Damages in Patent Infringement Litigation Judge Türkay Alıca Ankara 3th IPR Civil Court St. Gallen 23 May 2014

IPR COURTS Civil IPR Courts were established in 2000. Although, there is a law on courts of appeal, Appellate Courts have not been established yet. The Supreme Court has no specialized Chamber on IPR. Limited provisions concerning proceedings included in the IPR Laws. Civil Code, Code of Obligation and Code of Civil Proceeding are applicable. No bifurcation Ankara CiviI IPR Courts have exclusive juristiction on decisions of the Turkish Patent Institute.

(Article 136, 73, 74 of Decree Law No 551) Infringing Acts (Article 136, 73, 74 of Decree Law No 551) Direct Infringement (art. 136/1-a-b): Imitating the patented product or using the process Selling, distributing, commercializing, importing or keeping them in possession for commercial purposes such products, manufactured as a result of an infringement, where the person concerned knows or should know that such products are imitations Indirect Infringement (art. 74): The right holder is entitled to prevent third parties, from handing over to persons unauthorized to work the patented invention, elements and means related to an essential part of the invention; have to know or know essentiality and use not commonly to be found on the market Contributory infringement (art. 136/1-e) Participating in a/m acts or assisting, inducing, facilitating,

Requirements for Compensation Act (tort) Illegality prohibited act no statutory exceptions Damage Causal link Culpability intent negligence

Intent (Dolus): Compensation: 551 D.Law 138/1: A person who, produces, sells, distributes or puts in commerce, imports or keeps in possession for commercial purposes a product or makes use of a process under patent protection shall be liable to remedy the unlawful situation and to compensate the prejudice/damages he has caused. Absolute (strict) liability or presumption? «SCOTCH-BRITE decision- 11. Commercial Chamber 2005/5091, 2006/4635) «857 counterfeit products were found in the defandent’s market. Defendant has acknowledged that products are fake. The defendant should act as a prudent and diligent trader. The defendant shall be deemed to know that the products are fake.»

Negligence (Culpa) 556 D. Law art. 136/1-b: «Selling, distributing, commercializing, importing or keeping them in possession for commercial purposes or using by applying such products, manufactured as a result of an infringement, where the person concerned knows or should know that such products are imitations in whole or, in part;»

«Belko case» (11. Com. Cham. 2006/12733, 2007/15245) «Defendant has given his home phone to a friend named Harun Reşit who used the phone as a call center and in the flyers to sell the fake ‘Belko’ brand coals.» Defense on innocence is: contrary to the ordinary course of life not credible

Types of Damage Material damages Actual damages Loss of profit (Non-realized Income) Increasing the non-realized Income Compensation for loss of reputation Moral damages The burden of proof is on the plaintiff Patent owner may request from the infringing party the documents

Information: Documents Evidencing Infringement (Art. 139) Information on: the amount of patent infringements profit obtained from production Commercial records and documents Distribution Offers Advertisement: media, circulation figures, time Production: time, quantity, types, prices, trade names Acquisition costs without overheads Profits

Calculation of Lost Profit On the option of the proprietor of the patent: a)The lost income of the patent owner b) The income generated by the infringing party c) Reasonable royalty (licence analogy) In calculation of the lost profit: Economic importance of the invention Validity period of the patent in time of infringement Number and nature of the license If the patent holder has not fulfilled his obligation to use the patent, lost profit shall be calculated according to licence analogy

The lost income of the patent owner Lost sales Possible sales of the patent holder Price reductions Plaintiff's sales data the infringer's sales data determining possible net income the increase in sales of the plaintiff

The income generated by the infringer Net income Reduction of the costs arising from directly infringing products «DORUK» Trade mark case-2003 overall profitability ratio X gross sales amount generated from infringing products «Medrad Tomografi» patent case-29.11.2012 gross sales amount-direct costs: Net income

Licence Analogy Usual license fee Market value of the patent Appropriate royalty regarding the infringement in issue Adaptation to the subject of litigation of patent infringement If necessary, the plaintiff’s income: «MEF case-2012» Transit goods: licence anology is applicable, "Galatasaray case-2007"

Final Remarks Increasing Lost profit: «Belko cases» = (%10) Code of Obligation art 50/2: if necessary, the judge determines the compensation in equity (established case law) Moral compensation: If there is an infringement, there is also non-pecuniary damage : (Bosch case-2007) No double or triple damages, but the TSE (Turkish Standards Institute) trade marks infringements (controversial or established case law?)

Thank you for your attention turkay.alica@adalet.gov.tr turkayalica2003@yahoo.com