the evidence, that it was intended to be a claim under that Act. But this was, in my judgment, a clear indication that B.P. did intend to pursue a claim against Mr. Hunt in respect of the services which they had rendered, which would under the contract have been paid for by reimbursement oil; and if interest is to date from the time when Mr. Hunt was aware of B.P.'s claim, then it should date not from the date of the issue of the writ, but from June 14, 1974.
    This is not a case where the facts giving rise to the cause of action were unknown to Mr. Hunt; on the contrary, he was well aware of all the relevant facts. Even so, he did not know until June 1974 that B.P. were going to make any claim upon him; and on the very unusual facts of the case Mr. Hunt could not, in my judgment, have been reasonably expected to know that B.P. were likely to make any claim upon him until they notified him of their intention to do so. It appears that Mr. Hunt's lawyers expressed surprise when B.P.'s representatives stated their intention at the meeting of June 14, 1974; there is no reason to suppose that this surprise was simulated, the circumstances being so unique and both parties' attention having been concentrated upon their respective rights vis a vis the Libyan Government, and upon their rights to the oil, rather than upon any claim in restitution. It is in just such a case as this that a court may, in its discretion, decide not to award interest before the claim is made. I am not however, prepared to postpone the commencement of the period to allow time for the making of investigations by Mr. Hunt, because the circumstances giving rise to the claims were well known to him or to those in his employment.
    I therefore decide that the period for which interest is to be awarded runs from June 14, 1974, until the date of my order. It is right, however, that I should record that I would not have been inclined to abridge the period to June 14, 1974, on the separate ground that there had been any reasonable delay by B.P. It is true that 2 1/2 years elapsed between the date of accrual of the cause of action, and the date of notification of the claim to Mr. Hunt; and a further 10 months elapsed between that date and the issue of the writ. Thereafter, there cannot be said to have been any unreasonable delay by B.P.; on the contrary, having regard to the time inevitably occupied by Mr. Hunt's unsuccessful attempt to set aside the proceedings, which finally failed when Kerr J. gave judgment in October 1975, and having regard to the complexity of the case, it was a remarkable achievement to bring the case on for trial as early as October 1977. I am, however, concerned with the delay between December 1971 and June 1974. In all the circumstances of the case, I would not have regarded that delay as so unreasonable as to call for any reduction in the award of interest on that ground."
  35. Robert Goff J's reasoning provides no support for the proposition that interest should only run from the date of the patentee's election to claim an account of profits and, in my judgment, there is no reason in principle why the general rule that interest should run from the date of accrual of the cause of action should not apply either to an account of profits or in the present case. As Mr Cuddigan pointed out, every UK patent is publicly available on the register. I have also held that it was obvious to a reasonable person in the circumstances that the Components were suitable for putting Claims 1 and 2 of the Patent into effect: see the Principal Judgment, [482]. Moreover, if the Defendants were unwilling to take the risk of a claim for infringement, they could have initiated proceedings themselves by claiming revocation of the Patent or a declaration of non-infringement. Finally, the Defendants must have been aware that Lufthansa might elect for an account of profits. These are parties to litigation who have been advised throughout by a phalanx of legal advisers who have argued every single point available to them.
  36. (2) Delay

  37. The general rule is (as I have stated) that interest runs from the date of accrual of the cause of action although this may be displaced where the claimant has delayed unreasonably in commencing or prosecuting the claim: see Claymore Services Ltd v Nautilus Properties Ltd [2007] EWHC 805 (TCC) at [55] (Jackson J). In Carton-Kelly v Darty Holdings SAS [2022] EWHC 3234 (Ch) Falk LJ added the following gloss on this test which makes it clear that the rationale for a departure from this rule is one of causation, that is to say, that the claimant is itself responsible for being kept out of its money. She stated this at [9] and [10]:
  38. "9. The key points I derive from the authorities are as follows. The starting point is that interest runs from the date of the accrual of the cause of action, and its purpose is to compensate the claimant for being kept out of his money. I also note that in commercial cases the courts have taken the approach of identifying a rate of interest that reflects the cost of borrowing, not by the particular claimant in question, but claimants with the general attributes of the claimant. That is referred to in Sycamore at [7], citing Tate & Lyle v GLC [1982] 1 WLR 149 at 154.
    10. There may be a departure from this approach in the case of an unjustifiable delay, either by not awarding interest for a period or by adjusting the rate of interest. The rationale is that, although the defendant has had the use of the money and would get a windfall to the extent that interest is not awarded, the fact that the claimant has not received funds earlier is attributable to his own fault. The claimant has himself caused the loss of use of funds by choosing to delay. That is clear from the cases summarised in Claymore at [52] to [54]."
  39. Mr Purvis argued that Lufthansa had been guilty of two periods of "unjustifiable and unreasonable delay": first, the delay in bringing proceedings and, secondly, the delay following the conclusion of the liability phase. He argued that the first period began in 2011 and that Lufthansa unreasonably and unjustifiably delayed in failing to notify Astronics and Safran of its claim until 27 April 2018 and Panasonic until 29 May 2019. He also argued that Lufthansa unreasonably and unjustifiably delayed in failing to initiate the quantum phase from January 2022 until 2 September 2022.
  40. (i) 2011 to 2018

  41. In his third witness statement dated 18 March 2025 ("Jackel 3") Mr Gerd Jackel, a partner in Jones Day, gave evidence explaining the reasons for the delay in the issue of proceedings. Rather than attempt to summarise his evidence, I set it out in full:
  42. "Commencement of proceedings against AES and Safran in 2017
    7. Lufthansa first issued proceedings for patent infringement against AES on 29 December 2010, with proceedings in Germany. The fact Lufthansa is domiciled in that jurisdiction, combined with its status as a highly significant location for aerospace manufacturing (in particular relating to Airbus aircraft) meant that this was a proportionate approach to the dispute for Lufthansa. Lufthansa only brought the German action after it was convinced that the facts known and the evidence at hand provided sufficient support for the action, though at that time it still did not have all the relevant information. For example, Lufthansa was not yet in possession of a copy of the Settlement Agreement between KID and AES, on which AES based defence arguments in the German litigation and in these proceedings.
    8. Following a finding of validity in Germany (in distinct proceedings initiated by a subsidiary of AES), Lufthansa commenced infringement proceedings in the United States on 26 November 2014. That jurisdiction was chosen since AES was based there and manufactured its components for EmPower Systems there. AES also distributed components worldwide from its base in the U.S. Further, as I explain below, Lufthansa also maintained (and continues to maintain) extensive operations in the United States.
    9. For the above reasons, Lufthansa did not consider that it was necessary or even appropriate to commence further infringement proceedings in the UK or elsewhere at this time.
    10. From an enforcement perspective therefore, Lufthansa hoped that it would be able to obtain adequate relief against AES without having to pursue parallel proceedings outside of the two jurisdictions referenced above. That, however, turned out not to be possible.
    11. In the U.S. infringement proceedings, AES counterclaimed against Lufthansa for revocation of its U.S. patent. This led to the U.S. patent being revoked at first instance by a judgment dated 20 July 2016. Lufthansa appealed the revocation, but the decision was upheld by the appeal court on October 19, 2017.
    12. In response to the revocation of the U.S. patent, Lufthansa re-considered whether proceedings on equivalent patents in alternative jurisdictions needed to be brought from a recovery/enforcement perspective. The outcome was that Lufthansa commenced a UK claim against AES and Safran on 28 December 2017, with case number HP-2017-000085. It also filed an infringement claim in France on 29 December 2017.
    Commencement of proceedings against PAC in 2019
    13. I am instructed by Lufthansa that it was aware of PAC's involvement in EmPower System distribution before it started the German litigation. Certainly, it was aware that PAC distributed EmPower Systems in Germany by 17 June 2011, as this fact was mentioned in AES' Grounds of
    Defense in the German action. However Jones Day and Lufthansa were at that time unable to determine the geographical scope or scale of such activity. Lufthansa therefore commenced discovery proceedings against PAC under s. 1782 of Title 28 of the United States Code (the "s. 1782 Proceedings") on 23 January 2018, seeking PAC's sales and financial information regarding its distribution of EmPower Systems. PAC first provided financial information in response on 3 April 2018, but this was clearly deficient and had to be reworked, and a second more useful iteration was disclosed on 6 March 2019 (the "s. 1782 Spreadsheet").
    14. On 14 March 2019 Mr. Greenlee of PAC was deposed by Jones Day in the United States as to the precise content of the s. 1782 Spreadsheet. This was the point at which Jones Day (and by extension Lufthansa) started to gain a clear understanding of the scale of PAC's distribution of EmPower Systems, as well as the geographical scope of its infringing activity. The s. 1782 Spreadsheet contained in excess of 300,000 rows and more than 40 columns and had no mechanism to allow filtering by country. Accordingly, it took some time for the Jones Day team to manually analyse the contents of the spreadsheet and filter the data by jurisdiction.
    15. Nonetheless Lufthansa was able to commence proceedings against PAC in the UK on 13 May 2019, in time for the case (no. HP-2019-000019) to be heard at trial concurrently with the proceedings against AES and Safran."
  43. Mr Purvis did not challenge this evidence and I accept it. In particular, I am satisfied that Lufthansa did not make a conscious choice not to commence proceedings against any of the Defendants in the UK at any time between 2011 and 2018 or to delay the issue of proceedings. I am also satisfied that it is appropriate to treat the litigation in Germany, the USA and the UK as elements of a single multi-jurisdictional dispute which began in Germany on 29 December 2010. Indeed, it is clear that the Defendants have resisted Lufthansa's claims for infringement and disclosure and sought to challenge the validity of the Patent in every jurisdiction. In my judgment, therefore, it was not unreasonable or unjustified for Lufthansa to wait until 2017 to issue proceedings in the UK against Astronics and Safran and, in particular, until after the interrogation of the S.1782 Spreadsheet to commence proceedings against Panasonic.
  44. (ii) January to September 2022

  45. In my judgment, the delay in the commencement of the Account between January 2022 and September 2022 was not unreasonable or unjustified. Indeed, I am satisfied that this was a wholly unmeritorious point to take and that the Defendants themselves were primarily responsible for this delay by their failure to comply with their Island Records disclosure obligations. The Court of Appeal described this failure as "lamentable" and, although I was prepared to treat Panasonic's failure to comply with its obligations leniently when dealing with the important issue of sales credits (see the Principal Judgment, [525] to [529]), I am not prepared to give the Defendants any more latitude. I dismiss the Defendants' argument on delay.
  46. (3) Rate

    (i) Astronics

  47. In my Order dated 3 April 2025 I required Astronics to pay US $4.42 million to Lufthansa within 14 days of the date of the Order. Mr Cuddigan submitted that interest should be calculated by reference to US Prime Rate and in support of this submission he relied on Civil Procedure (above), Vol 1 at 16A1.2(e), Mamidoil-Jetoil v Okta [2002] EWHC 2462 (Comm) at [15] to [17] (Aikens J), Fiona Trust & Holding Corp v Privalov [2011] EWHC 664 (Comm) at [15] (Andrew Smith J) and Lonestar Communications Corporation Ltd v Daniel Kaye [2023] EWHC 732 (Comm). In Lonestar Foxton J stated as follows at [14] and [15]:
  48. "14. There are some contexts (for example which side of the road to drive on) when the existence of a clear default rule is important, even if there is much which can be said for both competing options. I am satisfied that the default interest rate for US$ awards in the Commercial Court going forward should be US Prime, irrespective of whether the claimant has a US place of operations or not and irrespective of whether the claim is a maritime claim or not. I have reached that conclusion for the following reasons: i) There are long-standing decisions of the Commercial Court which have referred to US Prime as a starting point for US$ awards: see [4]-[7]. That practice is referred to in Civil Procedure §16AI.2. ii) LIBOR is in the course of being discontinued. iii) LIBOR itself is an interbank rate, rather than a commercial borrowing rate. iv) The trend of the more recent authorities has been to favour the use of US Prime. v) A default rule would not achieve the requisite clarity if it did not apply to particular commercial sectors of indeterminate scope. 15. There being no contrary evidence in this case, the starting point will be US Prime."
  49. Mr Purvis submitted that this was a convention only and that the Court should apply UK base rates and add 1%. I reject that submission. Mr Purvis was unable to point to any reason why Astronics or Panasonic had a closer connection with the UK than the USA or why I should not apply the default rule in the present case. If anything, the expert evidence which the Defendants filed for the application provided a strong reason why there is a convention that the Court should adopt a US rate in cases where judgment is given in US dollars.
  50. In his first expert report dated 18 March 2025 ("Battrick 1") Mr Battrick had to convert the judgment into GBP using the average of exchange rates over the relevant year, add interest to that figure at the UK base rate plus 1% and then convert the figure back again to US dollars on 13 March 2025 (i.e. the date of his calculations). In my judgment, this exercise is unnecessarily complex and the overall outcome is heavily dependent on fluctuations in the exchange rate which could distort the overall award and are wholly unnecessary if the Court orders the payment of interest to be calculated by reference to US Prime Rate. I so order.
  51. (ii) Panasonic

  52. I make the same order in relation to Panasonic. On 3 April 2025 I also made an Order requiring Panasonic to pay US $7.384 million to Lufthansa within 14 days of the date of the Order. Both Mr Cuddigan and Mr Purvis approached this question on the basis that the position in relation to Panasonic was the same as Astronics and I therefore award interest calculated by reference to US Prime Rate.
  53. (iii) Safran

  54. It appeared to be common ground that it was appropriate to award interest against Safran calculated by reference to the UK base rate and the issue between the parties was whether the uplift should be 1% or 2%. I say that it appeared to be common ground because the Defendants' Skeleton Argument did not address the position of each Defendant individually. But in case there is any doubt, I am satisfied that it is appropriate to order Safran to pay interest calculated by reference to the UK base rate together with an uplift. I am also satisfied that the appropriate uplift should be 2% given that interest rates remained at historically low rates of between 0.25% and 0.50% for the Relevant Period: see Hunt v Optima (Cambridge) Ltd [2013] EWHC 1121 (TCC) at [14] (Akenhead J) and Involnert Management Inc v Aprilange Ltd [2015] EWHC 2934 (Comm) at [9] (Leggatt J).
  55. (4) Tax

  56. Mr Purvis also argued that the amount of interest which each Defendant was ordered to pay should be reduced to take account of tax. Mr Battrick justified this deduction in Battrick 1 on the basis that tax would be payable on interest income and interest charges would be tax deductible and he calculated it by reference to the tax rate which the Defendants would have paid at the date or dates on which the interest would have been earned. Mr Purvis did not draw my attention to any authority in which the Court had made a similar deduction from an award of interest.
  57. I have no hesitation in rejecting this argument for two reasons: first, in the Principal Judgment I struck the profits payable by each Defendant after deducting tax: see [498], [544] to [547] and [550]. Secondly, it was Mr Jackel's uncontested evidence in Jackel 3 that Lufthansa will be required to pay tax on any interest awarded under the Account on the basis that it is treated as income for income tax purposes. I am satisfied, therefore, that the Defendants will only be required to pay interest on their post-tax profits for the Relevant Period and Lufthansa will have to pay tax on the interest as additional income.
  58. Furthermore, it is unclear to me whether Mr Battrick was aware of either of these things when he gave evidence in Battrick 1 that it was appropriate to adopt a post-tax interest rate. When Mr Ryan pointed them out in his fourth report dated 18 March 2025 ("Ryan 4"), Mr Battrick replied to his evidence in a second report dated 19 March 2025 ("Battrick 2") in which he continued to maintain that a post-tax interest rate was appropriate. However, he did so on the basis that Lufthansa would have paid tax earlier and at a different rate. I found this evidence unconvincing. It was wholly theoretical and at best it would have required a minor adjustment to what is a fairly broad brush measure in the first place. In my judgment, Mr Battrick should have conceded the point.
  59. (5) Timing

  60. Lufthansa's cause of action against each of the Defendants accrued before the commencement of the Relevant Period but it is now barred by limitation from recovering any profits for any earlier infringement. In practical terms, therefore, Lufthansa is entitled to recover interest on the profits which the Defendants earned during the entirety of the Relevant Period. Given their recurring nature, both experts prepared calculations of interest on the assumption that the annualised profits for each year of the Relevant Period accrued at the mid-point in each year or part of a year. Mr Cuddigan also drew my attention to the fact that Briggs J (as he then was) had adopted the same approach in Cipriani (above). I accept that this approach is appropriate in the present case and I adopt it.
  61. C. Calculations

    (1) Astronics

  62. I have held that Astronics is liable to pay interest on the profits which it earned from the infringement of the Patent at US Prime for the whole of its Relevant Period calculated from the mid-point in each year or part of a year from the beginning of the Relevant Period until judgment. Mr Ryan calculated interest on this basis until the end of February 2025 as US $2,148,625. I will make an Order for payment of this sum subject to any additional sum payable for the period between the end of February 2025 and my Order dated 3 April 2025.
  63. (2) Panasonic

  64. I have also held that Panasonic is liable to pay interest on the profits which it earned from the infringement of the Patent at US Prime for the whole of its Relevant Period calculated from the mid-point in each year or part of a year from the beginning of the Relevant Period until judgment. Mr Ryan also calculated interest on this basis until the end of February 2025 as US $3,424,307. Again, I will make an Order for payment of this sum subject to any additional sum payable for the period between the end of February 2025 and my Order dated 3 April 2025.
  65. (3) Safran

  66. Finally, I have held that Safran is liable to pay interest on profits of US $567,800 at 2% above UK base rate for the whole of its Relevant Period calculated from the mid-point in each year or part of a year from the beginning of the Relevant Period until judgment. Mr Ryan calculated interest on this basis until the end of February 2025 as £128,212. His evidence was that Safran's profits were calculated in GBP and that Mr Bezant had converted them into US dollars for the purpose of his calculations (which I accepted). As a consequence, he simply adopted the original figures in GBP and calculated interest on them to arrive at a final figure.
  67. Instead of adopting the original figures Mr Battrick converted the figures as stated in US dollars back into GBP at different rates before converting them back into US dollars again. I reject this methodology because it was over-complicated and unnecessary and I adopt Mr Ryan's approach. Again, I will make an Order for payment of £128,212 subject to any additional sum payable for the period between the end of February 2025 and my Order dated 3 April 2025.
  68. III. Double Recovery

  69. The Defendants invited the Court to include a recital in the Order together with liberty or permission to apply. The recital which they invited the Court to include was a statement that the sums which I had assessed in the Principal Judgment were "provisional pending the final resolution of the Account involving the parties in France and Germany". Before I address this issue I briefly describe the foreign proceedings out of which it arises.
  70. D. The Foreign Claims

    (1) Germany

  71. I described the proceedings in Germany in the Principal Judgment at [115] to [119]. It is common ground that the damages awarded in the infringement proceedings arising out of Mannheim II related to direct shipments to Germany and, therefore, involved no potential for double recovery. However, in his third witness statement dated 17 March 2025 ("Stoll 3") Mr Christian Stoll of Hogan Lovells gave evidence that there is the potential for double recovery in a second set of proceedings which he referred to as "German Proceedings 2". I described these proceedings in the Principal Judgment at [119] but I did not define them. For consistency, I will refer to them as "Mannheim III".
  72. Mr Stoll's evidence was that there is scope for double recovery because a proportion of the parts used for the final assembly of the Airbus A380 in Hamburg and the Airbus A320 in France would have been shipped indirectly to Germany through the UK. The Defendants accept that it is not clear precisely what claims Lufthansa is making in Mannheim III but in their Skeleton Argument they argued that there is the potential for double recovery for the following reasons:
  73. "82. The potential for double recovery arises in respect of the Germany 2 proceedings (which has loosely been referred to as the "indirect damages" claim but which includes claims for shipments to Germany both directly and indirectly). In those proceedings Lufthansa's cases are broad enough to catch the following:
    (a) Profits made by Astronics in respect of Primary Components shipped to third parties in the UK (such as Safran) which are then shipped to Germany (after, for example, having been incorporated into seats). This scenario arises where the seats are for linefit on Airbus aircraft - the majority of Airbus final assembly lines being in France and Germany.
    (b) Profits made in respect of FAL components shipped directly to Germany where they are included within the scope of the English Account by virtue of being installed in the same aircraft as a UK-delivered Primary Component.
    (c) Profits, said to be payable by Astronics, but made by Panasonic in respect of Primary Components shipped to the UK (which parts are then shipped by others to Germany).
    83. Whether and precisely how double recovery arises depends on whether and precisely how each of the allegations above is pursued by Lufthansa and the findings made in the foreign proceedings. However, take the following examples:
    (a) A Primary Component is shipped to the UK by Astronics. Astronics contends that the Judgment proceeds on the basis that, in effect, Astronics receives payment and makes its entire profit in respect of that part upon supply in the UK . That same part is shipped by a third party (assume a seat maker) to Germany. Astronics received no further payment for that part upon its delivery to Germany (and so no further profit). In that scenario there is only one transaction that caused profits to be generated for Astronics, namely the shipment to the UK and all of Astronics' profits in respect of that part were in play in this Account. It is clear from Lufthansa's second letter of 14 March 2025 {I/1076/1} that Lufthansa nonetheless intends to claim in Germany in respect of the same transaction, for example by arguing that the 87% that this Court has not attributed to the infringement are somehow available in Germany and are not "the same profits" in respect of which a determination has been made in this Account. If that is the case, the Defendants wish to argue that recovery of such profits would be re-litigating an issue that has already been decided by this court and amounts to double recovery.
    (b) FAL components shipped directly to Germany where they are installed in the same aircraft as a UK-delivered Primary Component. Again, the UK award covers FAL components relative to the number of Primary Components shipped to the UK. A proportion of such FAL components will have been installed in Germany.
    (c) Profits made by Panasonic upon shipment to the UK. Panasonic makes no further profits when such parts are shipped to Germany having been incorporated into a seek. Nonetheless, in Germany Lufthansa is arguing that Astronics is liable for such profits."
  74. Lufthansa accepted in its Reply that it was not entitled to recover profits in overseas proceedings where an award "of those same profits" had already been made in the Account "in relation to the same physical products": see the Reply, ¶30(b). Mr Jackel also gave evidence that there was a defence of "performance" under German law under which the Court would limit any damages recovered by Lufthansa in Germany. Finally, Lufthansa did not accept that the potential for double recovery was as great as the Defendants argued. In their Skeleton Argument they submitted that the overlap was far more limited:
  75. "By way of example, consider an EmPower System manufactured by Astronics in the USA, sold by Astronics to Panasonic in the USA, subsequently supplied by Panasonic to Safran in the UK, assembled by Safran in the UK, and then supplied by Safran to Airbus in Germany. Panasonic's and Safran's profits derived from their acts of infringement of the UK Patent (which do indeed relate to the same product) are captured by this account. Astronics' profits on the other hand are not, because its acts in the USA were not acts of infringement of the UK Patent. Mr Jaekel explains, however, that under German law Astronics' acts did infringe the German patent where it knew that the EmPower Systems it supplied to Panasonic in the US would ultimately infringe the German patent (or was negligent as to the same). On that basis, Lufthansa may in Germany be able to claim profits obtained by Astronics further up the supply chain for the same product."

    (2) France

  76. I was told very little about the French proceedings. But it appeared to be common ground that Lufthansa had been successful on appeal and that its damages claim for infringement had been remitted to the Court at first instance on the day before the hearing took place before me. In his oral submissions Mr Hall accepted that the French claim was now on a similar footing (as he put it) to Mannheim III. The claim for damages for loss of profits has yet to be pleaded but he accepted that there is at least some potential for double recovery.
  77. E. Final or Provisional Award

    (1) The Defendants' case

  78. Lufthansa submitted that the Defendants could not take the "double recovery" point because they had not pleaded it and only referred in the Defence to awards of profits which the Courts in Germany and France had already granted and not to any award which they might grant in the future. The Defendants' pleaded case was as follows:
  79. "65. To the extent that the profits sought in these proceedings are duplicative of profits awarded in the German proceedings there should be no double recovery. To the extent that the profits sought in these proceedings are in respect of the same products for which damages are sought in the French Proceedings, in the event that the appeal is allowed there should be no double recovery."
  80. I reject that submission. The Defendants have pleaded both the French proceedings and both Mannheim II and Mannheim III in the Defence and their case is that Lufthansa is not entitled to profits which are awarded in those proceedings if they would lead to double recovery. The pleader may have anticipated that both the French and German Courts would have delivered judgment by the time that the English Court made a final award in the Account. But in my judgment, it is clear that the Defence refers to any award of profits in both the German and French claims (whenever made).
  81. (2) Finality

  82. The Defendants did not identify any provision of the Civil Procedure Rules which would enable the Court to make a provisional award of profits or any general principle of law. Indeed, the only analogy which came to my mind was the power to award provisional damages for personal injuries under section 32A of the Senior Courts Act 1981: see CPR Part 41.1 to CP Part 41.3. However, the editors of McGregor on Damages 22nd ed (2024) state at 53—038 that as a matter of general principle an award of damages for personal injury must be in the form of a lump sum unless the Court makes such an order:
  83. "With the exception of claims to which the amended s.2 of the Damages Act 1996 applies, it remains the law that the award must be in the form of a lump sum for which judgment is entered. No other form of final award is currently allowed to the court, so that in Fournier v Canadian National Ry, it was held to be improper and illegal to award an annuity by way of damages. Just as the rule was, before legislation intervened, that the Court of Appeal could not substitute its own award for the jury's even with the consent of the parties, so there is no reason to believe that in cases untouched by the replacement s.2 the hallowed lump sum award could be bypassed by agreement. As for the structured settlement, which formed an important part of the 1990s scene, it was admittedly alternative to the lump sum award but did not represent an award of damages as there was no judicial power to award to the claimant, or to impose upon both claimant and defendant, such a settlement; structures were agreed voluntarily between the parties. However, such matters are now of no more than historical interest since the jurisdiction to award damages for future pecuniary loss in the form of periodical payments has entirely superseded the court's jurisdiction to approve structured settlements, the applicable Practice Direction once attached to CPR Pt 40 having been duly revoked."
  84. The editors of McGregor also state at 41—059 that once damages have been assessed and no further appeal against assessment is possible, there is no method available for altering an award for events which take place after judgment (unless the Court has made an order for provisional damages for personal injury):
  85. "Once the damages have been fully assessed, and no further appeal against the assessment is possible, there is today no method available—unless the circumstances have permitted resort to a claim for provisional damages—for altering the award. An award to a disabled man of 30, based upon normal life expectancy, cannot be reduced even if another accident kills him within a very short time; nor can he have his damages increased upon proof that his disablement has now turned out to be much greater than had been anticipated. It was said in earlier editions of this work that this result of the system of lump sum awards not subject to revision might one day lead to the adoption of the proposal, advocated in 1978 by the Pearson Commission, by a majority, in respect of the future pecuniary loss caused by serious and lasting injury that the courts should in general make their awards in the form of periodical payments and that the periodical payments should be subject to later revision when there is a material change in circumstances. While little or nothing was done about the Pearson Commission's recommendations for many years, they have, from 2005, come to fruition."
  86. The Defendants cited Spring Form Inc v Toy Brokers Ltd [2002] FSR 17 as authority for the proposition that the Account could not be concluded until or unless Lufthansa elected not to claim profits in the French or German Courts on the same articles or products for which the English Court had made an award of profits. In that case Pumfrey J considered that, as a matter of English law, an upstream supplier may be able to treat as deductible costs any sums which it is required to pay to its downstream customers. For this reason he stated that an account of profits should be taken against all of the infringers the same time. He stated this at [33]:
  87. "The final question under this head relates in my judgment to computation.
    If a defendant is liable to indemnify, directly or indirectly, the other defendants, then in a damages claim his exposure is limited to the claimant's damage on Gerber v. Lectra principles. Where an account is claimed, the indemnity will affect the actual profit which he makes. It may be capable of extinguishing his own profit if he pays it. This must be the case down the line of infringers. My reaction is that each defendant is able to set off against his profits the payments which he is obliged to make to other defendants on behalf of the patentee's claims. While this may entirely extinguish his liability to account, he will still lose if his payments to the others exceed his own profits. It follows that the accounts must be taken together, and that no order for payment should be made in respect of any infringing article until the claimant undertakes not to make a claim in respect of that article against any other defendant. Unless this is done the account becomes hopelessly complicated."
  88. In my judgment, Spring Form does not provide authority for the proposition that the Court is not able to complete the taking of the Account or make a final Order in the present case. In Spring Form Pumfrey J was not concerned with cross-border claims which might overlap with each other as opposed to a domestic claim for infringement of the same patent. Moreover, I am not satisfied that he was intending to lay down an invariable rule. In this section of his judgment he was primarily concerned with procedural issues such as the effect of an election. Finally, there is no suggestion in the present case that any of the Defendants were entitled to deduct sums payable under a chain of indemnities from the profits which I ordered them to pay. I therefore attribute no weight to Spring Form in this context.
  89. I am not satisfied that there is any jurisdiction to make a provisional award of profits or why the general common law principle stated by the editors of McGregor should not apply to an account of profits as well as an award of damages. The principle of finality requires that the Court must bring the proceedings to a close and give judgment on the evidence before it at trial. If the Court is required to anticipate what further evidence might come to light in the future or give the parties an opportunity to reargue the case in the light of future events, it would be impossible to draw a final line under the litigation. For this reason, therefore, I refuse to include the proposed recital in the final Order or to give permission to apply to vary any of the awards of profits which I have made.
  90. (3) Discretion

  91. But even if I have the power to make a provisional award of profits in the exercise of the Court's case management powers, I decline to exercise that power in favour of the Defendants for the following reasons:
  92. (1) There was no evidence that the French or German claims would be resolved in the near future and it could be years before a final award of profits is made. I might have been prepared to stay any final Order and grant permission to apply if those claims were likely to be determined in a matter of weeks or months but that was not the position. In my judgment, the Court should be very wary of granting an open-ended permission to apply to vary or set aside an Order which a party might seek to exercise years later.

    (2) Furthermore, I am not prepared to grant a stay of execution of any final Order pending the determination of the French and German claims. Mr Acland attempted to meet this point by stating that the Defendants were willing to comply with the Order and pay over the funds and that Lufthansa would only be required to pay them back if the Defendants sought permission to apply and were successful in setting aside or varying the Order. In my judgment, this is unsatisfactory. No party who has the benefit of a final judgment should be required to live with the uncertainty that they might be ordered to repay the fruits of the judgment. The fact that Lufthansa is a multi-national corporation with the ability to raise and repay the funds should not, in my judgment, make a difference.

    (3) Mr Acland did not challenge Mr Jackel's evidence in relation to the defence of performance under German law or argue that they would not be able to deduct the profits which they are ordered to pay by the English Court either as costs of manufacturing the infringing articles or as a matter of general principle. I am not satisfied, therefore, that there is a real risk that the German Courts (or, for that matter, the French Courts) would permit double recovery or that Lufthansa's assurance in the Reply does not give the Defendants adequate protection.

    (4) But even if there is a risk that the French or German Courts would permit double recovery, I have reached the conclusion that this should be a matter for determination by them and not by the English Courts. For example I have held that the Defendants are liable to pay 13% of the profits in issue. It is possible, say, that the French Courts may award a further 15% of those profits and the German Courts a further 25%. It does not appear to me to be self-evident that each award should be set off against the others so that the Defendants pay a total of 25% of the profits. The French Court might take the view that profits awarded by the English Court should be set off against its own award but the German Court might take the view that the awards should be cumulative. Much may depend on the evidence and the principles of law which the Court must award. In my judgment, those are matters for each national court applying its own law.

    (5) Finally, even if I were persuaded that this is a matter for the English Court, it is entirely unclear what the scope of any further issue between the parties will be. Again, it is unsatisfactory for the Court to be asked to give permission to apply without the Defendants formulating precisely what issue they should be permitted to bring back before the Court. If I make a provisional award of profits and give the Defendants permission to apply, I fully expect the parties to treat this as an invitation to re-open the Order which I have made and to raise a raft of issues about the effect of the French and German decisions. It is time to bring this litigation to an end (at least at first instance).

    IV. Disposal

  93. I order Astronics to pay interest of US $2,148,625 at US Prime Rate, Panasonic to pay interest of US $3,424,307 at US Prime Rate and Safran to pay interest of £128,212 at UK base rate plus 2% in each case subject to adjustment for the period between the end of February 2025 and 3 April 2025 when I made an order for payment against each of the Defendants.
  94. I refuse the Defendants' application to make a provisional award of profits by including the proposed recital in any final Order and giving them permission to apply. In paragraph 3 of the Order dated 3 April 2025 I directed that the sums paid pursuant to paragraph 1 of that Order should be paid on a provisional basis pending further order. I will now make an Order setting aside that paragraph of the Order and declaring that those sums either will be paid (or have been paid) on a final basis following this judgment.


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