Intellectual Property Rights and Liability Rules: Proportionality in Injunctive Relief - A Focus on Non-Patent Industrial Property Rights

Both the TRIPs Agreement and the EU Enforcement Directive establish that measures, procedures and remedies to protect IP rights must be not only effective and dissuasive but also proportionate. Nevertheless, above all with regard to IP rights other than patents and copyright, the proportionality rule is seldom applied and the issuing of a full, unlimited injunction is generally considered to follow on automatically from an ascertainment of infringement. Various indications provided by the legislator in the EU Trade Secrets Directive and by the Courts in key decisions relating to the balancing of interests, prejudice to protected functions and the protection of fundamental rights, lead to the conclusion that also with regard to non-patent industrial property rights the proportionality rule can and must be of broader application than is currently the case and that, in particular, there may be cases in which, although there is infringement, the issuing of an injunction is not justified or the scope of the injunction must be limited. The article examines the significance and implications of the proportionality rule for injunctive relief in the field of IP rights other than patents and copyright and indicates in which cases application of the proportionality rule - which must always occur according to a fair balancing with the principles of effectiveness and dissuasiveness, and therefore reasonably reconciling the IP right holder’s need for protection with respect for third party interests and rights - may lead to an injunction being replaced by a compensation order, also in relation to future activities, according to the mechanism of ongoing royalties, or to the issuing of injunctions tailored to the needs of the actual case, and therefore potentially attenuated in their scope or duration.