Legal costs — Reimbursement of lawyers’ and experts’ fees in IP cases – Advocate General’s opinion

dollar-sign21The Advocate General CAMPOS SÁNCHEZ-BORDONA issued an opinion in Case C‑57/15 United Video Properties, Inc. v Telenet NV. The case concerns the following:

United Video Properties, Inc. (‘UVP’) was the holder of European patent No EP 1327209, granted on 27 March 2008, for providing storage of data on servers in an on-demand media delivery system. Since it took the view that Telenet NV (‘Telenet’) had infringed its rights in relation to that patent, UVP brought an action against Telenet on 7 June 2011. By its action, UVP sought, essentially, a declaration that Telenet had infringed its rights in relation to the patent and an injunction requiring Telenet to cease direct and indirect infringements of the patent. UVP also requested that Telenet be ordered to pay the costs.

By decision of 3 April 2012 of the acting president of the Rechtbank van Koophandel te Antwerpen (Commercial Court, Antwerp), following a counterclaim by Telenet, the Belgian part of European patent No EP 1327209 was revoked for failure to meet the condition of novelty, and UVP was ordered to pay the costs of the proceedings in the total amount of EUR 11 000. UVP lodged an appeal against that decision on 27 August 2012 before the Hof Van Beroep te Antwerpen (Court of Appeal, Antwerp).

UVP had brought parallel proceedings against Virgin Media (not a party to the main proceedings) in relation to the United Kingdom part of the same patent. On 14 July 2014, the High Court of Justice, London, ruled that the patent was invalid on the ground that there was no inventive step. In view of the decisions of the High Court of Justice, London, and the president of the Rechtbank van Koophandel te Antwerpen (Commercial Court, Antwerp), UVP decided to discontinue its appeal by letter of 14 August 2014, which was confirmed by a further letter of 24 October 2014.

In the light of UVP’s discontinuance of its appeal, Telenet requested the Hof Van Beroep te Antwerpen (Court of Appeal, Antwerp) to agree and declare that:

–   the Law of 21 April 2007 on the recovery of fees and costs of legal representation and the Royal Decree establishing a scale for the procedural costs indemnity are contrary to Article 14 of the Directive;

–  the case-law of the Hof van Cassatie (Court of Cassation) which provides that fees and costs for the assistance of a technical expert may be recovered from the unsuccessful party to the proceedings only in the event of fault also infringes Article 14 of the Directive;

–  finally, Telenet requested that UVP be ordered to pay Telenet the sum of EUR 185 462.55 in respect of lawyers’ fees and the sum of EUR 44 400 in respect of the assistance of a technical expert (patent agent).

According to Telenet’s submissions on the legal costs payable to it — the only matter still in contention in the main proceedings — the rule in Belgian law is that the unsuccessful party is responsible for payment. However, for the purposes of specifically fixing the lawyers’ fees which may be recovered from the unsuccessful party in the proceedings, the Royal Decree stipulates maximum amounts which cannot be exceeded, from which it follows — in Telenet’s view — that there is a conflict with Article 14 of the Directive.

Further, in relation to the costs of assistance by a technical expert, which do not fall within the scope of the Law of 21 April 2007 and the Royal Decree, Telenet submits that, according to the case-law of the Hof van Cassatie (Court of Cassation), those costs can by recovered only where there is found to be fault on the part of the unsuccessful party, which is also incompatible with Article 14 of the Directive.

In those circumstances, by order of 26 January 2015, the Hof Van Beroep te Antwerpen (Court of Appeal, Antwerp) referred the following questions for a preliminary ruling:

(1)  Do the terms “reasonable and proportionate legal costs and other expenses” in Article 14 of the … Directive preclude the Belgian legislation which offers courts the possibility of taking into account certain well-defined features specific to the case and which provides for a system of varying flat rates in respect of costs for the assistance of a lawyer?

(2)  Do the terms “reasonable and proportionate legal costs and other expenses” in Article 14 of the … Directive preclude the case-law which states that the costs of a technical adviser are recoverable only in the event of fault (contractual or extra-contractual)?’

The Advocate’s opinion:

(1)  Article 14 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights does not preclude national legislation, such as that at issue in this reference for a preliminary ruling, which sets a maximum limit for the recovery of the successful party’s lawyer’s fees from the party ordered to pay the costs, in all types of proceedings, including those relating to the protection of intellectual property rights.

(2)  Article 14 of Directive 2004/48 precludes a requirement that fault must exist as a necessary condition for ordering the unsuccessful party to reimburse the reasonable, proportionate and equitable experts’ costs incurred by the successful party, provided that those costs are directly and immediately connected to the pursuit of proceedings for the protection of intellectual property rights.

 

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