Damages
In Hong Kong trade mark infringement proceedings, assessment of quantum / amount of damages is done in a separate set of proceedings from those establishing liability. That means after the Hong Kong Court finds that the Defendant/ trademark infringer has committed the infringement act, there will be separate proceedings to determine or assess the amount of damages that the trademark infringer has to pay to the claimant or plaintiff (the trade mark owner). The order made by the Court for assessment of damages is not a punitive remedy for the claimant or plaintiff.
The general principle in assessing quantum of damages is that the trade mark owner should be put in the same position as if the infringement act has not been committed. The trade mark owner may be compensated for all reasonably foreseeable losses suffered as a result of the infringement act.
A number of factors will be considered by the Court in assessing the amount of damages:
1. Lost royalty or licence fee
If a claimant or plaintiff has licensed his/her rights, damages are typically assessed on the basis of a notional licence fee or reasonable royalty assumed to be agreed between a willing licensor and licensee.
2. Lost profits on the potential sales which would have been made by the infringer or defendant
3. Lost profits from any price reduction as a result of the infringement
4. Compensation for injury or harm done to the trade mark's reputation
In some cases, the parties in dispute, that is the claimant or plaintiff and the trade mark infringer or the defendant can reach agreement on the amount payable and how and when the amount should be paid, e.g. by one lump sum or by instalment.
Account of profits
An account of profits order made by the Court is intended solely to deprive the trade mark infringer or defendant of the benefit as a result of the wrongful infringement act.
The infringer has to account for the profits attributed to the unauthorised use of the trade mark and to pay over the amount to the claimant or plaintiff.
An account of profits can be apportioned if only part of the trade mark infringer or defendant's business has obtained benefit from the infringing act. Overheads incurred by the business can be deducted. Like the order of assessment of damages made by the Court, an account of profits is not a punitive remedy.
For legal advice or services on trade mark infringement or defence to trade mark infringement claim, please contact CHOW & CHEUNG [Tel: +852 2856 3799 or Email: cac@ccsn.hk]
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