Watson, Laidlaw and Co v Pott, Cassels and Williamsons, [1914] UKHL 238
Citation:Watson, Laidlaw and Co v Pott, Cassels and Williamsons, [1914] UKHL 238
Rule of thumb:Does a person’s body language in how they give evidence affect their reliability? Yes, the way in which a person gives evidence is just as important as the logic of what they are saying in order for a Judge to deem it to be reliable. Can a damages award be appealed? There is a ‘broad axe’ of damages and it can only be appealed if there is no sound basis for it at all, and where it is based on oral evidence it cannot be appealed. IF one person infringes another person’s patent in an area the patent holder had no intention to trade, can damages still be claimed? Yes, royalties can still be claimed.
Background facts:
The basic facts of this case were that a patent was infringed by an organisation selling ‘Java’ machines in a place where the patent holder did not trade commercially, nor had any realistic aspirations to.
Parties argued:
The patent breacher argued that the patent holder did not operate there so they were caused no losses which could be proved by actual accounting evidence. The patent holder argued that they lost the opportunity to trade there, with business able to change quickly, amongst other speculative losses such as loss of reputation for building inferior products which purchasers could perceive to be the same thing & spread bad reviews about, and that they were owed a royalty as well nonetheless.
Judgment:
The Court upheld the arguments of the patent holder and affirmed that there was a loss of opportunity caused by this, with this being an area where accounting evidence of actual losses did not apply. The Court in this affirmed 2 important principles over damages – accounts to prove financial loss, and the broad axe of compensation. Where someone is claiming that another person’s conduct has caused them a financial loss (also called pecuniary losses), generally receipts, bank account records and summarised accounts are needed to prove these financial losses. However, where someone is claiming for compensation for injury, stress & inconvenience, loss of reputation, or loss of opportunity, then this is harder to quantify as objectively, and there can be a range of potential figures for compensation, and the Court has to practice the ‘broad axe of damages’ where on the range of figures that compensation actually falls. The Court further held that a royalty on all sales was owed.
The defender also thought that the damages were excessive. However, the Court held that they could not re-hear these arguments as the damages award was based largely on oral evidence given by the witnesses regarding this. The Court also affirmed the point of law body language, attitude and demeanour of someone giving evidence is an important consideration and great weight is attached to this, and where this has happened then the matter cannot be appealed under the law of evidence.
Ratio-decidendi:
‘The patentee must prove the loss that he has sustained by unlawful sales, as the natural and direct consequence of the wrong done to him, and the Judge has to determine whether such loss has been proved’, per Lord Kinnear
‘Where someone has been injured or suffered damage to their reputation the Court has to estimate with a ‘broad axe' what would be a fair financial sum to reflect this damage that has been done. In a second class of cases, restoration being in point of fact difficult—as in the case of loss of reputation, or impossible, as in the case of loss of life, faculty, or limb—the task of restoration under the name of compensation calls into play inference, conjecture, and the like. And this is necessarily accompanied with those deficiencies which attach to the conversion into money of certain elements which are very real, which go to make up the happiness and usefulness of life, but which were never so converted or measured. The restoration by way of compensation is therefore accomplished to a large extent by the exercise of a sound imagination and the practice of the broad axe. It is in such cases, whether the result has been attained by the verdict of a jury or the finding of a single Judge, that the greatest weight attaches to the decision of the court of first instance. The reasons for this are not far to seek—such as the value of testimony at first hand down to even the nuances of its expression, and they include, of course, the attitude and demeanour of the witnesses themselves. In all these cases, however, the attempt which justice makes is to get back to the status quo ante in fact, or to reach imaginatively by the process of compensation a result in which the same principle is followed … In such cases a royalty is an excellent key to unlock the difficulty, and I am in entire accord with the principle laid down by Lord Moulton in Meters Ld. V Metropolitan Gas Meters Ld. (28 R.P.C. 163). Each of the infringements was an actionable wrong, and although it may have been committed in a range of business or of territory which the patentee might not have reached, he is entitled to hire or royalty in respect of each unauthorised use of his property. Otherwise, the remedy might fall unjustly short of the wrong’. Lord Shaw
‘...It is in such cases, whether the result has been attained by the verdict of a jury or the finding of a single Judge, that the greatest weight attaches to the decision of the court of first instance. The reasons for this are not far to seek—such as the value of testimony at first hand down to even the nuances of its expression, and they include, of course, the attitude and demeanour of the witnesses themselves..’. Lord Shaw
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.