By way of background, Article 13 of the Enforcement Directive states that when the judicial authorities set the damages that appropriate to the harm suffered:
(a) they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the rightholder by the infringement; or
(b) as an alternative to (a), they may, in appropriate cases, set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.
Nick Bolter of the London office of Edwards Angell Palmer & Dodge explained that in the UK there are bifurcated proceedings, i.e. two trials - one for liability and one for damages. Nick stated that in the UK damages trials are very rare as often the defendant, having already lost on liability, will come to its senses and sit down to negotiate a damages settlement with the claimant as this would be the most cost effective route. Nick explained that a claimant can be awarded compensatory damages or an account of profits, but that the UK Courts have not awarded punitive damages in trade mark infringement claims (in line with the European courts and the Directive Guidelines). Nick explained that the choice for how a claimant wishes their damages to be assessed is made at an early stage of the damages proceedings. He also noted that claimants can sometimes be faced with clever accounting on the defendants side which make any profits made as a result of the infringement seemingly disappear, and thus the choice for an election can be difficult. Nick referred to the recent Patents County Court cases of the National Guild of Removers dealing with damages (National Guild of Removers v Christopher Silveria  and Simon Jones, 9 February 2011). These were cases of IPKat favorite His Honour Judge Colin Birss QC who was described by Nick as being "extremely experienced IP lawyer and sensitive to IP issues" (the AmeriKat agrees). The judge stated in the former case that the "user principle" (lost royalties) is available in trade mark infringement and passing off cases, whereas previously the "user principle" was only available in patent cases. In the Simon Jones case, the judge increased the royalty rate by two-times the rate that the claimant would have been paid had the defendant approached the claimant before the infringement, because to make it 1:1 to would be unfair and would not recognize the harm caused. (The AmeriKat has to admit that she has not seen this opinion yet, so any comments on this are welcome!). Nick also referred to the Cipriani case which repeated the maximum of all cases - damages are to be determined on a case by case basis because they are so dependent on the facts of the case (yawn!).