by Gert Würtenberger
The value of intellectual property rights is determined by the quality of the examination within the proceedings for grant of an exclusive right, the scope of protection as well as by the efficiency of the enforcement system in cases of infringement and the claims given in those cases. The legal system has to care for an effective enforcement of objects of legal protection. If infringements of rights do not have appropriate consequences, not only the leading function of exclusive rights will be lost but their legitimation will also be weakened. 
Exclusive rights have the purpose to safeguard for the right’s owner and its licensees the exclusive benefit for a limited period of time. In cases in which third parties use, without the rights’ owner-s consent an object that is protected by an exclusive right, the damages caused will have to be compensated by the infringer. The legal systems of the Member States of the European Union provide partly different approaches. Moreover, the regulation on Union trademarks and Union designs do not provide provisions for the compensation of damages but refer to the rules of the national system to be applied by the competent Court, whereas the regulation on Community plant variety rights not only includes provisions on compensation of damages but also reference to national rules.
In order to achieve a homogenous and efficient level of protection of intellectual property rights, the Union has initiated harmonization of national laws and introduced Union-wide valid intellectual property rights accompanied by legal measures, such as the Anti-Piracy Directive and the Directive on the Enforcement of Intellectual Property Rights (Enforcement Directive). The latter provides – apart from measures which shall enable the rights’ holder to substantiate claims and avoid further damages – a harmonized system also with regard to the handling of damage compensation claims throughout the European Union. Besides Arts. 6 to 9 which deal with the enforcement and safeguarding of the various infringement claims, Arts. 10 to15 that are devoted to legal consequences of declared IP infringements belong to the core provisions of the Enforcement Directive. Destruction, recall and removal claims and compensation of damages according to Art. 13 as well as coverage of legal costs according to Art. 14 are of specific importance.
So far, the Court of Justice of the European Union (CJEU) has had the opportunity in three decisions to define more precisely the compensation of damages provided in the Enforcement Directive. Two of these decisions discuss the national rules of damage compensation whereas the third decision considers the damage claims as provided in cases of infringement of Union Plant Variety Rights. A fourth decision is related to the problem of compensation of attorneys’ costs not all of which are covered by the applicable national law and other expenditures which have not been directly caused by the infringement, but are supposedly connected with the enforcement of the infringed rights. That decision, however, will only be discussed to the extent that it may be relevant for the calculation of damages.
I. The Decisions of the CJEU
1. Judgment dated 17 March 2016 in case C-99/15
In a first reference for preliminary ruling the CJEU had been asked by the Spanish Supreme Court (Tribunal Supremo) whether Art. 13 (1) of Directive 2004/48 permits the injured right holder to claim, besides compensation of the material damage suffered on the basis of the hypothetical royalty according to Art. 13 (1)(b), an additional amount as compensation for immaterial damage for his moral prejudice, according to Art. 13 (1)(a). In the underlying national proceedings the plaintiff requested, as provided by the Spanish Law on Intellectual Property, in addition to an amount calculated on the basis of fees that would have been due to him if the infringer had requested his authorization, an additional lump sum in respect of the moral prejudice which he claimed to have suffered.
The Court emphasizes that in light of the objective of Directive 2004/48, as outlined in particular in the Recitals 10, 17 and 26 of that Directive, Art. 13 (1)(a) must be interpreted in a manner which safeguards that the holder of the Intellectual Property Right is to be compensated in full for the “actual prejudice suffered” by him, which also includes any moral prejudice.
2. Judgment of 6 June 2016 in case C-481/14
This case is related to the question of damage compensation according to Art. 94 of the Regulation on Community Plant Variety Rights in an infringement of a protected variety.
The right’s holder had obtained an enforceable judgment requiring the defendant to pay compensation for the damage resulting from the sale of infringing plants. In addition to a damage compensation amount calculated according to a hypothetical license fee plus interest, the plaintiff requested payment of a supplement to the license fee calculated at least half of the amount of the hypothetical fee claimed, and reimbursement of additional costs related to preliminary injunction proceedings, for the time and costs spent by the plaintiff to pursue the infringement, plus default interest on those additional requested amounts.
The Regional Court in Dusseldorf awarded compensation on the basis of a license fee calculation, plus interest, but did not uphold these additional claims. In appeal proceedings, the Higher Regional Court of Düsseldorf took the view that a reasonable compensation in the sense of Art. 94 of the Regulation 2100/94 on Community Plant Variety Rights was a license payment that should normally have been made to the holder of a Community Right on the basis of the license agreement actually signed during the period concerned by the infringement. It had doubts, however, whether the hypothetical license fee may be increased by an automatic flat rate or by factors justifying an increase of the normal market license fee in light of considerations specific to the protected variety infringed and the practical consequences that followed from the infringement. In addition, it expressed its doubts whether the infringer could be ordered to indemnify the holder of the protective right for all costs (such as travel, meetings, time invested) he had incurred in the course of the main action as well as for the costs of the proceedings for interim measures. The Higher Regional Court decided to stay proceedings and to refer questions on the interpretation of “reasonable compensation in case of a plant variety rights infringement” to the CJEU preliminary ruling.
The Court first of all emphasize that Art. 94 concerns exclusively the compensation of damages actually suffered by the holder of the right. With reference to its decision Geistbeck it continued to explain that the purpose of Art. 94 (1) of the Regulation is financial compensation for the actual and certain damage suffered by the holder of the right because of the infringement, whereas Art. 94 (2) relates to the compensation of the “further damage” in cases where the infringer acted intentionally or negligently confirmed by Recitals 17 and 26 as well as to Art. 13 I of the Enforcement Directive. Art. 94 would not permit that the infringer was ordered to pay a flat rate “infringer supplement”, since such a supplement would not necessarily reflect the damage suffered by the holder of the infringed variety. Similarly, it would not give a basis for the restitution of the profits and gains made by the infringer. In this context, the Court mentions in Art. 97 which explicitly refers to the national law of the Member States as far as the same provides restitutions of advantages gained by the infringer (unjust enrichment).
3. Judgment of 25 January 2017 in case C-367/15
In the underlying national proceedings a Polish collective society requested payment of damages because of copyright infringement from a cable network company. At the time, the Supreme Court of Poland (Sąd Najwyższy) referred the matter for preliminary ruling to the CJEU. The national law provided – as an alternative to the payment of the actual damage occurred – the payment of a lump sum in the amount of a double license fee and, in cases of negligent infringement, three times the usual license fee. The national Court referring the matter to the CJEU regarded the triple license fee as not being in compliance with Art. 13 of the Enforcement Directive as it would have to be regarded as penalty compensation. Moreover, the referring court wanted to know whether the person holding the infringement of which was copyright be compensated must prove the event giving rise to the loss, the loss suffered in its full extent, the causal link between that event and the loss claimed and the fact that the acts of the perpetrator of the infringement are culpable.
The CJEU interpreted the question raised by the national court to the effect that the holder of an intellectual property right may choose to demand from the infringer either compensation of the actual damage he has suffered or, without having to prove the same and the causal link between the event giving rise to the infringement and the loss suffered, payment of a sum corresponding to twice, or in case of a culpable infringement, three times the appropriate fee which would have been due if permission had been given for the work concerned to be used. Given that, after referral of the question of interpretation of Art. 13 of the Enforcement Directive, the Polish Constitutional Court regarded the payment of a sum corresponding to three times the amount of the appropriate fee as not being in compliance with the Polish Constitutional Law, the CJEU only had to consider conformity of the double license fee scheme with EU Law. With reference to the CJEU’s preceding judgment in Hansson, the Court emphasized that the Enforcement Directive lays down a minimum standard concerning the enforcement of intellectual property rights and thus does not prevent the Member States from laying down measures that are more protective. While the Enforcement Directive does not entail an obligation on the Member States to provide for “punitive” damages, it cannot be interpreted as a prohibition on introducing such a measure where an intellectual property right has been infringed, if the payment of a hypothetical royalty was not capable of guaranteeing compensation in respect of all loss actually suffered. If payment for a loss calculated on the basis of twice the amount of the hypothetical royalty might exceed the loss actually suffered so clearly and substantially that a claim to that effect could constitute an abuse of rights prohibited by Art. 3(2) of the Enforcement Directive, the Court did not further comment on that point, as it turned out in the course of the hearing that the Polish Court would not be bound in such a situation by the claim of the holder of the infringed right.
Finally, the CJEU commented on the national Court’s concerns that the damage on the basis of twice the amount of the hypothetical royalty no longer requires the injured party to prove the causal link between the event giving rise to the copyright infringement and the loss suffered. The Court emphasizes that the argument was based on an excessively strict interpretation of the concept of “causality”, under which the holder of the infringed right should establish a causal link between that event and not only the loss suffered but also its precise amount. Such an interpretation would be irreconcilable with the idea of settling damages as a lump sum as permitted by Art. 13 (1)(b) of the Enforcement Directive.
4. Judgment 28 July 2016 in case C-57/15
The Appellate Court Antwerp asked the CJEU for guidance in the interpretation of Art. 14 of the Enforcement Directive, which obliges Member States to ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party or the party which has discontinued proceedings, as a general rule, be borne by the unsuccessful party unless equity does not allow this. The Belgium Judicial Code provides compensation in the form of a flat rate covering costs of the successful parties’ lawyer.
A Royal Decree provides a scale of standard reimbursements of legal costs in the form of a staggered scale for procedural costs indemnity, ranging from a minimum to a maximum amount. In the national proceedings the defendant was ordered to pay procedural costs relating to the proceeding at first instance of € 11.000,–, the maximum amount provided by the Belgian national law. In appeal proceedings the patent holder decided to discontinue its appeal on the merits, but requested that the defendant be ordered to reimburse € 185.462,55 in respect of lawyers’ fees and € 44.400,– in respect of the assistance provided by an agent specialized in the field of patents.
The CJEU confirmed that legislation providing for a flat rate of reimbursement of lawyers’ fees could in principle be justified, provided that the national legislator has intended to ensure the reasonableness of the costs to be reimbursed, taking into account factors such as the subject matter of the proceedings, the sum involved, the work to be carried out to represent the client concerned. The requirement that the unsuccessful party must bear “reasonable” legal costs does not justify, for the purpose of the implementation of Art. 14 of the Enforcement Directive, legislation imposing a flat rate significantly below the average rate actually charged for the service of a lawyer in that Member State. Such legislation would be incompatible with the Directive which states that the procedures and remedies provided for by that Directive must be decisive.
With regard to costs of the technical advisor the Court regards those as well as “other expenses”, as those of which also fall under the application of Art. 14 of the Enforcement Directive. In order to avoid an excessive application scope it was necessary to interpret that concept narrowly and to take the view that only those costs that are directly and closely related to the juridical proceedings concerned fall under other expenses. Such a direct and close relation has not been given with regard to costs of research and investigation incurred in the context of actions covering, inter alia, general observation of the market carried out by a technical advisor and the detection by the latter of possible infringements of Intellectual Property Law.
On the other hand, to the extent that the services, regardless of their nature, of a technical advisor are essential in order for a legal action to be usefully brought seeking, in a specific case, to have such a right upheld, the costs linked to the assistance of that advisor fall within “other expenses” that must be borne by the unsuccessful party.
II. The Legal Frame
Art. 13 of the Enforcement Directive is devoted to the compensation of damages in case of an infringement of intellectual property rights whereas Art. 14 discusses legal costs incurred by the enforcement of the same.
1. General Considerations
In interpreting in particular Art. 13, considerations 17 and 26 of the Enforcement Directive have to be taken into account. According to consideration 17:
“The measures, procedures and remedies provided for in this Directive should be determined in each case in such a manner as to take due account of the specific characteristics of that case including the specific features of each intellectual property right and, were appropriate, the intentional or unintentional character of the infringement.”
Consideration 26 takes up the aspect of willful or negligent infringing behavior by emphasizing that the calculation of the amount of damages awarded must take into consideration all appropriate aspects, such as loss of earnings incurred by the right holder or unfair profits made by the infringer as well as any moral prejudice caused to the right holder in appropriate cases. In appropriate cases, in particular if the facts will render it difficult to determine the amount of the actual prejudice suffered, the amount of the damages might be derived from elements such as the royalty fees or the fees that would have been due if the infringer had requested authorization to use the intellectual property right in question. Simultaneously, it is emphasized that the aim is not to introduce an obligation to provide for punitive damages but to allow for compensation based on an objective criteria while taking into account the expenses incurred by the right holder, such as the costs of identification and research.
The aspects outlined in Consideration 26 find expression in Art. 13, (1), (1a) and (b) of the Enforcement Directive, in which the conditions are set up how an “appropriate” damage compensation has to be calculated in cases of willful and negligent infringements, whereas in cases where the infringer did not know or reasonably could not have known, compensation by means of recovery of profits or a lump sum payment may be provided for. (Art. 13(2)).
According to this provision, the judicial authorities
“… shall take into account all appropriate aspects such as the negative economic consequences including loss profits which the injured party has suffered any unfair profits made by the infringer and in appropriate cases elements other than economic factors such as the moral prejudice caused to the right holder by the infringement.”
As an alternative to the calculation of damages which may have occurred on the rights holder’s side, the legal authorities may
“… in appropriate cases, damages set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorization to use the intellectual property right in question … .”
The wording “at least” suggests that damage compensation based on the consideration of what the infringer would have had to pay if he had asked for a license fee, is the minimum amount to be paid by the infringer, as Advocate General Sharpston pointed out in her opinion Case C-367/15. Due to the wording, the method of calculation as provided in Art. 13(1a) should be regarded as a general rule, to which the method provided in subpara. (b) is an exception. In this context, she refers to Recital 26 giving, as an example, cases where it would be difficult to determine the amount of the actual prejudice suffered. As will be seen, the CJEU does not share this position.
Art. 13, para. 2, takes up the aspects of Consideration 17 in cases in which
“… the infringer did not knowingly or with the reason on what grounds to know engage in infringing activity the Member States lay down that the judicial authorities may order the recovery of profits or the payment of damages which may be pre-established.”
The wording of this provision raises the question whether the recovery of profits has the same meaning as in Art. 13(1)(a).
Art. 13(1)(a) clearly differentiates between material and immaterial damages. As far as material damages are concerned, two main aspects have to be considered: Lost profit which the injured party has suffered and any unfair profits gained by the infringer. The wording of Art. 13(1)(1a) suggests that lost profits and gained profits are different damage items. However, the CJEU made clear that they are just factors to be taken into account, whereby each factor may be taken into account only once.
As regards the question what may be understood under immaterial damages, no indications are given. They may be derived from the case law of the CJEU in other areas, such as compensation of immaterial matters of employees.
While legal costs do not fall under the concept of damage compensation but are separately dealt with by national legal provisions, the decisions in re Liffers and Hansson provide examples that certain legal costs by far exceeding cost which are to be borne according to national law by the unsuccessful party, as well as costs not caused for the representation in infringement litigation, but in preparatory activities raising the question whether those costs not to be compensated as legal costs may be covered by the damage claim. Art. 14 of the Enforcement Directive obliges Member States to ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule can be borne by the unsuccessful party unless equity does not allow this.
III. Interpretation of the CJEU in the Judgments
1. Proof of Damage
In its judgement LIFFERS the CJEU pointed out that where
“… in fact [the right holder] suffered more prejudice the actual wording of (b) of the second subparagraph of Art. 13 (1) of Directive 2004/48, read in conjunction with this first subparagraph of Art. 13 (1) of that Directive, precludes the calculation of the amount of damages to be paid to that right holder from being based exclusively on the amount of hypothetical royalties.”
In the preceding paragraph the Court refers to the opinion of the Advocate General, who pointed out that moral prejudice is a component of the prejudice actually suffered by the right holder provided that it is proven. This raises the question whether the right holder must prove that damage has been caused at all. A damage suffered may be inter alia questioned in cases in which the right holder did not or even could not use the right himself as, for example, he had no appropriate production facilities or did not use or licence the trademark.
In a decision related to damage compensation of the Community because of an unlawful decision of the Commission, the General Court pointed out that the Community’s liability is only given if there is actual and certain damage. This condition is fulfilled in cases where it was clear from the actual circumstances that there cannot be any doubt that damages did occur.
Whether a damage has occurred has to be proven at all, the CJEU so far was not asked to discuss this aspect, as the questions raised by national courts in proceedings for preliminary ruling did not mentioned raise this specific aspect. On the other hand, the Court very often discusses aspects which, although not referred to in the reference for preliminary ruling, are somehow connected with the questions to be asked. In all the proceedings related to IP Infringement issues, the CJEU would have had cause to consider whether the right holder must prove that some damage has been caused. As the Court failed to do so, it is justified to conclude that the Court, like German case law, regards the infringement of an intellectual property right as such as a damage. It was and is the understanding in Member States such as Germany, Austria and Anglo-American countries, that the illegal intrusion on an immaterial right is a damage as such.
2. Surrender of Profits
Compensation of damages in the EU serves to compensate the full harm suffered by an infringement, including compensation for suffered moral prejudice. The principle of restitutio status quo ante seems to be the same in legal systems, independent of whether they have been founded by Roman or Anglo-American law.
Art. 13 provides only two damage calculation methods:
– compensation of the actual damage and immaterial damage caused on the right holder’s side or
– on the basis of a lump sum.
Neither Art. 13 nor any other provision of the Enforcement Directive provides for the surrender of profits gained by the infringer. In contrast, Art. 13 (1)(a) mentions “unfair profits made by the infringer” only as one of a number of criteria which need to be taken into account. As outlined in the Hansson decision, the Enforcement Directive does not oblige Member States to provide for more protective measures. Thus, national law may provide for the possibility to surrender profits. There is no obligation for the Member States, however to provide this possibility. Art. 13(2) leaves open whether Member States provide in the respective National laws recovery of profits in cases where the infringer did not knowingly or with reasonable grounds know that he is committing an infringing activity..
As outlined by Attorney General Saugmandsgaard Øe in Hansson, the profit made by the infringer is not as such a component of the damage which the right holder has actually suffered as a result of the infringement. In contrast it is, like the notional fee, only a substitute for assessing the damage actually suffered in the absence of evidence of all the elements thereof. It is a tool enabling the national court to assess that damage.
In her opinion to proceedings KONE Advocate General Kokott had explained that:
“A claim for compensation is primarily concerned not with recovering from the injuring party the excess that has accrued to him but with awarding to the injured party reparation for the loss he has suffered as a result of the injuring party’s unlawful conduct.”
The obligation to consider, within the framework of assessing the damage to be compensated, the profit gained by the infringer through its infringing activities reflects the tradition of some Member States to use the turnover of profits gained by the infringer as a first reference margin. It lies within the nature of immaterial rights that it usually cannot be proven which profits the right holder would have achieved if the infringement had not occurred.
The surrender of profits is not a claim for compensation of the exact damage occurred, but a fair compensation of the monetary disadvantages caused on the aggrieved right holder’s side.
With regard to surrender of profits the German Federal Supreme Court made it clear that “in order to take into account the notion of compensation a fiction is created that, if the right had not been infringed, the right holder would have achieved the same profit from the exploitation of his right as the infringing party did. … The confiscation of the profit from the infringement also serves as a punishment for the infringement … and in this way acts as a deterrent against the infringement of intellectual property rights that particularly need protection …”
3. Damage Compensation According to the License Fee analogy
As mentioned, Art. 13 (1)(a) provides for the possibility to determine the damages to be compensated in the form of a lump sum, the minimum basis of which would be the amount of royalties or fees the infringer would have had to pay if he had requested authorization to use the infringed intellectual property right. The surrender of profits and compensation according to license analogy are only means to find a measurement to assess the amount necessary and appropriate to compensate the damage suffered by the right holder in a practical and efficient manner. In this context the CJEU emphasized that
“… the fee normally payable for licensed production cannot in itself form the basis for determining the damage to be compensated.”
It was to the national Court to determine the extended damage claimed by the holder of the infringed right can be precisely established. If this is not the case, it must consider assessment of a lump sum which reflects the actual damage as accurately as possible.43
This obligation of National Courts may, however, raise the question of overcompensation.
In Consideration 26 of the Enforcement Directive it is mentioned that it would be difficult to determine the exact amount of the actual prejudice suffered. For this reason, the amount of damages might be derived from elements such as the royalties or fees which would have been due if the infringer had requested authorization to use the infringed right.
The benefits which had been gained by the person who committed the infringement correspond at least to the amount equivalent to the license fee which that person failed to pay. A reasonable compensation includes loss or damage that is closely connected to the failure to pay the reasonable compensation. The Court emphasized that it is for the referring Court to determine the circumstances which require that fee to be increased, bearing in mind that each of the factors may be taken into account only once for the purpose of determining the amount of reasonable compensation.
While the CJEU makes it clear that he Enforcement Directive does not oblige to provide overcompensation in para. 27, in the matter Stowarzyszenie the CJEU admits that, in exceptional cases, it is possible that payment for a loss calculated on the basis of twice the amount of the hypothetical royalty will exceed the loss actually suffered so clearly and substantial, that a claim to that effect constitutes an abuse of rights prohibited by Art. 3(2) of the Enforcement Directive. Obviously, the observations of the Polish Government that under the legislation applicable in the main proceedings a Polish Court would not be bound in such a situation by the claim of the holder of the infringed right was sufficient for the CJEU not to discuss the question of overcompensation further. This justifies the assumption that a possible overcompensation is in principle in compliance with the Directive, as the preconditions as established in Art. 3, in particular proportionality, will not be misused and the impression caused that the damage calculated is a hidden punitive damage. This conclusion appears also to be justified since the CJEU regards the compensation calculated on the basis of twice the amount of the hypothetical royalty not to be precisely proportional to the loss actually suffered by the injured party. This possibility, however, would be inherent in any lump sum compensation as, for example, provided for in Art. 13 (1)(b) of the Enforcement Directive.
5. Delimitation of Damages and Legal Costs
It is a matter of fact that costs for preparing and pursuing an action because of infringement of a property right exceed by far the amounts recoverable according to the national laws. As a rule of thumb the compensation claim of the holder of the aggrieved right regularly covers at most a third of his total expenditures connected with the collection of facts and evidence as well as for the preparation and conduct of court proceedings.
For this reason not only a clear demarcation between damages, which have to be compensated according to Art. 13, and legal costs has to be made but an answer has to be given to which extent legal costs have to be qualified as reasonable and proportionate in the sense of Art. 14 of the Enforcement Directive.
In re Hansson, the referring court wanted to know whether legal costs incurred in preliminary injunction proceedings and out-of-court expenses may be included as compensation for the damage occurred. The Court outlines that nothing prevents national law providing reimbursement of those costs when it comes to determining the damage.
As regards out-of-court expenses, the Court confirmed in the Hansson case its opinion already outlined in its judgment of 16 July 2015 in C-681/13 – Diageo Brands that Art. 14 of Enforcement Directive aims to strengthen the level of protection of intellectual property, by avoiding the situation where an injured party is deterred from bringing legal proceedings to protect his rights. For this reason, the national Court must determine whether the foreseeable amount of the legal costs that may be awarded to the victim of the infringement is such, in view of the sums he has incurred in respect of out-of-court expenses and their utility in the main action for damages, as to determine from bringing legal proceedings in order to enforce his rights.
With regard to the costs for interlocutory injunction proceedings, which preceded the main proceedings, the Court expressed its view that nothing prevents national law from not making provision for these costs to be reimbursed when it comes to determining the damage for which compensation is to be paid under Art. 94 (2) of Regulation No. 2100/94.
In United Video the question arose whether Art. 14 of the Enforcement Directive precludes national rules, which provide the reimbursement of costs of a technical advisor only in case of fault on the part of the unsuccessful party as “other expenses” as provided by the enforcement directive. In para. 79 of his opinion the Advocate General referred to recital 26 of the enforcement directive in which the assessment of compensation must take into account the expenses incurred by the right holder, such as the costs of identification and research, the court followed this opinion.
These holdings of the Court impose on the national court the obligation to determine whether the foreseeable costs for enforcing an infringed right exceed reasonable and proportionate legal costs to be compensated by the infringer to an extent which may be a deterrent to the right holder to sue the infringer. While it is up to the national legislator to decide whether costs incurred before the case started and certain cost within court proceedings, regardless whether they have to be qualified as legal costs or other expenditures are to be borne by the unsuccessful party, a condition for not taking those expenses into account is that the amount of legal costs that are likely to be awarded will not deter him from bringing legal proceedings in order to enforce his rights. In view of the sums he has incurred in respect of out of court expenses and other costs connected with legal proceedings. Otherwise these costs not covered by National rules compensating legal costs will have to be regarded as part of the damage to be compensated by the infringer, as long as those additional expenditures are reasonable and proportionate.
The financial consequences arising from IPR infringements must safeguard that no advantage remains with the infringer. Compensation claims limited to a regular licence fee are unsuitable as they do not take into account the advantage for the infringer not to be bound to contractual obligations that a licensee would have to fulfill. There must remain the risk that the infringer has to pay at least what he has gained from the infringement, or even more. The risk of overcompensation is acceptable, if not desirable, as far as it is the result of difficulties to assess the actually caused damage as closely as possible without having the character of punitive measures. This would only be the case if the objective was no longer to compensate but also to award damages which go beyond full compensation, motivated by the hope that the deterring effect, which is in the nature of such damages, will prevent the person who has caused the damage from engaging in further similar acts.
Simultaneously, it is to be safeguarded that competition and inventiveness will not be hampered because of incalculable compensation risks. Punitive damages would be detriment to this objective.
 In consideration 3 to Directive 2004/48/EC (Enforcement Directive) it is emphasized that „… without effective means of enforcement intellectual property rights, innovation and creativity are discouraged and investment diminished.“
 Raue, Die dreifache Schadensberechnung, p. 452 referring to Schäfer/Ott, Lehrbuch der ökonomischen Analyse des Zivilrechts, 5th edition, pp. 286 et seq. (670).
 See consideration 2 of the Enforcement Directive.
 Directive 2004/48/EC of the European Parliament and the Council (Enforcement Directive), O.J. 2004 L 157/45 of 30 April 2014 corrected and again published in O.J. 2004 L 195/16 of 2 June 2004.
 See consideration 10 of the Enforcement Directive.
 Judgment of 17 March 2016, C-99/15, EU:C:2016:173 – Liffers.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419 – Hansson; the judgement and its consequences for the assessment of damages for owners of protected plant varieties as discussed by Ettje Trauenicht und Björn Thöne in GRUR 2016, 1047.
 Council Regulation (EC) 2100/94 of 24 July 1994 on Community Plant Variety Rights. Official Journal OJ 1994 L227 P.1.
 Art. 94 provides in para. 1 i. a reasonable compensation in para. 2, compensation of any further damage resulting from the act of infringement in cases of intentional or negligent infringement, in cases of slight negligence reduced compensation in relation to the degree of such slight negligence, however, not less than the advantage derived from the infringement.
 Judgement of 5 July 2012, C-509/10, EU:C:2012: 416 – Geistbeck.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419, para. 35 – Hansson.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419, para. ### – Hansson.
 Judgment of 25 January 2017, C-367/15, EU:C:2017:36 – Stowarzyszenie; ; the judgement is discussed by Raue under the aspect whether a double license fee scheme has to be regarded as punitive damages; Raue, Die doppelte Lizenzgebühr ist kein Strafschadenersatz – Anmerkung zu EuGH ZUM 2017, 349 – Stowarzyszenie “Olawska Telewizja Kablowa”, in ZUM 2017, 349-377.
 Judgment of 9 June 2016, C-481/14, EU:C 2016:419, paras. 36 and 40 – Hansson.
 Judgment of 25 January 2017, C-367/15, EU:C:2017:36, para. 30 – Stowarzyszenie.
 Judgment of 25 January 2017, C-367/15, EU:C:2017:36, para. 31 – Stowarzyszenie.
 Judgment of 28 July 2016, C-57/15, EU:C:2016:611 – United Video Properties Inc.; the judgement is discussed by Peter R. Slowinski, Case note on: “United Video Properties”, 48 IIC 373-377 (2017).
 Judgment of 28 July 2016, C-57/15, EU:C:2016:611, para. 25 – United Video Properties Inc.
 Judgment of 28 July 2016, C-57/15, EU:C:2016:611, para. 27 – United Video Properties Inc.
 Judgment of 28 July 2016, C-57/15, EU:C:2016:611, para. 39 – United Video Properties Inc.
 Both provisions are discussed thoroughly in the dissertation of Dennis Amschewitz, Die Durchsetzungsrichtlinie und ihre Umsetzung im deutschen Recht, at p. 198 et seq. (Art. 13) and at p. 210 seq. (Art. 14).
 Art. 13,(1),(b) of the Enforcement Directive.
 Opinion of Advocate General Sharpston, 24 November 2016, C‑367/15, EU:C:2016:900 – Stowarzyszenie.
 Opinion of Advocate General Sharpston, 24 November 2016, C‑367/15, EU:C:2016:900, para. 36 – Stowarzyszenie.
 Judgment of 25 January 2017, C-367/15, EU:C:2017:36 – Stowarzyszenie.
 Raue, Die doppelte Lizenzgebühr ist kein Strafschadenersatz – Anmerkung zu EuGH ZUM 2017, 349 – Stowarzyszenie “Olawska Telewizja Kablowa”, in ZUM 2017, 349-377, at p. 355, under IV.2.
 Judgment of 17 March 2016, C-99/15, EU:C:2016:173, para. 18 – Liffers.
 Opinion of Advocate General Wathelet of 19 November 2015, C‑99/15, EU:C:2016:900, para. 28 – Liffers.
 Judgment of the Court of 13 July 2005, T-260/97, EU:T:2005:283, para. 91 – Camar.
 Raue (supra note 2), p. 87 with further references.
 See Art. 3 (1) Directive 2014/104 EU certain rules governing actions for damages under national law for infringement of the competition law provisions of the Member States and of the European Union, O.J. 5.12.2014 L349/1; according to consideration 12 “[This] Directive reaffirms the acquis communautaire on the right to compensation of harm caused by infringement of Union Competition Law… Anyone who has suffered harm caused by such an infringement can complain compensation for actual loss (damnum emergens) for gain of which that person has been deprived (loss of profit or lucrum cessans), plus interest irrespective of whether those categories are established separately or in combination in national law.
 Judgment of 17 March 2016, C-99/15, EU:C:2016:173 ,para. 17 – Liffers.
 Dreier, Kompensation und Prävention, 2002, p. 165.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419, para. 40 – Hansson, Opinion of Advocate General Saugmandsgaard Øe of 4 February 2016, C-481/14, EU:C:2016:419 para. 104 – Hanson; see also Art. 2 of the Enforcement Directive.
 Trauenicht/Thöne are of the opinion that while the CJEU emphasizes in the judgement that the plant variety right holder cannot ask for surrender of the infringer´s profit in any case, the court has not excluded this possibilities, Ettje Trauenicht/Björn Thöne, GRUR 2016, 1047-1048, at 1047, under 3.b).
 In Community Plant Variety Law, however, Art. 97 provides surrender of profits/unjust enrichment in cases the relevant laws of the national Court dealing with a plant variety infringement matter provides such possibility. See Raue (supra note 2), p. 87 with further references.
 Opinion of Advocate General Saugmandsgaard Øe of 4 February 2016, C-481/14, EU:C:2016:419, para. 99 – Hanson.
 Opinion of Advocate General Kokott of 30 January 2014, C-557/12, EU:C:2014:45, para. 78 – Kone.
 Raue (supra note 2), p. 87 with further references.
 Raue (supra note 2), p. 87 with further references.
 Meier-Beck, in: Festschrift für Loschelder, p. 226.
 Federal Supreme Court, 33 IIC 900 (902) (2002) – Share of Overheads (Gemeinkostenanteil)
 Judgement of 5 July 2012, C-509/10, EU:C:2012, para. 37 – Geistbeck.
 Meier-Beck (supra note 38), p. 228.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419, para. 57 – Hansson.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419, para. 59 – Hansson.
 Judgment of 9 June 2016, C-481/14, EU:C:2016:419, para. 52 – Hansson.
 Raue, Die doppelte Lizenzgebühr ist kein Strafschadenersatz – Anmerkung zu EuGH ZUM 2017, 349 – Stowarzyszenie “Olawska Telewizja Kablowa”, in ZUM 2017, 349-377, at 354, under II. A brief overview about the question of exemplary damages in the European Union is given by Ansgar Ohly, Three principles of European IP enforcement law: Effectiveness, proportionality, dissuasiveness, in: Technology and Competition, Contributions in honor of Hans Ulrich, pp. 257-274, at p.270 f.
 Raue pointed out that the prohibition of punitive damages may be derived from para. 31 of the judgement in connection with Advocate General Sharpston’s opinion; Raue, Die doppelte Lizenzgebühr ist kein Strafschadenersatz – Anmerkung zu EuGH ZUM 2017, 349 – Stowarzyszenie “Olawska Telewizja Kablowa”, ZUM 2017, 349-377, at 354, under III.
 Judgment of 25 January 2017, C-367/15, EU:C:2017:36,para. 31 – Stowarzyszenie.
 Judgment of 25 January 2017, C-367/15, EU:C:2017:36,para. 26 – Stowarzyszenie.
 Judgment of 9 June,C-481/14,EU:C:2016:419, para. 61 – Hansson.
 Judgment of 16 July 2015, C-681/13,EU:C:2015:471, para. 77 – Diageo Brands.
 Judgment of 28 July, C-57/15, EU:C:2016:611 – United Video Properties.
 Peter R. Slowinski rightly criticizes that the CJEU has failed to provide any guidelines as to the means of “reasonable costs”, Case note on: “United Video”, 48 IIC 373-377 (2017), at 376 under 6.
 Opinion of Advocate General Mengocci of 3 September 2015, C-407/14 EU:C:2015:534 –para. 49 – Camacho.
This article was first published in GRUR Int. 2018, 725.
Dr. jur. Gert Würtenberger – Lawyer – Würtenberger RA
Foto: Roberto Grau Kuntz – Direitos reservados