No IP, no right to information? CJEU to clarify scope of article 8 Enforcement Directive

Under article 8(1) of the Enforcement Directive (Directive 2004/48/EC) a claimant in infringement proceedings can request a court to order certain parties to disclose information. This so-called ‘right to information’ includes information on the origin of the infringement (e.g. who manufactured the counterfeit goods) and its extent (the quantities produced or the price under which a good was sold). An action to obtain the information can be directed at the infringing party as well as third parties potentially involved in the infringement (producers, distributors etc.). 

A cat protecting trade secrets

In a recent request for a preliminary ruling by the Warsaw District Court (Sąd Okręgowy w Warszawie) a question was brought that touches on an interesting issue: can article 8(1) Enforcement Directive also be invoked when the claimant has not yet proven it can rely on a valid IP right?  In other words, must a court, prior to ordering a party to disclose information on an alleged infringement, confirm the existence of said IP right? 

Background of the case 

The facts of the case before the referring Polish court are quite straightforward. The defendants (Castorama Polska and Knor) are accused of infringing the copyrights of the claimant (a company called TB). TB claims it is the right holder of certain images that are protected by copyright under Polish law. TB commercially sells reproductions of these images. One image is depicted below.

  

TB alleged that Castorama Polska sold exact and near identical copies of the images, which had been supplied to them by Knor. After sending a cease and desist letter, TB filed an action before the Polish court on the basis of the national provision implementing article 8(1) Enforcement Directive. As part of the action, TB requested the court to order Castorama Polska and Knor to disclose detailed information on the origin and extent of the infringement. 

In its defense, Castorama Polska argued that the images, due to the trivial nature of the graphics and design, could not qualify as ‘works’ and subsequently would not be protected under Polish copyright law. TB did not counter this argument and failed to submit any evidence to demonstrate the existence of the claimed copyrights. This led the referring court to question whether an action based on article 8(1) Enforcement Directive could already be granted at this stage, or whether it was for TB to not only substantiate, but also prove the existence of its copyright.   

The court therefore stayed the proceedings and submitted the following questions for a preliminary ruling by the CJEU:

“(a) Should Article 8(1) […] be understood to refer to a measure to protect intellectual property rights only when the rightholder’s intellectual property right has been confirmed in these or other proceedings?

If question (a) is answered in the negative:

“(b) Should Article 8(1) of the directive […] be interpreted as meaning that it is sufficient to substantiate the fact that that measure refers to an existing intellectual property right, and not to prove that circumstance, especially in a case where a request for information about the origin and distribution networks of goods or services precedes the assertion of claims for compensation on account of an infringement of intellectual property rights? 

Analysis 

By its nature, article 8 Enforcement Directive causes friction between two different interests. On the one hand, the right holder has an interest in preventing further infringement and establishing the extent thereof. On the other, the party confronted with an order to disclose information has an interest to protect commercially sensitive information, such as trade secrets.

With respect to the latter interest, it is difficult to argue that anyone besides a right holder should gain access to sensitive and valuable information. In the referral, the Polish court seems to be conscious hereof:

“[…] If we acknowledge that [whether a person holds the intellectual property right at all] may only be substantiated, we would be dealing with an imbalance between basic rights – to the detriment of the commercial secrets, business secrets and business interest to which the request for information refers. […]” (point 21). 

The referring court therefore proposes to answer question (a) in the affirmative. 

To this Kat, it seems rather unlikely that the CJEU will rule differently. In the Coty case, the CJEU confirmed that:

“The right to information which is intended to benefit the applicant in the context of proceedings concerning an infringement of his right to property thus seeks, in the field concerned, to apply and implement the fundamental right to an effective remedy guaranteed in Article 47 of the Charter, and thereby to ensure the effective exercise of the fundamental right to property, which includes the intellectual property right protected in Article 17(2) of the Charter. […] “ (point 29).

Without the existence and validity of the underlying IP right being confirmed, it would be premature to already grant remedies to protect that right. Moreover, extracting knowledge from disclosed information is an irreversible process. The information cannot be 'unseen' by a party who exercised the right to information without having IP rights and will most likely be used to their commercial advantage.