A guide to the UPC and the UP - Flipbook - Page 290
Calculation Rules for the Determination of Damages
General Principles
15-42 Art.68(1) UPCA states that the defendant must pay the claimant damages appropriate to the
harm actually suffered as a result of the infringement. It sets out more detailed damages
calculation methods at art.68(3) UPCA and in art.68(4) UPCA refers to infringers who did
not know, or had reasonable grounds for not knowing, that they infringed. These provisions
are very similar to the provisions in art.13 Enforcement Directive. 63
15-43 In addition, art.68(2) UPCA lays down the general principles which should be observed by the
Court when calculating damages as follows:
– The injured party shall be placed back in the position it would have been in if no
infringement had taken place;
– The infringer shall not benefit from the infringement; and
– Damages shall not be punitive.
15-44 Thus, whilst an award of damages by the Court may not be punitive, it may transfer all
profit that the infringer has made as a result of the infringement to the patentee.
Accordingly, the three principles encompass the following two concepts: (i) the damage
that the patentee has been caused as a result of the infringement; and (ii) the profits the
infringer has made as a result of the infringement. However, the lack of any punitive nature in
the award of damages means that there can be no double accounting in the calculation of
damages. In other words, the infringer cannot be made both to compensate the patentee for its
losses and disgorge its profits on the same acts of infringement albeit that it is possible for the
patentee to be compensated for loss suffered as a result of certain infringing acts, whilst the
infringer is required to disgorge the profits it made in relation to certain other infringing acts.
15-45 It is up to the Court to do its best, within the scope of principles laid down, to avoid either
making such low awards that there is no disincentive to infringement or making such high
awards as to unfairly penalise the infringer. In striking this balance, the Court must have in
mind that damages must be an “effective, proportionate and dissuasive” remedy under art.3(2)
Enforcement Directive.
Primary Method for Calculating Damages
15-46 Art.68(3) UPCA 64 sets out two calculation methods in the alternative that the Court may adopt in
any given case. The primary method refers to assessing the “negative economic consequences”
of the infringement including the lost profits of the injured party, any unfair profits made by the
infringer, and in appropriate cases, elements other than economic factors, “such as the moral
prejudice caused to the injured party”. 65
15-47 The main negative economic consequence that the patentee (at least one who is a
manufacturer) will normally suffer is the loss of profits due to sales lost as a result of sales
made by the infringer. There will also be a loss when the patentee has been forced to reduce its
prices to avoid losing as many sales to the infringer (including ongoing losses due to price
depression caused by the infringer). Loss could also be suffered as a result of lost sales of
products sold or services provided together with the product that is infringed.
63
64
65
Indeed arts 68(1), (3) and (4) UPCA correspond almost verbatim to art 13 Enforcement Directive, and art 68(2), in excluding
punitive damages, follows the last sentence of recital 26 Enforcement Directive.
Equivalent to art.13(1)(a) and (b) Enforcement Directive.
art.68(3)(a) UPCA.
© Bird & Bird LLP | May 2023
A Guide to the UPC and the UP 280
