Nov 14, 2024 | Differences between “Deed of Undertaking”, “Agreement of Undertaking” and “Injunction” in Execution
1 When intellectual property owners discover an infringement, they often first send a warning letter (termed a “cease and desist letter”) to the infringer, requesting the infringer to agree to the following conditions: –
To immediately cease the infringing activities;
To commit to not engaging in similar infringing activities in the future;
To deliver the infringing goods to the intellectual property owner;
To disclose all infringing activities to the intellectual property owner under oath, including information regarding the suppliers and customers of the infringing products, and to provide relevant documents;
To compensate for damages; and
To compensate for legal fees.
2 If the infringer agrees to the requests of the intellectual property owner or if both parties reach an agreement, the intellectual property owner should still require the infringer to sign a “Deed of Undertakings”. Through this “Deed of Undertakings,” the infringer commits to comply with the terms therein.
3 In reality, only a few infringers default on their commitments. This means that the majority of infringers who have signed a “Deed of Undertakings” would adhere to the terms of the undertakings. Still, a small number of infringers may appear to comply but in fact violate the undertaking terms. This particularly occurs in cases of breaching the disclosure undertaking (as mentioned in 1d above).
4 If an infringer violates the terms of the “Deed of Undertakings,” what can the intellectual property owner do? Is it also necessary to issue a cease and desist letter to the infringer? Readers may find answers to these questions below.
5 Firstly, the English term for “承諾契約” is “deed of undertaking” (“Deed”), whereas general “承諾協議” is referred to as “Agreement of Undertaking” (“Agreement”). It is generally easier and more reliable to enforce a Deed when dealing with breaches of undertaking terms than to rely on an Agreement. In enforcing a Deed, the intellectual property owner is only required to prove that the defendant has violated the undertaking terms contained in the Deed, without the need to prove (as required in the case of an Agreement) that the intellectual property owner has provided some form of consideration for the undertaking terms. Therefore, the author suggests that when the intellectual property owner reaches settlement with the infringer, they should opt for a Deed of Undertakings instead of an Agreement of Undertaking.
6 If the intellectual property owner needs to enforce the terms of undertaking, they must apply to the Court for the relevant orders. By suing the infringer through the “Deed of Undertakings,” the intellectual property owner may rely on the following two bases for litigation against the infringer:-
The infringer has breached the “Deed of Undertakings”; and
The infringer has infringed on the intellectual property rights.
7 The first basis for litigation mentioned above (i.e., 6a) is, certainly, the infringer’s breach of the undertakings in the Deed. The second basis for infringement (i.e., 6b) arises from the infringing actions the infringer committed prior to signing the “Deed of Undertakings.” In other words, the intellectual property owner will ultimately need to go to court to seek an “injunction” and “enforcement order” (depending on which undertaking the infringer has violated).
8 The consequence of violating a court injunction is that the intellectual property owner may apply to the Court for a finding of “contempt of court” against the infringer. Once convicted, the Court may impose imprisonment on the infringer (or their director(s)) in serious cases, while less serious violations may result in fines. Based on experience, when infringers are accused of contempt of court, they typically wish to avoid further entanglement and will comply with their commitments and Court orders after receiving the application documents for contempt of court. Another reason for this is that infringers are concerned with the possibility to pay higher legal fees, prompting them to reach a compromise with the Court and the intellectual property owner as soon as possible.
9 In fact, sending a cease and desist letter to the infringer is not a necessary step in combating infringement (i.e., infringing on intellectual property rights). If the infringement is more severe, the intellectual property owner may actually file a lawsuit directly in Court (The World of Golf (1917)) and apply for the following orders: –
An injunction to cease the infringing activities;
A disclosure order requiring the infringer to deliver infringing goods to the intellectual property owner for destruction;
A disclosure order requiring the infringer to disclose all infringer activities and relevant documents under oath;
An order for damages; and
An order for legal fees.
10 If an infringer accepts the conditions set by the intellectual property owner after receiving a cease and desist letter, he or she is even more likely to settle the lawsuit after receiving the Court summons (i.e., Writ of Summons). However, the latter may incur higher legal fees. Nevertheless, the result of the Court summons will provide a direct and more powerful injunction to the intellectual property owner. Undoubtedly, the power of a Court injunction is far more effective and reliable than the commitments made in a “Deed of Undertaking.”