ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS IN THE EUROPEAN UNION: THE LEGAL FRAMEWORK Prof. Dr. Dr. M. Buydens lawyer, professor at the University of

ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

IN THE EUROPEAN UNION: THE LEGAL FRAMEWORK

Prof. Dr. Dr. M. Buydens lawyer, professor at the University of Brussels

[email protected]

IP rights are useful in order to:• Encourage innovation and creativity by ensuring a fair

return on investment stimulate investments and R&D activities in the EU

• Foster economic growth• Facilitate the access of SME’s to start-up finance and

venture capital• Stimulate cultural diversity • Foster high level employment in the EU• Help protect the consumers

Intellectual property rights: a key issue in the European Union

… Whilst infringement, including counterfeiting and piracy:• Threatens further investments and economic growth in the EU

(OECD: counterfeiting = USD 250 billions)• Threatens employment • Slows down innovation in useful products (e.g. pharmaceuticals)• Represents a risk for the health and safety of citizens

(counterfeited medicines, toys, foodstuffs, spare parts for cars…)REM : in 2008, customs seizures showed a 26% rise in fake foodstuffs, a 38% rise in electrical equipment and 118% increase in fake medicines!

• Is a part of organised crime (high profits, low penalties)• Has an impact on the budget of the Member States (tax losses)

Intellectual property rights: a key issue in the European Union

• General instrument: The Directive 2004/48/EC on the enforcement of intellectual property rights (civil measures)

• Customs : Regulation EC No 1383/2003 concerning custom actions against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights in 2008, EU customs intercepted more than 178 million counterfeited and pirated articles (100% more than in 2007)

• Police : Council decision 2009/371/JHA of 6 April 2009 establishing the European Police Office (Europol)

Various measures for enhancing the protection of IP rights in the European Union:

• Digital environment: – Directive 2001/29/EC on the harmonisation of certain

aspects of copyright and related rights in the information society

– Directive 2009/24/EC on the legal protection of computer programs

– Directive 2000/31/EC on electronic commerce– Directive 2009/140/EC amending Directives 2002/21/EC

on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to and interconnection of electronic communications network and facilities and 2002/20/EC on the authorisation of electronic communication networks and services


• Others: – long-term strategy for the enforcement of IP rights in

third countries– negotiation of Anti-counterfeiting Trade Agreement

(ACTA)– EU-China action plan to increase customs co-

operation on protecting IP rights– EU Counterfeiting and Privacy Observatory (2 April

2009 – gathering evidence and knowledge about counterfeiting; sharing best practices on enforcement techniques; creating public awareness)

– etc.


Directive 2004/48/EC of the European Parliament and the Council of 29 April 2004 on the enforcement of Intellectual Property Rights (civil measures)

• Certain aspects of substantive laws on IP rights were harmonised:

- Trademarks (Regulation 207/2009 on Community Trademark; Directive 2008/95/CE)

- Designs (Regulation 6/2002 on community designs; Directive 98/71/CE on design protection)

The cornerstone for Enforcing IP rights:

- Copyright (Bern Convention, various directives, including Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society)

- Patents (European Patent Convention, Regulation 469/2009 concerning the supplementary protection certificate for medicinal products; Regulation 1610/96 on SPC for phytopharmaceutical products; Regulation 2100/94 on Community plant variety rights)

Directive 2004/48/EC

• TRIPs contain some provisions on the means of enforcing IP rights

• But enforcement was not harmonised in the EU and varied considerably within the EUFor instance :

– Belgium and France had a very efficient procedure for gathering evidence of possible infringement, the other EU countries didn’t

– Germany had a very efficient summary proceeding even in patent cases, whilst summary proceedings in patent cases were in practice very difficult in France and Belgium

– The way of calculating damages also varied from country to country

Directive 2004/48/EC

• harmonise the laws on means of enforcing IP rights• make the system for protecting intellectual property

rights more efficient • establish a high level of enforcement across the

internal market (which promotes innovation, safeguard employment in Europe and prevent the tax losses resulting from IPR infringement)

• provide legal certainty• safeguard consumers and users interests

Objectives of the Directive 2004/48/EC (« the Enforcement Directive »):

• The measures should apply to any infringement of IP rights as provided by Community law and/or national law of the EU country concerned

• Statement of the Commission 2005/295/EC concerning art. 2 of the Enforcement Directive: list IP rights that are covered by the Directive :

– Copyright– Neighbouring rights– Sui generis rights of a database maker– Topographies rights– Trademarks– Design rights– Patent rights– Geographical indications– Plant variety rights– Trade names (if protected as IP right)

Scope of the Enforcement Directive

• Member States may extend the provisions of the Directive to include acts of unfair competition, including parasitic copies (Whereas 14).

• Copyright infringement: see also article 8 of the Directive 2001/29/EC

Scope of the Enforcement Directive

I. Persons entitled to apply for the measures

II. Evidence

III. Right of information

IV. Provisional measures

V. Measures resulting from a decision on the merits

VI. Legal costsVII.Measures against third parties

Content of the Enforcement Directive

• The holder of the IP right (e.g. the patent holder, the trademark holder…) REM: copyright and neighbouring rights: presumption of ownership for the person having its name/trademark on the work/subject matter

• Licensees (if permitted by national law: national law may provide that only exclusive licensees can apply for the measures)

• Professional organisations: recognised intellectual property collective rights-management bodies or recognised professional defence bodies (if permitted by national law)

I. Persons entitled to apply for the measures, procedures and remedies

• Purpose : providing right holders effective means of gathering evidence of (possible) infringement.

• Effective means imply:a) possibility to force the opposing party to present

relevant evidence asked for by claimantb) pre-trial measures aimed at preserving evidence

(description of the infringing goods/services), if necessary on an ex parte basisModel: the French and Belgian « saisie-contrefaçon » (descriptive seizure)

II. Evidence (art.6-7)

• Conditions: – The applicant (IP right holder, licensee...) must present

reasonable evidence to support its claims– The applicant must identify relevant evidence for this claim,

which is in possession of the opposing party– If infringement committed on a commercial scale: the

information can concern banking, financial or commercial documentsREM: « on a commercial scale » = « acts carried out on a commercial scale are those carried out for direct or indirect economic or commercial advantage » (Whereas 14) very broad but exclude acts carried out by end consumers acting in good faith

The court may order the presentation of such evidence, subject to protection of the opposing party’s confidential information

a)How to gather evidence of infringement: first measure, forcing the opposing party to present relevant evidence

• When? Before the start of proceedings on the merits: the purpose is indeed to gather evidence of a possible infringement

• What? Provisional measures to preserve the evidence, like for instance:– The detailed description of the infringing

products/processes/services, including all relevant documents relating to production, origin, channels of distribution of these products

– Possibility to take samples or to order the physical seizure of the infringing products, as well as materials used to produce and distribute them

– On an ex parte motion: the opposing party is not heard for preserving the « surprise effect »

b)How to gather evidence of infringement : second measure, the descriptive seizure

• Conditions to get such order:– The claimant is entitled to file an infringement

proceeding (IP right holder, exclusive licensee…)– The claimant presents reasonably available

evidence of infringement (or threat of infringement)– If need be: lodging of adequate security or an

equivalent assurance intended to ensure compensation for prejudice suffered by defendant if measures are revoked/lapse or where it is subsequently found that no infringement/threat of infringement

– Measures for preserving confidential information of defendant (whereas 20)


• Appeal: once measures are executed (= description has taken place), the defendant may ask for review of the measures measures may be modified, revoked or confirmed

• Action on the merits to be lodged by claimant within 20 working days or 31 calendar days, whichever is the longerIf no action on the merits timely filed:– Measures cease to have effect (upon request of

defendant)– Possibility for defendant to claim damages covering

the prejudice suffered due to the measures


a) Right to obtain information from the infringer

b) Right to obtain information from third parties

III. Right of information (art.8)

• Which information? Information on the origin and distribution networks, identifying third parties involved in the infringement, which can include:

– names and addresses of manufacturers, distributors and other previous holders of infringing goods

– names and addresses of intended retailers– quantities produced, received or ordered– Prices

• Conditions:– Proceedings on IP right infringement have been

lodged– Justified and proportionate request of claimant

a) Right to obtain information from the infringer

• Which information? Same

• Conditions:– Proceedings on IP right infringement have been

lodged– Justified and proportionate request of claimant


• From which third parties? any person who:– Was found in possession of the infringing goods

on a commercial scale– Was found to be using the infringing services on a

commercial scale– Was found to be providing services used in

infringing activities on a commercial scale (banking institutions, energy provided, carrier, storage place…)

REM : « on a commercial scale » = « acts carried out on a commercial scale are those carried out for direct or indirect economic or commercial advantage » (Whereas 14) very broad but exclude acts carried out by end consumers acting in good faith


• The IP right holder (or licensee etc.) must have the right to apply for preliminary measures (summary proceedings):

– An interlocutory injunction for preventing any imminent infringement

– An interlocutory injunction to forbid the continuation of the alleged infringement (with running penalties)

– An interlocutory injunction to make the continuation of the alleged infringement subject to the lodging of a guarantee

– The seizure of the allegedly infringing goods as to prevent their entry into or movement within the channels of commerce

– If infringement on a commercial scale and if claimant demonstrates circumstances likely to endanger recovery of damages: the blocking of the infringer’s assets and bank accounts

IV. Provisional measures (art.9)

• Conditions:– reasonable evidence that the claimant is the right

holder– reasonable evidence of infringement or imminent

infringement – If need be: lodging by claimant of a security

• Action on the merits to be lodged by claimant within 20 working days or 31 calendar days, whichever is the longerIf no action on the merits timely filed:

– Measures cease to have effect (upon request of defendant)

– Possibility for defendant to claim compensation for the prejudice suffered due to the measures

IV. Provisional measures (art.9)

If the court states that there is infringement on the IP right holder, the court may:1. Issue an injunction against the infringer aimed

at prohibiting the continuation of the infringement (+ running penalties)

V.Measures resulting from a decision on the merits (art.10-12)

2. Order a measure withdrawing the infringing products/processes from the channels of commerce, id est:• order the recall of the infringing products from

the channels of commerce• order the definitive removal from the channels

of commerce (charity…)• order the destruction of the infringing

goods/means principally used to infringe REM: The court must take into account:

• the proportionality between the seriousness of the infringement and the remedies

• the interests of third parties (public health…)


3. Grant damages to the claimant (art.13):• If the infringer infringed knowingly, or with

reasonable grounds to know: damages covering the actual prejudice suffered by claimantWhen assessing the damages, the court has the choice between:

– Taking all aspects of the prejudice into account:

» Lost profits» Unfair profits made by the infringer» Moral prejudice» Costs borne for fighting the infringement


– Setting a lump sum on the basis of the royalties which would have been due if the infringer had requested authorisation to use the IP right in question (lost royalties)

• If the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity: recovery of profits or damages ex aequo et bono


The reasonable legal costs borne by the successful party should be reimbursed by the loosing party « unless equity does not allow this »Rem: various interpretations in the different EU countries. E.g.

– Belgium: legal costs are fixed by Royal Decree and usually do not cover the real legal costs

– France: the court may allow the reimbursement up to 100%

VI. Legal costs (art.14)

• Which third parties? intermediaries whose services are being used to infringe an IP right

• Which measures? (interlocutory) injunction to forbid the further providing of the services (under running penalties)

VII. Measures against third parties (art.9 and 11)

Documents

ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS IN THE EUROPEAN UNION: THE LEGAL FRAMEWORK Prof. Dr. Dr. M. Buydens lawyer, professor at the University of