Guidance on IPRED – types of costs to be reimbursed and focus on commercial scale infringements

While Article 14 of IPRED refers to ‘legal costs and other expenses incurred by the successful party’, the Directive does not define what these concepts entail precisely. The CJEU has held that the concept of ‘legal costs’ includes, amongst others, lawyer’s fees. It also held that the concept of ‘other expenses’ includes, in principle, costs incurred for the services of a technical adviser.

However, the CJEU also indicated that the latter concept is to be interpreted narrowly and that, accordingly, only those costs that are directly and closely related to the judicial proceedings concerned qualify as ‘other expenses’ within the meaning of Article 14.

In this context, the CJEU found that the costs of research and identification incurred inter alia when a technical adviser performs a general observation of the market and detects possible infringements of intellectual property law, attributable to unknown infringers at that stage, do not appear to show such a close direct link. On the other hand, it held that, the services of a technical adviser, regardless of the nature of such services, are essential to usefully take legal action in a specific case to have such a right upheld, the costs linked to the assistance of that adviser fall within ‘other expenses’.

Article 14 of IPRED applies to legal costs, which includes lawyers’ fees, as well as to other costs directly and closely related to the judicial proceedings concerned. The latter includes costs incurred for the services of a technical adviser, where those services are essential in order for a legal action to be usefully brought seeking, in a specific case, to have a right upheld.

In the context of the legal framework for enforcement of IPR, the concept of ‘commercial scale’ requires the application of certain more far-reaching or intrusive measures in cases of infringements of particular gravity, thus ensuring that the most harmful infringements are effectively tackled while also ensuring proportionality and a balanced approach. It appears, however, that this concept is understood and applied differently across the Member States.

The concept of commercial scale has not been defined in the Directive. The Directive also does not make any express reference to the laws of the Member States for the purpose of determining its meaning. It is settled case law that, in light of the need for uniform application of EU law and the principle of equality, this concept should in such cases be given an autonomous and uniform interpretation throughout the EU.

The concept of ‘commercial scale’ as provided for in Articles 6(2), 8(1) and 9(2) of IPRED should be interpreted (de) and applied taking into account qualitative elements, such as the economic or commercial advantage which may be pursued by the infringements in question, as well as quantitative elements, such as the number and extent of the infringements, which are relevant in the case at hand.