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CJEU asked whether IP law allows the capping of legal fees recoverable from unsuccessful parties

In a decision of 26 January 2015, the Antwerp Court of Appeal decided to refer some preliminary questions to the Court of Justice of the European Union (CJEU) in a patent infringement action brought In a decision of 26 January 2015, the Antwerp Court of Appeal decided to refer some preliminary questions to the Court of Justice of the European Union (CJEU) in a patent infringement action brought by United Video Properties (UVP) against Telenet. The questions related to whether Belgium's system of limited costs recovery from an unsuccessful party is compatible with the IP Enforcement Directive 2004/48.

In April 2002 the President of the Antwerp Commercial Court revoked the Belgian part of United Video Properties' patent for lack of novelty. UVP appealed to the Antwerp Court of Appeal but, after a negative decision in the United Kingdom on the UK part of the same patent (in proceedings against Virgin Media), UVP withdrew its appeal. This meant that the only issue that remained to be decided was the costs. Telenet argued that, if Belgian law as it stands today were to be applied,

  • it would only recover a small part of its attorney fees. The Belgian Act of 21 April 2007 and a Royal Decree of 26 October 2007 indeed provide that only small capped amounts can be recovered from the losing party as compensation for the attorney fees of the successful party.

  • it would not recover the fees it paid to its patent attorney as Belgian case law only provides for the possibility to recover this type of costs where the unsuccessful party acted wrongfully and the fees were incurred in consequence of that wrongdoing.


Accordingly, argued Telenet, Belgian law violates Article 14 of the IP Enforcement Directive (which provides for the recovery of reasonable and proportionate costs from the unsuccessful party) and asked the Antwerp Court of Appeal to refer preliminary questions to the CJEU. On 26 January 2015 the Antwerp Court of Appeal in essence asked the CJEU whether Article 14 may be interpreted as authorizing:

  • a system of small capped amounts as provided for by the Belgian Act of 21 April 2007 and a Royal Decree of 26 October 2007,

  • case law that holds that the successful party can recover the fees it paid to a technical expert only when the losing party acted wrongfully.


Comment

We believe this case potentially has a huge European impact, as Belgium is not the only Member State to have a system under which only a small part of the real attorney fees can be recovered from the losing party in a IP dispute.

 

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