Some Resources on Damages in the UPC

Article 68 of the UPCA, titled “Award of Damages,” reads as follows:

1. The Court shall, at the request of the injured party, order the infringer who knowingly, or with reasonable grounds to know, engaged in a patent infringing activity, to pay the injured party damages appropriate to the harm actually suffered by that party as a result of the infringement.

2. The injured party shall, to the extent possible, be placed in the position it would have been in if no infringement had taken place. The infringer shall not benefit from the infringement. However, damages shall not be punitive.

3. When the Court sets the damages:

(a) it 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 injured party by the infringement; or

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

4. Where the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity, the Court may order the recovery of profits or the payment of compensation.

This language is similar, but not identical, to the language of article 13 (“Damages”) of IPRED, which reads as follows:

1. 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/her as a result of the infringement.

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 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.

I will be interested in seeing, among other things, how the UPC interprets the second sentence of UPCA article 68(2) ("The infringer shall not benefit from the infringement").  A judicially-determined royalty, as opposed to the disgorgement of profits, typically does leave the infringer with some benefit--though perhaps one could argue that if the infringer pays the royalty it should have negotiated ex ante, it enjoys no benefit above and beyond what it would have enjoyed, had it negotiated.

In any event, here are a couple of recent posts and a presentation that may be of interest to readers trying to understand how the UPC will assess damages:

1. In October, Simmons + Simmons LLP published a post on JUVE Patent, titled UPC:  How are damages dealt with.  The post includes a brief discussion of article 68, but also discusses the relevant Rules of Procedure, which spell out that one may request damages in the main infringement proceeding or in a separate proceeding.  The authors believe, however, that because of the added complexity that “only in exceptional circumstances [will] damages . . . be directly determined in a judgment on infringement.”  They also expect that there will be “more proceedings for the recovery of damages in the UPC than is current in patent proceedings before national contracting parties, because of the possibility to award damages for all territories . . . in only one procedure.”

2. OxFirst also has a short write-up, titled Considering Patent Infringement Damages Calculations under the Unified Patent Court.  In addition, a few weeks ago OxFirst hosted a webinar titled Legal underpinnings of patent damage calculations in Germany, at which Dr. Dietrich Kamlah discussed German law and also provided some analysis how article 68 compares with both German Patent Act article 139 and with IPRED article 13.  This portion of the discussion starts at about 48 minutes (though I would advise damages aficionados to view the whole presentation, which was quite informative) in and is available here. 

3. There is also a brief discussion of damages under the UPC in Paul England's book A Practitioner's Guide to European Patent Law:  For National Practice and the Unified Patent Court (2d ed. 2022), at pp. 235-36.  Dr. England also has a book titled A Practitioner's Guide to the Unified Patent Court and Unitary Patent, which I plan to get a copy of very soon.