Court of Appeal decision on IP accounts of profits and the Court’s jurisdiction to award interest

After a four-day appeal hearing the Court of Appeal has given judgment in a number of appeals in Lufthansa v Astronics & Ors [2026] EWCA Civ 964. The main appeal concerned the significant issue of the proper approach to identifying the profits derived from infringement of a patent for the purposes of the exercise identified in s.61(1)(d) of the Patents Act 1977. One of the other appeals in the case concerned interest: what jurisdiction did the court have to award interest on such profits, was such jurisdiction available in respect of the period prior to the election (i.e. the election to take profits rather than damages), and what was the principled approach to the exercise of discretion as to the interest rate to apply? The judge had awarded interest from the date of profits at US Prime rates (the sums of profits identified under the account being US$ sums). The Defendants argued that there was no jurisdiction in equity to award interest on such profits (the relevant equitable jurisdiction being, it was argued, limited to a narrower category of cases which excluded IP account of profits), that statutory interest under s.35A of the Senior Courts Act 1981 was only available from the date of election (when, it was argued, the liability as to profits became a “debt” for relevant statutory purposes), and that interest should be calculated by converting US$ sums into euro sums (and back) and applying  a euribor related rate. The Court of Appeal dismissed the appeal on interest: it agreed with Lufthansa that interest was available both in equity and under statute and was available in either case from (at least) the date of profits; it also agreed that the Defendants’ proposed approach to interest illegitimately brought post-profit pre-judgment currency exchange rate fluctuations into the Court’s assessment.

James Walmsley represented Lufthansa on the interest appeal (with Hugo Cuddigan KC and Chris Hall from 11 South Square on the appeal as a whole), instructed by Jones Day.

Read the full judgment