Damages for Trade Mark Infringement - Fendi Italia and others v Rolo Fashion Ltd and another

Fendi Christmas Decoration in Taipei

Author: MiNe Licence: CC BY 2.0 Source: Wikimedia Commons

Jane Lambert

Intellectual Property Enterprise Court (HH Judge Hacon) Fendi Italia SRL and others v Rolo Fashion Ltd and Another [2026] EWHC 1703 (IPEC) (9 July 2026)

This was an action for trade mark infringement.  Each of the following companies owned well-known fashion brands protected by registered trade marks:

• Fendi Italia Srl; 
• Loewe SA;
• Christian Dior Couture SA  and
• Celine SA.

Their holding company was LVMH Moët Hennessy Louis Vuitton SE ("LVMH").   LVMH and its subsidiaries alleged that Rolo Fashion Ltd. ("Rolo") had infringed their marks by selling what they described as "counterfeit luxury goods" bearing one or more of their marks.  

The Default Judgment

They obtained a freezing injunction against Rolo without notice on 3 Sept 2024 and a default judgment against Rolo and its director, Georgia Aldridge ("Ms Aldridge") on 17 Jan 2025. 

Choice of Remedy

After obtaining judgment, the claimants would have had the choice of seeking damages (compensation for the loss or damage that they sustained as a result of the infringements) to be assessed in proceedings known as "an inquiry as to damages" or the surrender of any profits that the defendants had obtained from the infringements assessed in proceedings known as an "account of profits".   It appears that the claimants chose an inquiry. 

The Inquiry

After the claimants had chosen an inquiry, the court directed the claimants to serve a statement of case or pleading setting out their claim for damages in detail, known as points of claim.   It directed the defendants to respond in a statement of case known as points of defence.   Witness statements were also served by LVMH's Head of Online Brand Protection and by Ms Aldridge.  The inquiry came before His Honour Judge Hacon.   

The Judgment

At the parties' requests, the proceedings were conducted in writing. The matter came before His Honour Judge Hacon, who received submissions from the solicitors for all parties. His Honour handed down judgment remotely at 11.10am on 9 July 2026. By para [65] of his judgment in Fendi Italia SRL and Others v Rolo Fashion Ltd and Another [2026] EWHC 1703 (IPEC) (09 July 2026), he ordered the defendants to pay the claimants collectively the sum of £213,000.

The Issues

The points of claim identified the following heads of damage:
(1) damage to the reputation of the brands, 

(2) profits lost as a consequence of lost sales and 

(3) lost licensing income.

None of this was disputed by the defendants.

Applicable Law

After referring to para [47] of Mr Justice Kitchin's judgment in Ultraframe (UK) Limited v Eurocell Building Plastics Limited [2006] EWHC 1344 (Pat) at [47] and Gerber Garment Technology Inc v Lectra Systems Ltd [1995] RPC 383, [1997] RPC 443 on appeal, Judge Hacon noted at para [16] of his judgment:

"It is well established in patent actions that where a claimant has exploited its patent by manufacture it can claim (a) the lost profit on sales which it would have made had the defendant's infringement not caused those sales to have been lost, (b) lost profit on sales made by the claimant to the extent that the defendant's infringing sales caused the claimant to lower its price on those sales and (c) a reasonable royalty on sales by the defendant to which no loss under (a) or (b) can be ascribed, see Ultraframe at [47(v)]."

He said in the next paragraph that an award of a reasonable royalty under (c) is often referred to as an award under the 'user principle'.

The learned judge reflected that the user principle may not be appropriate for all trade mark infringements.  He referred to para [165] of Lord Justice Jacob's judgment in Reed Executive plc v Reed Business Information Ltd [2004] EWCA Civ 159:

"I would add only one further matter in relation to damages. I am by no means convinced that the 'user' principle automatically applies in trade mark or passing-off cases, especially where the 'mark' concerned is not the sort of mark available for hire. The ordinary case is one that just protects goodwill. For damages to be awarded on the user principle is close to saying there is no damage so some will be invented. It is not the same sort of thing as having to pay for use of an invention (the basis of the user principle in patents). At present there is no clear finding that the inquiry should proceed on a user basis. Whether it should do so will be a matter for the judge—who thus far has said no more than that he 'apprehends' that a user basis will be used."

On the other hand, Judge Birss (as he then was) said at para [13] of his judgment in National Guild of Removers and Storers Ltd v Jones [2011] EWPCC 4:

"Jacob LJ draws a distinction between the ordinary case in which the mark just protects goodwill and another kind where the mark is the sort of mark available for hire. The ordinary cases are those in which the mark is used only by one business to distinguish its goods (or services) from those of all other competitive businesses. So for example to a consumer the trade mark "Flash" means a particular brand of cleaning fluid, nothing more. Competitors do not (I presume) pay the owners of Flash floor cleaner a royalty to use that mark on their own cleaning products. In that case the mark is never available to third parties to use for a fee at all. Jacob LJ's point that awarding user damages is close to awarding damages when there is really no damage at all, relates to that sort of case."

Judge Hacon concluded as follows:

"[24] In a patent case damages may be assessed on the user principle even where on the facts the patentee would never have granted a licence. In such instances the false but necessary assumption is made that patentee and infringer were a willing licensor and a willing licensee respectively. It is a means of assessing compensation faute de mieux. It is not evident to me why the same should not apply in a trade mark case even where the trade mark proprietor would not have licensed the mark to the infringer. 32Red plc v WHG (International) Limited [2013] EWHC 815 (Ch) was a post-Reed inquiry as to damages for trade mark infringement in which, with the agreement of both sides (by the time of the trial), the user principle was adopted by the court.
[25] In the present case the claimants claim damages on the user principle in relation to acts of infringement which did not result in lost sales on the part of the relevant claimant. I will discuss the merits of the claim below but to begin with I take the view that such a claim is available in law."

Loss of Profits
The judge directed himself at para [44] that there was no dispute that the claimants had suffered loss of profits and that he must attempt to put a figure on it. He calculated at [47] that the defendants had made 4,572 sales. Assuming that 15% of those sales were for substitutes for the claimants' products, he reasoned that sales by the defendants had caused the claimants to lose around 713 sales. The claimants' Head of Brand Protection online had testified that the average profit on the sale of an item was £280.  By multiplying £280 by 713, His Honour reached a total figure of £199,640, which he rounded up to £200,000.

User Principle

As for the defendants' sales that did not result in a loss of sales by the claimants, the judge deducted 713 from 4,572, leaving 4,039.  On the basis that the average selling price of each item was £110, the claimants' total revenue from the sale of 4,039 would have been £444,290.   In the learned judge's view, a reasonable royalty would have been 3%.  That would have generated a royalty of £13,328.70, which he rounded down to £13,000.

Damage to Reputation

The judge found no evidence that there had been damage to the reputation of the claimants' trade marks.

Intellectual Property (Enforcement, etc.) Regulations 2006

The claimants sought an additional award under reg 3 of the Intellectual Property (Enforcement, etc.) Regulations 2006:

"(1) Where in an action for infringement of an intellectual property right the defendant knew, or had reasonable grounds to know, that he engaged in infringing activity, the damages awarded to the claimant shall be appropriate to the actual prejudice he suffered as a result of the infringement
(2) When awarding such damages –
(a) all appropriate aspects shall be taken into account, including in particular –
(i) the negative economic consequences, including any lost profits, which the claimant has suffered, and any unfair profits made by the defendant; and
(ii) elements other than economic factors, including the moral prejudice caused to the claimant by the infringement; or
(b) where appropriate, they may be awarded on the basis of royalties or fees which would have been due had the defendant obtained a licence.
(3) This regulation does not affect the operation of any enactment or rule of law relating to remedies for the infringement of intellectual property rights except to the extent that it is inconsistent with the provisions of this regulation."

Judge Hacon considered their claim at [63]:

"The claimants argue in their written submissions that a further award should be made under Regulation 3 to compensate the claimants for (i) the defendants deriving an unfair advantage from sales of their counterfeit products, (ii) tarnishment and dilution and (iii) the commercial benefit derived by the defendants. The first two are heads of damage which may be compensated by ordinary damages if appropriate. I have found that they are not. The third may or be directed to a claim for unfair profits within the meaning of Regulation 3. If it is, I would need more detailed argument on the meaning of unfair profits and why they arise in the present case before making an award under that head."

He refused to make an additional award.

Comment

This court had to make assumptions because it was not at all clear that Ms Aldridge had complied with the court's directions for disclosure in a way in which she could and should have done. As a consequence, the defendants' probable failure to give proper disclosure and thereby to provide the court with a complete and satisfactory basis on which to calculate damages meant that they were not entitled to presumptions in their favour.  

Anyone wishing to discuss this case note may call me on +44 (0)20 7404 5252 during normal UK business hours or send me a message through my contact form at any time.