What Are Damages In The Chilean Patent Law?

One of the most important objectives of the patent owner in the enforcement field in the case of a patent infringement is the eventual damages incurred by the infringer. In this regard, Chile’s industry property legislation stipulates that a civil action can be filed before a civil judge to accomplish the following objectives:

• The cessation of the acts infringing the protected right;
• Compensation for damages;
• Adoption of the measures necessary to avoid the continuation of the offense
• 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.

Damages In The Chilean Patent System

Damages are only attainable in this scenario if a patent infringement lawsuit is filed in a civil court. Despite the fact that our statute contains a criminal violation, the penalty in this case is a fine of up to US 80,000, but the plaintiff is not entitled to launch a civil action before a criminal judge; instead, a separate civil action must be filed.

However, damages have always been assessed using the general rules of civil liability (e.g., direct, moral, and lost profit damages).

This is the first option available to patent owners, and it entails the application of our civil code in its entirety.

In this regard, one of the greatest obstacles encountered by individuals and businesses seeking patent infringement compensation in our system is the obligation of proving the harm caused by the breach of the granted patent’s monopoly position, particularly when it comes to lost earnings.

In consideration of this, Law 19.996 was enacted in 2005 to reform our industrial property law. This new law governs, among other things, the ability to take certain preventative measures in civil cases and an alternate method of calculating damages. This change was made in light of Chile’s commitments under the Marrakech Agreement and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

This new statute provides compensation possibilities under our industrial property law’s article 108, 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 approach” is based on a German jurisprudential concept known as the “Aristón case” (Dreifache Schadensberechnung) from 1895, from which it was replicated by almost all Roman-Germanic trademark and patent legislation.

The primary purpose is to resolve the evidential issues around lost earnings. Of the three primary ideas of compensation that may be inferred in our tort law, this is the most difficult to show in court. In this case, the goal is to reduce or eliminate the rigidity that certain courts exhibit when it comes to investigating patent damages.

Furthermore, it is important to note that the Chilean Patent Law does not provide for punitive damages.

Moreover, interests and readjustments are frequently included in Chilean damages. In the case of an intentional or willful infringement, there are no more remedies available.

Attorneys’ costs, on the other hand, can be recovered where the court determines that a defeated party has no valid motive to sue. The expenses and lawyers’ fees will be determined by the court, and the parties will have three days to raise objections before they are deemed accepted. Nonetheless, the costs set by Chilean courts are far cheaper than what a qualified patent and litigation attorney would charge in this type of case.

In addition, costs might be recovered where the court determines that a defeated party has no valid motive to litigate. The costs will be determined by the court, and the parties will have three days to object before they are considered approved.

Finally, it’s important to note that there are just a few examples in Chile where a court has determined damages in the context of a patent lawsuit. Another issue is the lack of specialized courts with specialist competence in these subjects, in addition to the problems already analyzed in this article. In general, explaining a patent case to judges who decide on the majority of case collections and other basic civil issues is difficult.