Erlangen, 25 March 2019 – In light of the considerable evidence that imbalances in Europe’s patent system are being increasingly exploited by Patent Assertion Entities (“PAEs”), to the detriment of digital innovation, the industry coalition IP2Innovate welcomes the fact that leading academics, practitioners and government officials came together to explore ways to ensure consideration of proportionality in the granting of patent remedies, as required by EU law.
The International Symposium “Enforcing Patents Smoothly – From Automatic Injunctions to Proportionate Remedies”, was hosted on 22 March by the Institute of Law and Technology of the Friedrich-Alexander-Universität Erlangen-Nürnberg. The conference looked at proportionate remedies as an alternative to granting automatic injunctions, which give undue leverage to PAEs. PAEs (also sometimes referred to as “Non-Practicing Entities” (“NPEs”) or “patent trolls”) are entities that don’t invent or innovate their own patents, but buy them for the sole purpose of making money via lawsuits, thus damaging innovation.
While the EU Intellectual Property Rights Enforcement Directive (IPRED) makes a clear case for proportionate and equitable remedies granted by courts, members of IP2Innovate are concerned that these requirements are not effectively applied in many Member States. In practice, upon a finding of patent infringement, courts generally grant an immediate permanent order to remove the product from the market, without considering whether an injunction is the most appropriate and proportionate remedy in each particular case.
This practice is increasingly concerning in times of digital transformation with more and more multi-feature, integrated products incorporating thousands of patents. The leverage obtained from the threat of an injunction on a complex product can greatly exceed the value of a patent covering a minor feature incorporated into that product. This has opened the field to PAEs, whose activity in Europe is on the rise, as documented in the recent report by Darts-ip.
Prof. Dr. Franz Hofmann, LL.M., Chair of Private Law, Intellectual Property
and Technology Law of the Friedrich-Alexander-Universität Erlangen-Nürnberg, the organizer of the Symposium, said: “In many EU Member States, injunctions are conceived as default remedies. Although patents are an important tool for innovation, granting an injunction irrespective of the particular facts of the case can lead to hardship. Automatic injunctions are not necessarily ‘fair and equitable’, as required by the EU’s Intellectual Property Rights Enforcement Directive”.
Kevin Prey, Chairman of IP2Innovate, said: “The threat of an immediate permanent injunction is a powerful weapon when wielded by PAEs, and its availability in certain Member States is driving increased activity in Europe. We welcome the intensified debate on proportionate remedies and hope it will lead to a more effective application of the proportionality principle to patent cases across European countries, as required by EU law”.
For further information, please contact:
Executive Director, IP2Innovate