From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Friday, 21 April 2017

Fordham 25 (Report 5): IP Remedies

The IP Remedies panel
After an invigorating session on doctrine of equivalents (which the AmeriKat plans to write up), the final panel session of the day in the patents track was on IP remedies.  Although sometimes forgotten in the rough of tumble of validity and infringement, it is the remedies which are the big motivator - on both sides - in litigation.  Laura Whiting reports:

"Nicholas Groombridge, introducing the panel, commented that in his day, remedies was not the most popular subject.  The focus of practitioners, at least in patent matters, was usually on validity and infringement and then, almost as an afterthought, on damages. However, that seems to have changed.
Hon Mr Justice Birss opened on the role of legislators and the courts in "crafting appropriate IP remedies" and the extent to which judges must step in to exercise discretion where legislators have (inadvertently) left gaps which need to be filled.  He noted that although substantive IP laws around the world are fairly similar, the remedies available to litigants differ widely from jurisdiction to jurisdiction and are often subject to judicial discretion.  For example, final injunctions are not granted uniformly, even in common law jurisdictions where they are understood to be equitable remedies: in the UK, the position is that the successful claimant is generally regarded as entitled to an injunction (Vestergaard); in the US, by contrast, that is no longer the case following eBay v MercExchange
Mr Justice Birss
Birss J explained that judicial discretion can be useful in order to fill the gaps left by legislators or where the issue at hand had never been envisaged by the legislature.  By way of example, in the UK Cartierdecision, legislation had paved the way for blocking orders in the context of copyright infringement (s97A CDPA 1988), but that jurisdiction was extended by the judge to cover trade mark infringement.  A further example was publicity orders, where the UK courts had extended the provisions of Art 15 of the Enforcement Directive to entitle the defendant to such an order (as opposed to the claimant) as it was considered appropriate to do so. 
Birss J gave the example of SEPs (and in particular FRAND obligations) as a situation where judges were left to exercise their discretion in the absence of any special legislation.  The regulations of the various SSOs leave the majority of the questions on FRAND outstanding, especially on the issue of how a FRAND royalty should be set.  So, the judges must exercise their jurisdiction to answer these questions. 
Richard Vary
Richard Vary mentioned that judicial discretion can lead to unpredictable outcomes but this is also a pragmatic method of legislating as some space for discretion can be required – for example in the discussions around the Rules of Procedure for the UPC, there was not perfect agreement between the stakeholders as to how the procedure should work.  Therefore drafting the Rules in a manner that allowed for future judicial discretion was a way forward that allowed consensus to be reached. 
Andrew Bowler agreed that judicial flexibility was a good thing, but commented that providing for a final injunction order to be truly optional would in his opinion move too far towards a situation where an infringer had little to fear from a patentee other than a judicially enforced compulsory licence in certain circumstances.  He acknowledged that there were particular problems in second medical use cases in defining an appropriate scope for an injunction. 
Richard then presented on his experience (as a district judge) of small claims in IP courts being brought by individuals with no legal qualifications.  The UK's Intellectual Property Enterprise Court (IPEC) small claims track is for disputes of less than £10,000 concerning IP rights (other than patents).  He suggested that the most important factor in making the small claims track work is its simple procedures.  There is no need for interim applications or hearings, nor disclosure (which, in his view, may not be needed even in larger cases).  It also requires a more interrogatory (sometimes interventional) judge than is traditional in the UK system to compensate for the lack of legal experience of the litigants.

Other important factors and speed and (low) cost.  A year to resolve a simple copyright dispute is too long – Richard considers this ought to be done in a matter of months (perhaps 4 or so) – but of course, litigants sometimes slow the process down.  In the IPEC small claims track, litigants in person are not discouraged because of the risk of adverse costs awards since the costs are strictly limited and usually do not include the other side's legal costs.

Nicholas asked what has been learned from the small claims system that can be applied to commercial IP cases.  Richard identified the Shorter Trials Scheme.  He also suggested that the removal of the UK costs regime would make the UK more attractive to litigants and suggested that the German system was more appealing.  Birss J commented that another important factor in the success of the IPEC was that the judges are specialists (to some degree) in IP law – that is especially important when the litigants are not specialists and may not be represented by specialist lawyers.  The judges have also learned to "say no" to litigants and lawyers on procedural questions, which enables a smoother and more streamlined procedure. 
Jill Ge
Yijun (Jill) Ge next clearly and concisely explained some of the recent developments in obtaining damages in China.  Previously, the damages regime was purely statutory and typically provided for very low damages (with an upper limit of RMB 1 million - about £113,000).  However, recently, the Beijing IP Courts have made an award of RMB 49 million (about £5.5 million) in respect of patents on USB technology.  This was assessed on the basis of (i) the plaintiff's lost sales and (ii) the defendant's gains from selling the infringing products.  The court ordered the defendant to produce books of accounts and when they refused, assumed the plaintiff's assessment of quantum. 
In practice, the Chinese courts' damages assessments are still relatively rough.  In the damages area there is still some work to be done, but Yijun is hopeful for further caselaw developments to clarify the position. 
Andrew commented that the UK experience is that the courts are able to accurately assess damages even in the absence of the full financial picture.  He commented however that some companies may consider that when facing the risk of compensatory damages only, it may sometimes be worthwhile to infringe patents.  In his view it may be worth looking for inspiration to copyright cases where additional damages have been awarded in order to further deter infringement. 
Klaus Grabinski noted that in Germany injunctive relief is automatic, but this is usually accompanied by an order to render accounts.  If that is not done, then the penalty can be quite high.  However, it is relatively rare for a case to progress to the assessment of damages – the plaintiff usually obtains all the information necessary to assess the quantum of the infringer's profits through the disclosure order and can usually settle at this stage. 
Finally, Penny Gilbert spoke on the UK "Arrow" declaratory jurisdiction, which was recently revisited in the FKB v Abbvie case.  The panel debated whether the UPC would have competency to consider such declaratory relief, with some scepticism being expressed given the court's exclusive competence."

No comments:

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':