Intellectual property: Changes in interim injunction and enforcement proceedings
Soon, another major amendment to the Polish Civil Procedure Code will enter into force, particularly affecting holders of intellectual property rights. The amendment will change the existing rules on interim injunction proceedings, which are typically used in intellectual property cases prior to filing a statement of claim. These changes will come into effect on 1 July 2023. Significant changes have also been made in the provisions on judicial enforcement, already in force since 15 April 2023.
Infringer will find out about planned interim injunction
Currently, as a rule, at the first instance interim injunction proceedings are conducted ex parte, i.e. without the defendant’s participation. The purpose is to efficiently issue an order on the basis of the claimant’s assertions and to “surprise” the opponent, who if aware of the application might try to frustrate enforcement of the interim injunction. As of 1 July 2023, this rule will change.
Pursuant to the newly added Art. 755 §22 of the Civil Procedure Code, in general the court will be able to issue an interim injunction in intellectual property cases only after hearing the respondent, except for situations where:
- It is necessary to make an immediate ruling on the applicant’s claim
- The interim injunction is fully enforceable by the bailiff
- In the interim injunction, the right holder seeks to establish receivership of a company, an agricultural enterprise, or an establishment constituting part of a commercial enterprise or agricultural enterprise.
Pursuant to the memorandum of the bill, this change is intended to combat abuse of interim injunctions and safeguard the interests of businesses which due to unwarranted interim injunctions may suffer significant losses or even be excluded from the market.
Thus in many cases the new provisions will allow an alleged infringer to respond to the claims asserted in the application for an interim injunction before the court issues its order.
Legal interest in obtaining interim injunction only for 6 months
Another important change in interim proceedings in intellectual property cases is the introduction of a time limit after which it will not be possible to successfully apply for an interim injunction. After the amendment comes into force, the court will dismiss an application for an interim injunction if the right holder files it more than 6 months after it became aware of the infringement of its exclusive rights.
When examining an application, the court will assess the likelihood of annulment of the right
After the new provisions enter into force, the court will be obliged to take into account the grounds for annulment of an intellectual property right in other pending proceedings before granting an interim injunction. Examination of the risk of annulment of exclusive rights underlying the application is to be based on information received from the parties to the proceedings or known to the court in its own capacity.
Therefore, in intellectual property cases, the parliament has also introduced a new requirement for an application for an interim injunction, i.e. an obligation to inform the court of pending or completed proceedings for annulment of exclusive rights or declare that the applicant is unaware of such proceedings (Art. 736 §5 of the Civil Procedure Code). Failure to comply with this requirement may be treated as a formal deficiency preventing the court from taking up the application.
According to the drafters, this rule is intended to reduce cases in which the court grants an interim injunction based on intellectual property rights for which protection has been granted but are nonetheless “questionable.”
Vertical appeals will return
Another change that will apply to all interim injunction proceedings, including those in intellectual property cases, is a return to the rule in force before 2019 of “vertical” interlocutory appeals against first-instance court orders on interim injunctions. Starting 7 November 2019, interlocutory appeals from such orders have been heard by the same court that issued the order, but in a different panel. With entry into force of the amended Art. 741 of the Civil Procedure Code, such appeals will be heard by the court with jurisdiction to consider the case in the second instance (in the case of intellectual property cases, exclusively the courts of appeal in Warsaw and Poznań). In turn, an interlocutory appeal against an interim injunction order issued for the first time by a court of second instance will be heard by a different panel of the same court.
All of these amendments to interim injunction proceedings will enter into force on 1 July 2023.
Amendments on enforcement of substitute performance
The enforcement provisions of the Civil Procedure Code have also been amended. To some extent, these changes may impact enforcement of intellectual property rulings.
The parliament has decided to amend the provisions on enforcement of substitute performance, i.e. where personal performance by the obligor is not required. In intellectual property cases, an example might be publication in the press of a statement with the wording specified in the judgment.
Previously, when demanding execution of a ruling via substitute performance, if the creditor was not authorised to execute it in the operative part of the judgment, the creditor could demand that the court summon the debtor to perform the act, and then authorise the creditor to execute the ruling on behalf of the debtor and award the creditor a sum of money needed for this purpose. But in its previous wording, Art. 1049 of the Civil Procedure Code did not regulate all issues in detail, which raised numerous doubts in practice.
Now that the amendment has entered into force, the court will examine whether the debtor has performed the act called for before authorising the creditor to make substitute performance. Once it is determined that the debtor has not complied with the ruling, the creditor will be authorised to perform the act, but unlike before, will be given a deadline within which to perform in place of the debtor. The deadline can be extended at the creditor’s request.
In the new wording, Art. 1049 expressly states that the debtor can perform the ordered act itself at any time before commencement of substitute performance. If the debtor fulfils its obligation after the creditor has already proceeded to execute substitute performance, the creditor can obtain reimbursement of the costs it has incurred to date.
However, unlike before, the costs necessary to fulfil the debtor’s obligation can be awarded to the creditor only after the action has been performed. Expenses incurred by the creditor will have to be documented and reasonable for implementation of the ruling, and a limit on the expenses can be set by the court at the request of either party, taking into account average market prices.
Additionally, if the creditor does not notify the court that it has made substitute performance within 6 months after the deadline set for performance, the court will discontinue the enforcement proceedings. Then the creditor can recover its expenses only under the general rules.
Enforcement of publication obligation in case of defamation
The provisions on execution of a judgment on defamation have also been amended. Pursuant to Art. 47989 §2 of the Civil Procedure Code, the intellectual property courts will have exclusive jurisdiction to rule on protection of personal interests relating to the use of personal characteristics to identify, advertise or promote a business, goods or services, as well as protection of personal interests in connection with scientific or inventive activity. To some extent, this means that the amendment will have an impact on enforcement of judgments in intellectual property cases.
Art. 1050 §4 of the Civil Procedure Code introduces new rules for enforcement of the obligation to make a statement of appropriate content and form, applying exclusively in cases involving defamation. In such cases, if the debtor evades the obligation to make a statement with the content and form specified in the ruling, despite being issued a deadline to make the statement under pain of a fine, the court will order publication of an announcement with the required content and form in Monitor Sądowy i Gospodarczy at the debtor’s expense and impose a fine of up to PLN 15,000 on the debtor. Publication in MSiG will cause the judgment to be deemed executed in the part relating to making the relevant statement. Thus the creditor could no longer seek enforcement of the ruling in this regard.
Both changes to enforcement proceedings entered into force on 15 April 2023. The new provisions will apply to pending but not yet completed proceedings. If the court already awarded a set amount to a creditor for the purpose of making a substitute performance, but the creditor did not perform the action by the effective date of the amendment, the debtor may apply to the court to rescind the order to the extent that the amount awarded to the creditor has not yet been enforced, and set a deadline for substitute performance under the amended provisions.
Ewa Nagy, attorney-at-law, Łukasz Wasilenko, Intellectual Property practice, Wardyński & Partners
