Question Q219 National Group: Denmark/Dänemark/Danemark Title: Injunctions in cases of infringement of IPRs Contributors: Peter-Ulrik PLESNER, Nicolai LINDGREEN, Leif RØRBØL, Jakob KRAG NIELSEN, Nicolaj BORDING, Klaus EWALD MADSEN, Jeppe BRINCK-JENSEN, Mikkel VITTRUP and Jakob Plesner MATHIASEN Representative within Working Committee: Peter-Ulrik PLESNER and Nicolai LINDGREEN Date: 14 April, 2011 Questions I. Analysis of current law and case law Availability: 1. Are injunctions for infringement of an IPR available on a provisional/preliminary basis? Yes. 2. Are injunctions for infringement of an IPR available on a permanent basis? Yes. Criteria: 3. If yes to question 1, what are the criteria for the grant of an injunction on a provisional/preliminary basis? The criteria for the grant of an injunction on a preliminary basis are set out in the Danish Administration of Justice Act, chapter 57. 1
As compared to permanent injunctions where the standard of proof is that the claimant should "prove" that the criteria for rendering an injunction are met, the standard of proof in preliminary injunction cases is eased so that the claimant must merely "render it likely" that the criteria are met. The main criteria for granting a preliminary injunction are that the claimant can render it likely: (i) that the acts for which an injunction is sought infringe the claimant's rights, (ii) that the defendant will perform the acts for which an injunction is sought, and (iii) that the objective will be lost (periculum in mora) if the claimant should enforce his rights during proceedings on the merits. In situations where the claimant renders it likely but does not prove that the criteria for rendering an injunction are met, the enforcement court shall make the preliminary injunction dependant on that the claimant furnishes a security for the defendant's tort and damages should the preliminary injunction turn out to be unlawful during the subsequent confirmatory action. A preliminary injunction can, however, not be granted if the court deems that financial and criminal sanctions optionally supplemented by a security offered by the defendant provide the claimant with adequate protection. The enforcement court can in its discretion refuse to grant a preliminary injunction if such injunction on the defendant will inflict nuisance or damage that is in obvious disproportion with the claimant's interest in the preliminary injunction being granted. In reported case-law, there is only one particular example of a situation where an enforcement court in IP cases concerning patents, trademarks, designs or copyrights has refused to grant a preliminary injunction (a) on grounds of obvious disproportionality or (b) because financial or criminal sanctions optionally supplemented by a security offered by the defendant was deemed to provide the claimant with adequate protection. The one particular case that has been reported in the 20 years history of the above mentioned rules regarding disproportionality is a High Court decision, Eastern Division, in the preliminary injunction case Deutsche Telekom AG vs 1) TeliaSonera Danmark A/S, 2) Telia Danmark, branch of Telia Nättjänster Norden AB, and 3) Telia Stofa A/S. The decision is reported in Ugeskrift for Retsvaesen 2008, page 2086. In the case, Deutsche Telekom claimed that Telia should be enjoined from using the colour magenta in the context of Telia's marketing of telecommunication services. The colour was registered as a Community Trademark Registration. The High Court, Eastern Division, rejected the application for preliminary injunction on grounds of obvious disproportionality. The High Court observed that uncertainty existed in respect of which particular colour that was comprised by Deutche Telekom's Community Trademark Registration. Irrespective of this uncertainty, the High Court found that the colour used by Telia was confusingly similar with the colour comprised by Deutche Telekom's registered trademark. The High Court, however, rejected to grant a preliminary injunction as this on Telia would inflict nuisance or damage that would be in obvious disproportion with Deutche Telekom's interest in the preliminary injunction being granted. The High Court observed that Deutche Telekom and Telia were not competing on the Danish market, and that an injunction would require Telia to thoroughly modify its marketing material. Generally speaking, a claimant can expect to be granted a preliminary injunction if the criteria set out under (i)-(iii) are met. The typical situation where an injunction is refused with reference to criterion (iii) is where the court finds that the claimant has been too slow to file the request for preliminary injunction. 2
While Danish enforcement courts consider all relevant facts of a particular case when considering whether to dismiss a preliminary injunction case on grounds of lack of periculum in mora, it is clear that a claimant is required to act without much delay in straight forward cases such as some trademark, copyright and design cases, whereas the claimant in complex cases such as some patent cases has much more time to act. 4. If yes to question 2, what are the criteria for the grant of an injunction on a permanent basis? Statutory law does not set any particular conditions for the grant of an injunction. Reported case-law indicates that an IP holder can obtain an injunction if the acts for which an injunction is sought infringe the claimant's rights. In consequence of the implementation of article 12 of the EC enforcement directive (directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights) in the Danish Patents Act (section 59(5)) and Danish Designs Act (section 38(5)), the court may - in respect of patents and designs but not in respect trademarks and copyrights - grant permission to the defendant to have the products, apparatuses, materials, tools or the like at his disposal during the term of the patent/design or part thereof against a reasonable compensation. This implies that an infringer may continue to use and be in possession of an infringing product. However, this only applies if: (a) the defendant has neither acted intentionally nor negligently, (b) measures such as product recall, destruction, assignment to claimant or product modification would cause the infringer disproportionate harm, and (c) a reasonable compensation is sufficient. In respect of copyrights, the Danish Copyrights Act provides particular compulsory licencelike exemptions to the exclusive right generally conferred by a particular copyright. By way of example, section 17 of the Danish Copyrights Act provides a limited access to furnish blind citizens with phonographic copies of a book. 5. If not addressed in answering questions 3 and 4, does the criteria for the grant of an injunction differ depending on whether the injunction sought is on a provisional/preliminary or permanent basis? If so, how? N/A 6. Are the criteria for the grant of an injunction equally applicable to infringement of all IPRs? In principle, yes. 7. If no to 6, are there any specific criteria or considerations for the grant of an injunctions for particular IPRs? If so, what criteria apply and to which IPRs? N/A 3
8. Are there any specific criteria or considerations for particular subject matter, for example, pharmaceutical patents? If so, what criteria or considerations apply to what subject matter? No, there are no specific criteria or considerations for particular subject matter such as pharmaceutical patents. 9. Are there any specific considerations relevant to particular IP holders, for example, NPEs? If so, what considerations are relevant and to what IPR holders? In preliminary injunction cases, the enforcement court will examine the particular facts of the case. The Danish Group is not familiar with any court decision where an NPE has been denied a preliminary injunction in a situation where an injunction would probably have been allowed had it been sought by a PE. However, it cannot be ruled out that such situation may arise because the enforcement court e.g. finds that the NPE's interests are adequately protected by financial and criminal sanctions optionally supplemented by a security offered by the defendant or because a preliminary injunction on the defendant would inflict nuisance or damage that is in obvious disproportion with the NPE's interest in the preliminary injunction being granted. In permanent injunction cases, the Danish Group expects that courts will grant injunctions to PEs and NPEs if the ordinary criteria are met. The ability to obtain injunction may be modified by other bodies of law such as competition law, human rights, including freedom of speech, and for patents, designs and copyrights by compulsory licences. Discretion: 10. Is there any element of judicial discretion in relation to the grant of an injunction for infringement of IPRs? If so, how does the discretion apply? Preliminary injunctions The enforcement court can refuse to grant a preliminary injunction if such injunction on the defendant will inflict nuisance or damage that is in obvious disproportion with the claimant's interest in the preliminary injunction being granted. (See question 3, above.). Other than that, the court must grant an injunction if the conditions are met. Permanent injunctions In consequence of the implementation of article 12 of the EC enforcement directive (directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights) in the Danish Patents Act (section 59(5)) and Danish Designs Act (section 38(5)), the court may - in respect of patents and designs but not in respect trademarks and copyrights - grant permission to the defendant to have the products, apparatuses, materials, tools or the like at his disposal during the term of the patent/design or part thereof against a reasonable compensation. This implies that an infringer may continue to use and be in possession of an infringing product. However, this only applies if: (a) the defendant has neither acted intentionally nor negligently, (b) measures such as product recall, destruction, assignment to claimant or product modification would cause the infringer disproportionate harm, and (c) a reasonable compensation is sufficient. (See question 4, above.). In addition to the above, Danish patent and design law provides legal basis for the grant of compulsory licences. 4
11. Are there any circumstances in which a court must grant an injunction for infringement of an IPR? If so, in what circumstances? The IP holder generally has a right to obtain a permanent injunction if the ordinary criteria are met. Danish law does, however, not stipulate any particular situation where the IP holder has an unconditional right to be granted an injunction. 12. Are there any circumstances where infringement of an IPR is proved and no Permanent injunction is available? If so, in what circumstances? Subject to the below exemptions, the claimant generally has a right to obtain a permanent injunction in case of infringement. In consequence of the implementation of article 12 of the EC enforcement directive (directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights) in the Danish Patents Act (section 59(5)) and Danish Designs Act (section 38(5)), the court may - in respect of patents and designs but not in respect trademarks and copyrights - grant permission to the defendant to have the products, apparatuses, materials, tools or the like at his disposal during the term of the patent/design or part thereof against a reasonable compensation. This implies that an infringer may continue to use and be in possession of an infringing product. However, this only applies if: (a) the defendant has neither acted intentionally nor negligently, (b) measures such as product recall, destruction, assignment to claimant or product modification would cause the infringer disproportionate harm, and (c) a reasonable compensation is sufficient. In respect of copyrights, the Danish Copyrights Act provides particular compulsory licencelike exemptions to the exclusive right generally conferred by a particular copyright. By way of example, section 17 of the Danish Copyrights Act provides a limited access to furnish blind citizens with phonographic copies of a books. (See question 4, above). Further, the IP holder's passivity may imply that the IP holder in extreme cases looses the right to obtain injunction. Such substantive loss of right generally requires the IP holder to have acted passively and/or indecisively for a prolonged period of time. There is no general time limit for when the IP holder's passivity can lead to a loss of right. The Danish Trademarks Act (sections 8-10) and the EC Trademark Regulation (article 54) i.a. provide that the IP holder may loose the right to obtain injunction already after 5 years provided that a newer trademark application was filed in good faith and the proprietor of the earlier right has been aware of and has tolerated the use in Denmark of the newer trademark for a period of 5 successive years. In respect of patents, the IP holder's loss of right to obtain an injunction requires a long period of passivity. In only one reported case was the patent proprietor found to have lost his right to obtain permanent injunction due to passivity. The case is reported in Ugeskrift for Retsvaesen 2009, page 2772 (Supreme court) and concerned a patent proprietor that 8 years after having unilaterally withdrawn a request for preliminary injunction filed a new writ for a permanent injunction. The Supreme Court found that the defendant had due reason to expect that the patent proprietor would not seek to enforce his patent right and that the patent proprietor had lost his right to seek an injunction against the particular defendant. The ability to obtain injunction is also subject to other bodies of law such as competition law, human rights, including freedom of speech, and for patents, designs and copyrights by compulsory licences. (See question 9, above). 5
Scope: 13. Is an injunction granted only against named parties to the infringement proceeding, or is an injunction available more broadly against potential infringers such as customers or manufacturers who are not parties to the proceeding? In general, the force of law of both permanent and preliminary injunctions is subjectively limited to the parties to the proceeding. In a decision from the enforcement court of Aarhus (unreported case law) of 3 December 1999 the plaintiff had requested the defendant to be enjoined in Denmark, Germany and Spain - directly and through its subsidiaries - from carrying out certain acts. The court held that according to the request the Danish parent company would be the only entity covered by the injunction and the only entity subject to liability in Denmark in case of the subsidiaries' unlawful actions outside Denmark. Further, the court stated that an obligation for the parent company to ensure that the subsidiaries would respect the injunction, e.g. by concrete instructions, would impose and obligation to act on the part of the parent company which would be inconsistent with the nature of an injunction. However, an injunction may of course have direct/indirect consequences for other parties than the named parties to the proceedings. 14. Is there a specific form of words used by your courts to describe the scope of the grant of an injunction? If so, what is the 'formula'? No, there is no specific formula used to describe the scope of the injunction. Normally, the courts use the phrase "the defendant is enjoined from [...]". 15. Is the grant of an injunction referable to the item(s) alleged to infringe the relevant IPR, or may the grant of an injunction be broader in scope? If it may be broader, what is the permissible scope of the injunction? In Denmark it is not possible to grant an injunction stating no more than the defendant is enjoined from infringing patent no [...] or trademark [...] etc. In general, an injunction, permanent or preliminary, under Danish procedural law, in whatever form, permanent as well as preliminary, should be directed against specific and defined actions. Accordingly, the injunction will in most cases refer only to the item(s) alleged to infringe. However, the exact wording or scope of the injunction may still be relevant to consider, as the infringement in some cases may depend on the circumstances under which the item(s) alleged to infringe the relevant IPR appear(s) and/or are used, and therefore also may have an impact on the injunctive scope, as it, e.g., could be the case in relation to contributory infringement and second medical use claims. However, this will in most cases entail an injunction which is narrower in scope compared to an injunction which refers only to the items alleged to infringe. In addition, the injunctive scope has to be clear. Unclear injunctions cannot be enforced by physical execution (removal of goods etc.) or criminal sanctions, as doubts whether or not a committed act is covered by the injunction may arise. Danish case law has refused to grant injunctions if the scope is unclear. For instance the actions for which injunction is sought should not be characterized by vague, unclear terms like "unlawful", "unauthorized" 6
In an old, but still relevant Supreme Court case an injunction was sought against the defendant taking any attempts to "unlawfully" seek some assistants working with the claimant to refrain from doing that. The Supreme Court refused to grant the injunction, as it did not sufficiently specify the actions for which injunction was sought, but instead by characterizing the actions by the word "unlawful" deferred the question of the actions' unlawfulness to a later decision. Violation of an injunction is criminally sanctioned. Accordingly, the injunctive scope must be clear and defined so the defendant knows what he can and what he cannot do. In other words, the injunction has to translate the relevant legal provision and determine the parties' legal position into a concrete defined action, which is then prohibited. Another reason for the requirement of a clear and defined injunctive scope is that the granted injunction should be immediately enforceable by the court. Accordingly, the enforcement of the injunction should not require a re-run of the case granting the injunction to decide whether the subsequent is an infringing act. Also, an injunction, whether permanent or preliminary, should not be worded so broadly as to also include clearly non-infringing actions. In a decision from the Eastern High Court in Denmark (UfR 1986.428Ø) the court refused to grant an injunction that was so generally worded so it would also encompass lawful actions. The claimant had requested an injunction against the use of some publicly known business leaders' pictures in adverts, posters and commercials. Whereas this use of the pictures would encompass lawful actions, so the injunction was refused, an injunction against the use of the pictures in a concrete advert campaign was granted. In relation to preliminary injunction proceedings regarding process patents, Danish enforcement courts have shown a tendency to a more liberal attitude towards the abovementioned principles. None of these cases have, however, at present been upheld by the higher courts. The above-mentioned case law all concerned preliminary injunctions. However, the principles laid out in the decisions also apply to permanent injunctions. Judicial trends and practice: 16. Is there any discernible trend in your country as to the willingness or otherwise of courts to grant or refuse injunctions for particular IPRs or in relation to particular subject matter? No. 17. What, if any, has been the impact of the ebay v Merc-Exchange decision or any tendency of the courts in your jurisdiction to treat final injunctions as discretionary? Please explain whether the ebay v Merc-Exchange decision has been relied on or cited by your courts, and in what circumstances. Alternatively, or in addition, has there been any legal commentary on any political implications of the ebay v Merc- Exchange decision in your jurisdiction? There has been no discernible impact of the decision. To the knowledge of the Danish Group, the decision has not been cited or relied on in any Danish decision and has only been cursorily commented on in the legal theory. The Danish Group is not aware that the decision has had any political implications. 7
II. Proposals for harmonisation Availability of provisional/preliminary injunctions: 18. Should there be a test or criteria for the grant of a provisional/preliminary injunction for the infringement of an IPR? If yes, what should that test or those criteria be? The Danish Group finds that the Danish Administration of Justice Act sets out adequate criteria for the grant of preliminary injunctions. Reference is made to question 3 above. The Danish Group observes that the economic value of IPRs is dependant on the IPR holder's ability to capitalise the limited monopoly conferred by the IPR in question. In the opinion of the Danish Group, IPR holders should therefore be provided with means that de facto secure that actual existence of the intended limited monopoly. As a starting point and in conformity with TRIPS article 50, the IPR holder should therefore be conferred with procedural rules that enable him to prevent his IPRs from being infringed. In respect of the question whether preliminary injunctions should in some situations be denied on grounds of disproportionality or because the IPR holder may seek monetary compensation, the Danish Group observes as follows. In many countries, including Denmark, the IPR holder has the full burden of proof for the actual damages suffered. The inherent uncertainties pertaining to substantiating financial loss, including future losses due to market disturbances, imply that IPR holders find it difficult to obtain adequate financial compensation in case of infringement. This seems to be acknowledged by Danish courts that have so far not denied any preliminary injunction because it was found that financial and criminal sanctions optionally supplemented by a security offered by the defendant provided adequate protection. It is the opinion of the Danish Group that if the Danish model was to be modified so that a preliminary injunction would frequently be refused due to disproportionality or because the IPR holder could seek damages, such modification should be balanced by a very significant strengthening of the IPR holder's ability to obtain financial compensation. 19. If no, what principles should be considered in determining whether to grant an provisional/preliminary injunction? N/A Availability of permanent injunctions: 20. Should there be a test for the grant of a permanent injunction for the infringement of an IPR? If yes, what should that test be? The Danish Group finds that subject to other bodies of law, such as competition law, human rights, including freedom of speech, and for patents, designs and copyrights by compulsory licences, permanent injunctions should be available in case of IPR infringement. 21. If no, what principles should be considered in determining whether to grant a permanent injunction? N/A 8
Discretion: 22. In what circumstances, if any, should the grant of an injunction automatically follow a finding of infringement of an IPR? The Danish Group finds that an injunction should generally be available in case of infringement and that the lawmaker should be very cautious to divert from this general rule. The grant of injunction should, however, remain to be subject to other bodies of law and to compulsory licence-type exemptions. 23. In what circumstances, if any, should the grant of an injunction be denied notwithstanding a finding of infringement of an IPR? The Danish Group finds that ability to obtain injunction should generally be subject to other bodies of law, such as competition law, human rights, including freedom of speech, and for patents, designs and copyrights compulsory licences. Differences between IPRs: 24. Should the above test/principles apply equally to all IPRs? Yes, the Danish Group does not see any reason to distinguish between different types of IPR in this context. 25. If, no, what should any differences be and why? N/A. Scope: 26. Should an injunction be granted only against named parties to infringement proceeding, or should an injunction be available more broadly against potential infringers such as customers or manufacturers who are not parties to the proceeding? In the view of the Danish Group, the principle that the force of law of any rulings by courts of law applies only to the named parties of the proceedings is a fundamental principle. Accordingly, the Danish Group cannot support a principle that an injunction should be available against infringers who are not themselves parties to the proceedings. In order to avoid repetitive injunction proceedings it may be considered to allow the IP holder to instigate proceedings against multiple parties and run these proceedings as one aggregated case. 27. What is the appropriate scope of an injunction prohibiting an infringer from committing further infringing acts? For example, should the injunction relate simply to the IP the subject of the allegation of infringement, or should the injunction be broader in scope? If broader, what is the permissible or desirable scope? In the view of the Danish Group the scope of an injunction, whether permanent or preliminary, should be clear and defined. The injunction should in unambiguous terms define the actions which are no longer allowed. This should be done in a way so the granted injunction is enforceable immediately by the court so that its enforcement does not imply a re-run of the case. 9
There seems to be no purpose of granting an injunction which does nothing more than stating the obvious fact that the defendant cannot infringe the IP in question. This is because if such an injunction is granted following a finding of infringement based on the manufacture, supply, offer to supply or import etc. of a product neither the IP-proprietor nor the defendant is any wiser as to what alternative products will or will not infringe the IP in question, and, hence, potentially breach the injunction. Therefore once the defendant brings an alternative product on the market which he does not accept to be an infringement of the IP in question, it is again up to the IP-proprietor to prove that the alternative products also infringe. Accordingly, in the view of the Danish group this way of phrasing an injunction seems to be an inappropriate and undesirable route to follow. In relation to preliminary injunction proceedings regarding process patents it may, however, be necessary with a more liberal attitude towards the above-mentioned principles, in order to ensure the patent holder a fair legal position. Summary In Denmark, preliminary as well as permanent injunctions are generally available in case of infringement. The grant of preliminary as well as permanent injunctions is subject to other bodies of law such as competition law, human rights, including freedom of speech, and for patents, designs and copyrights by compulsory licences. The Danish Group finds that IP holders should generally be able to obtain injunctions in case of infringement. Any relaxation of the IP holder's access to obtain injunctions in case of infringement should be balanced by strengthening of the IP holders' access to obtain financial compensation. Both permanent and preliminary injunctions are subjectively limited to the parties to the proceedings. In Denmark it is not possible to grant an injunction stating no more than "the defendant is enjoined from infringing patent no [...] or trademark [...]" etc.; In general, an injunction, in whatever form, permanent as well as preliminary, should be directed against specific and defined actions. It may desirable to more generally allow the patent holder to instigate injunction proceedings against multiple parties in the same case in order to avoid repetitive injunction proceedings, although this is not currently possible under Danish law in situations where the defendants have different home venues. 10