Mark Twain famously said "Never put off till tomorrow what may be done day after tomorrow just as well." Although procrastination usually does not have serious consequences, careful consideration is needed when enforcing IP rights. In its recent decision in case C‑186/18, the Court of Justice of the European Union ("CJEU") concluded that an unjustified delay in enforcing IP rights may result in the loss of a large part of the claim due to time-limitation.
Main facts of the dispute
After a proceeding lasting more than 10 years, a Community plant variety right was granted in respect of a special variety of mandarin tree. Following the successful application, a company entrusted with the management of the new plant variety right sent a cease-and-desist letter to a Spanish farming company that cultivated the protected variety of mandarin tree without a licence. Almost four years later, another cease-and-desist letter was sent, and as this too failed the rightsholder initiated court proceedings against the farming company in Spain.
The rightsholder claimed that the infringement was continuous, since the trees in dispute were still cultivated at the time the lawsuit was initiated. Pursuant to Spanish law, in the case of an ongoing infringement, the prescription period is extended for as long as the infringement continues.
However, the respective EU regulation on Community plant variety rights sets out that the prescription period starts to run after the Community plant variety right has finally been granted, from the time the holder learns about the act and the identity of the infringer, and it does not set out exceptions for continuous infringements.
The question arose: can EU law be interpreted in line with national law in a way that allows longer prescription periods in case of continuous infringements?
Conclusion of the CJEU
In short, the CJEU's answer is no. The time for the three-year prescription period to start to run in case of an infringement of Community plant variety rights is first determined by an objective event, namely when the Community plant variety right has finally been granted, and second, by a subjective event, namely when the holder of that right discovers the infringement and the party liable for it.
According to the CJEU, even infringers are entitled to the right of legal certainty. If rightsholders could bring an enforcement action any time with reference to continuous infringement, even if the statutory three-year prescription period lapsed, it would give rise to constant uncertainty for the infringer.
The CJEU also concluded that there is no such thing as continuous infringement of Community plant variety rights. Each act of infringement must be considered individually, irrespective of whether it is repeated, ongoing or part of a set of acts.
Therefore, claims for acts of infringement that happened three years after the initiation of the statutory limitation period are time barred.
This case should motivate all rightsholders not to wait too long to enforce Community plant variety rights.
However, the CJEU's arguments against the existence of a continuous infringement, where the prescription period starts to run separately from each act of infringement, does not only apply to Community plant variety rights. In Hungary, for instance, recent court practice in copyright law reached the same conclusion: when the legislation sets out the individual acts of infringement, each act must be taken into account individually and repeated or even ongoing acts cannot result in the extension of the statutory prescription period.
It is therefore advisable not to delay enforcement actions regardless of which IP right is in question.
By Mark Kovacs, Attorney at Law, Schoenherr