Unified Patent Court Draft Rules Drop Provision Authorizing Damages In Lieu of Injunctions

As I noted in a series of posts last year (see here, here, and here), article 118.2 of the 15th Draft of the Preliminary set of provisions for the Rules of Procedure (“Rules”) of the Unified Patent Court stated:

In appropriate cases and at the request of the party liable to the orders and measures provided for in paragraph 1 the Court may order damages and/or compensation to be paid to the injured party instead of applying the orders and measures if that person acted unintentionally and without negligence, if execution of the orders and measures in question would cause such party disproportionate harm and if damages and/or compensation to the injured party appear to the Court to be reasonably satisfactory.

In the 16th Draft, the wording was changed slightly to

Without prejudice to the general discretion provided for in Articles 63 and 64 of the Agreement, in appropriate cases and at the request of the party liable to the orders and measures provided for in paragraph 1 the Court may order damages or compensation to be paid to the injured party instead of applying the orders and measures if that person acted unintentionally and without negligence, if execution of the orders and measures in question would cause such party disproportionate harm and if damages or compensation to the injured party appear to the Court to be reasonably satisfactory.

However, as noted by Jim Sherwood at the November 11 Patent Remedies Conference at American University (see here), and as Florian Mueller also noted in a November 20 post and more recently in a November 26 post, the recently published 17th Draft (available here) deleted article 118.2.  See also the explanatory document, which at p.11 states

Rule 118.2 has been deleted. This provision had subjected the order of alternative measures, i.e. compensation instead of orders and measures referred to in paragraph 1, to a number of requirements which would have to be cumulatively met. It was felt that such a scenario would be difficult to imagine in particular where an infringer acted not only unintentionally but also without any negligence and that therefore the provision could in practice hardly apply. The deletion of the wording which stems from Article 12 of the Enforcement Directive 2004/48/EC is in line with EU law since the directive does not make implementation of this provision an obligation of MS (“Member States may provide”). Where the Court finds an infringement of a patent it will under Article 63 of the Agreement give order of injunctive relief. Only under very exceptional circumstances it will use its discretion and not give such an order. This follows from Article 25 of the Agreement which recognizes the right to prevent the use of the invention without the consent of the patent proprietor as the core right of the patentee. When exercising this discretion the Court can also consider the use of alternative measures.

For my part, I'm disappointed to see the previous provision deleted.  According to Florian Mueller's write-up of a recent hearing on the matter (linked above), however, there is still hope that whatever rules finally are adopted will make it clear that courts may deny injunctions in appropriate circumstances.  We'll see what happens.