Provisional text
OPINION OF ADVOCATE GENERAL
SHARPSTON
delivered on 24 November 2016 (1)
Case C‑367/15
Stowarzyszenie ‘Oławska Telewizja Kablowa’ w Oławie
v
Stowarzyszenie Filmowców Polskich w Warszawie
(Request for a preliminary ruling from the Sąd Najwyższy (Supreme Court, Poland))
(Intellectual and industrial property rights — Infringement — Calculation of damages — Directive 2004/48/EC — Legislation of a Member State providing for damages equivalent to two or three times the amount of the royalties which would have been due had there been an authorisation to use the intellectual property right in question)
1. By this request for a preliminary ruling, the Court is asked to rule on the interpretation of Directive 2004/48/EC on the enforcement of intellectual property rights (2) and, in particular, on the question whether Article 13 of that directive precludes a rule under national law allowing a rightholder to claim damages from an alleged infringer of a pre-determined amount which might, to use the terminology of the referring court, be described as ‘punitive’.
EU law
2. Recitals 2 and 3 of Directive 2004/48 state:
‘(2) The protection of intellectual property should allow the inventor or creator to derive a legitimate profit from his invention or creation. It should also allow the widest possible dissemination of works, ideas and new know-how. At the same time, it should not hamper freedom of expression, the free movement of information, or the protection of personal data, including on the internet.
(3) However, without effective means of enforcing intellectual property rights, innovation and creativity are discouraged and investment diminished. It is therefore necessary to ensure that the substantive law on intellectual property, which is nowadays largely part of the acquis communautaire, is applied effectively in the [European Union]. In this respect, the means of enforcing intellectual property rights are of paramount importance for the success of the Internal Market.’
3. According to recital 8 of Directive 2004/48:
‘The disparities between the systems of the Member States as regards the means of enforcing intellectual property rights are prejudicial to the proper functioning of the Internal Market and make it impossible to ensure that intellectual property rights enjoy an equivalent level of protection throughout the [European Union]. This situation does not promote free movement within the Internal Market or create an environment conducive to healthy competition.’
4. According to recital 10 of Directive 2004/48:
‘The objective of this Directive is to approximate legislative systems so as to ensure a high, equivalent and homogeneous level of protection in the Internal Market.’
5. Recital 17 of Directive 2004/48 is worded as follows:
‘The measures, procedures and remedies provided for in this Directive should be determined in each case in such a manner as to take due account of the specific characteristics of that case, including the specific features of each intellectual property right and, where appropriate, the intentional or unintentional character of the infringement.’
6. According to recital 26 of Directive 2004/48:
‘With a view to compensating for the prejudice suffered as a result of an infringement committed by an infringer who engaged in an activity in the knowledge, or with reasonable grounds for knowing, that it would give rise to such an infringement, the amount of damages awarded to the rightholder should take account of all appropriate aspects, such as loss of earnings incurred by the rightholder, or unfair profits made by the infringer and, where appropriate, any moral prejudice caused to the rightholder. As an alternative, for example where it would be difficult to determine the amount of the actual prejudice suffered, the amount of the damages might be derived from elements such as the royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question. The aim is not to introduce an obligation to provide for punitive damages but to allow for compensation based on an objective criterion while taking account of the expenses incurred by the rightholder, such as the costs of identification and research.’
7. Article 2 of Directive 2004/48 is entitled ‘Scope’. Paragraph 1 provides:
‘Without prejudice to the means which are or may be provided for in [EU] or national legislation, in so far as those means may be more favourable for rightholders, the measures, procedures and remedies provided for by this Directive shall apply, in accordance with Article 3, to any infringement of intellectual property rights as provided for by [EU] law and/or by the national law of the Member State concerned.’
8. According to Article 3 of Directive 2004/48:
‘1. Member States shall provide for the measures, procedures and remedies necessary to ensure the enforcement of the intellectual property rights covered by this Directive. Those measures, procedures and remedies shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time limits or unwarranted delays.
2. Those measures, procedures and remedies shall also be effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.’
9. Article 13 of Directive 2004/48 is entitled ‘Damages’. Paragraph 1 provides as follows:
‘Member States shall ensure that the competent judicial authorities, on application of the injured party, order the infringer who knowingly, or with reasonable grounds to know, engaged in an infringing activity, to pay the rightholder damages appropriate to the actual prejudice suffered by him as a result of the infringement.
When the judicial authorities set the damages:
(a) they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the rightholder by the infringement;
or
(b) as an alternative to (a), they may, in appropriate cases, set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.’
Polish law
10. Article 79(1) of the Ustawa z dnia 4 lutego 1994 r. o prawie autorskim i prawach pokrewnych (Polish Law on Copyright and Related Rights of 4 February 1994; ‘the law on copyright’), in the version in force at the material time, provided:
‘A rightholder whose economic rights in copyright have been infringed may request the person who infringed those rights to:
1. cease the infringement;
2. repair the effects of the infringement;
3. remedy the loss caused:
(a) on the basis of general principles, or
(b) by payment of a sum of money corresponding to twice, or, in the event of a culpable infringement, three times, the amount of the appropriate fee which would have been due at the time it was sought if the rightholder had given permission for the work to be used;
4. recover any profits obtained.’
Facts, procedure and the question referred
11. The Stowarzyszenie Filmowców Polskich (the Polish Filmmakers’ Association; ‘the Filmmakers’ Association’), is an organisation which is authorised to manage and protect copyrighted audiovisual works, including those (re)transmitted via cable television networks. It operates on the basis of a licence issued by the Polish Minister for Culture and the Arts. The Stowarzyszenie Oławska Telewizja Kablowa (Cable Television Association of the Town of Oława; ‘the Cable TV Association’) broadcasts programmes on cable television in the town of Oława in Lower Silesia.
12. On 4 October 1995, the parties concluded a licensing agreement setting out the rules governing the fees payable by the Cable TV Association to the Filmmakers’ Association. On 30 December 1998, the latter gave notice of termination of that agreement and proposed that the parties enter into a new agreement on modified terms. Those terms involved paying a higher licensing fee, namely 2.8% of the Cable TV Association’s net monthly income, a figure which had already been accepted by a significant number of other operators in the Polish cable television market.
13. The Cable TV Association did not accept the Filmmakers’ Association’s proposals. On 17 April 2008, it filed an application with the Komisja Prawa Autorskiego (Polish Copyright Authority) with a view to having the dispute between the parties resolved. (3) By decision of 6 March 2009, that authority ordered that the licence fee be set at 1.6% of monthly net income, excluding value added tax and installation and connection fees. The Cable TV Association subsequently paid the Filmmakers’ Association the sum of PLN 34 312.69 (4) in respect of its income for the period from 2006 to 2008, based on that monthly figure.
14. On 12 January 2009, the Filmmakers’ Association brought proceedings seeking an order prohibiting the Cable TV Association from (re)transmitting audiovisual works by cable television before a new licensing agreement had been entered into and requesting that the defendant be ordered to pay the principal sum of PLN 390 337.50 (5) in respect of the period from the date on which the action was lodged until the date of actual payment. Those claims were made on the basis of Article 79(1)(1) and (3)(b) of the law on copyright.
15. By judgment of 11 August 2009, the Sąd Okręgowy (Regional Court) in Wrocław declared that there was no need to adjudicate as regards the sum of PLN 84 120.51, (6) prohibited the Cable TV Association from (re)broadcasting programmes before a new licensing agreement had been concluded with the Filmmakers’ Association, awarded the latter the principal sum of PLN 160 275.69 (7) and dismissed the remainder of the action. That court found that there had been a breach of Article 79(1) of the law on copyright since the defendant had culpably (re)broadcast programmes in the knowledge that it did not hold a licence. An amount equal to three times the appropriate fee was therefore due to the applicant by virtue of that provision.
16. Both parties appealed against that judgment before the Sąd Apelacyjny (Court of Appeal) in Wrocław. By judgment of 12 March 2010, that court dismissed the appeals. Subsequently, the parties lodged appeals before the referring court which, by judgment of 15 June 2011, set aside the judgment of the Court of Appeal and remitted the case for re-examination by that court. By judgment of 19 December 2011, the Court of Appeal varied the judgment under appeal by ordering the Cable TV Association to pay a further PLN 145 941.30 (8) to the Filmmakers’ Association and dismissed the appeal brought by the Cable TV Association. On the case being heard by the referring court a second time, that court, by judgment of 27 March 2013, again set aside the judgment under appeal and remitted the case for re-examination by the Court of Appeal. By letter of 28 August 2013, the Filmmakers’ Association partially withdrew the claim for an order prohibiting the Cable TV Association from effecting any (re)broadcast. On re-examining the case, the Court of Appeal noted that the only outstanding matter between the parties was the question of the amount of damages payable under Article 79 of the law on copyright.
17. The dispute is now before the referring court for the third time. That court observes that the Cable TV Association has consistently argued that Article 79 of the law on copyright is contrary to Article 13 of Directive 2004/48, in particular in so far as it provides for the award of ‘punitive’ damages amounting to two or three times the appropriate fee.
18. Since it is uncertain as to the interpretation to be given to the provisions of that directive, the referring court decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Is Article 13 of [Directive 2004/48] to be interpreted as meaning that the rightholder whose economic rights of copyright have been infringed may seek redress for the damage which it has incurred on the basis of general principles, or, without having to prove loss and the causal relationship between the event which infringed its rights and the loss, may seek payment of a sum of money corresponding to twice the amount of the appropriate fee, or, in the event of a culpable infringement, three times the amount of the appropriate fee, whereas Article 13 of Directive 2004/48 states that it is a judicial authority which must decide on damages by taking into account the factors listed in Article 13(1)(a), and only as an alternative in certain cases may set the damages as a lump sum, taking into consideration the elements listed in Article 13(1)(b) of that directive? Is the award, made at the request of a party, of damages as a pre-determined lump sum corresponding to twice or three times the amount of the appropriate fee permissible pursuant to Article 13 of the directive, regard being had to the fact that recital 26 thereof states that it is not the aim of the directive to introduce punitive damages?’
19. Written observations have been lodged by the Filmmakers’ Association, by the Greek, Polish and Austrian Governments and by the European Commission. At the hearing on 14 July 2016, both parties to the main proceedings, together with the Polish Government and the Commission were represented and presented oral argument.
Assessment
Preliminary matter
20. The order for reference was lodged at the Court on 14 July 2015. By judgment of 23 June 2015, the Trybunał Konstytucyjny (Polish Constitutional Court) held that Article 79(1)(3)(b) of the law on copyright was contrary to the constitution of the Republic of Poland in so far as it allowed a copyright holder whose rights had been infringed to claim, where that infringement was culpable, payment of three times the appropriate fee. The provision has therefore been modified to that extent with effect from 1 July 2015.
21. The judgment of the constitutional court having been drawn to its attention, this Court asked the referring court whether it wished to maintain its reference for a preliminary ruling. The referring court replied on 28 August 2015 to the effect that, first, because Article 79(1)(3)(b) continued to provide for the payment of an amount equal to twice the appropriate fee, it was still concerned about the issue of punitive damages and, second, the constitutional court’s judgment served to reinforce its concerns regarding the potential absence under national law of a need to establish culpability on the alleged infringer’s part. The question referred should accordingly be read in the light of those developments.
Substance
22. Directive 2004/48 is a harmonising measure designed to govern the enforcement of intellectual property rights. The Court has held that it requires that ‘there must be effective legal remedies designed to prevent, terminate or rectify any infringement of an existing intellectual property right’. (9) To that end, Article 2(1) provides, subject to the proviso I shall address below, (10) for the measures, procedures and remedies laid down by the directive to apply to any intellectual property rights which are subject to the provisions of EU law or of the national law of a Member State.
23. The measures which the Member States must provide for cover all forms of intellectual property rights and include, but are not limited to, damages. (11) However, it is with the question of compensation payable in respect of breach of copyright that this order for reference is concerned. In particular, the Court is asked to rule on the calculation of damages under the directive having regard in particular to the issue of proof and causation of loss by the rightholder and that rightholder’s entitlement to recover lump sum damages which may not be related to the loss suffered and which might, on one analysis, be punitive. (12)
24. In that regard, the Austrian and Polish Governments (particularly the former) have placed great emphasis on the statement in Article 2 of Directive 2004/48 that that measure is without prejudice to means provided for in national legislation which may be more favourable for rightholders. If valid, such an argument would eliminate — or at least considerably reduce — the need to consider the remaining provisions of the directive, since it does not appear to be disputed that the provisions of the national law on copyright at issue are intended to be favourable to rightholders. Whilst it is clearly necessary to consider Article 2(1) in answering the question referred to the Court, it is in my view important first to address not what the directive does not seek to do — by leaving matters to the discretion of the Member States — but what it does seek to do in terms of laying down a basis for EU-wide harmonisation.
25. The particular issue with which the referring court is faced concerns a provision of national legislation (Article 79(1) of the law on copyright) which allows a rightholder who claims that his rights have been infringed to claim by way of damages a sum of money from the alleged infringer which is predetermined (13) and which accordingly has no necessary causal link to the actual loss incurred by the rightholder. Such an entitlement would appear to arise automatically. (14) On that basis, the referring court considers that the damages in question may be described as ‘punitive’.
26. That issue raises a number of points, which I would summarise as follows:
– whether a provision in national law which determines (15) the sum payable to a rightholder without leaving any discretion in that regard to the judicial body hearing and giving judgment in the case can satisfy the requirements of Directive 2004/48;
– the nature and extent of the obligations as to damages laid down by Article 13, read in the light of Article 3 of the directive; and
– the extent to which Article 2(1) of the directive permits Member States to go beyond the obligations as to damages laid down by Article 13 and, in particular, allows them to provide in their national law for the award of punitive damages.
27. I shall address these points in turn below.
Can national legislation fix the sum payable to a rightholder whose rights have been infringed without the intervention of the judicial body hearing and giving judgment in the case?
28. The answer to this question can be derived from the text of Article 13(1) of Directive 2004/48, read in conjunction with recital 17 and Article 3(1).
29. Article 13(1) obliges Member States to ensure that the competent judicial authorities will compensate a rightholder by making an award of damages in appropriate cases. In setting the damages, those authorities must award a sum which is appropriate to the actual prejudice suffered by the rightholder as a result of the infringement. This in turn reflects both the statement in recital 17 of the directive that remedies should be determined in each case in a way that takes due account of the specific circumstances of that case and the provision in Article 3(1) of the directive that remedies are to be ‘fair and equitable’. There must, in other words, be an assessment which is tailored to the matter in question and such an assessment can, by definition, be carried out only by a court or a body having judicial decision-making powers equivalent to those vested in a court. It follows, in my view, that a national rule which provides that a rightholder whose rights have been infringed may have an automatic right to a predetermined amount set by the relevant national legislation and without intervention on the part of the competent judicial authorities with regard to that calculation, whether it be based on the amount of the appropriate royalty fee or otherwise, cannot satisfy the requirements of the directive.
30. I am accordingly of the opinion that Directive 2004/48 should be interpreted as precluding a national rule which provides for the automatic payment of a predetermined sum to a rightholder whose rights have been infringed on the application of the rightholder and without any intervention on the part of the competent national judicial authorities in setting the amount of the damages in question.
The application of Articles 3 and 13(1)(b) of Directive 2004/48 to the calculation of damages
31. I referred in point 29 above to the requirement under Article 3(1) of Directive 2004/48 that remedies be fair and equitable. Due account must therefore be taken of the position not only of the rightholder but also of the alleged infringer. Article 3(2) goes on to provide that those remedies must be ‘effective, proportionate and dissuasive’. Those principles will govern the granting of all remedies under the directive, including the award of damages. The emphasis in this case is on the protection of the rightholder.
32. For the specific rules governing the calculation of damages, it is necessary to look to Article 13 of the directive. The case of an infringer who either knowingly or with reasonable grounds to know engages in an infringing activity is dealt with in Article 13(1). That provision lays down further general guidance, by stating that the damages must be ‘appropriate to the actual prejudice suffered’. That requirement must also inform all awards of damages pursuant to the directive.
33. I would pause here to note one point in response to the second of the concerns raised by the referring court in its reply to this Court of 28 August 2015. (16) The application of Article 13(1) is limited to cases of an infringer who acts either knowingly or with reasonable grounds to know that his conduct was culpable. The calculation of damages where the infringer did not know or did not have reasonable grounds to know that the activity constituted an infringement is a matter for Article 13(2). The recoverable amount under that provision is limited to ‘the recovery of profits or the payment of damages, which may be pre-established’. It is therefore plain in my view that in cases where Article 13(1) applies it is necessary that fault be established on the infringer’s part.
34. That provision then goes on to indicate the manner in which the judicial authorities concerned are to set the damages in a given case. It lays down two methods for doing so. The first (subparagraph (a)), whilst requiring the judicial authority to take into account all appropriate aspects of the case, takes as its basis the economic consequences of the infringement, with particular reference to any loss of profits on the rightholder’s part and any unfair profits made by the infringer. It also includes a reference to elements other than economic factors, such as the moral prejudice caused to the rightholder.
35. Subparagraph (b) operates as an alternative. It allows the judicial authorities to set the damages as a lump sum on the basis, inter alia, of the amount of the royalties or fees which would have been payable by the infringer had he requested authorisation to use the intellectual property right in question. Since subparagraph (b) lies at the heart of the referring court’s question, it is necessary to examine those parts of it that are relevant to the case in the main proceedings in some detail.
36. In the first place, the provision applies only ‘in appropriate cases’. The method of calculation laid down under subparagraph (a) of Article 13(1) should therefore be regarded as the general rule, to which the method under subparagraph (b) is an exception. Some clarification of what is meant by the expression ‘in appropriate cases’ is provided by recital 26 of the directive, which gives as an example cases where it would be difficult to determine the amount of the actual prejudice suffered.
37. There is, in my view, an important policy reason which serves to justify the presence of this alternative. It lies in the difficulty that rightholders will face in many cases in calculating the actual loss arising out of a given infringement. Frequently, this is likely to be difficult; on occasion, it may be impossible. Without some mechanism to assist the rightholder in that regard, the remedies provided by the directive risk being ineffective. In providing for a system of recovery based on royalties or fees, the legislature thus intended to enable the rightholder to avoid the potentially large amount of time and expense that he might otherwise have to incur as a condition of bringing proceedings against an infringer. Were the position to be otherwise, there would be a risk that the requirement under Article 3(1) of Directive 2004/48 that remedies must not be unnecessarily complicated or costly or entail unwarranted delays could not be satisfied. They would not, in other words, be ‘effective’ and hence ‘dissuasive’ for the purposes of Article 3(2) of the directive.
38. The fact remains, however, that the onus will be on the rightholder to establish that the circumstances of the case in question justify the making of an award of damages under the national equivalent of subparagraph (b) of Article 13(1) of the directive and that it is accordingly ‘appropriate’ to do so. It must, as a minimum, either be ‘difficult to determine the amount of the actual prejudice suffered’ (17) or there must be grounds which establish that the award of damages limited to a sum calculated by reference to subparagraph (a) is manifestly unjust or unreasonable.
39. In the second place, the calculation which subparagraph (b) provides for is one based on an amount which is ‘at least’ the amount of royalties or fees which would have been payable had the infringement not occurred. (18) It is not, therefore, a question of substituting an amount produced by calculating the profits lost by the rightholder and/or those received by the infringer with the amount of the royalties or fees which the infringer ought, in theory to have paid the rightholder. The yardstick is a more flexible one and plainly the sum in question may exceed the royalties or fees in question.
40. Does that mean that subparagraph (b) allows a judicial authority to make an award of ‘punitive’ damages on the basis that there need be no necessary connection between the amount awarded and the loss suffered?
41. In that regard, it should be pointed out that the Court accepted in its judgment in Manfredi and Others (19) that such damages may be payable under domestic provisions regulating infringements of competition law, provided that the principles of effectiveness and equivalence are observed. (20) Accordingly, it cannot be said that the notion of punitive damages must be regarded as being irreconcilable in all circumstances with the requirements of EU law.
42. However, I do not consider that the broad, general statements set out in that judgment can be carried over to the present case. First, it is clear from the final sentence of recital 26 of Directive 2004/48 that it was not the legislature’s intention to provide for punitive damages to be payable under the directive.
43. Second, the first paragraph of Article 13(1) of the directive provides that damages are to be ‘appropriate to the actual prejudice suffered by [the rightholder] as a result of the infringement’. (21) That provision requires, in my view, that the rightholder be able to establish a causal link between the amount claimed and the damage suffered. (22) It then follows that Article 13(1) does not allow for the award of a sum which may bear no necessary relation to the loss that the rightholder has incurred or is likely in the future to incur. (23)
44. Third, Article 3(2) of Directive 2004/48 lays down the overriding principle that remedies must not only be ‘effective’ and ‘dissuasive’; they must also be ‘proportionate’.
45. In support of its position that punitive damages may be proportionate, the Polish Government argued at the hearing that the Court should have regard to its judgment in Arjona Camacho. (24) That case concerned the interpretation of Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, (25) Article 25 of which is entitled ‘Penalties’ and provides, inter alia, that penalties applicable to infringements of the national provisions adopted pursuant to that directive, which may comprise the payment of compensation to the victim, are to be ‘effective, proportionate and dissuasive’. The Court held that national measures providing for the payment of punitive damages to a person who has suffered discrimination on grounds of sex satisfied that test and were accordingly proportionate. (26)
46. I can draw no useful guidance from the judgment in question. The provision which it refers to concerns, inter alia, the payment of sums by way of penalties and not as damages. In the former context, it is natural that the calculation concerned may bear no necessary relation to the harm suffered by the victim. The same cannot be said of an award of damages which, by virtue of Article 13(1) of Directive 2004/48, must be appropriate to the actual prejudice suffered by the rightholder. In that context, the test of proportionality presupposes, in my view, that there be some relationship between the loss suffered and the amount claimed. I suggest that an award of punitive damages will not, by definition, satisfy that test.
47. Applying the above observations to the present case, I am therefore of the opinion, first, that a national rule, such as Article 79(1) of the law on copyright, which provides for payment to a rightholder of a predetermined sum which bears no necessary relation to the loss suffered by him cannot meet the requirements of Directive 2004/48. However, it does not seem to me to follow from that that an equivalent rule, according to which a rightholder may claim a sum which is no higher than twice (or even, in appropriate circumstances, three times) the amount of the fee which would have been due if the rightholder had given permission for the work to be used should necessarily also be found to be contrary to the scheme laid down by the directive. What the rightholder must establish is that the loss suffered and the amount claimed are not out of proportion to one another. To that degree, therefore, he must establish a causal link between the two. By the nature of the remedy provided for in subparagraph (b) of Article 13(1), it is not necessary for the rightholder to establish that relationship with mathematical certainty, since the whole point underlying that provision is to cater for circumstances in which it may be difficult or impossible to do so. But it is in my view necessary that he demonstrate some relationship and that he should not be given an entitlement to damages that are in no way commensurate to his actual loss.
48. In summary, it is my conclusion as regards the application of Articles 3 and 13(1)(b) of Directive 2004/48 to the calculation of damages in the case in the main proceedings, first, that the onus will be on the rightholder to establish that the circumstances of the case in question justify the making of an award of damages under the national equivalent of subparagraph (b) of Article 13(1) of the directive and that it is accordingly ‘appropriate’ to do so and, second, that they preclude a national rule whereunder a rightholder may claim a fixed sum of two or three times the amount of the fee which would have been payable if the rightholder had given permission for the work to be used. They do not, however, render unlawful a national rule under which the rightholder may claim a sum which is limited to two or three times that amount provided that the rightholder can establish that the sum claimed is proportionate to the damage suffered. The onus is on the rightholder to demonstrate that this is the case.
The applicability of Article 2(1) of Directive 2004/48 to the case in the main proceedings
49. For the reasons indicated in point 24 above, it is necessary to consider the applicability of Article 2(1) of Directive 2004/48 to the case in the main proceedings. It provides for the measures, procedures and remedies provided for by the directive to apply to any infringement of intellectual property rights under EU or national law. Such application is, however, ‘without prejudice to the means which are or may be provided for in [EU] or national legislation, in so far as those means may be more favourable to rightholders’. (27)
50. At EU level, the provision thus makes it clear that Directive 2004/48 is to have no impact on remedies for the infringement of intellectual property rights laid down by other EU legislation which go beyond those specified in the directive itself. (28) An obvious example of such a remedy would be the entitlement given to a trade mark holder to apply for a declaration of invalidity of an EU trade mark under what are now Articles 52 and 53 of Regulation No 207/2009 (29) where he considers that the effect of the registration of another mark is to infringe his rights.
51. As regards the means in place at national level, some guidance as to the EU legislature’s intention in enacting the provision can be found in the Proposal of the European Parliament and the Council for a directive on measures and procedures to ensure the enforcement of intellectual property rights, (30) on which Directive 2004/48 was based. The Explanatory Memorandum to that Proposal states as regards Article 2 of the draft directive, which was the equivalent of Article 2 of the directive as adopted, that: ‘… The Member States may lay down that the competent authorities may order other measures adapted to the circumstances such as to put an end to the infringement of the intellectual property right or to prevent further infringements, as well as any other appropriate measures. …’ (31)
52. Article 2(1) thus leaves Member States free to adopt provisions at national level which provide additional remedies in favour of a rightholder. They may therefore adopt rules in terms of which a right may be deemed forfeited, for example in the event of a serious and continuing infringement, or impose restrictions on the exercise of such a right above and beyond those laid down by the directive where that right infringes an intellectual property right held by another party.
53. But I do not see that Article 2(1) can serve as a basis for an argument which states that Directive 2004/48 introduces only minimal harmonisation in those areas which it does cover. (32) First, such a proposition runs counter to the wording of that provision, which refers not to ‘measures’ which are or may be provided for in EU or national legislation but to ‘means’. Second, it fails to reflect the general scheme of the directive, which, as indicated in recital 8, is to ensure that intellectual property rights enjoy an equivalent level of protection throughout the European Union. In so far as the directive lays down rules applying to a particular form of remedy, as it does in the case of damages, the rules should in my view be the same throughout the European Union.
54. I therefore conclude that Article 2(1) of Directive 2004/48 does not authorise a Member State to provide a rightholder whose intellectual property rights have been infringed with an entitlement to punitive damages.
Conclusion
55. I therefore suggest that the Court should answer the questions referred by the Sąd Najwyższy (Supreme Court, Poland) as follows:
(1) Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights should be interpreted as precluding a national rule which provides for the automatic payment of a predetermined sum to a rightholder whose rights have been infringed on the application of the rightholder and without any intervention on the part of the competent national judicial authorities in setting the amount of the damages in question.
(2) Articles 3 and 13(1)(b) of Directive 2004/48 should be interpreted as meaning, first, that the onus will be on the rightholder to establish that the circumstances of the case in question justify the making of an award of damages under the national equivalent of subparagraph (b) of Article 13(1) of the directive and that it is accordingly ‘appropriate’ to do so and, second, that they preclude a national rule whereunder a rightholder may claim a fixed sum of two or three times the amount of the fee which would have been payable if the rightholder had given permission for the work to be used. They do not, however, render unlawful a national rule under which the rightholder may claim a sum which is limited to two or three times that amount provided that the rightholder can establish that the sum claimed is proportionate to the damage suffered. The onus is on the rightholder to demonstrate that this is the case.
(3) Article 2(1) of Directive 2004/48 does not authorise a Member State to provide a rightholder whose intellectual property rights have been infringed with an entitlement to punitive damages.