Tay & Partners | Will This Amount Make Good The Loss In Goodwill

Goodwill is nothing more than the probability that the old customers will return to the old place.” – Lord Chancellor Eldon

Introduction

In trademark litigation, where a claimant elects not to pursue an account of profits, the usual course is to seek an inquiry into damages, aimed at compensating the claimant for the actual loss suffered as a result of the defendant’s acts of infringement and/or passing off. These damages typically fall under two principal heads: (i) loss of business profits; and (ii) loss of goodwill and reputation. The assessment of such damages is governed by the foundational principle of restoring the injured party to the position they would have been in had the wrongful acts not occurred.

Loss of business profits lends itself, at least to a degree, to a mathematical and evidentiary exercise. Courts typically examine historical earnings, projected growth trajectories, diversion of customers and reduction in sales attributable to infringing activities. Financial records, sales data and, where appropriate, expert evidence, often form the basis for quantifying the claimant’s lost profits.

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