Polish Constitutional Tribunal declares provision transposing right of information partly unconstitutional

Right of information from alleged infringers ...

Article 8(1) of the Enforcement Directive mandates upon Member States to ensure that, in the context of proceedings concerning an infringement of an IP right and in response to a justified and proportionate request of the claimant, the competent judicial authorities may order that information on the origin and distribution networks of the goods or services which infringe said right be provided by the infringer and/or any other person who was: 

1. found in possession of the infringing goods on a commercial scale; 
2. found to be using the infringing services on a commercial scale; 
3. found to be providing on a commercial scale services used in infringing activities; or
4. found to be providing on a commercial scale services used in infringing activities; indicated by the person referred to in point (1), (2) or (3) as being involved in the production, manufacture or distribution of the goods or the provision of the services.

But is the right of information compatible with the values that individual Member States recognize in their constitutions?

The IPKat has learned from Katfriend Bohdan Widła (attorney-at-law at Barta&Kalinski) that, recently, the Polish Constitutional Tribunal has ruled (the text is not yet available, but the press release is) that this might not always be the case.

Here’s what Bohdan writes:

Is the right to information about the infringing activities compatible with constitutionally protected values? According to the latest ruling of the Polish Constitutional Tribunal, it might not necessarily be the case if information is requested from a non-infringing party, at least with regard to the Polish implementation of Article 8 of the Enforcement Directive.

Summary

The case dates back to 2015, when Grupa Allegro sp. z o.o. (the biggest e-commerce platform in Poland) was ordered to provide information about the origin and distribution of allegedly infringing goods from 2006 onwards. The claim was submitted by a German automobile manufacturer and related to two EUTMs it owned. The proceedings against the alleged infringer had not yet been initiated. Grupa Allegro tried to invoke a number of defences including statute of limitations, safe harbours, protection of trade secrets and protection of personal data. Neither by the Court for the EU Trade Marks and Community Designs in Warsaw nor the Court of Appeal in Warsaw accepted either of them. The latter also refused to refer the case to the Court of Justice of the European Union (CJEU).

Since the decision of the Court of Appeal was final, Grupa Allegro filed a constitutional complaint. Last week, in an unanimous decision, the Constitutional Tribunal declared that Article 286[1] sec. 1 subsec. 3 of the Industrial Property Law Act, which refers to the right to information against non-infringing parties, is incompatible with freedom to conduct a business as  guaranteed under the Polish Constitution.

Reasoning

The full text of the decision has not yet been published, but we can extract some information from the available press release. At first glance, the provision in question appears similar to Article 8 of the Enforcement Directive and its other national implementations (e.g. §140b of the German Patentgesetz). As always, the devil is in the details. Just to name a few potentially problematic aspects:

• the rightholder may request information without brining an action against the infringer, even when the infringing activity is neither proven nor obvious, but ‘highly likely’,
• it is not explicitly stated that the court should assess the proportionality of the request.

To verify compliance with the Constitution, the Constitutional Tribunal applied a well-established test of proportionality. A statutory provision may limit a constitutional freedom only if it is:

• useful (i.e. adequate to achieve its declared goal),
• necessary (i.e. there are no alternative ways which are at least equally useful),
• proportionate (which requires weighing and balancing opposing interests).

The rationale behind the right to information was not at issue here, nor was the usefulness of the relevant provision. Necessity was a different story. The main problem was that the disclosure of confidential information of the third party is irreversible. However, the rightholder may request and receive such information even if the proceedings against the actual infringer are never initiated. In such circumstances, the right of information loses the connection with the alleged infringement. As a result, the Polish implementation goes beyond what is necessary to enforce IP rights.

Finally, the court considered the protection granted to the rightholder to be disproportionately strong in comparison with the interests of the third party. This was due to the lack of statutory protections against any abuse of the right of information and lack of specific safeguards to ensure proportionality be observed.

The court dismissed the other arguments raised by Grupa Allegro, which mostly referred to the right to a fair trial.

... but also from AngelKats,
aka innocent third parties?

Impact

Almost all of the parties of the proceedings, including the ombudsman and the Parliament, argued before the Constitutional Tribunal that Article 286[1] sec. 1 subsec. 3 of IPL was unconstitutional to some extent. The final decision, however, is a bit surprising. Why is that so?

Perhaps most importantly, it seems that the court struck down the entire provision referring to right of information from non-infringing parties, without using any of the tools which would allow it to survive at least to some extent. Some parties suggested a so called partial judgment, which would only invalidate the provision to the extent that it would interfere with the protection of trade secrets or would be detached from actual infringement proceedings. In other cases, the right of information would have remained unchanged. The court did not follow this path. Nor did it postpone the effects of the judgment, something that would have been possible for up to 18 months. As a result, the Constitutional Tribunal pushed Poland into a state of non-compliance with the EU law essentially overnight.

Although this warrants a quick legislative intervention, its direction is not immediately obvious. For example, what safeguards can be created to counterbalance the irreversibility of disclosure? It is hard to imagine an equivalent of the ‘right to be forgotten’. Perhaps linking the right of information more strongly to ongoing (or completed, as the CJEU pointed out in C-427/15 NEW WAVE CZ) infringement proceedings would do the trick. Moreover, there are more issues with the provision in question. It has been criticized by Polish scholars since its introduction in 2007. One can hope that any fixes to the right of information will go beyond what is explicitly stated in the ruling.

The impact is not limited to patents, trade marks and designs. A very similar claim is described in Article 80 sec. 1 subs. 3 of the Act on Copyright and Related Rights. Although it was not struck down here, courts may follow the reasoning of the Constitutional Tribunal and refuse to apply the twin provision in copyright cases. It would not be entirely surprising. After the Polish provision allowing the rightholder to claim triple the value of license fees for a culpable copyright infringement was found unconstitutional, the Polish Supreme Court followed the same reasoning with regard to the provision regarding claim for double the value for non-culpable infringement, and refused to apply it (even though it is compliant with EU law).

Last but not least, the ruling is tainted by the ongoing Polish constitutional crisis. The judge rapporteur (Mr Mariusz Muszyński) was chosen for the already filled office, so the validity of his appointment is questionable. It remains to be seen if also this would affect the impact of the ruling.

UPDATE on 14 December 2018: The text of the ruling is now available here.