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1 Digital Spark 2010 2 September 2010 Remedies and Sanctions under the IP Enforcement Directive Enrico Bonadio - Lecturer in Law Dundee Business School Universty of Abertay Dundee
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2 Enforcement of IPRs n EC Directive 2004/48: “Enforcement Directive” n First Directive aiming at harmonising all IPRs n Form of horizontal harmonisation n Earlier directives on IP: vertical harmonisation
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3 Enforcement of IPRs n Subjects entitled to ask for remedies n Art. 4 Dir: subjects entitled are n (a) the IPR holders n (b) the persons authorised by the said holders (e.g. licensees) n (c) collective rights management bodies n (d) professional defence bodies
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4 Enforcement of IPRs n It is often difficult to gather evidence of IPRs violation n Art. 6.1 Dir: courts may order that an evidence (in control of the opposing party) be presented in court by defendant n 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 n Bank accounts records/invoices/delivery notes/warehouse receipts n Subject to protection of confidential information
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5 Enforcement of IPRs n Gathering evidence is not enough n It is also important to preserve evidence n Art. 7 Dir: court may order provisional measures to preserve evidence in respect of the alleged infringement n Application of the injured party n Subject to protection of confidential information
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6 Enforcement of IPRs n Eg: “description” of the infringing goods (similar to UK Anton Pillar orders) n It is carried out by a court bailiff n It is often necessary when it is not possible to buy a sample of the infringing product (eg trade fair) n … and in case of infringement of process patents (and the violation is not detectable by examining the final product)
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7 Enforcement of IPRs n Obtaining information on (i) involvement of third parties and (ii) origin of infringing goods n Art. 8 Dir: info on origin of goods and distribution networks used by defendant n Eg: name/address of producers, distributors, suppliers, wholesalers, retailers, etc. n Eg: information on quantities produced, delivered, received or ordered and on price of goods/services
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8 Enforcement of IPRs n Provisional measures to stop infringing activities (Art. 9) n a) Interlocutory injunctions and b) seizures n a) Interlocutory injunctions prevent any imminent infringement of IPR or forbid the continuation n Rapid and cheap way of procuring temporary redress
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9 Enforcement of IPRs n b) Seizures aims at seizing/delivering up goods suspected of infringing IPR n Purposes: n preventing the entry into channel of commerce of infringing goods n therefore avoiding further circulation of infringing products n Carried out by a court bailiff n Right holders can participate to seizure operations
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10 Enforcement of IPRs n Art. 9.3 Dir: to obtain provisional measures, right owners must show evidence: n (i) they are right holders n (ii) their IPRs are being infringed (or infringement is imminent)
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11 Enforcement of IPRs n Provisional measures may be ordered inaudita altera parte (without the other party having been heard) n … where delay is likely to cause irreparable harm to IPR holder (Art. 9.4 Dir) n so-called ex parte orders (eg UK Anton Piller orders) n After execution of the measure, the parties effected must be given notice … n … and a review (including a right to be heard) should take place … n … to give the respondent a chance to challenge the lawfulness of the injunction/seizure
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12 Enforcement of IPRs n Remedies at the end of a proceedings on the merit n “Corrective measures” (Art. 10 Dir): n (i) recall from the channels of commerce of infringing products n (ii) definitive removal from the channels of commerce n (i) destruction n The aim is to “correct” the infringement and eliminate infringing products
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13 Enforcement of IPRs n Art. 11 Directive n Final injunction: n one of the most important measures obtainable by IPR holders … n … as it prevents the continuation of the infringing activity n Non compliance with injunction orders is subject to penalties … n … with a view to ensuring compliance n Penalties aim at strenghtening the injunction order
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14 Enforcement of IPRs n Damages are awarded with the decision on the merits of the case n Money damages are the most important n Art. 13.1 Dir: just infringers who knowingly engaged in infringing activities may be ordered by courts to pay damages n Damages can be invoked in case of wilful and/or negligent acts
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15 Enforcement of IPRs n Compensation based on objective criteria n 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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16 Enforcement of IPRs n When quantifying damages, all factors must be taken into account: n (i) Negative economic consequence which the injured party has suffered n (ii) Any unfair profits made by the infringer n (iii) Reasonable royalty rate n (iv) Moral prejudice caused to IPR holder by the infringement
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17 Enforcement of IPRs n (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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18 Enforcement of IPRs n (ii) Any unfair profits made by the infringer n It is possible that IPR owners has not recorded lost profits n Nonetheless, they are entitled to damages compensation n Art. 13.1: any unfair profits made by the infringer must be taken into consideration
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19 Enforcement of IPRs n (iii) Reasonable royalty rate n Royalties which would have been due if the infringer had requested authorization to use IPR n Such method may be a successful approach … n … if the right holder shows in court to have granted licences in the past
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20 Enforcement of IPRs n (iv) Moral prejudice caused to IPR holder by the infringement n Art. 13.1 Dir: also moral damage should be compensated n Such damages are usually requested by companies renowed for quality/reliability of goods/services
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21 Enforcement of IPRs n Publication of judicial decisions n Art. 15 Dir: courts may order – at the request of applicant and expenses of infringer – appropriate measures for dissemination of information concerning the decision … n … including displaying the decision and publishing it (in full or in part) on newspapers or specialized magazines n It aims at giving a message to trade and avoiding market distortions
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22 Enforcement of IPRs n Thanks for your attention!
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