In the case of Lufthansa v Panasonic & ors, which is now at the stage of an account of profits, the Court of Appeal has held that an application by Panasonic to correct errors it had identified in its Island Records witness statement is not an application to which CPR r.3.9 and the relief from sanctions doctrine apply.
Birss LJ, giving the leading judgment, held that Island Records orders have to be seen in light of their purpose, which is only to facilitate the patentee’s election between an inquiry as to damages or an account of profits. The Court rejected Lufthansa’s argument that there is an express sanction for the breach provided in the CPR by reason of CPR r.31.21, inter alia since Panasonic was not seeking to rely on any documents and whilst Island Records evidence might be given in lieu of disclosure, it is not given in lieu of the substantive disclosure obligation on Panasonic in the proceedings. Having reviewed the so-called “implied sanctions” case law, the Court also rejected Lufthansa’s argument that a sanction should be implied for breach of the order for policy reasons, finding that the most that policy considerations would support is the idea that when a patentee learns that an infringer’s Island Records evidence is inaccurate they should be entitled to seek permission to revisit their election, since the purpose of the Island Records order has been frustrated.
As such, Birss LJ considered Panasonic’s application to correct its Island Records evidence under ordinary case management principles and acceded to its application, thereby allowing the appeal. At the same time, he ordered that Lufthansa be given the opportunity to revisit its election in light of the new information that had been provided.
The Court of Appeal’s judgment is available here.