Fieldfisher Brussels obtains favourable ruling from ECJ regarding Belgian legislation on the recoverability of attorney fees in IP cases
A team from Fieldfisher's Brussels office obtained a favourable ruling from the European Court of Justice following a preliminary reference questioning Belgian legislation on the recoverability of attorney's fees.
The Antwerp Court of Appeal referred a preliminary question to the European Court of Justice in February 2015, after the Brussels IP team, led by partners Stijn Debaene and Hakim Haouideg, argued that Belgian legislation relating to the recoverability of attorney's fees is contradictory to the obligations set forth in the IP Enforcement Directive (2004/48/EC).
The team had previously represented Belgium-based telecommunications services company Telenet in litigation against US-based company United Video Properties regarding an alleged patent infringement. Telenet ultimately won the case, but incurred legal costs which exceeded the maximum amount of costs recoverable under Belgian law in IP related cases.
The relevant Belgian legislation - that is, the Belgian Act of 21 April 2007 and the Royal Decree of 26 October 2007 - only provides for the recovery of relatively low flat rates from the unsuccessful party as compensation for fees incurred.
Consequently, the team argued that this legislation contradicts Article 14 of the IP Enforcement Directive which holds that "Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this".
After a hearing in early January this year, Advocate-General M. Campos Sánchez-Bordona took the view that the cap on recoverable attorney fees provided by Belgian law is not incompatible with the Enforcement Directive, and sided with the Belgian State. The Advocate-General supported his view by stating that the Royal Decree laying down the maximum amounts was adopted "in the light of the favourable opinion of the Belgian professional (bar associations) and [that] therefore, in principle, it must be assumed that the maximum figures laid down therein are consonant with the average standards applicable in Belgium".
Last week, the European Court of Justice came to the opposite conclusion to the AG's opinion and confirmed that Belgian legislation does violate the Enforcement Directive, clarifying that "article 14 of that directive precludes national legislation providing flat-rates which, owing to the maximum amounts that it contains being too low, do not ensure that, at the very least, a significant and appropriate part of the reasonable costs incurred by the successful party are borne by the unsuccessful party".
As a result, the unsuccessful party in Belgian IP related cases can now be ordered to reimburse the successful party's attorney fees, if these fees surpass the maximum amount provided for and therefore do not cover a "significant and appropriate part of the reasonable costs incurred".
This landmark decision confirms the clear objective of Article 14 of the Enforcement Directive and will have a major impact on IP litigation in the EU: for example, patent trolls will now think twice before initiating infringement proceedings.
Other team members included Associates Hanne Snoeks and Matthias Machtelinckx and Assistant Pieter van de Ponseele.