Reimbursement of the damage without its proof

The Court of cassation with judgement 20716 of September 4, 2017 faced the thorny topic of the reimbursement of a damage caused by a patent counterfeiting reaffirming some important principles.

In the case at hand, an Italian company- accused of having counterfeited the patent of a German undertaking – was condemned to reimburse the damage endured by the owner of the patent even if any proof of the real damage has been provided by the undertaking.

The owner of the patent in fact did not experience a diminishment of its turnover and consequently any economic loss, and the assumed counterfeiter thought that the Court should have taken into account this point to prevent the sentence.

The Italian undertaking argued that the Judge can quantify the damage in accordance with art. 125 IPC only if there is the proof of real damage.

The Court of cassation instead said that there is always a damage when a product is commercialized and there is no need to prove it (Court of cassation 4739/2012). Only if a product is not on the market, one should prove the damage since it cannot be directly supposed (Court of cassation 12545/2004).

In reference to the quantification, the Court considered right the method of calculation used firstly by the Tribunal and then by the Court of Appeals which takes into account the so-called “fair royalty” criterion.

The main criteria to evaluate the damage are the “actual damage” and the “loss of profit”.

The first one stands for the loss caused by the counterfeiting to the owner of the patent. In this case, as seen, the owner suffered no loss because even during the counterfeiting its business went on as before therefore this criterion is inapplicable.

The loss of profit is the gain the counterfeiter made thanks to the infringement of the patent. During the judgement there was not a proof of a real profit because of the lacking of account books allowing the Judge to calculate precisely the profit arising from the sale of the contested product.

The trial judges adopted the criterion of the “fair royalty” at art. 125 paragraph 2 IPC  low estimating it since they consider moderate the innovative contribution of the patent.

A part from the quantification, the Court of cassation affirmed again the necessity to sentence the counterfeiter to pay a reimbursement for the damage, independently of its proof, any time there is a counterfeiting and the commercialization of the illicit product.

Obviously, these proofs has to be furnished and so it was in the case at hand for this reason, it was possible to make a quantification resorting, in absence of other proofs, to the “residual” fair royalty principle that is very useful in cases like this.

Leave a Reply

Your email address will not be published. Required fields are marked *