Three Principles of European IP Enforcement Law: Effectiveness, Proportionality, Dissuasiveness

Abstract

European intellectual property enforcement law is governed by Directive 2004/48/EC on the enforcement of intellectual property rights. Article 3 (2) of this Directive sets out its basic principles: effectiveness, proportionality and dissuasiveness. Against the widespread view that the Directive unilaterally benefits right owners by strengthening the possibilities of en-forcement, this paper argues that all of these principles are of equal importance. Tensions be-tween effectiveness, proportionality and dissuasiveness certainly exist, but it is the task of the courts to balance these principles, aiming at practical concordance. The result may well be that the traditional “all or nothing” rules may be challenged and replaced by more flexible approaches. This is demonstrated with respect to three current issues of patent law. First, in cases of patent trolling the principle of proportionality may require an award of damages in lieu of an injunction. Second, the principle of effectiveness requires injunctive relief to be available in patent cases whereas the principle of proportionality requires that interim relief can only be granted on a balance of convenience. Third, due to the principle of dissuasiveness the possibility of overcompensatory damages cannot be ruled out categorically. Damages which reflect more than just the amount of a reasonable licence fee, however, should only be available in cases of intentional infringement which occurs on a commercial scale.

Keywords: intellectual property, enforcement, patent law, patent trolls, injunction, overcompansatory damages, interim relief

JEL Classification: K11, K41