Request for help; Summertime blues for Visto as January draws close

Another of the IPKat's friends, a charming lady who shall remain anonymous and who practises IP in a EU member state, has written to him for advice on what she calls "a question of general and principal importance in the fight against counterfeiters". She writes:

"In one of several cases before our national court concerning imports of counterfeit products we have unfortunately only succeeded in part. A shipment of jackets was seized by customs, as the customs authorities investigate all incoming shipments from China. ... The court has rendered us a judgment by default. So far so good.

Above, right: President George W. Bush, a staunch supporter of IP rights, practising the art of seizing Chinese jackets. Unfortunately Chinese President Hu Jintao was still wearing it ...

The judge, however, decided not to award our client its full claim of damages and compensation. In particular, no damages due to loss of business and/or reputation have been awarded, but only compensation (which has been calculated as a percentage of original retail price). The judge’s argument was that, since the jackets never reached the domestic market, the client has not suffered any loss.

This is only partly in line with previous national case law and our client has instructed us to appeal .... Our argument is, among other things, that a client’s loss in such a case cannot be area-specific (just isolated to this jurisdiction), as the damage to the brand is both global and local. The fact that a potential national customer chooses to purchase counterfeit items in China instead of original items in his home country results in a direct loss for the right holder.

In connection with our preparation of the appeal, I would like to hear of any judgments – local or international – or literature that could support our claim".

The IPKat can't think of any cases in which this argument has been the basis of a successful damages claim in any EU country, but he does feel that Article 13 of Directive 2004/48 (the IP Enforcement Directive) gives the courts the opportunity to be far more flexible in their assessment of damages, taking into account the prejudice to the rights owner. He asks readers to post their comments below or email him here if they know of any cases, or have any good suggestions. All responses will be acknowledged.

Here's another summertime IP decision from the Patents Court for England and Wales, which Lawtel picked up on. It's Research in Motion UK Ltd v Visto Corporation [2007] EWHC 1921 (Pat), a decision of Mr Justice Patten on 1 August.

Visto owned a European patent,designating the United Kingdom, for a way of synchronising email across a network. BlackBerry-maker RIM launched post-grant opposition proceedings before the European Patent Office (EPO) and then commenced revocation proceedings in England and Wales. Trial of this action, which was well advanced, was expected to take place in January 2008, while the EPO proceedings were at a relatively early stage and could easily take up to five years to resolve if - as was likely - the loser appealed.

In this action Visto applied for a stay of the UK revocation action pending the outcome of the EPO opposition proceedings, maintaining that a stay would avoid unnecessary expenditure in processing the English action to its conclusion, including an appeal, since exactly the same issues would be dealt with by the EPO. RIM disagreed: the January trial was imminent and it would be unfair to deny them the opportunity to press their revocation claim and have to pin its hopes and efforts on opposition proceedings that were still years away. RIM also said there was a need for commercial certainty: the company should not have to commit itself to the considerable time, effort and expense involved in the process of modification and improvements to its product in ignorance of whether what it produced would infringe Visto's patent. Visto softened its position at this point, offered undertakings that, in respect of future developments of RIM's product, it would not seek injunctive relief or seek to recover damages or an account of profits based on infringement, either for the period of the stay or thereafter.

Patten J refused Visto's application for a stay. In his view
* while opposition proceedings were part of the process of determination by the EPO as to the form of grant (if any) a patent should take, the Patents Court was free to pronounce on the validity of the patent in advance of opposition proceedings, if necessary revoking the patent;

* even if the proceedings were stayed and the EPO later upheld the validity of the patent, RIM could still seek revocation in the national courts;

* in the absence of circumstances that would make it unjust to stay the English proceedings, it was better to let the EPO proceedings continue and for the English action to be stayed - but the court had to exercise its discretion when determining an application for a stay based on a consideration of all relevant factors.

* a stay of national proceedings would not be granted unless the EPO proceedings could be resolved quickly and a stay would not inflict injustice on a party or be against the public interest;

* on the facts, the need for a speedy resolution of issues of validity, particularly in the UK which was a major market for RIM's products, outweighed the mere cost savings involved in staying proceedings. And in this highly competitive field there was a need for commercial certainty at the earliest opportunity;

* given the advanced state of the English proceedings, the considerable costs already incurred and the potential for wasted expenditure and delay that would be involved in a stay, even with the undertakings which had been offered in place, it would not be just to deprive RIM of the opportunity of seeking an early resolution of the issue in England in January rather than having to wait four or five years for a determination by the EPO.
The IPKat wonders why Visto's application for a stay of the English proceedings came so late - it's not as if the company had only just discovered that RIM was applying to revoke its patent. Merpel says, perhaps the companies were talking to each other and Visto didn't wan't to spoil the chance of picking up a tidy sum from its fruity foe.
Request for help; Summertime blues for Visto as January draws close Request for help; Summertime blues for Visto as January draws close Reviewed by Jeremy on Friday, August 17, 2007 Rating: 5

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