Good to know when you are litigating

5 april 2017 – Micheline Don

For those who are involved in or getting involved in litigation, the following aspects are worth knowing.

Independent claim unregistered licensee

A manufacturer or trademark proprietor has given a customer a license in order to put products or services on the market using his European Union trademark or design right. If another party then infringed on that trademark or model (e.g. by offering an identical or strongly resembling trademark or product), the customer could in principle only invoke that license against the third party if the license had been registered in the European register for trademarks and models. The highest European judge has now ruled that the licensee can also invoke the license against a third party when it has not been registered. What is important here is that the trademark or design right owner has given permission in his agreement with the licensee for an independent legal action by the licensee. This means that the licensee can also institute an independent claim for damage compensation. He is no longer dependent on the owner of the trademark/design right for this.

Compensation of the cost of proceedings

When litigating in the Netherlands, the costs are in principle for your own account. These are mainly lawyer’s fees. The judge awards only a low lump sum to the winning party to be paid by the losing party. In procedures about maintaining intellectual property rights (trademarks, design rights, copyrights, patents and trade names) another arrangement applies. Since 2008, the winning party can then get its actual costs reimbursed. These costs do have to be reasonable. What is reasonable has often been the subject of discussions. In order to somewhat streamline the awarded compensations in cases of intellectual property, the judges in the Netherlands determined some years ago the so-called “indication tariffs” (patent cases have as yet been excluded from this). It means that in principle the winning party can only get the indication tariff reimbursed, except for exemptions.

As of 1 April 2017, these indication tariffs have been reviewed, to enhance the predictability of the cost risk for parties. The reviewed arrangement distinguishes between cases on the basis of complexity:

Very simple compensation according to the fixed amount
Simple max. EUR 6,000 in a preliminary injunction and EUR 8,000 in proceedings on the merits
Normal max. EUR 15,000 in a preliminary injunction and EUR 20,000 in proceedings on the merits
Complex max. EUR 25,000 in a preliminary injunction and EUR 40,000 in proceedings on its merits

In principle, parties can always come to a different understanding among themselves about the reimbursements. The judge will then usually go along and ignore the indication tariffs.

Besides, there is also the risk that the claimant, who started the interlocutory proceedings and then prematurely revokes it, will be sentenced to pay the defendant’s legal costs. This can be the case when, for example, the claimant had needlessly started the proceedings, thus being guilty of the costs incurred by parties. The defendant, though, could then ask the judge to continue the proceedings, solely for the purpose of obtaining a decision about the process costs.

Micheline Don