Introduction
Patents are more than just technical documents; they drive innovation and economic progress.[1] Indeed, the European Commission considers patents, along with other intellectual property (IP) rights, “a powerful tool for growing the competitiveness of all companies”.[2] Notably, patent-intensive sectors contribute significantly to the EU economy, accounting for 11% of total employment and 17.4% of GDP between 2017 and 2019.[3]
This success is rooted in the patent system. Patents grant inventors exclusive rights[4] to their ground-breaking creations for a limited time (typically 20 years).[5] In return, they must publicly disclose their innovations, ensuring that knowledge is shared and can inspire further technological advancements across industries.[6]
In practice, when a third party uses a patented invention to make, sell, or import products without the patent owner’s consent, it infringes the rights arising from the patent. By enforcing their rights by legal means available, such as through an injunction, patent owners can stop unauthorised use. They can also generate revenue through licensing, secure their market position, and strengthen their bargaining power in collaborations. This legal protection gives stakeholders confidence to share their innovations without fear of misappropriation.
Considering the importance of IP rights, the EU adopted in 2004 the Directive 2004/48/EC on the enforcement of IP rights (hereinafter “IPRED”).[7]IPRED’s purpose is to “ensure a high, equivalent and homogeneous level of protection” to guarantee “a minimum but standard set of measures, procedures and remedies allowing effective civil enforcement of intellectual property rights.”[8] In other words, IPRED was created to harmonise and strengthen IP rights enforcement standards in the EU.[9]
The importance of adequately protecting IP rights by means of injunctions stopping infringement is well understood by both the IPRED and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). According to Art. 11 IPRED, Member States “shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction. These injunctions are intended to prevent the infringement from continuing.” Also, Article 28 TRIPS[10] prevents third parties from profiting economically from goods or services that use a patented invention without authorisation from the patent owner.
At the same time, Article 3 IPRED emphasises that enforcement mechanisms must strike a balance between protecting IP rights and ensuring fairness in legal proceedings. It mandates that enforcement measures be “fair and equitable”, avoiding unnecessary complexity, excessive costs, or unreasonable delays. Additionally, Article 3(2) stipulates that these measures must be “effective, proportionate, and dissuasive”, while ensuring they do not create barriers to legitimate trade or allow for abuse. This dual focus seeks to prevent both over-enforcement that could hinder lawful commerce and under-enforcement that could weaken IP protection.
In recent years, the application of the “proportionality principle” outlined in Article 3 (2) IPRED has sparked a heated debate, particularly concerning the issuance of injunctions against the infringement of patents embedded within complex, multi-patent products.[11] In this context, some have proposed incorporating into IPRED a new standard for assessing injunctions. They propose to amend the current text of IPRED,[12] as well as encourage European courts, such as the Unified Patent Court (UPC), to adopt an approach that could deny or limit patent injunctions.[13] The new standard would be based on the four factors established in the U.S. Supreme Court decision eBay Inc. v. MercExchange, L.L.C. (2006) (hereinafter “eBay decision”).
[14]This paper examines the role of proportionality in patent infringement proceedings in the EU[15] and analyses whether amendments to Article 3 IPRED are necessary. Part II explores the origins and legal framework of proportionality in EU law, including its role in IPRED and its application in Germany, France, and Italy. Part III analyses the proposal to automatically deny injunctions for patents embedded in complex products based on Article 3(2) IPRED, for standard essential patents (SEPs) and implementation patents alike. Part IV explores the development of the proportionality principle in the U.S., with particular emphasis on the Supreme Court’s decision in the eBay decision and its consequences. Finally, Part V presents concluding observations on the role of proportionality in global patent litigation and its impact on innovation and enforcement.
[1] While patents are not the sole driver of innovation, they play a crucial role in incentivizing investment in new technologies. Patents enable the transfer of technology and are key for startups aiming to secure venture capital investment. See Ohlhausen, Maureen K., Patent Rights in a Climate of IPRs scepticism, Harvard Journal of Law & Technology, Volume 30, Number 1 Fall 2016. Available at: https://jolt.law.harvard.edu/assets/articlePDFs/v30/30HarvJLTech103.pdf p.48. [All links in the paper were Accessed 01.04.2025].
[2] Legal provisions of COM(2017)708 - Guidance on certain aspects of Directive 2004/48/EC on the enforcement of intellectual property rights. Introduction. Brussels, 29.11.2017 COM(2017) 708 final. Available at: https://www.eumonitor.eu/9353000/1/j4nvhdfcs8bljza_j9vvik7m1c3gyxp/vkjri0w115uo.
[3] European Union Intellectual Property Office and European Patent Office, 2022. IPR-intensive industries and economic performance in the European Union: Industry-level analysis report, fourth edition. Available at: https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/reports/IPR-intensive_industries_and_economic_in_EU_2022/2022_IPR_Intensive_Industries_FullR_en.pdf. Equal impressive figures are reached in the US. See U.S. Patent and Trademark Office, 2022. The latest USPTO report finds industries that intensively use intellectual property protection account for over 41% of U.S. gross domestic product, and employ one-third of the total workforce. Available at: https://www.uspto.gov/about-us/news-updates/latest-uspto-report-finds-industries-intensively-use-intellectual-property-0.; U.S. Patent and Trademark Office, 2023. Employment in IP-intensive industries during the COVID-19 pandemic and beyond. Available at: https://www.uspto.gov/ip-policy/economic-research/publications/reports/employment-ip-intensive-industries-during-covid-19.
[4] In Bloomer v. McQuewan (1852), Chief Justice Taney affirmed that patents merely grant the right to exclude others from using or selling the invention in question; likewise, in Centrafarm v. Sterling Drug (1974), the European Court of Justice confirmed that patents grant inventors exclusive rights to use and market their creations.
Justia.com: Justia US Supreme Court Center, Bloomer v. McQuewan, 55 U.S. 539 (1852). Available at: https://supreme.justia.com/cases/federal/us/55/539/; SCOTUSblog: Duffy, J., Amicus Brief in Impression Products, Inc. v. Lexmark International, Inc., No. 15-1189. SCOTUSblog, 2017. Available at: https://www.scotusblog.com/wp-content/uploads/2017/02/15-1189_amicus_np_prof_duffy.pdf ; Google Scholar: Google Scholar, Bloomer v. McQuewan, 55 U.S. 539 (1852). Available at: https://scholar.google.it/scholar_case?case=8745936874816403351&hl=en&as_sdt=6&as_vis=1&oi=scholarr . Court of Justice of the European Union, Centrafarm BV v. Sterling Drug Inc., Case 15-74 (1974). Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A61974CJ0015
[5] See more information on patents at 4iP Council, Which types of intellectual property do you need? Patents. Available at: https://www.4ipcouncil.com/smes-corner/what-intellectual-property-and-which-types-do-i-need.
[6] See other benefits of patents at 4iP Council, 4 Reasons to Patent. Available at: https://www.4ipcouncil.com/smes-corner/4-reasons-patent.
[7] European Parliament & Council of the European Union. (2004). Directive 2004/48/EC on the enforcement of intellectual property rights. Official Journal of the European Union, L 195, 16-25. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32004L0048.
[8] Legal provisions of COM(2017)708 - Guidance on certain aspects of Directive 2004/48/EC on the enforcement of intellectual property rights. Introduction. Brussels, 29.11.2017 COM(2017) 708 final. Available at: https://www.eumonitor.eu/9353000/1/j4nvhdfcs8bljza_j9vvik7m1c3gyxp/vkjri0w115uo.
[9] Götting, H.P., Du Vall, M. and Röder-Hitschke, H., 2012. Enforcing intellectual property rights: necessary instruments versus over-enforcement. (No Title). Götting, H.P., Du Vall, M. and Röder-Hitschke, H., 2012. Enforcing intellectual property rights: necessary instruments versus over-enforcement. (No Title). p. 13.
Strowel, A., 2004. The scope of the proposed IP enforcement directive: torn between the desire to harmonise remedies and the need to combat piracy. European intellectual property review, p.244.
[10] World Trade Organization (1994) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Available at: https://www.wto.org/english/docs_e/legal_e/27-trips_04c_e.html.
[11] See Bailey, V., 2024. Why proportionality is key for patent injunctions. Managing Intellectual Property. Available at: https://shorturl.at/RDM2y
[12] Germany’s Automotive Industry Association (VDA) and the Fair Standards Alliance (FSA). See VDA, 2024. Patent law. Available at: https://shorturl.at/K0ZfF; IPFray, 2024. Next attack on EU patent injunctions: IP2Innovate officially pushes for stronger proportionality requirement. Available at: https://shorturl.at/SuUA8.
[13] Ohly, A., Injunctions in the UPC And the Principle of Proportionality (September 5, 2022). Stockholm Intellectual Property Law Review 2022, 58-65, Available at: http://dx.doi.org/10.2139/ssrn.4627314
[14] U.S. Supreme Court. (2006). eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388.
