British Thomson-Houston Co., Ltd v. Charlesworth, Peebles, & Co. and Others [1923] ScotLR 425 (17 March 1923)

British Thomson-Houston Co., Ltd v. Charlesworth, Peebles, & Co. and Others [1923] ScotLR 425 (17 March 1923)

The royalty method is an appropriate and fair means of assessing damages for patent infringement where the patentee grants licences or where the patent is included in a block licence, but the royalty rate must reflect the actual value of the patent infringed. Where the patent is not expressly licensed and evidence of its value is limited, damages should be substantial but may be reduced to reflect uncertainty. For the gas-filled lamp patent (No. 10918 of 1913), the 10% royalty is justified; for the leading-in wire patent (No. 23775 of 1912), damages are reduced to half the Lord Ordinary's award due to lack of direct licensing evidence.

Citation
[1923] ScotLR 425
Parties
Pursuer: British Thomson-Houston Company, Limited; Defender: Charlesworth, Peebles, & Company; Defender: King & Company; Defender: Naamlooze Vennootschap Pope's Metaaldraadlampenfabriek
Jurisdiction
Scotland
Judgment Date
17 March 1923
Procedural Posture
Patent Infringement and Damages / Appeal (reclaiming Motion) From Lord Ordinary's Assessment of Damages
Outcome
Appeal allowed in part; damages reduced for two actions, affirmed for third.
Legal Topics
Patent Infringement, Measure of Damages, Royalty Method, Assessment of Damages, Licensing, Remedies for Infringement
Intellectual Property Patents Damages Patent Infringement Measure of Damages Royalty Method Assessment of Damages Licensing +1 more

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Parties

British Thomson-Houston Company, Limited

Pursuer

Charlesworth, Peebles, & Company

Defender

King & Company

Defender

Naamlooze Vennootschap Pope's Metaaldraadlampenfabriek

Defender

Procedural Posture

Patent Infringement and Damages / Appeal (reclaiming Motion) From Lord Ordinary's Assessment of Damages

Legal Issues

  1. 1 What is the appropriate measure of damages for patent infringement where the patent is not itself the subject of a licence?
  2. 2 Is the royalty method applicable when the patent infringed is included in a block licence or not expressly licensed?
  3. 3 Should damages be nominal or substantial where infringement is admitted but evidence of loss is limited?

Ratio Decidendi

The royalty method is an appropriate and fair means of assessing damages for patent infringement where the patentee grants licences or where the patent is included in a block licence, but the royalty rate must reflect the actual value of the patent infringed. Where the patent is not expressly licensed and evidence of its value is limited, damages should be substantial but may be reduced to reflect uncertainty. For the gas-filled lamp patent (No. 10918 of 1913), the 10% royalty is justified; for the leading-in wire patent (No. 23775 of 1912), damages are reduced to half the Lord Ordinary's award due to lack of direct licensing evidence.

Court Disposition

Appeal allowed in part; damages reduced for two actions, affirmed for third.

Orders

  • Damages against Charlesworth, Peebles, & Company reduced to £885, 3s. 9d.
  • Damages against King & Company reduced to £19, 10s. 11d.