Injunction in accordance with the principles of equity and proportionality

Brussels, January 23, 2017 – When deciding on the appropriateness of injunctive relief in respect of one or more SEPs, factors such as the market participation of the patent holder, proportionality, and the interests of the general public should be taken into consideration. When a SEP holder has voluntarily committed to license its patents under FRAND terms, a ruling made in favour of damages or a licence as opposed to injunctive relief will often provide for a more proportionate remedy. In the interest of maximizing innovation, it would be highly desirable for lawmakers to take into consideration the particularities of SEPs and provide corresponding guidance.

In Europe, the Intellectual Property Rights Enforcement Directive (IPRED) requires that remedies for violation of intellectual property rights must always remain equitable and proportionate.1 Other jurisdictions have similar requirements. This paper considers issues of equity and proportionality in the application of injunctive relief in the context of standard essential patents (SEPs).

In order to address the subject of equity and proportionality in relation to injunctive relief, it is appropriate to go back a few steps in time, and review why and how patent law was developed. The oldest patent law was enacted in Venice in 1474 and already contained many of the key principles embodied in modern European patent laws. That law stated that certain innovators reporting a new, innovative and feasible design to an authority would be given several years of protection against imitations. Other patent laws were drawn up (e.g. in France, England and Germany) over the following centuries.

The key purpose of these laws is to serve economic development and foster innovation, by providing a patent holder with the exclusive right to exploit the invention protected by its patent for a certain period of time in return for public disclosure of the invention. Publishing the invention allows others to build upon the technology, or alternatively incentivizes them to build a competing ‘work-around’ solution to the problem solved by the invention.

As part of its exclusive right, a patent holder may be able to exclude others from using the patented technology (by, for example, obtaining an injunction against infringing products) or alternatively exploit its patent right by licensing others (e.g., by claiming payment of a royalty for the use of the patent technology).