New EC Study on IPRED

There already has been a lot going on in the IP world this year, especially in relation to SEPs  in the U.K., Germany, and China; and unfortunately, I am still a bit underwater for a variety of reasons--including the fact I’m teaching one-and-a-half-new courses this semester; the release of my new book Remedies in Intellectual Property Law; and going through edits (and very soon, page proofs) for my other new (forthcoming) book, Wrongful Patent Assertion.  As I work on catching up on the backlog, I thought I should mention the recent publication of the European Commission‘s Follow-up study on the application of the Directive on the Enforcement of Intellectual Property Rights, which I have begun reading.  For now, I will note a few things, mostly from the Executive Summary. and expect to have more to say about some of these issues in the weeks to come.  (As Florian Mueller notes on ip fray, the research that went into the study was concluded in 2024, so there isn’t much there about the UPC.  But what the report does address is, in my view, of substantial interest.) 

As stated in the Executive Summary, the study focuses on “five priority research topics”:  proportionality; PAEs; dynamic blocking injunctions; information sharing and data protection; and costs for the destruction of infringing goods.  Of these, the first two are of greatest relevance to patent law (though all are important to IP law, and my new remedies book provides some measure of discussion of blocking injunctions, the right to information, and the destruction remedy).  One thing that caught my attention is that, according to the study, in patent cases courts in EU member states grant permanent injunctions in 94% of cases, and that “proportionality was explicitly assessed in only 0.6% of these cases.” This is not exactly surprising, but it is interesting to see the statistics.  The study suggests that it might be useful to have some sort of harmonized criteria for determining when proportionality should limit matters such as injunctive relief and destruction orders, and in this regard “concludes that the Commission could issue guidelines defining factors which courts should assess when applying the proportionality principle, such as i) the nature of the plaintiff, ii) the economic harm suffered by the parties, and iii) the public interest.”  The full discussion of proportionality, found in section 3.1 of the report (pp. 27-50), includes some comparative analysis from different member states; discussion of some leading cases; and possible avenues for reform.  As for PAEs, the study states that “their presence in the EU remains relatively limited” compared to the U.S., but also notes that “the data could be showing only the tip of the iceberg as parties may settle disputes outside the courts.”  It also “found that PAEs are highly concentrated in Germany,” and calls for greater transparency “particularly in jurisdictions such as Germany where court decisions are not systematically published.”  The full discussion of PAEs, found in section 3.2 (pp. 50-69), includes, among other things, discussion of why (according to Darts-IP) 90%+ of all PAE activity takes place in the U.S. (among them, no loser-pays rule except in exceptional cases, much higher damages awards, and lack of specialized trial courts), and also suggests that the development of proportionality guidelines could help to forestall (future?) abusive litigation by PAEs within the EU.