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21-02-2017 » Directive 2004/48 on the enforcement of IP rights interpreted by two judgements of the Court of Justice of the European Union

  • On the « Right to information » on the origin and distribution networks of counterfeit products(article 8 parag.1 of the Directive)

The Polish Supreme Court had doubts about the possibility to grant the right to information after a judgment of infringement had been made and the relevant case permanently closed.

The Court of Justice of the European Union (CJEU) responds positively :

« Article 8(1) of Directive 2004/48 must be interpreted as applying to a situation, such as that at issue in the main proceedings, in which, after the definitive termination of proceedings in which it was held that an intellectual property right was infringed, the applicant in separate proceedings seeks information on the origin and distribution networks of the goods or services by which that intellectual property right is infringed. »

(Judgement of 18 January 2017, Case C-427/15)

  • On the compensation of victims of infringement (article 13)

Article 13 of the Directive provides for calculating the amount of the damages and interest (i) taking into account negative circumstances for the victim of infringement, the unfairly-obtained profits of the infringer and the “moral damage” or (ii) as an alternative, one lump sum which may not be less than what the infringer would have paid if he had been authorized to use the infringed right.

The same Polish jurisdiction was concerned about the compliance of its legislation with this article of the Directive since in a case of copyright infringement Polish legislation allows, the owner of the rights to receive a sum equal to twice the hypothetical royalty amount.

The Court of Justice considers that:

-       Directive 2004/48 specifies a minimum standard and does not prevent the Member States from providing more protective measures. Moreover, this is not in contradiction with the text of the TRIPS Agreement, the Berne Convention or the Rome Convention (points 13 and 14)

-       It is inherent in any compensation not to be exactly proportional to the damage actually suffered by the injured party (point 16)

-       Although recital 26 of the Directive does not aim to introduce damages and punitive damages, it does not go so far as to ban them (point 18)

-       The amount allocated on the basis of the hypothetical royalty may constitute an abuse of rights if it exceeds, clearly and significantly, the damage actually suffered. However, in such a case, the judge is not bound by the request of the aggrieved right holder (point 21)

-       The very idea of setting damages based on a hypothetical royalty excludes any requirement for the injured party to demonstrate a causal link between the facts underlying the breach of rights and the damage suffered and the specific amount of the latter (point 22)

Therefore, the Court rules that :

« Article 13 of Directive 2004/48 must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, under which the holder of an intellectual property right that has been infringed may demand from the person who has infringed that right either compensation for the damage that he has suffered, taking account of all the appropriate aspects of the particular case, or, without him having to prove the actual loss, payment of a sum corresponding to twice the appropriate fee which would have been due if permission had been given for the work concerned to be used. »

(Judgement of 25 January 2017, Case C-367/15).

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