• Provision of security by the applicant (TRIPS 50.3): he may deposit money in the bank account of the authority, to show his good faith in the proceedings.
• pay Damages to the alleged infringer if the preliminary injunction is deemed to be unjustified
preliminary injunction (TRIPS 50.7): at the end of the proceedings. If we defend a claimant we may be aware not to it in a bad faith way, or unjustified way, we shall be careful to be in good faith.
(1) Ex parte injunctions => the countries provide high standards of evidence. We really need to prove that we are in our good right. Therefore, we need to prove:
• precautionary measure ordered without hearing the defendant
* Conditions
* particular urgency (delay is likely to cause irreparable harm: for example, if the witness is about to die, or we can show to the judge there is a risk that the evidence will be destroyed (banking account, documents) or that the infringer will disappear. cause irreparable harm) or a risk of evidence being destroyed (TRIPS 50.2): ex. Destroy his bank account, documents for example. So we want to go quickly for example.
(2) Preliminary injunction => status quo
• Preserves the status quo of a situation at an early stage (urgency) until a more considered decision on the merits is possible
ex: factory producing shoes then the shoes go out in a boat out of the country and then this boat goes to a distributor third party countries and distributes to in consumers so whether if we are here and we know that next week the shoes will be shipped we have to do a preliminary injunction or ex party so that we can to stop at this stage the sipping therefore dependant in the situation we need to make a tailor made enforcement measure.
• Conditions
• « Plaintiff must establish that
[1] he is likely to succeed on the merits, i.e. that the claimant has a good right to do so and there is likely an infringement.
[2] that he is likely to suffer irreparable harm in the absence of preliminary relief: so if we don’t stop the shoes shipping, if we are in the same country, then the boat will go away and it will be difficult to claim the injunction to the distributor, so we need to show that we will have irreparable harm otherwise the shoes will be put in the market.
[3] that the balance of equities tips in his favour, and
[4] that an injunction is in the public interest » (Winter v. Natural Res. Def. Council, Inc. 555 U.S. 7 (2008))
(3) Permanent injunction => no other remedies: ask the infringer to stop in the future permanently the right.
For when other remedies inadequate to compensate
• Conditions
« Plaintiff must demonstrate: (1) that it has suffered an irreparable injury;
(2) that remedies available at law are inadequate to compensate for that injury and
(3) that the public interest would not be disserved by a permanent injunction » (eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)): the patent troll usually when he ask for injunction the judge will say you don’t use anyhow your patent so instead of injunction there will be damages that may compensate your prejudice instead of having an injunction.
c. Damages
• Pecuniary remedy that aims to compensate the prejudice suffered
• Compensatory purpose, sometimes deterrent and punitive: for ex in USA. But most of the jurisdictions have compensatory purpose, we put the claimant in the same situation that he would have without the infringement.
• Ordinary rules of tort law unless statute provides otherwise
• Conditions (≠ automatically awarded)
• 45.1 TRIPS; 13.1 Directive 2004/48:
(1) Subjective condition (fault); intention or negligence.
(2) Objective condition (infringement., causation, damage):it is really the infringement that caused the damage. It is really hard to prove.
• Burden of proof
(1) Lost profits
• Sales the claimant would have made « but for » the infringement: without the infringer the claimant would have been able to do x amount of sales.
• Often calculated on the infringer’s profits, with respect of the causation (four factors test): between the damage and the infringement
(1) demand for the infringed product,
(2) absence of non‐infringing substitutes, : other products that the consumer would have bought.
(3) capacity of the right holder to exploit the demand: he should prove that he would have made these sales
(4) amount of the profit it would have made (Panduit Corp v. Stahlin Bros Fibre Works Inc, 575 F2d 1152)
(2) Depreciation of the IP Right
• Amount by which the relevant IP right has been depreciated by the infringement: ex reputation. But this is difficult because of causation.
• Infringement must cause a diminution in the capital value (e.g. « Bigfoot », Big O Tire Dealers Corp. v. Goodyear Tire & Rubber Co., 408 F.Supp 1219, 189 USPQ 17):a claimant used the sell tires 13 in the US and then b o tires the infringer copied the product, patent of the tires of the claimant and sold this tires in 50 states. The court decided that there was a depreciation of rights, of reputation only with respect to the 13 states where he was used to sell his tires not in the 50 states.
(3) Unfair profits: claim the profits sales made by the defendant.
III. Types of measures
• Jurisdictions allow usually to claim the profits sales made by the defendant
• Knowledge of infringement often required (intention so more than negligence)
• Only the portion of the infringer’s profits attributable to the invention (causation) (e.g. OLG Frankfurt GRUR‐RR 2003, 274)
Adidas has been copied by a Chinese infringer: Adidas has claimed for the infringer profit so the whole price made by the infringer. So how would you assess the infringer profit? usually we award the profit sales made by the defendant with the deduction of his fixed and net costs. If we do that, what is the percentage? The German court decided 20% of the sales.
(4) Reasonable royalty
to grant to the claimant the amount of money he would have made through contractual agreement with the infringer.
• Jurisdictions allow usually to claim a reasonable royalty from the defendant
• « But for » principle not applicable
• Calculating the reasonable royalty:
‐ Willing buyer/willing seller test : assume that you put the infringer and the claimant in a room and close the door and let them negotiate on an amount of money, or come to an agreement for example. Theoretical amount of money as royalty.
‐ 5‐20% of the infringer’s sales. 5 is more in patent right 20 = highest one for copyright industry, books, music etc.
‐ See 15 Factors of Georgia‐Pacific v. US Plywood Corp, 446
F2d 295
(5) Statutory/increased damages
• Some jurisdictions give the court a discretion for fixed or increased damages (to assess the damage and to grant damages)
• usually Compensatory, here it is also for deterrent (= dissuasif) and punitive purposes.
• Statutory damages : having within the regulation an amount of money we can claim per infringement.
e.g. US Copyright Act § 504(c) $750 ‐ 30’000 per infringed work, min. $200 if no fault and max. 150’000 if bad faith
let assume an infringer does many infringed work we have to multiply 150’000 per the number of infringed work (see Walt Disney Co. v. Powell, 897 F.2d 565): to sanction and punish the infringer.
In the Disney case the toy has been copied by an infringer and he made 3 pieces, fortunately the court said that it was only one infringed work so didn’t multiply by 3. But then he multiplied the number of manufactured work.
The claimant has not to prove a prejudice, but can ask an amount of money and the court has to power to assess.
• Increased damages: e.g.
• US Patent Act §284 « [...] the court may increase the damages up to three times the amount. »: the idea is to sanction and punish the infringer.
• US Lanham Act §1117(a) «[...] In a case involving the use of a counterfeit mark [...] three times such profits or damages [or]
statutory damages »
• Discretion of Court, see the « 9 Read factors » (Read Corp. v. Portec Inc., 970 F.2d 816)
2. Border measures
• What (Art. 51‐60 TRIPS)
• procedures that lead to suspension of release by customs author.
• Mandatory for trademark & copyright (Art. 51)
• Optional for other IPR and goods in transit (Art. 51)
• Conditions
• evidence of prima facie infringement
• detailed description of the goods required
• procedure: notice of suspension and 20 days to initiate proceeding on merits
* Questions
* How to deal with goods in transit? (e.g. transit through EU of generic drugs from India to Brazil)
* Why discriminate between IP rights?
• Classical counterfeiting cases:
Of we assist Rolex and we want to advice: here the watches are still in production, we might claim for injunction.it would be certainly provided. If we look at the conditions of injunctions:
Ex parte: high standard:
The claimant will need to prove with high standards that his rights will be infringed.
If Rolex claim preliminary injunction he would also need to prove that he will succeed on the merits and also that he is likely to suffer an irreparable harm damage. Probably If the Rolex watches goes on shipping and go on the market. We mention the reputation, so Rolex may suffer reputation risk so he may also have access to permanent and preliminary injunction.
What about damages for Rolex?
Lost profit? is the sales that Rolex would have made without infringement. If the watch is sold for 100$ in a country and the original is sold for 1000$. No lost profit for counterfeiting goods because the consumer would not buy these counterfeiting watches. Usually we can forget lost profits.
Depreciation of the right? is there any depreciation of Rolex goods? There is no depreciation because it increases the sales of luxury goods, but Rolex would claim that his reputation may be depreciated. It is difficult. This point is arguable.
Unfair profit? Yes.
Complex infringement case? If we take the conditions: see slide 13
As a claimant if I want to ask injunction I may prove that I can likely succeed on the merit,
here am I likely to do so? Case of smart DATA: claimed in Switzerland that apple in the iPhone was infringing his patent. Is smart data likely to succeed on the merit? Here we need to prove to the judge that our patent is really and effectively infringed! It is difficult because sometimes it inspiration or is a little part of the invention. Assuming that the judge admits that and stop iPhone at the border because it is infringing one software among all the software. what is the risk of our client? He might be responsible if the injunction is unjustified for all the iPhone not sold. Smart data need to prove that he would suffer an irreparable harm. Does he really suffer through the fact that apple is incorporating JUST a part of its software in his iPhone? The answer is usually no.
permanent injunction: the remedies available are inadequate to compensate: the judge will ask apple to stop using the software only if he think that there are no other remedies available to compensate. smart data is a small company producing software it is a small the judge would say that compensation shall be enough for compensating the claimant.
3. Criminal sanctions
What criminalization limited to TM counterfeiting (imitation) and copyright piracy (copy) (TRIPS 61)
Conditions
a. Wilfulness
b. Commercial scale
Sanctions
c. imprisonment and/or monetary fines sufficient to provide a deterrent effect. “In appropriate cases”: seizure, forfeiture, destruction of the infringing goods and of material (TRIPS 61)
Questions
Why criminalizing (Advantages/Disadvantages)? Why discriminate between IP rights?
What is the meaning of « on a commercial scale »?