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Newsletters and Bulletins / May 2005 / European Union - Withdrawal of Proposed Directive for Harmonization of the Law on Utility Models

European Union (EU) - Directive on Enforcement of IP Rights

Directive 2004/48/EC provides that all EU member states must amend their laws to comply with its provisions by April 29, 2006. The directive applies to all “intellectual property rights”, which is not defined except to state that it includes “industrial property rights, i.e. those rights referred to in the Paris Convention.” After setting out some general provisions, the directive sets out a number of specific requirements:

• A requirement that “competent judicial authorities” shall have the right, even before commencement of a suit, to order preservation of evidence of infringement and, where delay is likely to cause irreparable harm, to make such an order without the other party being heard. To obtain such an order it will be necessary to present reasonably available evidence that IP rights have been infringed or are about to be infringed. Such orders are, however, subject to the party obtaining them posting security for any damage that may be done, to provisions to safeguard confidential information and to termination if the party obtaining them does not bring suit within a reasonable period. (i.e., such orders have some similarities with saisie in France and the former Anton Piller orders (now search orders) in the UK. Implementation will, however require significant changes, for example, in Germany where hitherto there has been almost no form of discovery available.

• A requirement that, where justified and proportionate, the competent judicial authorities shall have the right to order disclosure by an infringer, or anyone having possession of infringing goods “on a commercial scale”, concerning the origin and distribution networks of goods or services that infringe IP rights.

• A requirement to provide that the courts may issue interlocutory injunctions, orders seizing goods suspected of infringing IP rights and orders freezing an alleged infringer's assets if “the circumstances are likely to endanger recovery of damages” (i.e., something similar to the UK's Mareva orders (now known as a freezing order)).

• A requirement to provide for recall of infringing goods from the channels of commerce or destruction of infringing goods and, where appropriate, materials and implements used to make infringing goods.

• A requirement that, where the infringer knew or had reasonable grounds to know that it was engaging in an infringing activity, the damages awarded are to be “appropriate to the actual prejudice” suffered by the rights holder. The calculation shall take account of lost profits of the rights holder, unfair profits made by the infringer and, where appropriate, the “moral prejudice” the rights holder suffers as a result of the infringement. However, the directive still sets out the possibility “where appropriate” that damages may be no less than a lump sum corresponding to a reasonable royalty.

• A requirement to provide that the courts may order that once infringement has been found the infringer must publicize the decision against it.

The Commission’s original proposal that led up to this directive included the imposition of criminal penalties for infringement of IP rights (including patents). It is understood that the Commission intends to pursue the introduction of a requirement for criminal sanctions in separate legislation.

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© Copyright 2006 Ladas & Parry - Posted 5/23/2006
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Date & time viewed: Tuesday, 22-May-2012 12:54:33 PDT