Contributed By Gilat, Bareket & Co., Reinhold Cohn Group
Generally, the prevailing party is entitled to reimbursement of its reasonable legal costs. However, as stated above, in practice reimbursement is almost always partial. Courts also have the power to award costs in interim proceedings, but sometimes will defer its decision until after a decision on the merits is made.
Courts also have regard to the parties’ conduct, which may result in denying an award of costs to the winning party (in whole or in part) and may even result in the court providing an award in favour of the losing party or in providing for an award to the state treasury.
According to sections 364 and 365(b) of the Civil Procedure Regulations, the application for an interlocutory injunction shall be accompanied by the applicant’s personal undertaking to compensate the person to whom the order is directed for any damage caused to him by the interlocutory injunction, if the action ceases or the order expires for any other reason.
As far as lawyer fees are concerned, courts usually award lawyer fees (without extensive factual inquiry), which are significantly lower than the actual lawyer fees incurred. Thus, the lawyer fees awarded by courts are but a fraction of the lawyer fees actually incurred.
The prevailing party is also entitled to reimbursement of all reasonable out-of-pocket expenses. Court fees are generally viewed as a reasonably incurred cost and are reimbursed by the losing defendant in full, although the court has discretion to refuse such reimbursement, in part, where it finds that the amount initially claimed (and on the basis of which court fees were paid) were unduly high.
Costs appearing in the court docket (such as payments ordered by the court to witnesses for their lost time, which are relatively low) are reimbursed as a matter of right. Reimbursement of other costs, such as expert fees, travel and accommodation costs, translation costs, photocopies, couriers, and the like require submission of an application, proving the costs in a detailed manner, and the costs are then scrutinised to ensure their reasonableness as a condition for reimbursement.
The practice before the ILPTO in oppositions and revocation actions is different. Following judgment, the prevailing party is entitled to submit an application that details, on an itemised basis, not only out-of-pocket costs but also lawyer fees paid. All items are scrutinised, and practice shows that the amount of lawyer fees reimbursed is substantially higher than in District Court litigation.
Accordingly, in District Court infringement litigation, the recovery may be well below 15%. However, in proceedings before the ILPTO the recovery may be 50% or more and legal fee awards may be as high as few hundreds of thousands of US dollars.