We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
15 October 2012
Any human activity that causes damage creates the need to implement reparatory mechanisms. 'Damage' can be defined as any loss suffered by a person (or his or her goods) that has been caused by the actions or intervention of a third party.
The patent regime constitutes an essential basis of the current legal and economic system. Newer, safer and more efficient products are in constant demand. Many of these products can be manufactured and introduced into the market only on making significant investment, and therefore unfair enrichment arising out of the unauthorised imitation of patented material is to be avoided.
The party infringing a patent uses a good that does not belong to it in order to obtain a benefit. If the sole legal reaction consists of ordering the infringing party to cease the inappropriate use of the third party's invention, without supplementing this with a reasonable economic compensation to the damaged party, this will not only send a message of eventual impunity to potential infringing parties that engage in illegal conduct, but may even stimulate such conduct; if such parties keep the illegally obtained benefit, they would achieve unjustified enrichment.
A person engaging in an illegal activity will make a cost-benefit analysis of the expenses he or she would face. If judges systematically fix low damages, patent infringers may consider that the benefits of breaking the law are higher than the penalty resulting from the damage caused to the injured party. This situation encourages the reiteration of illegal conduct in the future.
Obtaining cessation of the activity infringing the right for exclusive use is as important as obtaining full compensation for the damage caused; thus it is to be expected that the criteria set out by laws and applied by the courts should generate real, and not symbolic, damages discouraging the violation of any IP right by infringers. When applying these laws, judges should therefore endeavour to facilitate proper damages to a greater extent in cases of patent infringement.
The December 13 2011 judgment rendered by the Federal Court of Appeals in Civil and Commercial Matters, Division 1, provides a good example of such facilitation.
The court analysed the requirement of appraising the claimed amount when filing a complaint for patent infringement in Aventis Pharma SA v Sandoz SA for cease of patent use - Damages. The plaintiff - Aventis Pharma SA - had filed a complaint consisting of, among other things, a request for damages for the alleged illegitimate use of its patent.
In its decision, the court applied one of the situations stipulated by the Code of Procedure (Section 330 (6)), which expressly releases the plaintiff from the burden of having to determine quantitatively the amount to be claimed when such a determination is necessarily and essentially subject to the evidence to be presented in the legal process.
The court held that a quantification of the claimed amount could be seriously established only once the evidence had been produced (in this case, through the inspection of the defendant's accounting books offered by the plaintiff).
Due to the lack of determination of the amount, the plaintiff was able to file the complaint by paying the minimum court fees.
In cases of alleged patent infringement and according to the court's criterion, the plaintiff would be released from quantitatively determining the amount to be claimed when this could be seriously established only when the evidence has been produced.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.