Injunctions and remedies in the Czech Republic

13 July 2012

Jiří Malý

In Case C 235/09 DHL Express France SAS v Chronopost SA, the Court of Justice of the European Union ruled that an injunction based on a Community trade mark granted in one member state may have effect in the whole European Union. Legislation on injunctions and more specifically on their enforcement applicable in individual member states is therefore of paramount importance. This note describes basic rules governing injunctions and their enforcement in the Czech Republic.

Measures which are available in trade mark proceedings to a large extent derive from Directive 2004/48/EC on the enforcement of intellectual property rights and include the option of recall of the infringing goods from the channels of trade, destruction of the goods, award of damages (or a lump sum in the amount of at least twice the usual licence fee), publication of the decision and the right to information, discussed later in this text.

Preliminary injunctions

Preliminary injunctions under Czech law typically include an order to restrain the infringement, ie to refrain from marketing of the infringing goods. The basic condition for the grant of a preliminary injunction is the necessity temporarily to adjust the relationship between the parties balanced against the risk that the decision is not later upheld. The Czech Republic has generally implemented the option enshrined in the Enforcement Directive to subject the grant of a preliminary injunction to payment of a security. The security which is required for all preliminary injunctions amounts to CZK 10,000 (approximately EUR 400) in civil disputes and CZK 50,000 (approximately EUR 2,000) in commercial disputes (which also include trade mark litigation regardless of the parties involved).

Recently, courts have been given the opportunity to request the payment of an additional security if there is a risk that the preliminary injunction could cause substantial damage to the alleged infringer. This may often be the case in trade mark infringement disputes, where a party is ordered to refrain from marketing its goods. Although courts can increase the security without a specific request, typically it is done upon the application of the alleged infringer. The applicable legislation does not limit the amount of the additional security, however, in practice courts used CZK 1,000,000 (approximately EUR 40,000) as the maximum amount, equivalent to the maximum court fee, and only in rare circumstances. Now, as the upper limit of court fees has doubled to CZK 2,000,000 (approximately EUR 80,000) and has been removed altogether in some cases, it can be expected also courts might ask the applicant for higher security if there is a risk of particularly high damage.

If the goods have been put on the market already, Czech courts normally do not order their recall from the trade as a provisional measure (as opposed to following the decision on the merits of the case). There have been some exceptions to this practice when courts took into account the seasonal nature of the goods or the fact that their producer has been informed about their infringing character. In a situation where the goods have been already put on the market, a better approach may be to apply to the customs authorities for the seizure of the goods, rather than to seek a preliminary injunction at a court.

It is also important to note that courts do not have to give reasons for the grant of a preliminary injunction (but they do if they reject the motion). As a consequence, courts are often willing in practice to grant preliminary injunctions. Although this may be welcomed by the rights holders, they should bear in mind the risk of liability for damages caused by the injunction if later found to be wrongly granted, and not rely solely on the discretion of the court in this regard.

Right to information

Under Czech Law the right to information (such as about the manufacturer, distributor or other holder of the infringing goods or about the quantities and price of the infringing goods) stems largely from the Enforcement Directive. The most noticeable difference is that the wording of the Czech Act only mentions the possibility of requiring the information from a third party, not the infringer himself. Nonetheless, Czech courts interpret the provision in line with the Directive and allow the information to be requested from the alleged infringer as well. The information must be requested from a person who is or has been in the possession of the goods. Therefore, in a situation where the goods have been seized under Council Regulation No 1383/2003 and are placed in a bonded warehouse, the information may be requested only from the consigner of the goods, not the consignee, which will often not be practicable. Recently, Czech courts have recognized that it is also possible to request information separately from the proceedings on the infringement and if the information is not provided voluntarily, the owner of the right may bring a separate action solely with respect to the information.

Enforcement of measures

As to the question of enforcement of injunctions, which would be especially important if an injunction granted in one member state is infringed in the Czech Republic, Czech law allows the imposition on the infringer of a recurring penalty payment. The first such penalty can amount up to CZK 100,000 (approximately EUR 4,000). If the infringer does not comply, there is no limit on subsequent penalties but they must be reasonable (taking into account the nature of the injunction as well as the particular infringer). Every penalty has to be specifically requested by the owner of the right. It is therefore the responsibility of the right holder to monitor whether the granted injunction has been complied with and if not, to request the court to impose the penalty. The penalty however cannot be used to cover possible damages of the right holder, but is paid to the government. Not complying with a court-ordered injunction can lead to criminal liability, which can also be imposed on legal entities as of 2012.

 

See also:

Authors

Jiri Maly

Jiří Malý

Associate, Prague
Czech Republic & Slovakia

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