Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Before :
HIS HONOUR JUDGE HACON
Between :
LUXE WORLD LIMITED | Claimant |
- and - | |
(1) TOUCH OF VOGUE LIMITED (2) MIRWAS NAFFEE | Defendants |
Ashley Roughton for the Claimant by direct access
Ian Silcock (instructed by AV Law Solicitors Limited) for the Defendants
Hearing date: 27 January 2026
Approved Judgment
This judgment was handed down remotely at 10.30am on 30 January 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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HIS HONOUR JUDGE HACON
Judge Hacon :
Introduction
This is an application by the defendants to strike out the claim for an account of profits made by the claimant (‘Luxe World’) as a head of relief in an action alleging an actionable threat of proceedings for infringement of a registered design.
The defendants have a related application. They say that Luxe World has relied on its claim to an account of profits – as an alternative to seeking an inquiry as to damages – as a device to minimise the court fee paid (£646). Luxe World has stated on the Claim Form that the value of its claim is unknown. The defendants argue that had Luxe World properly sought only an inquiry, it would have been required to pay the full court fee of £10,000. The defendants now seek an order that Luxe World either states the value of its claim or pays up in full.
At first it was my impression that the defendants’ application is premature, being of no practical benefit to the defendants at this stage. Part of the defendants’ overall case is that if Luxe World should succeed in its claim of threats at trial, the damage it has suffered is either negligible or non-existent. It would follow that whatever the outcome of the application to strike out, the court fee to be paid by Luxe World will remain unchanged. However, having heard submissions in the CMC in which the application was made I accepted the defendants’ argument that this is an action in which the trial judge should decide quantum, if it arises, as well as the merits of Luxe World’s claim of an actionable threat. As matters stand, that would require an order for Island Records disclosure to allow an election to be made by Luxe World between an inquiry or an account. There would then be directions which would include directions for pleadings, disclosure and evidence in the inquiry or, as the case may be, the account. An order for Island Records disclosure would mean that the defendants must disclose information relating to the profit, if any, they have made in consequence of the communication from them alleged to have been a threat. It would not be appropriate to order the defendants to give Island Records disclosure before deciding whether an account of profits is available and therefore whether there is any basis in law for requiring such disclosure.
The statute
Section 26C of the Registered Designs Act 1949 (‘the 1949 Act’) as amended by the Intellectual Property (Unjustified Threats) Act 2017 (‘the 2017 Act’) provides:
‘26C Remedies and defences
Proceedings in respect of an actionable threat may be brought against the person who made the threat for—
a declaration that the threat is unjustified;
an injunction against the continuance of the threat;
damages in respect of any loss sustained by the aggrieved person by reason of the threat.’
The law
Luxe World accepts, of course, that the statute does not provide for an account of profits as a form of relief in proceedings for a threat of infringement of a registered design. (See, likewise, s.70C of the Patents Act 1977 in respect of an actionable threat to bring proceedings for infringement of a patent.) Luxe World argues that the rules of equity create a jurisdiction of their own, including the jurisdiction to order the equitable remedy of an account of profits. The statute may be silent as to an account of profits but silence does not deprive the court of its equitable discretion to order an account.
Luxe World also acknowledged that the 1949 Act expressly provides for relief by way of an account in an action for infringement of a registered design (see s.24A(2)). So do the statutes which govern infringement of other intellectual property rights. Luxe World submitted that those provisions establish a right to seek an account of profits. While an account is not available as of right under s.26C(1), the court’s equitable power to order an account remains.
Luxe World relied on Experience Hendrix LLC v PPX Enterprises Inc [2003] EWCA Civ 323. Litigation between the claimant’s predecessor in title and the defendant over rights in recordings made by Jimi Hendrix had been settled. The terms of the settlement allowed the defendant to fulfil any existing licences under those rights it had granted, subject to the payment of royalties to the plaintiff. An injunction restrained the grant of further licences without the predecessor’s consent. The benefit of the settlement agreement was later assigned by the predecessor to the claimant. In breach of the settlement agreement the defendant granted further licences and received royalties. The claimant sued for breach of contract seeking injunctions and an account of profits. The claimant appealed the refusal at first instance to order an account of profits. The Court of Appeal held that the claimant was entitled to a reasonable sum by way of compensation and in reaching that conclusion discussed the availability of an account of profits. Mance LJ cited Attorney General v Blake [2001] 1 AC 268. In Blake’s case the House of Lords had made a declaration that the Attorney General was entitled to be paid whatever amount was contractually due to the traitor Blake from his publisher under the agreement for publishing his account of his treacherous activities. Mance LJ said:
‘[34] Since Blake I see no reason why, if the beneficiary of a restrictive covenant is unaware of its infringement in time to obtain an injunction immediately, but is able to obtain an injunction for the future after the defendant by the infringement has obtained some benefit, the appellant should be precluded from obtaining an injunction and, if justice requires, a reasonable sum to compensate for the past infringement, even though he may not be able to show any financial loss to himself.
…
[35] I can take the example put in argument of breach of a restrictive covenant not to use land for a pop concert, committed in circumstances where the beneficiary was out of the country and suffered no discomfort at all. Why should he not obtain an injunction to restrain repetition and a reasonable sum having regard to the financial benefit obtained by the neighbouring landowner from the infringement? Likewise, if a breach of contract occurs in such circumstances that there is no possibility at all of obtaining an injunction (e.g. because the interests of a third party have intervened), I see no reason why that should, since Blake, present any insuperable bar, in appropriate circumstances, to an order for payment of a reasonable sum having regard to any benefit made by the infringement, even though the appellant cannot prove any financial loss (cf. Jaggard [v Sawyer [1995] 1 WLR 269 (CA)], at p.291, per Millett L.J.). Lord Nicholls in Blake took as ‘‘a useful general guide, although not exhaustive’’ of circumstances in which an account of profit might be appropriate, ‘‘whether the plaintiff had a legitimate interest in preventing the defendant’s profit-making activity’’. Those are precisely the circumstances in which an injunction for the future is likely to be granted. It would be paradoxical if its granting in the light of a continuing future risk were at the same time to deprive the appellant of any claim to strip, or seek a reasonable sum taking account of, the defendant’s profit from past infringement.’
Luxe World submitted that in the present case the circumstances accorded with Lord Nicholls’ guide: Luxe World had a legitimate interest in preventing the defendants’ profit-making activity made possible by their threats of proceedings for infringement of a registered design.
The defendants referred to Snell’s Equity (35th ed., 2025). The authors say this about infringement of intellectual property rights (at 20-032, p.664, footnotes omitted):
‘Courts of equity traditionally awarded accounts of profits gained through the infringement of intellectual property or breach of confidence. Relief of this type was seen as a corollary of injunctive relief. As to intellectual property infringements, the remedy has in several cases been put onto a statutory footing.’
The defendants relied on the following passage in Snell (at 20-034):
‘Apart from intellectual property torts, the account of profits is not an available remedy for common law torts, although damages measured on a licence fee basis are sometimes available, particularly in cases involving proprietary torts and cases of cynical wrongdoing. Since Attorney General v Blake was decided in 2001, the Court of Appeal has confirmed that the account of profits continues to be unavailable in cases involving non-proprietary torts’
A footnote at the end of the passage I have just quoted cites Devenish Nutrition Ltd v Sanofi-Aventis SA [2009] Ch 360 (CA). This litigation followed a decision of the Commission of the European Communities that the defendants in Devenish had entered into worldwide cartels in respect of certain vitamins in breach of art.81(1)EC of the EC Treaty. The claimants were direct or indirect purchasers of vitamins from one or more of the defendants and sought relief, including an account of profits. There was a preliminary issue as to the availability of relief, including the availability of an account. The appeal was limited to the issue of the availability of an account of profits as a matter of English law and whether European Community law either required or prevented the making of a restitutionary award on the facts of the case. The Court of Appeal held (Longmore LJ dissenting) that it was bound by authority to hold that a restitutionary award could not be made on a claim for a non-proprietary tort. This was aside from points arising on the facts of the case which led to the same result. EC law did not affect that outcome.
Arden LJ gave the leading judgment. She recorded that the claimant had relied on Blake’s case and set out the defendants’ response (at [2]):
‘The defendants contend that this court cannot apply the principle established in Blake’s case to a purely personal tortious claim, and in particular that this court is precluded by precedent, namely the decisions of this court in Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 and Halifax Building Society v Thomas [1996] Ch 217, from holding otherwise. The defendants accept that a restitutionary award could be made for a proprietary tort. (By a “proprietary tort” I mean a tort for which a claimant entitled to property or a property right is entitled to sue for interference on the basis discussed by Lord Nicholls of Birkenhead in Blake’s case. … )’
Arden LJ summarised her finding of law:
‘[4] My essential conclusion on the Blake issue is this. The overall holding in Blake’s case is that the law on remedies for interference with property, damages in lieu of an injunction, damages for breach of fiduciary duty and breach of contract should be coherent and that the same remedies should be available in the same circumstances, even if the cause of action is different. On that basis, a restitutionary award is available in tort unless it is precluded by the Wass case [1988] 1 WLR 1406 or the Halifax case [1996] Ch 217. In my judgment, it is precluded by the Wass case. However, if I am wrong in that conclusion, it is a condition of a restitutionary award that exceptional circumstances of the kind described in Blake’s case [2001] AC 268 should be shown.’
Arden LJ went on to develop the reasons for her conclusion in more detail. Tuckey LJ agreed with them:
‘[156] … Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 is binding on us. I agree with what Arden LJ says, at para 57, that Attorney General v Blake [2001] 1 AC 268 suggests that an account of profits could be ordered for non-proprietary torts. But for the reasons she gives in para 75 I do not think it can be said that the Wass case, which was not cited in Blake’s case, has necessarily been overruled by it. It can stand with Blake’s case. Non-proprietary torts do still therefore fall to be considered as an exception to the general principles articulated by Lord Nicholls of Birkenhead in Blake’s case unless and until the Wass case is overruled.’
Longmore LJ agreed with Arden and Tuckey LJJ on the outcome of the appeal but dissented on the point of law, stating (at [145]) that the Wass case is not authority for the proposition that the categories of cause of action in which it is permissible to order an account of profits are necessarily confined to tortious claims for breach of a proprietary right.
Discussion
Experience Hendrix was a contract case in which the ruling was founded on what Lord Nicholls had said in Blake’s case. Lord Nicholls’ observations were all concerned with breach of contract. Although his discussion began with a consideration of remedies for torts, I am bound by both the interpretation of what was said in Blake’s case and by the ruling on the law given by the majority of the Court in Devenish.
An actionable threat of infringement proceedings for infringement of a registered design is not a tort concerned with the invasion of a proprietary right. Luxe World did not contend otherwise. Two consequences follow. First, even if Luxe World were right to say that equity provides the court with a jurisdiction that operates independently of the jurisdiction to grant relief provided by s.26C of the 1949 Act, equity does not permit relief by way of an account of profits in relation to a claim relating to an actionable threat of proceedings for infringement of a registered design. Secondly, the law set out in Devenish explains what otherwise may appear to be an anomalous difference in the relief available under s.26C and that provided for in respect of an infringement of a registered design or, for that matter, an infringement of other intellectual property rights governed by statute.
Conclusion
Luxe World is not entitled to claim alternative relief by way of an account of profits.
Luxe World accepted in argument that, subject to one qualification, if it is not so entitled it must either now provide a value for its claim or alternatively pay the full court fee. The qualification was that because HMCTS accepted the fee of £646 together with an undertaking to pay more should circumstances dictate, HMCTS is now functus officio and cannot claim a higher payment. I do not find this persuasive. This court is not constrained by the acceptance of the fee from ordering that Luxe World either states a value or pays a higher fee and is not functus officio.
I invite counsel to agree an order which should include, if possible, proposals for all necessary directions for the trial.