Monday, 5 September 2011

Fine for grossly negligent (or worse) breach of cease-and-desist order

Here's a bit of delayed-action  news. According to a recent email from the PR folk at Nichia, an order was made last January by the District Court of Düsseldorf, Germany, that The Republic Group Handelsvertretung GmbH (“TRG”) stop offering for sale, placing on the market or using, or importing or possessing for any of those purposes in Germany the white LED products covered by Nichia’s YAG patent EP 936 682 (DE 697 02 929)It appears that, while more traditional forms of trading in those products ceased, TRG continued to offer an infringing product (Harvatek HT-U158TW) on its website even after the judgment. 

It seems that there was a happy ending, though -- for Nichia. On 25 July the District Court Düsseldorf made a further order that TRG to pay a fine of EUR 5,000. According to the decision, the court concluded that, even if it had not done so intentionally, TRG caused the breach of its earlier order at least by gross negligence.  This could not be regarded as a minor breach or a “less severe case”, and it could not be ruled out that there would be further breaches in the future. 

PatLit was wondering whether the infliction of a fine for a negligent breach of a cease and desist order might be expected in other countries than Germany, and what sort of scale of fine is inflicted.  It is unlikely that there will be any norm as between national courts, this blogger thinks.

1 comment:

Michael Thesen said...

A minor correction on this:

According to the Nichia press release , there was no court order to cease-and-desist but rather an out-of-court settlement including a confession statement.

It is very common that such an undertaking to cease and desist contains an entitlement to a contractual fine. 5000 EUR is a very common amount for this type of fine.

Since inappropriate amounts for the fine lead to the nullity of the entire claim, the undertakings often do not specifically fix the amount but rather say that the amount "shall be appropriately fixed by the disctrict court in the case of dispute".

It appears to me that this is what has happened here.