Abuse of Rights in Intellectual Property.

Contextualisation: Over-enforcement practices and the search for a solution. Intellectual property (IP) laws were designed to provide an incentive for creative, inventive, and entrepreneurial efforts by offering exclusive rights to individuals. In order to reach the objectives of these substantive laws and to protect the exclusive rights granted, effective means of enforcement of intellectual property rights (IPRs) are of paramount importance. The European legislator has, therefore, adopted the European Directive on the enforcement of IPRs (IPRED). In recent years, commentators have, nonetheless, argued that the current system of adjudication allows for over-enforcement practices by right holders, and by certain patent holders in particular. The rise of new actors on the enforcement scene such as Non-Practicing Entities (NPEs), also called patent trolls or Patent Assertion Entities (PAEs), has been at the heart of many debates. Moreover, it has also been observed that, to provide right holders with particularly strong enforcement tools (such as those envisaged under IPRED) might be detrimental to defendants if the latter do not benefit from sensible measures to counter over-enforcement practices. Similar concerns have been raised vis-à-vis the rules envisaged for the Unitary Patent (UP) regime and the Unified Patent Court (UPC). 

Against this backdrop, this thesis aims at exploring and elaborating a correction mechanism (i.e. the principle of the prohibition of abuse of rights), in the framework of patent litigation in Europe, that would be capable of reducing or mitigating the negative effects resulting from the ways in which certain patent holders (such as NPEs, patent trolls or PAEs) exercise their rights and prerogatives, while providing defendants with a sensible measure to counter over-enforcement practices. 

Research questions: The main research question addressed in this research is formulated as follows: How to develop and interpret the principle of the prohibition of abuse of rights, as a workable correction mechanism, in order to curb over-enforcement practices by right holders in the system of adjudication of patents in Europe?

To provide a comprehensive response to the main research question, four sub-questions are explored: (1) What are the fundamental characteristics of the principle of abuse in national and European legal orders and what is its relationship with the rules governing the enforcement of IPRs? (2) How have national courts in Europe responded to defences grounded on a claim of abuse or over-enforcement of rights by patent holders? (3) How to reconsider the principle of abuse in light of the theoretical findings of the first sub-question and the practical findings of the second sub-question in order to provide a workable correction mechanism against over-enforcement practices by right holders? (4) What may be the impact of such reconsideration of the principle of abuse on the activities of PAEs since these have been argued to constitute the perfect example of over-enforcement practices by right holders witnessed in recent years? The answer to each of these sub-questions is to be found in each of the four parts forming the thesis. 

Main findings: By engaging in a theoretical analysis (Part I) and an in-depth multi-national case law analysis (Part II) of the role, scope, and actual effects of the principle in the framework of patent litigation, the first two parts of the thesis revealed some of the potential of the principle of abuse. First, it was observed that, the principle of abuse has strong underpinning in the texts forming the IP enforcement framework (at the international, European and UP levels).Second, the multi-national case law analysis revealed that a solid theory, which already has the intrinsic potential to pertain to many situations falling within the scope of what is considered an over-enforcement practice in literature, is already available to defendants and courts. Finally, it was concluded that, despite variances in the terminology used, the flexibility in interpretation of the principle, its legal underpinnings, or regarding the theories in which the principle may be grounded, the overarching principle of the prohibition of abuse of rights holds significant characteristics to function as an internal correction mechanism to mitigate the negative effects of over-enforcement practices. In particular, the interpretative and corrective functions of the principle, have been identified as fundamental characteristics for its effectiveness.

Despite this positive finding, the case law analysis also revealed that the main defect of the principle has been to be neglected or ignored due to its seemingly vagueness and rigidity. In particular, the relationship between the principle of abuse and the subjective intentions of right holders, has been identified as detrimental to its effectiveness. 

By removing certain prejudices and by studying its main features, the real potential of the principle revealed itself. Six categories of abuse sensu lato (i.e. illegal exercise, disproportionate exercise, contradictory behaviour, right-function, abuse sensu stricto, and fraudulent exercise) and their remedies (i.e. refusal to grant, tailoring, withdrawal, specific court orders, adjustment of legal costs and fees, and damages) have been elaborated and operationalised in order to provide a clearer reference framework for assessing whether right holders abusively exercise the rights and prerogatives at their disposal. These categories and remedies are not totally new. They are entrenched in the general conceptions of the principle at the national and European levels. Moreover, they also benefit from a strong foundation in the texts governing the IP enforcement framework (in particular Art. 3(2) IPRED) and have already been adopted by some national courts, although not in a uniform manner.

By providing a more flexible interpretation of the principle of the prohibition of abuse of rights within the framework of patent litigation, in particular by distantiating the principle from subjective considerations and the principle of good faith, it was concluded that such interpretation could serve in filling the gaps of a seemingly cracked shield of currently available correction mechanisms. Overall, and more fundamentally, this reconsideration could serve to re-equilibrate the initial balance envisaged in the rules governing the national and European IP enforcement frameworks, and which rely on the principles of effectiveness, dissuasiveness and proportionality.

In order to test the main findings of this research vis-à-vis activities which have been argued to constitute the perfect example of over-enforcement practices by right holders witnessed in recent years, the reference framework elaborated in Part III has been operated in the specific context of litigation strategies adopted by PAEs (Part IV). Three key takeaways have been reported. First, the internalisation of the correction mechanism presents some advantages when compared to the line of defence traditionally relied upon in patent litigation (i.e. formal and/or external remedies). Second, by allowing for more objectivation in the assessment of the exercise of prerogatives by PAEs, the flexible approach provides more leeway for judges to consider the nature and business model of right holders. Third, this objectivation also allows to overcome the problem of quasi-automatism in the grant of injunctive relief.