Patent attorney’s fees and legal expenses – an opinion by the Advocate General of the EU Court

The Advocate General of the European Court M. CAMPOS SÁNCHEZ-BORDONA has issued an opinion on the case C‑531/20 NovaText GmbH срещу Ruprecht-Karls-Universität Heidelberg.

This dispute has the following background:

The Ruprecht-Karls-Universität Heidelberg (‘the University’) brought an action before the (Regional Court, Mannheim, Germany against NovaText GmbH for an order that the latter cease and desist from the infringement of the University’s EU trade marks and acknowledge the University’s rights in relation to those marks.

The University’s legal representative noted in the application that assistance had been provided by a patent attorney.

The proceedings concluded when the parties reached a written settlement, pursuant to Paragraph 278(6) of the Law on civil procedure. On 23 May 2017, the first-instance court made the settlement order.

On the same date, the first-instance court set the value of the dispute at EUR 50 000 and ordered NovaText to pay the costs of the proceedings. The appeal brought by NovaText against that decision was dismissed.

By order of 8 December 2017, the first-instance court set the amount of costs to be reimbursed by NovaText to the University at EUR 10 528.95. Of that sum, EUR 4 867.70 were for the assistance of the patent attorney in the proceedings at first instance and EUR 325.46 were for that patent attorney’s work in the appeal proceedings against the order as to costs.

NovaText appealed to the Higher Regional Court, Karlsruhe, Germany, seeking the annulment of the decision as to costs in so far as it had been ordered to bear the costs relating to the involvement of the patent attorney.

The appeal court dismissed NovaText’s appeal on the following grounds:

–   Since the dispute relates to trade marks and signs, it is not possible under Paragraph 140(3) of the MarkenG to determine whether the patent attorney’s assistance was necessary for the purpose of obtaining the legal remedy sought or whether that patent attorney provided a service which ‘added value’ to that provided by the lawyer instructed by the University.

–  Paragraph 140(3) of the MarkenG cannot be interpreted in a manner consistent with Articles 3(1) and 14 of Directive 2004/48 in order to verify whether the involvement of the patent attorney was necessary.

–   That paragraph does not infringe the general principle of equality laid down in Paragraph 3(1) of the German Basic Law either.

An appeal on a point of law was lodged against the appellate decision before the Federal Court of Justice. After explaining the prevailing interpretation of Paragraph 140(3) of the MarkenG, that court deduces from the judgment in United Video Properties that that provision may be incompatible with Articles 3(1) and 14 of Directive 2004/48, in conjunction with recital 17 thereof.

In the referring court’s view, the automatic imposition on the unsuccessful party of the requirement to reimburse the cost of a patent attorney’s assistance, regardless of whether that assistance was necessary, creates difficulties on three levels:

–  First, the reimbursement of costs relating to the work of a patent attorney whose involvement is not necessary for the purposes of obtaining the legal remedy sought might be excessively costly, thereby infringing Article 3(1) of Directive 2004/48.

–  Second, the reimbursement of such costs might not be proportionate, within the meaning of Article 14 of Directive 2004/48, if the assistance provided by the patent attorney is not directly and closely linked to the action seeking to have a trade mark right upheld.

–  Third, Article 14 of Directive 2004/48 requires the court responsible for making the order as to costs to examine the specific circumstances of the case (judgment in United Video Properties, paragraph 23). Reimbursement of the patent attorney’s costs, regardless of whether or not the patent attorney’s involvement was necessary for the purpose of obtaining the legal remedy sought, does not take adequate account of the specific characteristics of the particular case.

Against that background, the Bundesgerichtshof (Federal Court of Justice) has referred the following question to the Court of Justice for a preliminary ruling:

‘Are Article 3(1) and Article 14 of Directive 2004/48/EC to be interpreted as precluding national legislation imposing an obligation on the unsuccessful party to reimburse the costs incurred by the successful party for assistance by a patent attorney in judicial proceedings concerning trade marks, whether or not the patent attorney’s assistance was necessary for the purpose of appropriate legal action?’

The Advocate General’s opinion:

‘Articles 3 and 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 are to be interpreted as precluding national legislation imposing an obligation on the unsuccessful party to reimburse the costs incurred by the successful party for assistance by a patent attorney in judicial proceedings concerning trademarks, whether or not the patent attorney’s assistance was necessary in order to obtain the legal remedy sought.’

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