IP Quick Tip: Determination of damages and compensation before the UPC

Show notes

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Proceedings on the amount of damages do not take place very often. It is even rarer for them to be conducted through till the end, at least from a German perspective, as they are time consuming and expensive. This might change with the UPC.

Similarly as in German proceedings the Rules of Procedure also provide for separate proceedings on the amount of damages. However, the court may order an interim award of damages to the successful party in the decision on the merits already. Such award has to at least cover the expected costs of the subsequent proceedings on damages but is not limited to this.

With costs already being secured, parties ought to be more likely to litigate proceedings on damages and less likely to settle at an early stage based on a rather uncertain basis. The new system is made even more attractive by a new tool: the request to lay open books. This is a more thorough and safer option of assessing the extent of a potential claim for damages.

Further, both lost profits of the injured party as well as unfair profits made by the infringer are to be taken into account by the court when awarding the amount of damages. In contrast, these two aspects so far have an either-or-relationship in German proceedings.

Due to all these aspects favoring the plaintiff, proceedings on damages before the UPC might well become the preferred choice when it comes to determining the amount of damages that a successful party may demand from the infringer.