European Observatory on Counterfeiting and Piracy (2010)

Source Details

European Observatory on Counterfeiting and Piracy (2010)
Title:	Damages in Intellectual Property Rights
Author(s):	European Observatory on Counterfeiting and Piracy
Year:	2010
Citation:	European Observatory on Counterfeiting and Piracy (2010). Damages in Intellectual Property Rights.
Link(s):	Definitive , Open Access
Key Related Studies:	European Observatory on Infringement of IPRs. Observatory update on Cost and Damages (2015)
Discipline:	K42: Illegal Behavior and the Enforcement of Law O34: Intellectual Property and Intellectual Capital O38: Government Policy
Linked by:	European Observatory on Infringement of IPRs (2015)

About the Data
Data Description:	Questionnaires were issued by the authors to 27 Member States of the European Union, to be answered by selected legal practitioners within each Member State.
Data Type:	Primary data
Secondary Data Sources:
Data Collection Methods:	Qualitative Collection Methods Survey Research (qualitative; e.g. consumer preferences)
Data Analysis Methods:	Qualitative Analysis Methods Legal Analysis
Industry(ies):
Country(ies):	European Union
Cross Country Study?:	Yes
Comparative Study?:	Yes
Literature review?:	No
Government or policy study?:	Yes
Time Period(s) of Collection:	2010
Funder(s):	European Commission

Abstract

This report is the work of the European Observatory on Counterfeiting and Piracy together with a group of professional and technical legal practitioners. The purpose is to horizontally assess intellectual property rights legal framework across Member States of the European Union.Members of the legal group drafted questionnaires to be distributed to legal practitioners in Member States. The responses of each Member State have been collated in tables with an executive summary for each. The authors have also outlined best practices or shortcomings and have added specific recommendations for each topic.

Main Results of the Study

In implementing the EU’s Directive on the Civil Enforcement of Intellectual Property Rights (“IPRED”), Member States are required to provide compensation for various types of detriment suffered by the rightholder, which include lost sales and consequential damage (such as to the value of the brand). Member States also are required to award the rightholder the reasonable costs of investigating, taking legal action against, and rectifying the infringement. As the IPRED has been implemented in national legislation and carried out in practice, however, the rightholder often cannot recover in full the compensation appropriate to an infringement, or the full costs that the rightholder has borne to redress the infringement. Some do not award compensation for all relevant types of damage. Many limit the types and amount of costs that can be recovered. Some courts are unwilling to award damages with respect to infringements and damage that clearly have taken place but are difficult to quantify precisely. These legal and practical drawbacks mean that some of the profit or other economic benefit of an infringement often remains with the infringer even after the rightholder has brought a “successful” civil case, or that some of the cost of litigation or other cost of redressing that infringement is borne by the rightholder rather than by the infringer. As a result, damages and costs awards can effectively leave the rightholder in a worse position, and the infringer in a better position, than either would have been in had the infringement and the civil litigation not occurred. Such a state of affairs provides not a deterrent but rather an economic incentive to engage in infringement and an economic penalty for enforcing IPR rights through civil action.

Policy Implications as Stated By Author

Recommendations or current best practices for member States include:

• Measures aimed at ensuring that rightholders are able to recover the totality of the losses sustained as a result of an infringement.
• Measures that enable rightholders to recover their actual costs of investigating, taking legal action against, and rectifying an IPR infringement.
• Measures designed to ensure that infringers do not retain any economic benefit from their infringing activities.

Coverage of Study

Coverage of Fundamental Issues

Issue	Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

Coverage of Evidence Based Policies

Issue	Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size:	27
Level of aggregation:	Country
Period of material under study:	2010