The claimant who withdraws preliminary relief proceedings has to pay the defendants legal costs
(Former) claimant can claim procedural costs until 3 September 2016
Up to the present time, uncertainty remained in the Dutch IP-world about who has to reimburse the (full) legal costs if preliminary relief proceedings are withdrawn before the court session commences. I have conducted legal proceedings on this matter and have previously published about this subject. The Dutch Supreme Court has recently brought an end to this uncertainty: if the (former) claimant withdraws the case, he shall be burdened with the actual costs the (former) defendant has incurred.
The problem used to lie in the discrepancy with the law, which states that the “losing party” shall compensate the costs of the winner. However, if a court session never takes place, there is in fact no winner nor loser. And the law does not offer a clear answer for this specific situation in preliminary relief proceedings. The procedural rules (a set of judge-made rules that serves as a manual for court procedures) however clearly state that the judge in preliminary relief proceedings does not decide on the costs of the proceedings if the case has been withdrawn. In other words, both parties are left with their own legal costs. This could be experienced as unfair by the defendant. After all, he has been involved in a lawsuit he (probably) did not expect. So what should prevail?
According to the Dutch Supreme Court, the procedural rules are not consistent with the statutory provisions for civil proceedings (both in proceedings on the merits as in preliminary relief procedures). The Supreme Court is of opinion that the claimant who withdraws his claim, should be equated with the “losing party”. And the loser has to compensate the procedural costs of the winner.
Furthermore, transitional arrangements will be created for the (possibly many) defendants who have foregone further proceedings on necessarily incurred legal costs in the past:
1. If the preliminary relief proceedings have been withdrawn by the claimant and the defendant has not indicated to continue further proceedings on the matter of the incurred legal costs within two weeks, the decision becomes irrevocable. In such a situation, that case will no longer allow for further squabbling about the costs.
2. Ongoing (separate) proceedings concerning the payment of legal costs in withdrawn proceedings may still be brought to a completion.
3. Additionally, (former) defendants will be granted the opportunity to commence stand-alone proceedings. However, this has to happen within three months from the Supreme Court decision that has been passed down on June 3rd, 2016.
Have you (recently) been the defendant in an IP-case that then has been withdrawn? Then it might still be worthwhile to conduct legal proceeding on that matter. Please contact our office!
Daan van Eek