Damages for Industrial Property Infringement in France

Grégoire Desrousseaux, Mayeul Ottaviani, and Louis Jabert have published an article titled L’évaluation du prejudice de la contrefaçon devant les juridictions françaises, Propriété Industrielle (“Quantifying infringement harm before the French courts”), Sept. 2025, pp. 15-26.  I highly recommend the article to anyone who wants to understand how the French courts calculate damages for the infringement of patents, trademarks, and designs.  The abstract reads as follows (my translation):

 

The transposition into French law of the damages calculation rules of Directive 2004/48/CE has caused a lot of ink to flow.  The authors have attempted an empirical, cross-sectional approach for the amount and calculation of damages, in compiling the accessible decisions rendered between 2016 and 2025 concerning patents, trademarks, and design and models.  An objective was to analyze, concretely, how the parties and the courts make use of the economic factors (often incomplete) to which they have access, to justify their demands and to guide their decisions.  Another objective was to try to identify—if they exist—the most common methods of calculation.

The article is enlightening.  The authors identified 52 decisions from the relevant time period, decided by courts of first or second instance (juridictions du fond), consisting of 26 patent decisions, 19 trademark decisions, and 7 involving designs and models.  They divide these into two basic categories, paragraph 1 and paragraph 2, reflecting the division set forth in the relevant statutory provisions for patents, trademarks, and designs, which for all three reads the same, to wit (again, my translation):

            For assessing damages and interest, the court takes into account distinctly:  (1) the negative economic consequences of the infringement, including lost profits and the loss sustained by the injured party; (2) the moral prejudice incurred by the latter; and (3) the profits realized by the infringer, including the intellectual, material, and promotional investments which the latter has derived from the infringement.

    

            However, the court may, alternatively and 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 sum does not exclude compensation for moral prejudice inflicted upon the injured party.

According to the authors, 45 of the 52 cases (87%) made use of the first paragraph, and only 7 (13%) the second.  Of those falling into the first class, they found 4 that (wrongly, in their view) cumulated (that is, added together, if I understand correctly) lost profits with infringer’s profits.  15 were based on lost profits, 24 on infringers’ profits, and 2 used a mixed methodology (meaning that the amount awarded fell in between lost profits and infringers’ profits).  They describe the formula for lost profits as follows:  (1) the number of infringing products sold by the infringer, (2) multiplied by the price at which the plaintiff would have sold those products, (3) multiplied by the plaintiff’s profit margin, (4) multiplied by the taux de report—a term I find difficult to translate into idiomatic English, but which they define as the percent of the infringing products the plaintiff would have sold but for the infringement—(5) multiplied by the taux de pondération (the percent by which the infringed right contributed to the infringer’s sales).  The formula for calculating the infringer’s profits is:  (1) the number of infringing products sold by the infringer, (2) multiplied by the price at which the infringer sold them, (3) multiplied by the infringer’s profit margin, (4) multiplied by the taux de pondération.   They also find that plaintiffs frequently request and frequently are granted some amount for moral prejudice.  Finally, they remark that courts have a fair amount of discretion in applying the rules; they do not have to follow a strictly mathematical rule, and sometimes the relevant evidence (e.g., of consumer  behavior) have to be estimated qualitatively rather than quantitatively.

Paris Court of Appeal Denies Permanent Injunction on Proportionality Grounds

I’ve been catching up on some back issues of the European IP journals, and so I am a little late reporting on this decision, which was handed down in October 2024.  The decision is Peugeot Motocycles SAS c. Société Piaggio & C. SpA, Cour d’appel de Paris, No. 21/18176, Oct. 16, 2024, and is discussed in a short article by Abdelaziz Khatab, Oscar Lamme, and Peter Meyer titled Redefining remedies:  the Paris Court of Appeal applies proportionality to deny a permanent injunction, 2025 GRUR Patent 138; in another short article by Jacques Raynard titled Contrefaçon et contrôle proportionalité, Propriété Industrielle, Feb. 2025, p.25; and in PIBD 1238-III-1 (with a link to the full decision in French), though this last article doesn’t discuss what the other commentators (and I) perceive to be the most interesting issue.  

The facts of the case, in brief, are as follows.  The plaintiff (Piaggio) sued the defendant (Peugeot) for the infringement of four patents and a design model.  As it turned out, only a few dependent claims of one of the patents were found to be both valid and infringed (by the defendant’s METROPOLIS line of scooters).  There are several issues of importance in the case—including an award of damages which takes into account the fact that the patented feature at issue covers only one feature of a complex end product—but the most important, arguably, comes toward the very end of the decision, where the Court of Appeal reverses the lower court’s order for a permanent injunction.  The defendant notes, inter alia, that the patent in suit deals with only a detail in implementing an anti-tilting system, and that the patent was due to expire on February 1.  The Court of Appeal agrees that an injunction would be disproportionate, stating (in my translation):

In view of the particular circumstances of the present case, consisting of an initial proceeding involving four patents of which was invalidated, the appellate proceeding concerning no more than the EP 612 patent whose expiration is near and which has been the object of long and fruitful debates concerning its scope, concerning a relatively limited turnover and moreover that the market share occupied by Peugeot Motocycles has been decreasing since 2021, the court concludes that the corrective measures and injunction sought would appear disproportionate in regard to the interests before the court and, not only for the infringer but also for third parties acting in good faith, would entail excessive hardship, not justified by the right of exclusivity, while that a measure of pecuniary compensation suffices to remedy the right of the injured party, the plaintiff having admitted that it granted a license concerning its exploitation to another competitor.        

Instead of a permanent injunction, therefore, the court awarded damages equal to €150,000, which would cover the 300 scooters the defendant was expected to sell following the entry of the lower court’s judgment up to the date of expiration.

Professor Raynard notes the source of the proportionality requirement in the Intellectual Property Rights Enforcement Directive and in the Charter of Fundamental Rights, though he expresses  some concern that denying injunctive relief on proportionality grounds could result a slippery slope by which exclusive rights are rendered merely rights to demand compensation--though if I read him correctly, he believes that some departures from a purely property-rule entitlement may be necessary in the modern economy.   For their part, Messrs. Khatab et al. emphasize that the decision rests upon a consideration of the relevant facts and circumstances; and both articles note some departures from a strict property-rule perspective in a few other contexts involving copyright, neighboring rights, and moral rights.  According to both articles, however, this appears to be the first French patent case in which a court has denied the prevailing plaintiff a permanent injunction.

Unfair Competition by Publicizing a Pending Infringement Action

Both ip fray and JUVE Patent have recently reported on the decision of the Tribunal des Activités Économiques de Lyon (available here) awarding bioMérieux SA €10,000, after Qiagen N.V. published a press release concerning Qiagen’s having filed a patent infringement suit against bioMérieux in the Düsseldorf Local Division of the UPC.  Since the topic of whether, or under what circumstances, an IP owner may be found liable for disparagement (and/or in violation of unfair competition or other law) for accusing another firm of infringement is one of the topics I address in my forthcoming book Wrongful Patent Assertion, I thought I should say something about this decision, which highlights some of the risks posed under the relevant French law.  

As I discuss in the book, France is hardly the only country in which IP owners need to be careful about sending warning letters, especially when the recipient of the latter is an alleged “secondary infringer” (i.e., a customer, distributor, or supplier of an alleged “primary infringer,” that is, an alleged infringing manufacturer).  The U.K., for example, has a statutory cause of action known as “unjustified threats” that is intended to protect secondary infringers from groundless threats of infringement liability; and there is also a rather complex body of German decisions differentiating between permissible inquiry letters and potentially impermissible warning letters.  (For detailed discussion, see Minyu Zheng, Legal Responses to Unjustified Threats of Patent Infringement – Intellectual Property Approach or Unfair Competition Approach? (Edward Elgar Publ. 2024), previously noted on this blog here.)  On the other hand, it is extremely difficult to win such cases in the U.S., in part because of perceived First Amendment protections.

More relevant here, previous French caw law has found that it also can be a violation of unfair competition law to publicize a pending action, at least prior to the rendering of a first instance judgment. To illustrate, consider this 2004 Cour de cassation decision holding that Défi France had violated unfair competition law by reporting its own pending (and ultimately successful) unfair competition lawsuit, against a firm called LVP partner’s, to Défi France’s client Nissan.  The recent decision of the Lyon court seems consistent with this earlier case, in finding that the publication of the press release can constitute dénigrement (disparagement) and unfair competition.  The decision states, inter alia, that the press release informed the technical sector and the general public of the filing of the complaint, “without communicating any data as to the context and the nature of the facts giving rise to the dispute,”  apart from any adversarial proceeding and in the absence of  any judicial decision, in relation to a patent in a very sensitive field in the health care sector (my translation from the French).  The court awarded damages as noted above; ordered Qiagen not to make further public comments about the case prior to a judicial decision; and ordered Qiagen to post the Lyon court’s decision on its own website.  As the above commentators suggest, this aspect of French law may not be well-known to companies outside of France, and questions may still remain regarding exactly how to comply with French law while also satisfying obligations to keep one’s own shareholders informed of material information.    

Review of FRAND: German Case Law and Global Developments

The January 2025 issues of Concurrences includes a very engaging review of FRAND:  German Case Law and Global Perspectives (Elgar Intellectual Property Law and Practice Series, 2024), the recent volume I was happy to contribute to, and edit, with Peter Picht and Erik Habich.  The author of the review (available in French and in English) is Rebekka Flamind, University of Paris I Panthéon-Sorbonne.  She provides a detailed overview of the book, concluding that it "stands out . . . for its depth of analysis and unique approach," and offers "an invaluable comparative perspective" that "[l]awyers, clients and academics alike will find . . . indispensable . . . for understanding not only the German approach, but also the global context of FRAND litigation. It is an essential reference work for all those involved in the field."

I also learned something it seems I should have known previously, but didn't:  that the French acronym for standard-essential patent is BEN (for brevets essentiels à une norme).

Gabriel on the CJEU’s Decision in Mylan v. Gilead

Marianne Gabriel has published an article titled Quand le Cour de justice rappelle la nécessité d’un régime équilibré!  CJUE, 11 janv. 2024, aff. C-473/22, Mylan AB c/ Gilead (“When the Court of Justice Recalls the Need for a Regime in Balance!  CJEU, Jan. 11, 2024, Case C-473/22, Mylan AB v. Gilead”), Propriété Industrielle, avril 2024, pp. 3-5.  Ms. Gabriel argues (and I agree, see here) that the CJEU was right to conclude this past January that member states may award compensation to a defendant who has been excluded from the market on the basis of a preliminary injunction, where the patent is later found to be invalid or not infringed, regardless of whether the patent owner was at fault in pursuing the injunction.  As I noted when the case came out earlier this year, it is a bit hard to square with the CJEU’s previous decision in Bayer v. Richter, which appeared to permit member states to deny compensation, at least where the defendant had entered at risk before attempting to invalidate the patent in suit and the patent owner was not at fault; and it is still a bit unclear to me how exactly to square the strict liability standard affirmed in Mylan v. Gilead with some of the CJEU’s statements in that case approving of the consideration of all the relevant facts and circumstances in determining the amount of compensation due.  That said, I think the decision is a step in the right direction, and I assume that these other matters are fleshed out in future cases.  The author, as I said, approves of the recent decision as well, and notes that it is consistent with French precedent pre-dating Bayer v. Richter, such as Laboratoires Negma SAS v. Biogaran SAS, Cour d'appel de Paris, Jan. 31, 2014 (for previous discussion, see here).  As the title of the article suggests, and if I understand correctly, Ms. Gabriel believes that the recent decision restores balance to the system, insofar as both parties assume a certain degree of risk:  the defendant, that it will be enjoined, and the plaintiff, that it will have to pay if the injunction is granted and thereafter lifted.  But there is no reason why the defendant’s risk should also entail not being restored to the position it would have occupied, had the injunction never been entered; in particular, the perceived need for a high level of IP protection does not weigh in favor of imposing this burden on a defendant who, it turns out, is merely engaging in lawful competition.  Ms. Gabriel also holds out hope that the UPC will interpret UPCA article 60(9) and Rules of Procedure 213 and 354(2) in like fashion.    

Stief on Preliminary Injunctions Prior to Grant

The issue of whether courts in EPO member states have authority to grant preliminary injunctions on the basis of pending patent applications has recently been litigated in a number of European countries (see previous mentions on this blog here, here, here, and here).  Marco Stief has now published two papers, one in German and one in English, on the topic, noting that such injunctions appear to be permissible in some countries, albeit in several of them only in exceptional cases.  His more recent contribution is Fingolimod—(no) injunction before patent grant, J. Intell. Prop. L. & Prac. __ (forthcoming 2024).  Here is the abstract:

This article analyses the position of European courts on the availability of preliminary injunctions on the basis of a patent application, reviewing several national decisions in the fingolimod litigation. The decisions handed down by the Düsseldorf Regional Court, the Tribunal Judiciaire de Paris, the Danish Maritime and Commercial Court, the District Court of The Hague and the Barcelona Commercial Court show that the courts, with limited exceptions, reject provisional legal protection on the basis of a mere patent application on the grounds of absence of legal certainty.  The analysis identifies four (minimum) prerequisites that must be fulfilled for the courts to consider the possibility of issuing an injunction before a patent is granted.

The corresponding German article is (Keine) Unterlassungsverfügung:  Zugleich Besprechung von LG Düsseldorf „Fingolimod‟ unter Berücksichtigung von Parallel-Verfahren in anderen Jurisdiktionen, ("No Preliminary Injunction:  As Well as Case Law from the Düsseldorf Regional Court in "Fingolimod" in Consideration of Parallel Proceedings in Other Jurisdictions"), 23/2023 GRUR 1651-60.

For a different point of view, see Matthieu Dhenne’s article Preliminary Injunctions Based on a Patent Application:  A Justified Solution? (Fingolimod Case), 45 EIPR 236 (2023), previously noted here, and his more recent post FINGOLIMOD or the Hesitation Blues: can preliminary injunctions be based on a patent application under French law?, Kluwer Patent Blog, Dec. 19, 2023, which updates the French case law discussed in his earlier article and in the two Stief articles.

Cotter and Shen on Destruction and Proportionality

My article with Professor Chung-Lun Shen, Destruction, Proportionality, and Sustainability: A Law-and-Economics Analysis, 32 Texas Intellectual Property Law Journal 111 (2024), has now been published.  It is available on Westlaw and SSRN, and should be available soon on TIPLJ’s website.  Here is the abstract:

This Paper undertakes a law-and-economics analysis of the remedy of destruction (and, subsidiarily, the related remedies of recall and removal) of products that infringe intellectual property (IP) rights. We begin with a brief survey of international, regional, and domestic law and practice, observing that (1) courts generally are believed to be more likely to order the destruction of copyright- and trademark-infringing goods than of patent-infringing goods, and (2) the frequency with which courts order the destruction of patent-infringing goods varies from one country to another. Our observations lead us to present two principal theses.

 

The first is that a comparative reluctance to order the destruction of patent-infringing goods, as opposed to copyright- or trademark-infringing goods, would be consistent with economic considerations. From an economic standpoint, destruction can be viewed both as a complement to injunctive relief and as a substitute (albeit an imperfect one) for ongoing monitoring of an infringer’s compliance with the terms of an injunction. The social benefits arising from substituting destruction for monitoring, however, are likely to be lower—on average, and perhaps subject to regional variation—for patent-infringing goods than for products that infringe other IP rights. In addition, although observers have long noted that the private and social costs of destruction provide a rationale for withholding that remedy when it would cause disproportionate harm to the defendant or third parties, these costs may be unusually high in patent cases—particularly that subset of cases in which the risk of patent holdup is substantial. In view of these factors, the social costs of ordering the destruction of patent-infringing goods are likely to outweigh the social benefits in a comparatively broader swath of cases.

In addition, I may as well note a paper I just came across in the preceding volume of TIPLJ, Deepa Sundararaman & Cleve B. Tyler, A Detailed Study of Court Decisions on Admissibility of Intellectual Property Damages Experts, 32 Tex. Intell. Prop. L.J. 45 (2023).  Here is a link to the paper, and here is the abstract:

Damages experts’ opinions in intellectual property litigation are routinely challenged for failing to reach standards set forth in the Supreme Court’s 1993 Daubert decision. Our study is the first of its kind, in performing a systematic and in-depth review of court decisions, including an analysis of the substantive reasons for challenge. We studied more than 400 Daubert orders covering nearly 1,300 decisions over a six-year period from 2015 through 2020.

 

Patent cases make up a significant majority of our dataset. Overall, we find an exclusion rate of 24%. While plaintiff experts are challenged more frequently than defendant experts, their exclusion rates are not significantly different. However, the type of analysis challenged appears to matter—in particular, lost profits analyses are excluded at lower rates than other types of analyses, and experts described as offering legal opinions are excluded at higher rates. Exclusion rates vary by district, with the Northern District of California (NDCA) having higher exclusion rates and the Eastern District of Texas (EDTX) having lower exclusion rates than the rest of the country. We study the impact of the Supreme Court’s Heartland decision on exclusion rates, which has reduced a plaintiff’s ability to engage in “venue shopping.” Overall, rates of exclusion in EDTX and Delaware declined following the decision, with a moderate increase in exclusion rates in NDCA.

 

Finally, we find substantial disparities in exclusion rates among judges. Among the top ten judges ranked by number of decisions, five have relatively “low” exclusion rates of less than 15% and four have relatively “high” exclusion rates greater than 30%. Variations such as these, along with differences by jurisdiction, raise questions about courts’ consistency in application of the Daubert standard—questions that are left for future researchers and policymakers to address.

Montefusco and Crespo on Spanish Eli Lilly v. Teva Decision

A post I published a few months ago titled Recent Patent Damages Decision of the Madrid Court of Appeal began as follows:

A few weeks back Adrián Crespo published a short post on the Kluwer Patent Blog titled Patent case: Judgment no. 18/2023 of Madrid Court of Appeals (Section32) of 23 June 2023, Spain.  The author writes that, as a result of the decision, “generic companies wishing to launch at risk” should be aware that “the first mover(s) will be held liable for triggering regulatory price reduction and thus for the damages arising from the price gap between the innovator and the generic, even if other third parties have launched at a later point in time.”  The post references a longer summary of the decision on Kluwer IP Law, to which I do not have access, but I was able to obtain a copy of the decision itself and will note a few things about it below.  (Here is a link to the decision in the original Spanish, and here is a link to a machine translation.)

More recently, Mr. Crespo and Josep Montefusco have published an article titled Madrid Court of Appeal Rules in Landmark Damages Case, 46 EIPR 65 (2024).  The abstract reads:

In a recent judgment, the Madrid Court of Appeal (Section 32) has ruled in the landmark raloxifene patent infringement case. The decision dealt inter alia with the allocation of liability among patent infringers for triggering regulatory price reduction. This comment considers the main implications of this precedent, which are likely to shape future damages claims in Spain (an important market for pharmaceutical products which, moreover, is not part of the Agreement on a Unified Patent Court).

The article provides a detailed analysis of the facts and the principal holdings.  It concludes, first, that one of the decision’s important holdings is that “patentees and/or their licensees may claim damages for losses suffered by their subsidiaries” (p.69).  (By way of comparison, I would note that U.S. law on this point is not altogether clear; for brief discussion and citations, see my post dated Oct. 26, 2016, noting Mark Lemley’s critique of Federal Circuit case law that generally precludes a patentee from recovering losses suffered by its exclusive licensee, and district court cases considering the “inexorable flow” doctrine, under which a parent may under some circumstances recover for losses suffered by a subsidiary.  In a somewhat related vein, see also my post dated Nov. 20, 2023, discussing some recent French and Canadian cases addressing  standing to sue of licensees and related companies. )  Second, the article notes the significance of the court’s holding that the first generic in the market can be liable for a subsequent price reduction even if other entrants follow, and considers its implications and possible nuances.

FRAND Commitment to ETSI Is Irrevocable, But Can Be Suspended

Judge Gilstrap reached the above conclusion in a decision earlier this week in G+ Communications, LLC v. Samsung Electronics Co., Civil Action No. 2:22-CV-00078-JRG.  The conclusion comes in response to a request by Samsung that the court “make the following determination of French law:  French law does not allow a SEP declarant to unilaterally discharge (and thus avoid) its irrevocable FRAND obligations, including its duty to negotiate in good faith and its obligation to license declared patents on FRAND terms” (p.5).  The court agrees that the commitment is irrevocable, as stated in Clause 6.1 of the ETSI IPR Policy, but that it can be suspended during the period of time, if any, that the opposite party fails to discharge its obligation to negotiate in good faith:

 

The Court is persuaded that the obligation to negotiate toward a FRAND license in good faith may be temporarily suspended. . . . First, G+ and Samsung are subject to reciprocal obligations of good faith during negotiations for a license to a FRAND-encumbered patent. The parties’ experts agree on this point. . . . Next, one party’s failure to fulfil its obligation to negotiate in good faith suspends the other’s. . . . Indeed, Samsung’s own expert, Professor Molfessis, testified that “[w]hen in presence of reciprocal obligations a party doesn’t perform its obligation, it’s possible for the other party to ask for the termination of the contract or to suspend its own obligation.” (Dkt. No. 552-1 at 49:3–7 (emphasis supplied).) . . .

 

SEP holders maintain an obligation to license its [sic] SEPs on FRAND terms and to negotiate toward such licenses in good faith. These obligations are irrevocable in the sense that SEP holders cannot withdraw them or take them back. However, their irrevocable nature does not mean they are static.

 

. . . It is both practical and logical that the obligations of a party acting in good faith be suspended when a counterparty to a negotiation for a FRAND license is acting in bad faith. If the counterparty is acting in bad faith, it is impossible for negotiations for a “fair” and “reasonable” and “non-discriminatory” contract to proceed. . . . To hold otherwise would strain logic and reason. However, when the counterparty ceases acting in bad faith, the barrier to consummation of the license on FRAND terms is removed and the negotiations can and must resume (in good faith). Further, holding that a party’s duty to negotiate in good faith is suspended while the counterparty is acting in bad faith prevents the party acting in good faith from being taken advantage of by the counterparty. Such a suspension can counter the effects of holding up and holding out. . . .

 

For the reasons and supporting sources noted herein, the Court makes the following determination of French law pursuant to FRCP 44.1:

 

Where a patent is contributed to an adopted standard established by a standard setting organization, such contribution contractually burdens the patent to thereafter be licensed on fair, reasonable, and non-discriminatory terms. This is known as the FRAND obligation. This obligation is irrevocable, and thereafter runs with the patent. However, if in negotiating for a license to a patent burdened by a FRAND obligation either the patent holder or the implementer of the adopted standard fails to act in good faith and thereby prevents a license from being granted, the other party’s obligation to continue negotiations is suspended. This does not remove the burden of the FRAND obligation from the patent, but avoids obliging a party acting in good faith to continue negotiating with a party who fails to do so. If the bad faith actor ceases its bad faith and begins acting in good faith, the good faith negotiations must also resume (pp. 6-11).

 Hat tip to my former student Michael Sikora, for calling this decision to my attention.