Recovery of profits based on estimation

Case No. O2013_007 ¦ Decision of 19 March 2014 ¦ “Quantitativer Schadenersatz”

— THE DECISION IN A NUTSHELL —

The defendant had not complied with a prior order of the FPC to provide information on sales figures and accounting. Complete silence. An easy walk-over for the plaintiff: Defendant’s profits were recovered based on estimation. Non-compliance with the prior order will be prosecuted by the criminal judge.

— THE DECISION IN MORE DETAIL —

The patent in suit is EP 1 393 417 B1. The plaintiff had requested injunctive relief in first place, and further information and accounting in an action by stages for the recovery of profits of the defendant originating from illegitimate sales of infringing products. As discussed in detail in an ealier post on this matter, the defendant neither challenged the validity of the patent nor was the infringement disputed. He did not make representations of any kind. The FPC thus had accepted the claim for injunctive relief and the defendant was obliged to provide the requested information and accounting within 60 days after the decision had become final.

Now, guess what happened: The defendant did not respond. It was thus up to the plaintiff again to reasonably quantify his request for recovery of profits.

Art. 73 PatA stipulates that any person who performs an act of infringement either wilfully or through negligence shall be required to pay damages to the injured party according to the provisions of the Code of Obligations (CO). That means that (i) a loss or damage must have occured; (ii) the act must have been unlawful; (iii) it must have been a fault of the defendant; and (iv) causality of the unlawful act and the loss or damage must be established. But the plaintiff had requested recovery of profits of the defendant. This is a special case of business conducted in an agent’s interest, based on Art. 423(1) CO: Where agency activities were not carried out with the best interests of the principal in mind, he is nonetheless entitled to appropriate any resulting benefits.

In fact, the plaintiff had an easy walk-over: It was undisputed that the defendant had realised profit with the (undisputedly) infringing goods. Recovery of profits requires bad faith of the agent (BGE 126 III 69, r. 2a; 129 III 422, r. 4), but this was easily established here since the defendant had evidently imported the infringing goods from Taiwan without having clarified patent issues. Since the defendant did not comply with the order of accounting, the profits were estimated by the court at its discretion, essentially based on the representations of the plaintiff. The sales price of an infringing good was CHF 14,90. It was plausible that a reasonable purchase price of the defendant was USD 3,– per item, resulting in profits of approx. CHF 12,16 per item. Even though the plaintiff argued that 3’000 pieces had been purchased by the defendant, he apparently assumed that only 1’500 items had been sold and thus only profits for 1’500 items were recovered. Albeit the profit can only be recovered inasmuch as it is caused by the infringed right, this was not a critical issue in this case: The FPC held that the technical principle protected by the patent in suit was “evidently” the key feature of the infringing, and thus the whole profit could be recovered by the plaintiff. The plaintiff further requested an interest of 5%, without further substantiation; this request was dismissed. The plaintiff also requested damages for costs incurred prior to the suit by the attorney and patent attorney. However, these costs were attributed to costs and compensation to be paid by the defendant.

The FPC further obliged the defendant to destroy any infringing devices that are still in his possession, within 10 days after the decison has become final.

As noted above, the defendant failed to comply with the order of FPC with the prior decision of  14 August 2013 under the threat of the criminal penalty for non-compliance. Consequently, the FPC handed over this matter to the criminal judge for further prosecution.

Reported by Martin WILMING

— BIBLIOGRAPHY—

Case No. O2013_007 ¦ Decision of 19 March 2014 ¦ “Quantitativer Schadenersatz”

WorldConnect AG ./. John Rusillon, owner of the individual company Easy-Tech, Rusillon

Subject(s):

  • Patent Infringement
  • Damages
  • Recovery of profits

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President)
  • Dr. Tobias BREMI (Judge)
  • Dr. Mark SCHWEIZER (Judge)
  • Lic. iur. Susanne ANDERHALDEN (Court Secretary)

Representative(s) of Plaintiff:

Representative(s) of Defendant:

  • (none)

— FULL TEXT OF THE DECISION —

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