The Court of Appeal rules on non-pecuniary damages

On 9 December 2025 the Court of Appeal (CoA) issued a decision (UPC_CoA_8/2025) focusing in particular on non-pecuniary damages and the requirements to recognising those in the context of a damages claim and, more specifically, a provisional grant of damages.

In the decision, the CoA has principally confirmed that damages for non-pecuniary damages can be liquidated and claimed in UPC proceedings, including moral prejudice, eg in the form of reputational damages.

However, the court has also held that this requires specific assertions and facts to be submitted by the claimant that allow the damages amount to be quantified. General statements are not sufficient to meet those requirements.

Background and First Instance Decision

The dispute originated from an infringement action brought before the Milan Local Division and relating to the textile sector. The claimant is holder of a patent relating to a machine for texturizing and winding and brought infringement allegations against a competitor active in the same sector. The claimant sought, among other things, that the compensation for damages take into account the moral prejudice allegedly suffered as a result of both the display of the infringing product at a globally significant trade fair and the publication of certain statements by the defendant company emphasizing the commercial success achieved thanks to the event.

The first-instance judges, having first found the products to be infringing, decided that the Claimant had sufficiently substantiated its claim for reputational damage and ordered the defendant to pay EUR15,000 as provisional compensation pursuant to Rule 119 RoP (so-called interim award of damages). In particular, in the first-instance decision, the Court highlighted that the trade fair was one of the most important trade fairs in the world, attended by over 100,000 visitors, thus deeming reputational damage resulting from the display of goods interfering with the claimant’s exclusive rights to be inevitable.

On appeal, the defendant and appellant contested the existence of reputational harm to the claimant and argued, in any case, that such harm should not be compensable since the conduct was not carried out with awareness of its unlawfulness. This argument was based on Article 68(4) UPCA, which provides that when the infringer acted unknowingly, only restitution of profits or payment of compensation is due.

Court of Appeal Decision

In its decision, the Court of Appeal categorically excluded the applicability of Article 68(4) UPCA in the case, noting that, as the appellant was a company active in the relevant sector, it is reasonably expected to conduct freedom to operate analysis and confirm that no patents prohibit the marketing of its product. Therefore, the Court correctly applied the general criteria set out in the first three paragraphs of Article 68 UPCA, which expressly require consideration of moral harm suffered by the patent holder.

At the same time, after analysing the evidence presented by the respondent and initial claimant to support the alleged damage, the Court found it excessively generic and insufficient to justify an award, as it merely demonstrated the appellant’s participation in the trade fair and explained the functioning of the contested machine. The submission by the claimant did not provide any specific facts or evidence as to any concrete reputational damage.

The Court of Appeal therefore overturned the first-instance decision insofar as it had ordered the defendant to pay an amount as provisional compensation for reputational damage.