Written by Judit Rius Sanjuan
The most important international intellectual property agreement regulating remedies for intellectual property infringement is the 1994 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement).
Part III of the TRIPS Agreement deals with enforcement of intellectual property rights. It usually indicates objectives/purposes but leaves considerable leverage to WTO Member States on how to implement their enforcement obligations.
PROVISIONS ON REMEDIES
Article 44 of the TRIPS Agreement sets out the based obligations for injunctions as a remedy for intellectual property infringements and contains three important flexibilities.
Article 44.1: if the subject matter is acquired or ordered by a person prior to knowing or having reasonable grounds to know it would entail IP infringemen.
Article 44.2 contains the other two flexibilities and that reads:
“Notwithstanding the other provisions of this Part and provided that the provisions of Part II specifically addressing use by governments, or by third parties authorized by a government, without the authorization of the right holder are complied with, Members may limit the remedies available against such use to payment of remuneration in accordance with subparagraph (h) of Article 31. In other cases, the remedies under this Part shall apply or, where these remedies are inconsistent with a Member’s law, declaratory judgments and adequate compensation shall be available.”
The first part of the article 44.2 recognizes that in some countries injunctions are in fact not allowed as a remedy in cases of government use. In the United States, for example, section 28 USC 1498 limits remedies to compensation in cases of government use of patents and copyright.
The last sentence of article 44.2 goes even further and allows Member States to limit remedies in cases of infringement to declaratory judgments and adequate compensation. Differentiating from the first part of article 44.2 (for compulsory license and government use), this flexibility is not limited to patents and integrated circuits, but can potentially apply to infringements of all types of intellectual property rights.
Article 45 of the TRIPS Agreement deals with damages and reads as follow:
"1. The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person’s intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity
2. The judicial authorities shall also have the authority to order the infringer to pay the right holder expenses, which may include appropriate attorney’s fees. In appropriate cases, Members may authorize the judicial authorities to order recovery of profits and/or payment of pre-established damages even where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity."
The TRIPS Agreement does not provide rules on how to define “adequate compensation.” But it is clear that WTO Member States are not required to offer lost profits or other specific approaches, and that articles 1, 7, 8 and 40 provide Member States with considerable flexibility to consider consumer protection and public interest objectives. One can also read the last sentence of article 45 as authorizing judicial authorities to order payment of pre-established damages.
Article 48 of the TRIPS Agreement deals with indemnifications to the Defendant. It establishes that some times Defendants will be compensated when enforcement procedures are abused and, for example, a Defendant is wrongully enjoined
Article 50 of the TRIPS Agreement deals with provisional measures that judicial authorities can order to prevent the infringement of intellectual property rights or to preserve relevant evidence. The provisional measures regulated in article 50 could include injunctions or other mechanism. Article 44 is applicable to all injunctions, whether temporary or permanent, and is the authoritative legal provision that regulates injunctions, therefore allowing the judicial authorities a great deal of flexibility in determining the adequate remedy for patent infringement or measure to prevent infringement.
PROVISIONS ON BORDER MEASURES
Article 51 of the TRIPS Agreement deals with custom authorities and establishes that the basic obligation is to provide for the possible “suspension of release by customs” of imported “counterfeit trademark or pirated copyright goods.” This “may” be extended to “other infringements of intellectual property rights.”
Article 51 – Suspension of Release by Customs Authorities
"Members shall, in conformity with the provisions set out below, adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. Members may enable such an application to be made in respect of goods which involve other infringements of intellectual property rights, provided that the requirements of this Section are met. Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories.In footnote 13, the TRIPS notes that: “It is understood that there shall be no obligation to apply such procedures to imports of goods put on the market in another country by or with the consent of the right holder, or to goods in transit.”