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Digital Spark 2010

2 September 2010

Remedies and Sanctions under the IP Enforcement Directive

Enrico Bonadio - Lecturer in LawDundee Business School

Universty of Abertay Dundee

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Enforcement of IPRs

EC Directive 2004/48: “Enforcement Directive”

First Directive aiming at harmonising all IPRs

Form of horizontal harmonisation Earlier directives on IP: vertical

harmonisation

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Enforcement of IPRs

Subjects entitled to ask for remedies Art. 4 Dir: subjects entitled are (a) the IPR holders (b) the persons authorised by the said

holders (e.g. licensees) (c) collective rights management

bodies (d) professional defence bodies

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Enforcement of IPRs It is often difficult to gather evidence of IPRs violation Art. 6.1 Dir: courts may order that an evidence (in

control of the opposing party) be presented in court by defendant

Art. 6.2 Dir: in case of infringement committed on a commercial scale, courts may order the defendant to communicate banking/financial/commercial docs under his control

Bank accounts records/invoices/delivery notes/warehouse receipts

Subject to protection of confidential information

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Enforcement of IPRs

Gathering evidence is not enough It is also important to preserve evidence Art. 7 Dir: court may order provisional

measures to preserve evidence in respect of the alleged infringement

Application of the injured party Subject to protection of confidential

information

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Enforcement of IPRs Eg: “description” of the infringing goods

(similar to UK Anton Pillar orders) It is carried out by a court bailiff It is often necessary when it is not

possible to buy a sample of the infringing product (eg trade fair)

… and in case of infringement of process patents (and the violation is not detectable by examining the final product)

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Enforcement of IPRs

Obtaining information on (i) involvement of third parties and (ii) origin of infringing goods

Art. 8 Dir: info on origin of goods and distribution networks used by defendant

Eg: name/address of producers, distributors, suppliers, wholesalers, retailers, etc.

Eg: information on quantities produced, delivered, received or ordered and on price of goods/services

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Enforcement of IPRs

Provisional measures to stop infringing activities (Art. 9)

a) Interlocutory injunctions and b) seizures

a) Interlocutory injunctions prevent any imminent infringement of IPR or forbid the continuation

Rapid and cheap way of procuring temporary redress

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Enforcement of IPRs

b) Seizures aims at seizing/delivering up goods suspected of infringing IPR

Purposes: preventing the entry into channel of commerce

of infringing goods therefore avoiding further circulation of

infringing products Carried out by a court bailiff Right holders can participate to seizure

operations

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Enforcement of IPRs

Art. 9.3 Dir: to obtain provisional measures, right owners must show evidence:

(i) they are right holders (ii) their IPRs are being infringed

(or infringement is imminent)

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Enforcement of IPRs

Provisional measures may be ordered inaudita altera parte (without the other party having been heard)

… where delay is likely to cause irreparable harm to IPR holder (Art. 9.4 Dir)

so-called ex parte orders (eg UK Anton Piller orders) After execution of the measure, the parties effected

must be given notice … … and a review (including a right to be heard)

should take place … … to give the respondent a chance to challenge the

lawfulness of the injunction/seizure

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Enforcement of IPRs

Remedies at the end of a proceedings on the merit

“Corrective measures” (Art. 10 Dir): (i) recall from the channels of commerce of

infringing products (ii) definitive removal from the channels of

commerce (i) destruction The aim is to “correct” the infringement and

eliminate infringing products

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Enforcement of IPRs

Art. 11 Directive Final injunction: one of the most important measures

obtainable by IPR holders … … as it prevents the continuation of the

infringing activity Non compliance with injunction orders is

subject to penalties … … with a view to ensuring compliance Penalties aim at strenghtening the

injunction order

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Enforcement of IPRs

Damages are awarded with the decision on the merits of the case

Money damages are the most important Art. 13.1 Dir: just infringers who

knowingly engaged in infringing activities may be ordered by courts to pay damages

Damages can be invoked in case of wilful and/or negligent acts

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Enforcement of IPRs

Compensation based on objective criteria

Overriding principle: an injured party must be restored to the position it would have been in before its IPR was infringed

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Enforcement of IPRs

When quantifying damages, all factors must be taken into account:

(i) Negative economic consequence which the injured party has suffered

(ii) Any unfair profits made by the infringer

(iii) Reasonable royalty rate (iv) Moral prejudice caused to IPR

holder by the infringement

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Enforcement of IPRs (i) Negative economic

consequence which the injured party has suffered– (a) Damnus emergens: actual

loss suffered by the injured party– (b) Lucrum cessans: lost profits

suffered by right holder

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Enforcement of IPRs

(ii) Any unfair profits made by the infringer

It is possible that IPR owners has not recorded lost profits

Nonetheless, they are entitled to damages compensation

Art. 13.1: any unfair profits made by the infringer must be taken into consideration

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Enforcement of IPRs

(iii) Reasonable royalty rate Royalties which would have been due

if the infringer had requested authorization to use IPR

Such method may be a successful approach …

… if the right holder shows in court to have granted licences in the past

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Enforcement of IPRs

(iv) Moral prejudice caused to IPR holder by the infringement

Art. 13.1 Dir: also moral damage should be compensated

Such damages are usually requested by companies renowed for quality/reliability of goods/services

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Enforcement of IPRs

Publication of judicial decisions Art. 15 Dir: courts may order – at the

request of applicant and expenses of infringer – appropriate measures for dissemination of information concerning the decision …

… including displaying the decision and publishing it (in full or in part) on newspapers or specialized magazines

It aims at giving a message to trade and avoiding market distortions

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Enforcement of IPRs

Thanks for your attention!