AIPPI Q236: Relief in IP Proceedings Other than Injunctions or Damages, Part 2

As I mentioned in my first post on this topic a couple of weeks ago, in 2012 AIPPI (the Association Internationale pour la Protection de la Propriété Intellectuelle, or International Association for the Protection of Intellectual Property) posed a range of specific questions, supplemented by Working Guidelines, to its member groups relating to various forms of "additional relief" that may be available in IP proceedings (including, but not limited, to patent cases).  According to AIPPI, these forms of additional relief may include, among other things, "seizure of infringing goods, delivery up and destruction of infringing goods, rectification, publication of the court’s judgment and declaratory relief. In addition, there may be other forms of monetary relief than damages, e.g. account of profits where the infringer is asked to surrender the profits earned as a result of the IPR infringement. . . . Alternatively, the plaintiff may obtain an award of monetary reparation for moral tort or an award of reasonable royalty based on unjust enrichment law. Finally, in addition to these more general forms of relief, there are also other forms of relief which are heavily fact specific, e.g. alteration of infringing goods such as change/removal of packaging, and modifications to technology by way of a workaround."  

Following submission of the member group reports, AIPPI published a summary of the reports and approved a resolution at its September 2013 meeting in Helsinki. (All of these documents are available here.)  Here is the full text of the resolution:

Noting that:

1) AIPPI has studied issues related to injunctions (Q219, Q215, Q214, Q204/204P, Q134, Q86 and Q80),

2) AIPPI has also studied issues related to damages (Q203, Q186, Q71),

3) AIPPI has not previously studied, as a dedicated question, forms of relief available in cases of infringement of IPRs other than injunctions and damages (additional relief). Additional relief may, in particular, include declaratory relief, delivery up/surrender of goods, destruction, rectification, alteration of infringing goods, corrective advertising, publication of judgments, orders to provide information, and monetary relief (other than damages),

4) This resolution concerns additional relief available in inter partes proceedings of a court or applicable administrative body (collectively, courts) following a finding on the merits of the case.

Considering that:

1) The TRIPS Agreement provides in Part III Section 2 for certain forms of additional relief, in particular evidence (Article 43), disposal or destruction (Article 46) and information (Article 47),

2) There is broad support for the proposition that various forms of additional relief should be available, that already being the case in most jurisdictions, and harmonizing the availability of additional relief furthers the creation of effective and appropriate means for enforcement of IPRs,

3) Additional relief should be used to achieve a fair and just result, having regard to the circumstances of the jurisdiction and the case,

4) It creates legal certainty and reinforces an effective system for IPR enforcement for all parties to understand the basis on which, in practice, additional relief has been awarded or refused,

Resolves that:

1) It should be the right and responsibility of the IPR holder to request the relief it believes to be appropriate to the circumstances of the case,

2) Courts should have the power to award additional relief for infringement,

3) In relation to monetary relief (other than damages), courts should have the power to award accounts of profits, reasonable royalties and/or reparation, in each case in jurisdictions in which the concept of damages does not already include them

4) Courts should also have the power to award legal costs,

5) All forms of additional relief should be available in principle for all forms of infringement against all infringers, but the decision on whether and what is awarded or refused should be made on a case-by-case basis,

6) Where the grant of additional relief is contested, courts should give reasons for awarding or refusing additional relief, such reasons being sufficient to understand the rationale,

7) The reasons for awarding or refusing additional relief should in general be made available to the public (anonymised or not, in accordance with national practice),

8) Additional relief should be awarded or refused so as to achieve a fair and just result, having regard to the circumstances of the jurisdiction and the case,

9) Additional relief should be appropriate to the circumstances, reasonable, practicable, and proportionate,

10) Taken as a whole, damages, injunctions and additional relief should be effective to prevent and/or dissuade further infringement,

11) Courts may, in appropriate circumstances, take the interests of third parties into account, and may hear those third parties, when determining whether to award additional relief,

12) The award in a particular jurisdiction of an order requiring corrective advertising and/or publication of a judgment should have regard to whether and how, in that jurisdiction, judgments are made available to the public,

13) In relation to an order for corrective advertising, in general it is preferable that:

a) courts’ procedures require that the party requesting the order also proposes wording, placement and costs, and effects its publication,

b) the party against whom the order is made pays the costs of publication.

I'll offer a few observations on the above and then return in more detail, in a future post or posts, to some of the specific matters that struck me in reading the member group reports and the summary report.   

First, as you can see from resolution (3), AIPPI recommends that countries authorize courts to award "accounts of profits, reasonable royalties and/or reparation, in each case in jurisdictions in which the concept of damages does not already include them." The Working Guidelines provide some background for this resolution:

33) Account of profits: . . .  Some jurisdictions treat profits made from infringing use of an IPR as a method of calculating compensatory damages. Other jurisdictions recognise a difference between damages and an account of profits. . . .  The Groups are invited to identify whether account of profits (or any monetary remedy) is available as a separate and/or alternative remedy to damages in their country.
34) Reasonable royalty:  while actually a measure of damages, a court (or applicable administrative body) may sometimes award monetary relief measured on the basis of a presumed licence fee or reasonable royalty rate as if the IPR holder and infringer had entered into a voluntary licensing arrangement. . . . As for account of profits, the Groups are invited to explain whether a reasonable royalty is merely a measure of damages in their jurisdiction or is available as a separate and/or alternative form of monetary relief.
35) Reparation: generally, the making of amends for wrong or injury done.

The question of whether awards of infringer's profits or reasonable royalties should be viewed as "damages" (or as a remedy for unjust enrichment, or as restitution, or as something sui generis) can be an important one, for a variety of reasons. From an economic perspective, for example, an award of the defendant's profits might seem like an overly crude tool for estimating the plaintiff's actual damages, and yet be defensible as a means for attaining optimal deterrence.  Moreover, because of the peculiarities of legal doctrine as its exists in different countries, classifying these remedies one way or the other may affect matters such as the statute of limitations or the right to trial by jury.  These are some of the issues to which I will return in greater depth in a future post or posts.

Second, some of the resolutions (including resolutions (3), (4), and (11)) state merely that courts shall have the power to do certain things without laying down any very specific conditions for the exercise of that power.  Perhaps the AIPPI members view the ability to tailor those conditions to a particular country's legal traditions and policy choices as an important matter, or simply prefer to keep things flexible.  See, e.g., Summary Report p.16 (stating that, in response to the question "What should the criteria be for the grant of the types of Additional Relief identified in response to question 11?", "While just under one-quarter of the Groups did not provide a substantive response to this question 12, those that did highlighted a number of related themes, such as the desirability of giving the court . . . sufficient discretion to order relief appropriate in the circumstances of the case, ie appropriate relief where infringement is established but achieving a result variously described as 'fair and just', 'appropriate, reasonable and practicable', proportionate, effective to prevent infringement or generally complying with the principles expressed in the European Directive.")  I also imagine it would have been quite difficult to achieve consensus on something more specific with regard to these points.  Still in all, for better or worse some of these resolutions seem rather vague.

Third, resolution (10) appears to contemplate that additional relief may sometimes be justified in view of a deterrence rationale, though without spelling out whether courts may award additional relief solely for purposes of deterrence.

Anyway, as noted I'll be back with some more thoughts on matters addressed by Q236 in a subsequent post or posts.