WORKING SESSION
The Unified Patent Court
Alice PEZARD - Judge, Court of Cassation, Paris, France - Injunctive relief
I. Scope of injunctive relief
A. Permanent injunction
Since the Intellectual Property Law 1984 came into force, a finding of infringement (of a patent, copyright or trade mark) after trial or in a final judgment against the infringing user can result in the grant of a permanent injunction.
The grant of a permanent injunction, in procedures known as "référés", is subject to two conditions: the infringement must be serious and the patent proprietor must have filed the action challenging the infringement without delay.
It is generally acknowledged that, in practice, satisfaction of those conditions is virtually automatic and, although the courts will analyse the individual case to some extent, the outcome is more or less a foregone conclusion.
In a ruling of 21 December 2007 (SAS Schneider Electric Industries v Chint Europe Ltd), the Paris Court of Appeal found that the infringement was not serious and denied a compulsory licence.
In a ruling of 17 October 2008 (EVAC v Jets Vacuum), the Paris Court of Appeal held that a permanent injunction could not be cancelled, even though the infringer had offered to alter the infringing parts of the device.
B. Preliminary injunction
Under the most recent anti-counterfeiting law, Law No. 2007-1544 of 29 October 2007, which transposes European Directive 2004/48/EC, a preliminary injunction can be obtained against an infringing user to enjoin use before trial (seven courts have jurisdiction in France).
The reason is that an act infringing IP rights is, essentially, presumed to cause irreparable harm to the holder of those rights.
Preliminary injunctions are granted more sparingly than permanent injunctions because, at this stage, there has been no final finding of infringement. Nonetheless, the courts attach great weight to the presumption of harm.
Injunctions are the preferred form of relief in IP cases. The courts seek to achieve a fair and equitable remedy which is not based solely on financial damages. The general idea is that the exclusive protection conferred by IP rights is lost if their proprietor is forced to license the protected subject-matter or share it with others. An injunction, on the other hand, genuinely preserves the pre-infringement status quo.
II. Restrictions on injunctive relief
A. Guarantees against unfair actions
To limit the scope for unfair actions and protect defendants' rights, the courts may subject injunctions to the condition that the claimant provide guarantees that any loss suffered by the defendant will be compensated if the allegation of infringement is rejected or a first-instance finding of infringement is overturned.
Such guarantees are useful where the preliminary procedure is not adversarial.
In any event, the infringement must be both probable and serious and the ensuing main action must be brought promptly, i.e. within 20 working days or 30 calendar days.
Under Directive 2004/48/EC, the defendant must be protected if provisional measures are adopted in an ex parte procedure. Article 9(4), last sentence, provides that, in such cases, the defendant must be notified without delay, at the latest after implementation of the injunction.
The defendant is also entitled to ask for an amendment of the injunction within a reasonable period of such notification.
The French legislator has not transposed this last provision but the national rules of procedure similarly allow defendants to ask for a correction, even during preliminary proceedings.
B. Compulsory licences
The statutory licences granted by the IP Authority ceased to exist in 2005.
Compulsory licences are now granted by the courts if the patentee has not made use of his patent for three years after grant (Article L. 613-11 of the French Intellectual Property Code).
Such licences are very rare (Court of Cassation, Commercial Division: judgment No. 9-20 822 of 11 January 2000 granting a compulsory licence and judgment of 16 January 1996 denying a dependent licence).
C. Patent "trolls"
If a patent troll fails to exploit his patent, it is very easy to grant a compulsory licence and, if the infringer can demonstrate the ability to exploit the patent, this will preclude any infringement suit.
But what if the courts establish a patent infringement and order remedies (e.g. damages) where the patentee is a troll - can they refuse permanent injunctive relief as in the eBay case?
Of course, the context in France is very different from that in the United States, given that the French courts are not in favour of broad patentability for business methods patents.
The eBay case has not led to fewer injunctions.
Two very similar cases in the past:
A buyer who, in good faith, had purchased an infringing process within a machine was permitted to continue using it after the main infringer had been found guilty. The court held that a permanent injunction would be tantamount to awarding the patentee a greater amount of damages than those paid by the direct infringer based on its unfair advantages. In those circumstances, the patentee is legally and equitably deemed to be fully compensated and have his rights re-established by publication of the judgment, which will include his name as patentee (TGI Paris judgment of 1 March 1972, PIBD 1972, No. 94, III, p 320).
In a case concerning copyright software, a context in which good faith is irrelevant in civil law, the copyright holder was refused permanent injunctive relief against the users of the infringing software. The court found that if the Oenolog Vinilog software integrated or adjusted a large part of the infringing Logicop, it was also an original part of Steral, and that it was impossible to confiscate the infringing software without adversely affecting its users. The infringement only had to be taken into account to evaluate the damage suffered by the patentee (Montpellier Court of Appeal, 2nd Chamber A, 2 July 1991, No. 88-241; Lamy informatique 2002).
In such cases, injunctions are not granted automatically after a finding of infringement and there is no presumption of harm. If the French courts consider that, according to the four eBay criteria, the damage (to goodwill, marketing, customers, company, etc.) is not irreparable, they may permit the infringer to continue its manufacture of the products or use of the process.
When deciding on the grant of an injunction, the courts consider a number of factors: whether the parties are competitors, whether an injunction would put one of them out of business, whether there are relevant competition factors, whether licensing is a reasonable alternative.
Directive 2004/48/EC is not an obstacle to limiting the scope for injunctions. Article 3(1) states that the measures must be fair and equitable, while Article 12 allows the member states to provide for the award of damages instead of issuing an injunction if the infringer did not act intentionally or negligently, an injunction would be disproportionate and damages are a sufficient remedy.
Although no corresponding provision has been adopted in French law, the courts are authorised to take this approach.
Another proposal which might prove very useful in combating patent trolls is "soft intellectual property", a sort of alternative patent form, which would be mainly available in the computer and telecommunication fields. Many French companies are in favour, and it could serve as a replacement for the regrettably abolished scheme of statutory licences.