Interim payment on account of damages (provision)

An interim payment on account of damages is the sum that a court awards to the holder of an intellectual property right, in advance of final compensation, where the existence of the infringement and of the obligation to compensate is not seriously disputable. Under the general law, it rests on Article 835 of the Code of Civil Procedure, which allows the interim relief judge to award an interim payment to the creditor in that case, and, under the special rules, on the provisions governing provisional measures for each title, such as Article L. 615-3 of the French Intellectual Property Code for patents, Article L. 716-4-6 IPC for trade marks and Article L. 521-6 IPC for designs.

Conditions for an award

Within the framework of the provisional measures specific to intellectual property, the court may award an interim payment to the claimant where the existence of its loss is not seriously disputable, a condition that overlaps with the likelihood of infringement required for a provisional injunction. The claimant must therefore establish, on the basis of reasonably available evidence, that infringement is likely to be occurring or imminent, and quantify with sufficient documentation the portion of the loss that admits of no dispute. A serious challenge to the validity of the title or to the reality of the infringement precludes an interim payment, without depriving the claimant of its action on the merits.

Competent judge and timing of the request

An interim payment may be sought from the president of the judicial court sitting in summary proceedings, together with a provisional injunction, or from the pre-trial judge once proceedings on the merits have been commenced, that judge having power to award an interim payment where the obligation is not seriously disputable. The court ruling on the merits may also award an interim payment where it finds infringement but orders an expert report or disclosure of documents to determine the final amount of the loss, which is frequent in patent matters. The court may make enforcement of the measure conditional on the claimant providing security.

Fate of the interim payment

The interim payment is set off against the damages finally awarded. If the action on the merits fails or the title is invalidated, the claimant must repay the sums received, with interest, and may be ordered to compensate the loss caused by enforcement. An interim payment awarded in summary proceedings is not res judicata as to the merits, and the amount set does not bind the court hearing the merits. Comparable mechanisms exist before the Unified Patent Court, with similar safeguards.

Key points

An interim payment gives the right holder an advance on compensation where the infringement and the loss are not seriously disputable. It is obtained in summary proceedings, from the pre-trial judge or in the judgment ordering an expert report. Document precisely the undisputable portion of the loss, anticipate the obligation to repay if the action on the merits fails and check whether security will be required.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats litigates patent disputes before the Paris Judicial Court, the Paris Court of Appeal and the Unified Patent Court. When the question arises in a real case, the right moment is almost always before proceedings are issued.

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