Experience Hendrix Llc v PPX Enterprises Inc. & Anor

Experience Hendrix Llc v PPX Enterprises Inc. & Anor

The Court of Appeal held that, although the case was not exceptional enough to warrant a full account of profits, it was appropriate to award damages measured by reference to the benefit gained by PPX from its breaches (Wrotham Park damages). The appellant had a legitimate interest in preventing PPX’s profit-making activity in breach of contract, and it would be unjust for PPX to avoid payment by breaching the agreement. The judge was wrong to accept a limited undertaking rather than make an order for an account of sales for royalties.

Parties
Appellant: Experience Hendrix LLC; Respondent: PPX Enterprises Inc.; Respondent: Edward Chalpin
Jurisdiction
England and Wales
Judgment Date
20 March 2003
Procedural Posture
Civil Appeal / Appeal From Queen’s Bench Division to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Damages for Breach of Contract, Account of Profits, Restitutionary Remedies, Injunctions, Settlement Agreements
Contract Law Intellectual Property Damages for Breach of Contract Account of Profits Restitutionary Remedies Injunctions Settlement Agreements

Case Brief

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Parties

Experience Hendrix LLC

Appellant

PPX Enterprises Inc.

Respondent

Edward Chalpin

Respondent

Procedural Posture

Civil Appeal / Appeal From Queen’s Bench Division to Court of Appeal

Legal Issues

  1. 1 Whether the appellant is entitled to an account of profit or more than nominal damages for PPX’s breaches of the settlement agreement
  2. 2 Whether the judge was right to accept an undertaking rather than make an order regarding an account of sales for royalties

Ratio Decidendi

The Court of Appeal held that, although the case was not exceptional enough to warrant a full account of profits, it was appropriate to award damages measured by reference to the benefit gained by PPX from its breaches (Wrotham Park damages). The appellant had a legitimate interest in preventing PPX’s profit-making activity in breach of contract, and it would be unjust for PPX to avoid payment by breaching the agreement. The judge was wrong to accept a limited undertaking rather than make an order for an account of sales for royalties.

Court Disposition

Appeal allowed

Orders

  • PPX to pay damages assessed as a reasonable sum for use of material in breach of the settlement agreement (Wrotham Park damages), with guidance that the rate should be significantly higher than the royalty for Schedule A masters.
  • Order requiring PPX to account to the appellant for royalties on Schedule A masters, not limited by accounts received from licensees.