Commercial Court clarifies the law

Commercial Court clarifies the law on the remedy of an account of profits in passing off cases

A judgment handed down by Mr Justice Charleton on 27 May 2014 in the Commercial Court has clarified the law on the remedy of an account of profits in respect of passing off cases. It was held that the correct approach is to award an appropriate portion of profits earned due to the passing off, rather than an award of all profits earned by the defendant during the period of the infringement. 

The judgment was delivered in the case McCambridge Limited v Joseph Brennan Bakeries [2014] IEHC 269, a passing off case concerning packaging of brown bread which was decided in favour of the Plaintiff in November 2011, a decision affirmed by the Supreme Court in July 2012.

McCambridge had elected for the remedy of an account of profits rather than an award of damages. The question to be decided by Judge Charleton was the extent of the Plaintiff's entitlement to Brennan's profits in the sale of the brown bread. Two approaches were considered. The first was the simpler option - to award all profits earned by Brennan's during the period that it used the infringing packaging, measured at €608,481. The second approach was more complex - to calculate the proportion of the profits that it earned which were attributable to the packaging.

The Court favoured the second approach, considering that "apportioning profits is not an impossible task". The bread made by Brennans was already on the market and had been achieving profits before the infringing wrapping was adopted. The adoption of the new wrapping "merely boosted those profits" by "about one third". The Plaintiff could have elected for an award of damages, which could be aggravated or exemplary, but elected instead for an account of profits.

 In a detailed judgment, Mr Justice Charleton reviewed the law on account of profits as it applies to all intellectual property. He affirmed that an account of profits is an equitable remedy, whose purpose "is not to punish an infringer but to remove from the infringer any unjust enrichment through stripping out the profits attributable to the infringement". 

The Court ordered an account as to the profits of the Defendant that were attributable to its decision "to dress up the packaging of its sliced brown bread in a get up that unintentionally passed it off as the highly regarded loaf of the plaintiff".  The amount ultimately paid by Brennan's to McCambridge was settled between the parties.  

Mr Justice Charleton's judgment provides a useful analysis of the law on an account of profits and the nature of this remedy in passing off and intellectual property infringement cases.


For further information, contact Jon Legorburu or Mona Costelloe of our Litigation Department.