Thursday, November 11, 2021

Loconsole on a Recent Italian Patent Damages Decision

This decision--Cappellotto S.p.A  v. Farid Industrie S.p.A., Cassazione civile sez. I - 02/03/2021, n. 5666-- was previously discussed by Giulia Pasqualetto and Federica Franchetti on EPLaw (in both a short post a longer, four-page write-up), as I noted here.  It is now also the subject of a short article by Michele Loconsole, Reasonable Royalty and "Adequate" Compensation for Patent Infringement:  Italian Supreme Court, No. 5666/2021, 43 E.I.P.R. 752-54 (2021).    Here is the abstract:

With decision No.5666/2021, Italian Supreme Court (Corte di Cassazione) rules again on damages suffered by an IPR owner in a case of patent infringement. The topic has gained importance in the last 10 years and it has become a key aspect in Italian IPRs disputes. The court stated the judge shall not set damages imposing a "reasonable royalty" rate when the IPR holder has offered the chance to estimate its losses referring to a different criterion, such as, in this case, its real lost profits.

According to the author, the Italian Corte di Cassazione has held that (1) a patent infringement plaintiff is not required to settle for a reasonable royalty, if it can establish a basis for a lost profits award or for the disgorgement of the defendant's profits (the latter of  which the author states are available "in any case,"  emphasis in original); and (2) if the plaintiff opts for lost profits, it can recover the defendant's turnover multiplied by its (the plaintiff's) profit margin.  As I noted in my post mentioning the EPLaw article, this is similar to what Japanese courts sometimes do  (see, e.g., my book Comparative Patent Remedies at p.313), though I personally think it is not a sound methodology, given that the patentee might not have made the same number of sales as did the defendant.   The author also states that when Italian courts award reasonable royalties, they may consider whether the patentee typically charges a standard royalty, or look to the "'average royalty rate ' charged in the same sector for similar goods or processes," though (like courts in Germany and France, I would add) they have discretion to increase the rate to make up for some of the advantages an infringer has over a real-world licensee.

No comments:

Post a Comment