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Damages and Innocence

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28 April 2011

Damages for registered and unregistered designs innocent infringement no defence.

On any discussion on this the starting point is Council Regulation 6/2002 ("the 2002 Regulation") directly applicable here. It relates to both registered and unregistered Community designs. Article 89 of the 2002 Regulation provides:

Sanctions in actions for infringement

1. Where in an action for infringement or for threatened infringement a Community design court finds that the defendant has infringed or threatened to infringe a Community design, it shall, unless there are special reasons for not doing so, order the following measures:

(a) an order prohibiting the defendant from proceeding with the acts which have infringed or would infringe the Community design:

(b) an order to seize the infringing products:

(c) an order to seize materials and implements predominantly used in order to manufacture the infringing goods, if their owner knew the effect for which such use was intended or if such effect would have been obvious in the circumstances:

(d) any order imposing other sanctions appropriate under the circumstances which are provided by the law of the Member State in which the acts of infringement or threatened infringement are committed, including its private international law.

2. The Community design court shall take such measures in accordance with its national law as are aimed at ensuring that the orders referred to in paragraph 1 are complied with."

The 2002 Regulation, does not require an english court to give a remedy in damages. It only requires a court to make an order which is "appropriate under the circumstances"

We then need to review the EC Directive of 2004 on The Enforcement of Intellectual Property Rights ("the 2004 Directive") and Article 13:

Damages

Member States shall ensure that the competent judicial authorities, on application of the injured party, order the infringer who knowingly, or with reasonable grounds to know, engaged in an infringing activity, to pay the rightholder damages appropriate to the actual prejudice suffered by him as a result of the infringement." This paragraph is mandatory. It requires damages to be recoverable where there is knowing infringement. Whereas the next paragraph is discretionary, ie damages may be awarded against innocent infringers.

When the judicial authorities set the damages:

(a) they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the rightholder by the infringement;

or

(b) as an alternative to (a), they may, in appropriate cases, set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.

2. Where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity, Member States may lay down that the judicial authorities may order the recovery of profits or the payment of damages, which may be pre-established."

Next comes the United Kingdom's own Community Design Regulations 2005. As originally enacted these had no provisions about damages, but the Intellectual Property Enforcement Regulations 2006 ("the 2006 Regulations") inserted a paragraph 1A as follows:

Infringement Proceedings

1A. (1) This regulation and regulations 1B to 1D are without prejudice to the duties of the Community design court under the provisions of Article 89(1)(a) to (c) of the Community Design Regulation.

(2) In an action for infringement of a Community design all such relief by way of damages, injunctions, accounts or otherwise is available to the holder of the Community design as is available in respect of the infringement of any other property right."

The 2006 Regulations amended the UK legislation by inserting the following "24B Exemption of innocent infringer from liability

(1) In proceedings for the infringement of the right in a registered design damages shall not be awarded, and no order shall be made for an account of profits, against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable ground for supposing, that the design was registered.

(2) For the purposes of subsection (1), a person shall not be deemed to have been aware or to have had reasonable grounds for supposing that the design was registered by reason only of the marking of a product with—

(a) the word "registered" or any abbreviation thereof, or

(b) any word or words expressing or implying that the design applied to, or incorporated in, the product has been registered,

unless the number of the design accompanied the word or words or the abbreviation in question.

(3) Nothing in this section shall affect the power of the court to grant an injunction in any proceedings for infringement of the right in a registered design."

The 2006 Regulations, by the above amendment gave an innocent infringer a specific defence in the case of infringement of a UK-registered design. In contrast, a court can grant all such relief by way of damages for infringement of a Community design as is available for infringement of any other property right.

Michael Coyle is a Solicior Advocate and can be contacted via his email at michael.coyle@lawdit.co.uk. Lawdit Solicitors is a commercial law firm based in Southampton. http//www.lawdit.co.uk


About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.



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Article Published/Sorted/Amended on Scopulus 2011-04-29 21:45:20 in Legal Articles

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