The matter at hand

This matter concerns the interpretation of Article 14 of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, which provides that Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this.

The request has been made in proceedings in Belgium between United Video Properties and Telenet, in which the claims instituted by United Video Properties on the basis of an alleged patent infringement were denied and in which United Video Properties was ordered to pay Telenet a procedural cost indemnity relating to the proceedings at first instance of € 11 000, the maximum amount provided for in the Belgium Judicial Code. United Video Properties lodged an appeal against that judgment before the Antwerp Court of Appeal, but subsequently decided to discontinue its appeal. After that discontinuance, Telenet requested that United Video Properties be ordered to reimburse it € 185 462 in respect of lawyers’ fees and € 44 400 in respect of the assistance provided by an agent specialised in the field of patents.

At issue was first of all whether a provision of the Belgium Judicial Code which provides for a flat-rate scheme setting out an absolute reimbursement ceiling in respect of costs for the assistance of a lawyer is compatible with the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights.

Secondly, the referring court asked whether national rules providing that reimbursement of the costs of a technical adviser is provided for only in the case of fault on the part of the unsuccessful party is compatible with the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights.

The judgment of the ECJ

Regarding the first question, the ECJ holds that national legislation that lays down an absolute limit in respect of legal costs “must ensure, on the one hand, that that limit reflects the reality of the rates charged for the services of a lawyer in the field of intellectual property, and, on the other, that, at the very least, a significant and appropriate part of the reasonable costs actually incurred by the successful party are borne by the unsuccessful party” (paragraph 30).

This precludes national legislation providing maximum amounts that are too low, “so that the reimbursement which the successful party may claim becomes disproportionate or even, where applicable, insignificant, thus depriving Article 14 of [the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights] of its practical effect” (paragraph 30).

In that light, the ECJ holds that “Article 14 of [the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights] must be interpreted as not precluding national legislation (…) which provides that the unsuccessful party is to be ordered to pay the legal costs incurred by the successful party, offers the courts responsible for making that order the possibility of taking into account features specific to the case before it, and provides for a flat-rate scheme for the reimbursement of costs for the assistance of a lawyer, subject to the condition that those rates ensure that the costs to be borne by the unsuccessful party are reasonable, which it is for the referring court to determine. However, Article 14 of that directive precludes national legislation providing flat-rates which, owing to the maximum amounts that it contains being too low, do not ensure that, at the very least, that a significant and appropriate part of the reasonable costs incurred by the successful party are borne by the unsuccessful party” (paragraph 32).

As to whether a national rule may subject the reimbursement of the costs of a technical adviser to the condition that the unsuccessful party has committed a fault, this depends on the link between those costs and the judicial procedure concerned (paragraph 38). If such a link is direct and close, those costs fall within the scope of Article 14 of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights as ‘other expenses’ and cannot be conditioned on fault (paragraph 36). The costs of a technical adviser incurred in the context of a general observation of the market and the detection of possible infringements of intellectual property law do not appear to show such a close direct link between the costs and the judicial procedure (paragraph 39). However, to the extent that the services of a technical adviser are essential in order for a legal action to be usefully brought seeking, in a specific case, to have such a right upheld, the costs thereof do fall within the scope of Article 14 of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (paragraph 39).

In those circumstances, Article 14 of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights “precludes national rules providing that reimbursement of the costs of a technical adviser are provided for only in the event of fault on the part of the unsuccessful party, given that those costs are directly and closely linked to a judicial action seeking to have such an intellectual property right upheld” (paragraph 40).