Profit in United Kingdom

Concept of Profit; Profits

The following is an old definition of Profit; Profits [1], a term which has several meanings:1. The gain made upon any business or investment, when receipts and expenses are taken into account. Compare Earnings. Net income; as, in the expression “profits used m construction.” Not, therefore, that which is required and expended to keep property (as, a railroad) in its usual condition, proper for operation, and which is classed with repairs, part of the current expenses. Mesne profits. The pecuniary benefit received by one who dispossesses another of realty, between the disseisin and the restoration of possession. The provisions of the New Tofk Code of Civil Procedure providing for recovery in an action of ejectment, as damages for withholding the property, ” the rents and profits, or the value of the use and occupation of the property,” may be regarded as a legislative definition of the ancient technical expression ” mesne profits.” The owner should have either the rents actually received or the rental value, as may be just under the circumstances. The ” mesne profits ” consist of the net profits,, the rental value, or the value of the use and occupation, in ascertaining which necessary payments for taxes and ordinary repairs are to be deducted. Net profits. The gain that accrues on an investment after deducting losses and expenses; not what is made over losses, expenses, and interest. See Income. The words “net profits” define themselves. They mean what shall remain, as the clear gains of any business venture, after deducting the capital invested in the business, the expenses incurred in its conduct, and the losses sustained in its prosecution. In the law of partnerships, ” profits ” are the excess of returns over advances; the excess of what is obtained over the cost of obtaining it. ” Losses ” are the excess of advances over returns; the excess of the cost of obtaining over what is obtained. ” Profits ” and ” net profits ” are, for all legal purposes, synonymous expressions; but the returns themselves are often called ” gross profits; ” hence it becomes necessary to call profits “net profits,” to avoid confusion. See further Partnership. Profit a prendre. The right to take a pai’t of the soil or produce of the land. A right to the products or proceeds of Iand . This right, if enjoyed by reason of holding another estate, is regarded as an easement appurtenant to the estate; whereas, if it belongs to an individual, distinct from ownership in other lands, it takes the character of an interest or estate In the land itself, rather than that of a proper easement. The right, although capable of being transferred in gross, may be attached by the owner of the land to other land as an appurtenance, and pass as such upon conveyance of the latter. While the technical definition of an easement excludes such right, the right is nevertheless in the nature of an easement. See Penancy. Profits of a business. The receipts, deducting concurrent expenses; the equivalent of “net receipts.” Depreciation of buildings is not ordinarily or necessarily considered in the estimate. Wherever profits are spoken of as not a subject of damages it will be found that something contingent upon future bargains, or speculations, or states of the market, are referred to, and not the difference between the agreed price of something contracted for and its ascertainable value or cost

Alternative Meaning

In patent law, the rule of damages for an infringement is the amount the infringer actually realized in profits; not what he might have made by reasonable diligence. This amount is estimated by finding the difference between cost and sales. The elements of cost of materials, inierest, expense of manufacture and sale, and bad debts, considered by a manufacturer in find- ing his profits, are taken into account, and no others. Profits due to elements not patentable may sometimes be allowed. Salaries, as dividends of the profit imder another, name, are disallowed. The wrong-doer is made liable for actual, not for possible, gains. The controlling consideration is that he shall not profit by his own wrong. The rule compensates one party and punishes the other. A decree “for all the profits made in violation of the rights of the complainant under the patent aforesaid, by respondent, by the manufacture, use, or sale of any of the articles named in the bill of complaint,” is correct in form. Interest upon the various sums is not allowed. In an action at law for the infringement of a patent, the plaintiff can recover a verdict for only the actual damages which he has sustained; and the amount of such royalties or license fees as he has been accustomed to receive for the use of the invention, with interest thereon from the time when they should have been paid, is generally, though not always, taken as the measure of his damages; but the court may, whenever the circumstances of the case appear to require it, inflict punitive damages, by rendering judgment for not more than thrice the amount of the verdict. Upon a bill in equity, the plaintiff is entitled to recover the amount of gains and profits that the defendant has made by the use of the invention. This rule was established by a series of decisions under the patent act of 1836, which simply conferred upon the courts of the United States general equity jurisdiction, with the power to grant injunctions, in cases arising under the patent laws. The reasons for the rule are, that it comes nearer than any other to doing complete justice; that, in equity the profits made by an infringer belong to the patentee; and that it is inconsistent with the ordinary principles and practice of courts of chancery either to permit a wrong-doer to profit by his own wrong or to make no allowance for the expense of conducting his business, or to undertake to punish him by obliging him to pay more than a fair compensation to the person wronged. The infringer is liable for actual, not for possible, gains. The profits, therefore, which he must account for, are not those which he might reasonably have made, but those which he did make, by the use of the invention: or, in other words, the fruits of the advantage which he derived from the use, over what he would have bad in using other means then open to the public and adequate to enable him to obtain an equally beneficial result. If there was no such advantage, there can be no decree for profits, and the plaintiff’s only remedy is by an action at law for damages. But if the defendant gained an advantage by using the invention, that advantage is the measure of the profits to, be accounted for, even if from other causes his business did not result in profits. If, for example, the unauthorized use of a patented process; produced a definite saving in the cost of manufacture, he must account for the amount so saved. This application or corollary of the general rule is as well established as the rule itself. . . The profits allowed in equity have been, and are still, considered as a measure of unliquidated damages, which, as a rule, and in the absence of special circumstances, do not bear interest until after their amount has been judicially ascertained.

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Notes and References

1. Meaning of Profit; Profits provided by the Anderson Dictionary of Law (1889) (Dictionary of Law consisting of Judicial Definitions and Explanations of Words, Phrases and Maxims and an Exposition of the Principles of Law: Comprising a Dictionary and Compendium of American and English Jurisprudence; William C. Anderson; T. H. Flood and Company, Law Publishers, Chicago, United States)