In the context of a patent infringement, one of the most relevant objectives of the patent owner in the enforcement arena is the eventual damages caused by the infringer. In this context, in Chile the industry property law sets forth that it is possible to file a civil action, before a civil judge, seeking the following goals:
(1) The cessation of the acts infringing the protected right;
(2) Compensation for damages;
(3) Adoption of the measures necessary to avoid the continuation of the offense;
(4) The publication of the decision, at the expense of the party found guilty, by means of inserts in a newspaper to be chosen by the plaintiff. This measure shall apply where the decision expressly so determines.
In this sense, damages are only available in case there is a patent infringement brought before a Civil court. Despite the fact that our law also includes a criminal infringement, in this case the punishment is a fine that can reach US 80,000, but the plaintiff are not allowed to bring a civil action before a criminal judge, it is necessary to file a separate action before a civil judge.
Having said that, damages has been historically calculated according to the general rules of civil liability (e.g., direct, moral, and lost profit damages).
This is the first option that the law offers to patent owners, and it implies the general application of our civil code.
In this sense, one of the major disadvantages faced by persons and companies seeking a patent infringement compensation in our system is the requirement of proof of the damage caused by the violation of the monopoly position over the patent granted, especially when it comes to lost profits.
In view of this situation, our industrial property law was amended in 2005 by enacting Law 19.996. This new statute regulates among other issues the opportunity of specific precautionary measures in civil matters and an alternative way to determinate damages. This modification was also conducted considering the obligations that Chile adopted in the Marrakech Agreement and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
This new statute offers alternatives for compensations in article 108 of our industrial property law, with the following options:
a) Lost profits from the patent holder because of the infringement.
b) Profits earned by infringer as a result of the infringement; or
c) A license fee, taking into account the commercial value of the infringed right and other licenses previously granted by the patent holder.
This "three alternative system" has its origin in the German jurisprudential doctrine of 1895, known as the "Aristón case" (Dreifache Schadensberechnung), from where it was copied by practically all the legislations of trademarks and patents of the Roman-Germanic law tradition.
The main goal is to solve the evidence problems linked with lost profits. This is the most difficult damage to prove in court of the three basic concepts of compensation that can be deduced in our tort law. In this context, the idea is to facilitate or alleviate the rigidity that some judges show when it comes to probe damages in the patent system.
Letter a) does not solve this problem, because this first alternative insists in the concept of lost profits, with the problem already described in terms of evidence. In the context of a patent case or a public tender, it is very difficult to assess whether the potential client or public institution would have used the technology protected by a patent.
As to option b), it requires both proof of the benefit obtained by the infringer and the link between that benefit and the use of the patent. The legislator's intention is that the compensation sought should be a measure of the benefit directly obtained by the infringer through the unlawful and unlawful use of the industrial property right.
This alternative is also difficult to prove. In this sense, there are only a few decisions in which this option has been used, since it can only be granted as a compensation if it is demonstrated that in the productive or commercial process, in relation to the promotion of the product or service, just to name a few factors, there has been a benefit directly obtained by the infringer, all within the corresponding relation of causality. This is particularly complicated in the context of patents that protects methods or procedures.
Option c) seems to be the easiest legal avenue to follow, because a license fee is simpler to prove, except in some cases in which the commercial value of the product or system is not stablished yet, or there is a technology in which there isn´t prior license agreements.
In addition, letters b) and c) of article 108 are hypotheses of unjust enrichment and not of compensation for damages in the strict sense. They are, moreover, regulated in relation to the infringer. In these cases, the compensation is not related to the damage caused, but is based on the benefits or profits obtained from the unlawful use of another person's exclusive rights, regardless of whether the infringer was guilty or not.
Moreover, it is important to point out that there are no punitive damages in Chilean Patent Law.
In addition, in Chile damages tend to include interests and readjustments. No additional remedies are available against a deliberate or willful infringer.
On the other hand, attorneys' fees can be recovered when a defeated party did not have a justifiable reason to litigate, as determined by the court. The court will determine the costs and attorneys' fees and the parties will have three days to file their objections, otherwise these will be considered approved. Nevertheless, attorneys' fees established by Chilean courts are considerably lower than the fees that normally specialized patent and litigation attorney charges in this kind of cases.
In addition, costs can be recovered when a defeated party did not have a justifiable reason to litigate, as determined by the court. The court will determine the costs and the parties will have three days to file their objections, otherwise these will be considered approved.
As to the procedure, article 107 of the industrial property law states that these actions will follow the rules of a 'summary proceeding' stipulated in the Code of Civil Procedure that is submitted to substantially shorter terms than those of an ordinary proceeding. Nevertheless, the whole procedure at first instance can take around 24 months.
Finally, it is important to point out that in Chile there are only a few cases in which a judge has established damages in the context of a patent case. In addition to the difficulties already described in this paper, another reason is the lack of specialized courts with specific knowledge in these matters. Generally, it is complicated to explain a patent case to judges that decide in majority of the case collection and other general civil problems. This is an urgent modification in our industrial property enforcement system.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.