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Digital Spark 2010

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. Enforcement of IPRs. EC Directive 2004/48: “Enforcement Directive”

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Digital Spark 2010

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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

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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)

  7. 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

  8. 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

  9. 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

  10. 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)

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. Enforcement of IPRs • Thanks for your attention!

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