IPEC insights. Account of profits not available in threats action: Luxe World v Touch of Vogue
The Intellectual Property Enterprise Court (IPEC) has issued a helpful decision in an interim strikeout application confirming that an account of profits is not available as a remedy in an unjustified threats action. Whilst this decision specifically concerns registered designs, the reasoning of the judge suggests that it would apply equally in the context of other relevant IP rights.
Takedown risks
Takedowns are a useful tool regularly used by IP rights holders to remove listings from online marketplaces (and other platforms/websites) where these contain infringing material. However, takedowns are not risk-free and can expose the rights holder to a claim for unjustified threats from the takedown target.
In this case, Touch of Vogue was hit with an unjustified threats claim after filing takedown requests with Amazon against Luxe World based on its registered designs for a bike accessory.
Strikeout application
Touch of Vogue alleged that Luxe World had relied on its claim to an account of profits in order to minimise the court fee payable. By stating on the claim form that the claim value was “unknown” and seeking an account of profits, Luxe World only had to pay a court fee of £646. However, if Luxe World had properly sought an inquiry into damages (that is, without specifying the amount of damages to be claimed) a court fee of £10,000 would have been payable.
Touch of Vogue therefore applied to strike out Luxe World’s claim to an account of profits.
Account of profits not available
The starting point is that the relevant statute (s. 26C of the Registered Designs Act 1949 as amended by the Intellectual Property (Unjustified Threats) Act 2017) does not provide for an account of profits in unjustified threats actions based on registered designs. However, Luxe World argued that an account of profits remained available to it as an equitable remedy.
Judge Hacon conclusively ruled that Luxe World was not entitled to claim an account of profits in the context of an unjustified threats action concerning a registered design. The main basis being that an unjustified threats action is “not a tort concerned with the invasion of a proprietary right” (Snell’s Equity (35th ed., 2025) at 20-032, p.664; Devenish Nutrition Ltd v Sanofi-Aventis SA [2009] Ch 360 (CA)). This was key because an account of profits is not available for non-proprietary torts following the Court of Appeal’s decision in Devenish Nutrition Ltd v Sanofi-Aventis SA [2008] EWCA Civ 1086, which is binding on the IPEC.
What next?
Luxe World will now have to either provide a concrete value for its unjustified threats claim and pay the appropriate court fee, or pay the £10,000 court fee for an inquiry into damages.
