Injunctions and Corrective Measures

Provisional Injunctions

Purpose

Provisional (or interlocutory) injunctions are issued by the court pending the final decision.

They aim to prevent damage and to avert any imminent infringement (Article 62.1 of the Agreement on the Unified Patent Court).

They may also ensure that the alleged infringer is capable of paying damages in the event of a finding of infringement (Articles 62.1 and 62.3 of the Agreement on the Unified Patent Court).

This type of measure is also provided for under Article 44 of the TRIPS Agreement.

Types of Injunctions

Article 62 of the Agreement on the Unified Patent Court provides for several possible injunctions:

• prohibition of continuing the infringement under penalty of a fine;
• authorization to continue the acts of infringement but subject to the provision of guarantees;
• seizure or delivery-up of infringing products (Rule 211.1(b) of the Rules of Procedure);
• freezing of the infringer’s movable and immovable assets (Rule 211.1(c) of the Rules of Procedure);
• blocking of bank accounts and other assets (Rule 211.1(c) of the Rules of Procedure).

Balance of Interests

Naturally, these injunctions are very powerful (since no final decision has been issued). It is therefore essential to carefully balance the interests of the parties and the potential harm that these measures may cause (Article 62.2 of the Agreement on the Unified Patent Court and Rule 211.3 of the Rules of Procedure).

They must therefore be proportionate and dissuasive (Article 3 of Directive EC/2004/48 on the enforcement of intellectual property rights), and the applicant may be required to provide security (Rule 211.5 of the Rules of Procedure), particularly if the injunction is sought ex parte.

Court’s Discretion

In any event, these measures are left to the discretion of the court (Article 62.1 of the Agreement on the Unified Patent Court): it is for the court to decide whether an injunction should be granted.

Defenses Against Injunctions

Naturally, when a provisional injunction is being considered or sought, the defendant may attempt to mount a defense.

In Relation to Patent Law

Validity of the Patent

This defense may be based on the questionable validity of the patent (SISVEL v Xiaomi, The Netherlands 2019).

Indeed, it would be unjust to grant an injunction if the patent is debatable or if the arguments regarding validity are highly complex.

Proportionality

Similarly, the proportionality of the measure must be carefully considered.

For example, if the alleged infringement concerns a claim worth a few hundred thousand euros, it would be questionable to seek a provisional injunction that could cost the defendant several hundred million euros.

Likewise, if another provisional measure can be considered (e.g., payment of damages instead of an outright prohibition, as provided under Article 12 of Directive 2004/48/EC on the enforcement of intellectual property rights and Article 62.1 of the Agreement on the Unified Patent Court), the court must take this into account.

If the patent proprietor has also tolerated the existence of infringement for many years, it may be considered more “appropriate” to await the final decision (unless there are specific circumstances to the contrary).

Infringement concerning negligible elements

It may happen, particularly in the field of electronic equipment (such as a smartphone), that the claimed subject matter is a negligible element in relation to a more complex product.

We may then question whether it would be proportionate to prohibit, by way of a preliminary injunction, the sale of the complex product.

Patent troll

If the claimant is a « non-practicing entity » (or patent troll), we may question whether an injunction is necessary.

Indeed, insofar as this patent troll does not commercialize any product covered by the patent, it is difficult to argue that imminent harm is about to occur (see IPCom vs Xiaomi, UK, 2019 or SISVEL v Xiaomi, Netherlands 2019).

Exception to infringement

There are cases where certain exceptions to infringement may be invoked.

If the invocation of these exceptions appears serious, the judge must, of course, take this into account.

In connection with general law

Good faith

The claimant must act in good faith in its requests.

Thus, if discussions have taken place, they must have been conducted in good faith.

Abuse of rights

The claimant’s action must not have as its sole purpose to cause harm to the infringer (see Article 41 of the TRIPS Agreement).

Dominant position

The claimant must not use this action by abusing its dominant position (Vestel vs HEVC (EWHC 2766)).

Thus, European law continues to apply.

Public interest

Similarly, it may happen that the proceedings could harm consumers and/or their health.

Thus, we understand that seeking a preliminary injunction that would have the effect of depriving consumers of an essential product for their health (e.g., a medicine for which the only supplier is the alleged infringer) would be unacceptable.

Permanent injunctions

Purpose

Permanent injunctions are issued by the judge with the final decision.

They uphold the rights of the parties as established in the final decision (Article 63.1 of the Agreement on a Unified Patent Court) to prohibit any further infringement.

Permanent injunctions may be directed against the infringer but also against a third party facilitating the infringement (Article 63 of the Agreement on a Unified Patent Court).

A penalty is associated with this injunction (Article 63.2 of the Agreement on a Unified Patent Court).

Types of injunction

There is only one type of permanent injunction: prohibiting the continuation of infringement (Article 63.1 of the Agreement on a Unified Patent Court).

Balance

The detrimental effects of such an injunction do not appear to be a consideration for the judge: the infringer is an infringer and must cease to be one!

Judge’s assessment

Here, it is unclear whether the issuance of this type of injunction remains at the discretion of the judges (Article 63 of the Agreement on a Unified Patent Court, note that Article 62 of the Agreement on a Unified Patent Court explicitly mentions this discretion. Should it therefore be understood that there is no discretion under Article 63?).

Corrective measures

Purpose

Corrective measures are issued by the judge with the final decision.

Types of Measures

The judges may order (Article 64 of the Agreement on a Unified Patent Court) a wide range of corrective measures, such as:

• a declaration of infringement;
• the recall of products from commercial channels;
• the removal of the infringing character of the products;
• the definitive removal of products from commercial channels; or
• the destruction of the products and/or the materials and implements concerned.

Nevertheless, this list is not exhaustive.

It is likely that the judge may draw inspiration from national practices to order such measures.

Balance

When examining a request for corrective measures, account shall be taken of the need for proportionality between the seriousness of the infringement and the corrective measures ordered, as well as the interests of third parties (Article 10.3 of Directive EC/2004/48).

Discretion of the Court

The judge remains free to decide: these corrective measures are merely an option, even if requested by a party (Article 64 of the Agreement on a Unified Patent Court).

Disclosure of Information

Purpose

In the context of litigation, and once the infringer has been so adjudged, the court may order the disclosure of information (Article 67 of the Agreement on the Unified Patent Court).

Type of Information to be Disclosed

The infringer (or a third party involved in the infringement) may be ordered to disclose (Articles 67.1 and 67.2 of the Agreement on the Unified Patent Court):

• the origin and distribution channels of the infringing products or processes;
• the quantities produced, manufactured, delivered, received, or ordered, as well as the price obtained for the infringing products; and
• the identity of any third party involved in the production or distribution of the infringing products or in the use of the infringing process.

Balance

Here, the judge ensures that the applicant’s requests are justified and proportionate (Article 67.1 of the Agreement on the Unified Patent Court).

Discretion of the Court

The judge therefore has discretion to grant or refuse such disclosure of information (Article 67.1 of the Agreement on the Unified Patent Court).

Damages

Purpose

The purpose of damages is to compensate the harm suffered by the applicant (Article 68.1 of the Agreement on the Unified Patent Court).

Calculation of Damages

For the calculation of damages, the following must be considered:

• ensuring that the applicant is placed in the same situation as if no infringement had occurred (Article 68.2 of the Agreement on the Unified Patent Court).
  • loss of opportunity,
  • loss of market,
  • lost profits (Article 68.3(a) of the Agreement on the Unified Patent Court),
  • loss of margin due to the commercial efforts the proprietor had to make to counter the infringement,
  • damage to the trademark’s reputation, moral prejudice (Article 68.3(b) of the Agreement on the Unified Patent Court),
  • etc.
• ensuring that the infringer does not ultimately benefit from the infringement, without this being punitive (Article 68.2 of the Agreement on the Unified Patent Court)
  • profits made by the infringer in connection with the infringement (Article 68.3(a) of the Agreement on the Unified Patent Court),
  • consideration of customer diversion,
  • etc.

It is also possible to set lump-sum damages based on elements such as, at least, the amount of the official fees or royalties that would have been due if the infringer had requested authorization to use the patent in question (Article 68.3(b) of the Agreement on the Unified Patent Court).