Patent Licensing in the Shadow of the IPR Enforcement Directive.

Modifications of the IPR Enforcement Directive are currently discussed that could lead to

changes to the way injunctive relief is granted in the European Union. Against this background we recommend that the existing rationale of Article 11 of the IPRED, regulating the usage of injunctive relief, should be reinforced, so to constitute an actual obligation for E.U. Member States to grant discretion to their magistrates. A regime, whereby injunctive relief is granted nearly automatically, leads to licensing negotiations that depend primarily on the financial distress of either party to the case, and thus the nuisance of the dispute. This inconsistency is not pronounced in damage awards as damages can be linked to the value of the patent. We hence recommend to add teeth to Article 11 of the IPRED and reinforce the discretionary usage of injunctive relief. In addition, the rather low damage awards in Europe should be reviewed and Article 12 dealing with pecuniary compensations should be reinforced. Furthermore, IP valuation guidelines should be further promoted as a way to assess the economic value of damage awards. In doing so, the regulator should aspire for fair and equitable legal remedies in IP infringement cases. The preliminary importance of such revisions is emphasized by the fact, that the IPRED constitutes the baseline of the Agreement on the Unified Patent Court (UPCA) and hence bears the potential to substantially transform the European patent landscape.