Remedy and Enforcement
What are the available and commonly sought interim remedies for technology disputes in your jurisdiction?
There are no specific interim remedies for technical disputes. However, there are interim remedies available for intellectual property infringement. From Article L716-4-6 of the Intellectual Property Code, a plaintiff in an infringement action may, as part of a summary action (either ex parte or adversary), take interim measures, i.e. You can see that the measures may be approved. prevent the infringement of the rights conferred by the title or the continuation of the infringing act under penalties as appropriate; However, an action on the merits must be brought after such interim relief is sought.
Another option is to use summary proceedings under Articles 834 and 872 of the French Code of Civil Procedure in case of urgency. You can then ask the judge to order all actions that are not subject to a material challenge. It is also possible for the judge to order precautionary measures to prevent imminent damage or to stop a clearly unlawful disturbance, even in the event of a serious challenge (Articles 835 and 835 of the French Code of Civil Procedure). 873).
What substantive remedies are available and commonly sought in technology disputes in your jurisdiction? How are damages typically calculated?
Substantial remedies related to technology disputes are generally based on ordinary civil remedies. The principle of article 1240 of the French Civil Code is that all damage or injury caused by a person must be remedied by that person. However, in some cases, certain remedies tend to remedy intellectual property infringement. For example, in patent infringement litigation, the patent owner typically seeks to block the distribution and publicity of the infringing product (including some or all of the subject matter of the patent) in territories in which it owns the intellectual property rights. . Remedies regularly take the form of monetary compensation for loss of opportunity or customers, loss of investment, reimbursement of prices, or loss of value of licensed technology due to non-compliance with technology usage limits.
Damages are generally based on the profit or loss of the technology licensor. To assess such losses, several economic and judicial aspects are considered, such as the impact of intellectual property rights on the market, the productive capacity of technology holders, and competition in a particular market. The unit selling price of the IP owner is also taken into consideration. Another important aspect when assessing damages and related remedies is investment that engages in the use of licensed technology, especially if the intellectual property owner can show evidence of the amount invested. is. Claims for reimbursement of irrecoverable costs (ie, attorneys’ fees) under Section 700 of the Code of Civil Procedure are also systematic.
Recent examples demonstrate the principle of damage calculation and full liability in relation to data loss. The court pointed out that damages consisted of compensating the injured party for the adverse consequences suffered directly as a result of the other party’s breach of contract (Nanterre Commercial Court, 23 April 2019, No. 2018F00579). The amount of damages should be calculated taking into account not only the total cost of reconstructing the files, but also the reconstruction of the files necessary for the customer to continue its activities. In other words, any compensable loss incurred is limited to the cost of reconstructing only the data that is useful to the customer’s activity, not all the lost data.
Limitation of Liability
How can liability be limited in your jurisdiction?
THE PARTIES MAY ENTER INTO LIMITED OR EXCLUSIVE LIABILITY CONTRACT CLAUSES. SUCH TERMS WILL NOT APPLY IN CASE OF GROSS NEGLIGENCE OR FRAUD AND ARE VOID IN CASE OF BODILY DAMAGE (such as death or personal injury). Recent cases have shown that gross negligence cannot be attributed solely to a breach of contractual obligations, but must be inferred from the debtor’s conduct, even if it is substantive (TC Nanterre 23 April 2019, No. 2018F00579). Moreover, these clauses are valid unless they deprive the contract of substance or prejudice public policy or obligations.
A recent case illustrates the derisive nature of limited liability clauses. The company liquidator sued the software publisher for damages following a major anomaly due to a software defect. The publisher objected to a limited liability clause that limits compensation to €2,700. The Court of Cassation considered this sum to constitute a decidedly derisive ceiling. This clause therefore contradicts the scope of the publisher’s essential obligation to provide functioning software (CA Montpellier, 26 May 2021, No. 18/05776).
Furthermore, clauses that unduly limit the liability of a party in such a way as to create a material imbalance may render that party liable under Article 442-1, I, 2º of the French Commercial Code. .
A party may also limit liability by defining force majeure primarily. In most IT contracts, the parties refer to definitions set out in the French Civil Code, but in some cases, such as strikes and cyberattacks, may not be considered force majeure events by French courts. Certain events are explicitly included.
However, the parties agree to a full exemption from liability beyond traditional force majeure where the limitation of liability clause may deprive the contract of substance or create a material imbalance in the above terms. should be avoided.
In the absence of contractual clauses on liability, French law stipulates that consequential damages are excluded and only damages incurred can be repaired. That is, the parties must be in the same situation as they were before the damage occurred.
Upon termination of the contract, the limitation of liability clause ceases to apply (CA Montpellier, 22nd May 2020, No. 17/03561).
A judge will try to determine an appropriate amount to repair the damage.
French law prohibits individual interests in liability proceedings. French law therefore prohibits punitive damages. However, common law accepts recognition of foreign arbitration awards or decisions of courts awarding punitive damages if they are not disproportionate as to the damages suffered.
Compensation for damages
Are penalties allowed, and if so, what rules and restrictions apply?
To be valid, liquidated damages clauses must be expressly stated in the contract and known to the parties. Application of the provisions will be automatic as soon as a breach is established. The creditor must give formal notice of performance to the debtor before invoking this provision, unless the default is final.
However, a judge may reconsider the amount set forth in the liquidated damages clause if he determines that the amount is clearly excessive or derisive. Neither party can deny this intervention by the judge. In addition, if there is a partial non-performance of the obligation, the judge may reduce the amount of compensation according to the actual performance of the obligation.
What enforcement tools are available and commonly used by successful litigants in technology disputes in your jurisdiction?
The means of enforcement available and commonly used by successful litigants in technical disputes are the same as in standard disputes and are regulated by the French Code of Civil Procedure. According to Section 500 of the Code, a decision acquires res judicata if it is no longer subject to appeal. Decisions are enforceable if accompanied by a formula for enforcement (Article 502). Finally, the decision can only be enforced against the opposing party upon notice (Article 503). It should be noted that due to recent reforms in French civil procedure (December 2019), first-instance decisions may, in principle, be temporarily enforced unless otherwise provided by law. Yes (Article 514).