I’ve reported twice before on the new French
legislation on IP damages, here
and here.
Recently Xavier Buffet Delmas d’Autane and Jules Fabre sent me a copy of their
article Nouveautés, clarifications,
carences et incertitudes du dispositif de lutte contre la contrefaçon tel que
renforcé par la loi no 2014-315 du 11 mars 2014 (“Novelties,
clarifications, gaps, and uncertainties of the plan for fighting infringement
as reinforced by Law No. 2014-315 of March 11, 2014”), pages 10-18 of the May
2014 issue of the French IP journal Propriété Industrielle. The abstract reads as follows (my translation
from the French):
Although Law No. 2014-315 of March 11, 2014 does not
effect an actual reform, it marks a new effort of the legislature for
reinforcing the arsenal of the fight against infringement in French law, which
should be welcomed. Its impact, however, must be tempered, insofar as the
law contains less in the way of novelty than clarifications that confirm
established standards or practices. Moreover, one might regret certain
gaps, even uncertainties, of a sort that leads us to conclude that the
announced objective of the law is not fully attained.
For present purposes, I‘ll just focus on some of
the authors' observations concerning the damages provisions of the new law
(which also makes some amendments to matters relating to border measures, the saisie-contrefaçon, and the statute of
limitations). As I reported previously, as proposed last year the IP
Code’s damages provisions would have been amended to read:
For assessing damages and interest, the court takes
into account distinctly:
the negative economic consequences, including loss of
profit and the loss sustained by the injured party;
the moral prejudice incurred by the latter;
the profits realized by the infringer and, where
appropriate, the savings of intellectual, material, and promotional investments
which the latter has derived from the infringement.
If the court determines that the resulting amounts do
not make good the entirety of the prejudice suffered by the injured party, it
orders to the profit of the latter the confiscation of all or part of the
revenue procured by the infringement.
However, the court may, alternatively, upon request by
the injured party, award damages as a lump sum. This amount is higher
than the royalties or fees that would have been due if the infringer had
requested authorization for the use of the right infringed.
The version actually enacted into law, however,
reads as follows:
For assessing damages and interest, the court takes
into account distinctly:
the negative economic consequences, including loss of
profit and the loss sustained by the injured party;
the moral prejudice incurred by the latter;
and the
profits realized by the infringer, including
the savings of intellectual, material, and promotional investments which the
latter has derived from the infringement.
However, the court may, alternatively, upon request by
the injured party, award damages as a lump sum. This amount is higher
than the royalties or fees that would have been due if the infringer had
requested authorization for the use of the right infringed. This amount is not exclusive of the
compensation for the moral prejudice suffered by the injured party.
Messrs. Buffet Delmas d’Autane and Fabre
express disappointment that the new law affords no significant increase in the
damages granted to IP owners. They argue that both courts and parties
have been overcautious in taking into account the infringer’s profits, and that
it is not clear that the new law will put an end to this hesitancy. In
this regard, the authors critique a recent judgment I hadn’t come across
before, TGI Paris, 3o ch., 3o sect., 11 oct. 2013, no
11/14587. (Recently I was provided with complimentary access to a service
called Darts-IP, from which I was easily able to access the case.) As the
authors note, in this case the court stated that the 2004 Enforcement Directive
and its implementation in French law do not envisage the disgorgement of the
infringer’s profits, but rather only that those profits may be taken into
account in estimating the IP owner’s damages. The authors also note, among
other matters, that the law as enacted discarded the proposed language stating
that “if the court determines that the resulting amounts do not make good the
entirety of the prejudice suffered by the injured party, it orders to the
profit of the latter the confiscation of all or part of the revenue proceed by
the infringement,” on the ground that this risked introducing the concept of
punitive damages into French law. They argue that the proposed text was
unclear, but that it would have been desirable to have included language,
proposed in 2011, clearly permitting disgorgement in cases involving bad faith
infringement.
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