EU Enforcement Directive

The remedies available to intellectual property owners are harmonised across Europe as from April 2006 by the EU Enforcement Directive (Directive 2004/48/EC on the enforcement of intellectual property rights). The Directive aims to ensure that the EU is TRIPS-compliant, and generally to strengthen and harmonise enforcement of IP rights.

In many countries, the introduction of the Directive will increase the remedies available to the intellectual property owner. In the UK, the courts already have the power to order almost all of the remedies specified in the Directive, so few changes in relation to patent enforcement are necessary. However, the Directive indicates a number of factors which the courts may need to bear in mind when ordering damages or injunctions.

A very brief overview of the content of the Directive is on the opposite page.

 

Injunctions in the UK – a matter of course?

The Directive requires EU Member States to provide the courts with the possibility of ordering an injunction, and enables them to provide that the court may instead award damages for “innocent” infringers who would be caused disproportionate harm, provided that this would be reasonably satisfactory to the IP owner.

Although injunctions are discretionary remedies, the UK courts have almost invariably granted injunctions to successful intellectual property owners. We are aware of no decided patent case in the past century in which an injunction was refused (though the issue has sometimes seemed close) and only one IP case where a final injunction has been refused (Banks v. EMI Songs Ltd (No.2), [1996] EMLR 452, a musical copyright case described by its own trial judge as “wholly exceptional”).

As we write, the issue of final injunctions in patent actions is before the US Supreme Court for consideration. A Patents Court judge has therefore chosen an interesting moment to re-state the position in England and Wales on the grant of final injunctions. In Navitaire Inc v. Easyjet Airline Co. Ltd. (No. 2), [2006] RPC 4 (a copyright infringement case concerning copyright in computer software and databases), Mr. Justice Pumfrey, summarised the position in England and Wales, granting injunctions on some infringements and not on others. It is in the context of an infringement action which, the judge makes clear, the defendants largely won. The copyright owners were successful only in establishing infringement in minor aspects of the software, and it is therefore unsurprising that the judge found himself reluctant to grant them sweeping remedies.

Briefly, the judgment makes the following propositions:

• Generally, an injunction will be granted where the invasion of a property right is demonstrated, and where repetition is threatened”
• An exception to the general rule is that an injunction will not be granted where the effect of the grant of the injunction is oppressive (following Jaggard v. Sawyer [1995] 2 All ER 189, a case on access rights on use of a road and creation of a driveway).
• The mere fact that the defendant is willing to pay damages does not free him from the threat of an injunction (following Shelfer v. City of London Electric Lighting Co., [1895] 1 Ch 287) - that would simply grant the infringer a licence legalising the misconduct.
• The grant or refusal of a final injunction is not merely a matter of the balance of convenience: the factors in Shelfer should normally be applied, granting damages in substitution for an injunction
  1. If the injury to the Plaintiff’s legal right is small,
  2. And is one which is capable of being estimated in money,
  3. And is one which can be adequately compensated by a small money payment,
  4. And the case is one in which it would be oppressive to the defendant to grant an injunction.
• “Oppressive” in this context means that the grant of an injunction would be grossly disproportionate to the right protected
• Reported cases all concern the exercise of discretion, and none of them is a binding authority on how discretion can be exercised (Jaggard v. Sawyer)
• Banks v. EMI Songs was a case providing no general guidance. So was another musical copyright case (Ludlow Music Inc. v. Williams [2002] FSR 57 decided by Mr. Justice Pumfrey himself).

Applying these factors, the Patents Court judge granted injunctions against the ongoing infringement of icons and GUI screens. However, he refused injunctions in respect of the following infringements:

In relation to one table of data (“the history table in eRes”) – because the infringer was entitled to know the data, and could migrate the data without the use of the table, at some inconvenience to themselves. The damage to the copyright owner was therefore slight and the effect on the infringer would have been disproportionate.

In relation to a web interface (“Take Flight”) and also in relation to some interim databases and copies – because the evidence indicated that no further infringement would be likely, and the judge had made an order for delivery up or destruction of existing infringements. However, in these cases he left the copyright owners at liberty to apply for such an injunction in future if it were necessary.

 

Comment:

This judgement provides a welcome restatement of the position on final injunctions in the UK, which should withstand the arrival of the Enforcement Directive. The judge explicitly adopts the test of “disproportionate harm” to the defendant under Art. 12 of the Directive, explains previous case law and, in doing so, renders it largely redundant. Although the judgement makes it clear that injunctions will continue to be available in the vast majority of IP cases, it appears that the courts will in future have no hesitation in applying some degree of economic analysis to the issue of grant or refusal of a final injunction.

Art. 3 – Enforcement proceedings should be “fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays” – we wonder whether any country, at any time, could meet these “motherhood and apple pie” aspirations!

Art. 4 – Actions can be brought not only by the proprietor but also, in some cases, by licensees, “intellectual property collective rights-management bodies”, and “professional defence bodies”. This is the one change of substance for UK patent enforcement.

Art. 5 – A named author is presumed to be the true author for copyright purposes.

Art. 6 – An order for discovery or disclosure from the opposing party must be possible. This is a major change for some European jurisdictions, but not for the UK.

Art. 7 – Provisions for the safeguarding of evidence, including the possibility of seizure.

Art. 8 – A “right of information” – infringers can be ordered to disclose information on the origin and distribution networks of infringing goods.

Art 9 – Detailed provisions on interlocutory or interim injunctions.

Art. 10 – An order for delivery up, destruction or removal from trade channels at the infringer’s expense must be possible. Minor changes to UK law are being made to implement this.

Art. 11 – Final injunctions, with sanctions for non-compliance, must be possible.

Art. 12 – Damages as an alternative to an injunction can be ordered where there would be “disproportionate harm and if pecuniary compensation to the injured party appears reasonably satisfactory”

Art. 13 – Detailed provisions on calculation of damages allowing all economic losses, and extra damages for non-economic factors, or as an alternative at least a reasonable royalty, and making allowance for innocent infringers. Scottish law is to be amended to allow damages for non-economic loss.

Art. 14 – Reasonable costs should normally be paid by the loser to the winner (the UK rule).

Art. 15 – The Court should be able to order publication of decisions at the request of the successful proprietor, at the infringer’s expense.

Art. 16 – States can apply additional sanctions (e.g. criminal sanctions).