ruling on offers for sale over the internet means for patent owners
What happened in the Nouvag case?
On 19 February 2016, the Belgian Supreme Court issued a judgement in a dispute between the holder of a European patent for a liposuction device and Swiss-based medical and dental equipment manufacturer Nouvag. The court confirmed that Nouvag had not complied with an injunction prohibiting it from offering, on Belgian territory, a liposuction device that was found to infringe the patent in an earlier judgement.
The court confirmed that Nouvag had violated the injunction, essentially because the product was presented on its website and the website mentioned that Nouvag’s products are available throughout Europe. Nouvag was ordered to pay €915,000 in penalties for 183 days of non-compliance with the injunction, at €5,000 per day.
Did Nouvag take a risk by advertising the goods for sale despite the prior ruling?
It is unclear whether Nouvag actually meant to advertise the infringing device for sales in Belgium. The company does not appear to do direct sales. The website included a description of the product and details of a Belgian distributor for all of its products, among distributors for other jurisdictions. The court deduced from these circumstances that Nouvag was ready to supply the product in Belgium. It found that this was ‘an offer’ of the infringing device on Belgian territory and, therefore, that the presentation of the products on Nouvag’s website was a violation of the court order.
I would not go as far as to say that Nouvag purposely took a risk. The company was probably taken by surprise by the claim for penalties by the patentee. In any event, the judgement illustrates that once an injunction is issued in Belgium, the infringer must tread carefully and take due care to comply.
How careful must patent owners be, in light of this clarification from the Belgian Supreme Court, when offering goods for sale that are determined by the court to be infringing?
The judgement confirms that “offering” as an act of patent infringement is, in Belgium at least, broader than offers for sale. To companies selling their products all across Europe through a website, it makes sense to include a statement that the product is not available in Belgium if it is the subject of an injunction in Belgium.
How does the decision affect European patent owners and patentees seeking to litigate in Europe?
An interesting aspect of the judgement was the Supreme Court’s effect-based approach to infringement by offering a product. The court held that it was not relevant that the website displaying the offer was not hosted in Belgium, as long as the offer produced its effects in Belgium, ie, that it reached its audience here.
While it is by no means a given that the court had this in mind, this aspect of the decision could be applied by analogy to cloud-based products and applications, where the servers are not based in Belgium.
Note that the appeals court held that to comply with the injunction Nouvag could have avoided penalty payments by clarifying on its website that the product is not available in Belgium. In hindsight, not including such a statement has become a costly affair, with Nouvag now having to pay nearly €1 million in penalty fees.
Is the penalty fee amount per-day a typical feature of violating an injunction in Belgium?
Yes. To ensure compliance, an injunction is usually imposed at a penalty fee per day or per product sold in violation of the court order. In the past years, courts often set a maximum cap on the amount of penalty payments to avoid excess.