1.1 What are the principal sources of law and regulation relating to patents and patent litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties)
The Austrian Patent Act 1970 (Federal Law Gazette 1970/259 – ‘Patentgesetz 1970’ or ‘PatG’) is the primary source of Austrian patent law. In addition, the Law on Utility Models 1994 (Federal Law Gazette 1994/211 – ‘Gebrauchsmustergesetz 1994’ or ‘GMG’), the Act on Supplementary Protection Certificates 1996 (Federal Law Gazette I 1997/011 – ‘Schutzzertifikatsgesetz 1996’ or ‘SchZG’) in conjunction with Council Regulations 1768/92 and 1610/92, and the Law on Patent Office Fees (Federal Law Gazette I 149/2004 – ‘Patentamtsgebührengesetz’ or ‘PAG’), plus subsequent amendments, are to be consulted regularly when dealing with questions of patent law.
In addition, Austria is a signatory to a number of international conventions, most notably the EPC, PCT and the TRIPs Agreement. The Introductory Act on Patent Treaties (Federal Law Gazette 1979/52 – ‘Patentverträgeeinführungsgesetz’ or ‘PatV-EG’) serves as a link between the EPC and PCT on the one side and the PatG and the GMG on the other side. As a member of the EU, Austria is bound by the applicable Council Regulations and has implemented the relevant Directives in the field, lately amending the PatG so as to comply with the prerequisites of the Biotech Directive and the Enforcement Directive.
1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?
Generally, the international conventions, in particular the EPC, are understood as a framework which sets the limits of what is to be considered an acceptable interpretation of the provisions of the PatG. According to an unbroken line of precedent since the EPC entered into force for the territory of Austria in 1979, a harmonised approach, in particular with regard to questions of claim construction, is favoured, though due consideration is given to pre-harmonised Austrian practice. In questions of nullity and unenforceability, Austrian law takes precedence over the EPO’s interpretation of the corresponding grounds of nullity in the EPC where national and international case law and practice cannot be reconciled.
2.1 In which courts are patents enforced? Are they specialised patents courts? If not, what level of expertise can a patent holder expect from the courts?
A patent infringement may have civil and criminal law consequences under the Austrian system, which means that jurisdiction in this respect is distributed between the applicable civil and criminal courts. Furthermore, Austria is a typical dual-track country with matters relating to the nullity of patents referred to the Patent Office in principle. In addition, and as an Austrian speciality, there also exists the option of ‘abstract’ declaratory proceedings before the Patent Office.
All civil patent infringement cases are heard before three specialised senates of the Vienna Commercial Court; the Vienna Court of Appeals serves as a court of second instance. Such exclusive jurisdiction ensures that all relevant Austrian proceedings are handled by the same courts and has been designed to facilitate balanced decisions by expert judges experienced in the highly specific and complex area of patent law. Where questions of general legal importance and interest are concerned, there further exists the possibility of a third instance appeal to the Supreme Court.
Criminal cases are exclusively heard before the Vienna Criminal Court and the Viennese Appeal Court.
2.2 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?
As all patent infringement matters are concentrated before the specialised senates of the Vienna Commercial Court and all follow the same route of appeal, domestic decisions in parallel cases are usually of high relevance, though not formally binding. Decisions from other national courts are generally considered in infringement litigation. Great importance is, however, only attributed on a regular basis to the rulings of German courts in parallel proceedings due to the very similar IP systems in the two countries.
2.3 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or government agency (eg the Patent Office)?
The final decision on the validity of a patent is exclusively subject to the Patent Office’s jurisdiction. Cases are heard before the Patent Office’s Nullity Division. An appeal is possible to the Supreme Patent and Trademark Senate, a panel consisting of members of the Patent Office and of the Supreme Court.
The complex interaction between the court and the Patent Office is regulated by s 156 PatG, which provision, however, only applies to main proceedings: In principle, the validity and effectiveness of a patent may be evaluated independently by the court as a so-called ‘preliminary question’ in the course of infringement proceedings. In respect of the most common reason giving rise to invalidity, namely a patent’s nullity, s 156(3) PatG provides that where a decision depends on the question of whether a patent is null and void the court must first carry out an independent examination of the issue. On the court’s request the Patent Office is instructed to prepare a written expert opinion establishing whether it appears likely on the basis of the documents submitted in the course of the court proceedings that the patent will be revoked. If the court considers it likely on the basis of the evidence taken (thereby also taking into account the opinion of the Patent Office) that the patent is null and void, the proceedings are to be suspended. The court is under no obligation to request an expert opinion from the Patent Office, and this does not prejudice the outcome of any nullity proceedings. Within one month of the service of the decision suspending the proceedings the defendant must evidence that it has filed a petition for revocation with the Patent Office, that revocation proceedings between the litigants are already pending, or that it has joined such proceedings as intervener. If the defendant fails to comply with this requirement the court proceedings will be continued upon application by the plaintiff and will be decided without taking into account the objection of nullity. A decision issued by the revocation division prior to the conclusion of the oral proceedings must however be taken into account.
Before the 2004 amendment of the Patent Act came into force the court was required to suspend the proceedings unless the patent’s nullity could obviously be ruled out, which was rarely the case. It remains to be seen whether the duty to carry out an independent examination will change the former practice of suspending proceedings.
In order to ensure legal uniformity s 156(5) PatG stipulates that where the validity or effectiveness of a patent has been evaluated differently by the Patent Office or Supreme Patent and Trademark Senate on the one hand and the court in the infringement proceedings on the other hand, a motion for a new trial can be filed on the grounds of such disagreement.
2.4 Who can represent parties before the courts handling patent litigation and/or the government agency dealing with patent validity issues?
According to the Austria Civil Procedure Code (‘ZPO’) applicable in infringement proceedings before the courts all parties have to be represented by an attorney-at-law authorised to practice in Austria. In addition (and highly recommended), the parties also have the option of involving a patent attorney as support for the underlying technical questions; supporting patent attorneys may speak before the court and are treated as equivalent to the attorneys-at-law in practice.
Attorneys-at-law, patent attorneys and – interestingly enough – notaries authorised to practice in Austria may represent before the Patent Office.
2.5 What is the language of the proceedings? Is there a choice of language?
The language of the proceedings is German. There is no choice of language.
2.6 To what extent are courts willing to grant cross-border or extraterritorial injunctions?
Austrian courts are bound by the European regime of international civil procedure law, in particular Regulation EC 44/2001 (former Brussels Convention). Nevertheless, Austria has never been a classic cross-border country and cases involving claims from more than one jurisdiction only rarely find their way before the courts; if at all, such cases are litigated on the basis of Art 2 of the Regulation.
2.7 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?
Within the framework of Regulation EC 44/2001, Austrian courts have in most cases been rather reluctant in the past to suspend proceedings due to torpedo actions in other jurisdictions, thereby applying a restrictive reading to the precondition of ‘the same subject matter’ within the meaning of Art 27 of the Regulation. As the entire system of cross-border cases and torpedoes is under review following the latest decisions of the ECJ on this subject, time will show how Austrian courts will tackle these issues in the future.
3.1 How is patent infringement assessed? To what extent does the doctrine of equivalents apply in an infringement action?
Pursuant to s 22(1) PatG, the patent confers to the patentee the exclusive authority to produce the subject of the invention industrially, to put it on the market, to offer it for sale or to work it or to import or own it for the said purposes. Where a patent has been granted for process, its effect will also cover the products directly produced by such process. In addition, if the product at the time of priority was novel, then a reversal of the burden of proof in accordance with Art 34 TRIPs takes place (s 155 PatG). Provisions fighting contributory (indirect) patent infringement have recently been included in the PatG (s 22 (3)–(5)), which is defined as a delivery (or any respective offer) of means which relate to an essential feature of the invention, in case it is apparent or it is known to the supplier that such means are suitable and intended to be used for the use of the invention. Furthermore, Austrian law features a ‘BOLAR’ clause (cf Art 10 para 6 of Directive 2004/27/EC) which exempts clinical trials and related tests which are required for obtaining a marketing authorisation for generic products. The general position with regard to research and other kinds of tests and trials in unclear, although the legislator has in the explanatory remarks to the Biotech Directive Implementation Act commented that generally research activities will not constitute a patent infringement due to the lack of ‘industrial’ use, an opinion that may seem too broad and will have to be refined by the courts.
In questions of claim construction Austrian law is harmonised along the lines of Art 69 EPC; s 22a(1) PatG. The relevant key provision with regard to the interpretation of patents reads as follows:
‘The extent of the protection conferred by a patent and a published application (s 101(2)) shall be determined by the terms of the claims. Nevertheless, the description and drawings shall be used to interpret the claims. For this purpose the Protocol on the Interpretation of Article 69 of the European Patent Convention. Federal Law Gazette No 350/1979 as amended shall apply mutatis mutandis.’
Austrian courts are thus bound de iure conventionis always to consider the description and the drawings in determining the scope of a patent’s protection. In addition, traditional Austrian case law also provides for the possibility of consulting the office files, a practice which lately has been disputed among European scholars in view of the wording of Art 69 EPC. Since s 163(5) PatG on declaratory proceedings before the Patent Office explicitly stipulates that the office files are necessarily to be reviewed when interpreting patents, it is fair to assume that this aspect of Austrian practice will continue to play a role also in infringement proceedings before the courts.
In practice, the courts apply a two-stage approach: In a first step the courts establish whether or not a literal infringement is to be presumed. This assessment is made on the basis of the claims, the description, the drawings and eventually the office files, whereby the starting point is the plain and ordinary meaning of the claims. In addition, technical dictionaries and relevant publications in the applicable files serve to determine the adequate understanding of the claims from the point of view of an ‘average expert’.
Where literal infringement is denied, the courts in a second step consider a classic continental European approach to equivalence, which – as per an unbroken line of precedent and in accordance with German case law, which plays an important role in this regard – is defined as follows:
‘There is an equivalent use of the patented invention if the person skilled in the art at the time of the priority, with the general specialist knowledge and in awareness of the technology communicated in the patent specification, can derive the replaced features of the patent claims as a solution with the same function without any inventive effort. The solution must correspond with the technical function of the features specified in the patent claims (problem) and generally make use of the principle of the patented solution. On the other hand, the use of means with the same effect that substantially change the concept of the protected solution or that conflict with the basic concept of the invention is not equivalent.’
The Austrian courts have not yet had the opportunity to also consider more recent approaches to equivalence, eg along the lines of the ‘Custodiol’ and ‘Schneidemesser’ decisions of the German Federal Supreme Court; also the UK approach featuring the ‘Catnic/Improver’ scheme does not play a role in Austrian practice.
For the alleged infringer a number of defences are available in court proceedings: Besides contesting the infringement as such, the defence of nullity plays an important role; in addition the defence of the free state of the art (‘Formstein’ defence according to the German lead case) is a recognised counter-argument in cases revolving around equivalent infringement. Own prior use, agreement with patentee and statute of limitation are other less frequently used defences.
3.3 To what extent can enforcement of a patent expose the patent holder to liability for an antitrust violation?
Austrian Competition law is harmonised along the lines of applicable EU law; thus, the principles developed by the Commission and – in particular – the ECJ in the IMS/Health case, according to which an antitrust violation is to be presumed in exceptional cases only, apply.
The grounds for nullity largely conform to the regime of the EPC. Thus, nullity claims can be brought forward on the basis of lack of novelty, lack of inventive step, lack of industrial applicability, breach of good morals, insufficient disclosure, inadmissible addition and, with regard to computer programs, therapeutic methods, plant and animal varieties excluded from patentability along the lines of Arts 52 and 53 EPC and inventions excluded from patentability in accordance with the Biotech Directive.
3.5 Can a court only partially invalidate a patent? Can it transform the patent into a utility model?
Nullity within the meaning of s 48 PatG does not always affect the entire patent; in the course of revocation proceedings a patent may also be limited only in part. In accordance with s 48(3) PatG the final revocation is effective retroactively as per the date of filing the patent, and also affects any previous civil law decisions in so far as a motion for a new trial may be filed where a claim has been granted on the basis of a void patent. All of the foregoing, however, is not an issue in court proceedings, but remains under the sole competence of the Patent Office.
No, as this is a matter for the Patent Office. It is, however, possible to limit the claims in the court proceedings so as to conform to a limitation ordered by the Patent Office in nullity proceedings.
3.7 Are there any grounds on which an otherwise valid patent can be deemed unenforceable, owing to misconduct by the patent holder, or for some other reason (eg expiry of time limit)?
Basically, wilful misconduct against good business morals may in very limited cases bar the patentee from enforcing his rights; more relevant cases relate to the statute of limitation (generally three years) and agreements with the defendant.
3.8 Can a patent holder bring a law suit claiming both patent infringement and unfair competition for the same set of facts?
No; patent law takes precedence over the Law against Unfair Competition (‘UWG’). To also bring forward unfair competition claims additional facts must exist, eg a parallel misappropriation of business secrets pertaining to the subject matter of the invention and the like.
4.1 Who can sue for patent infringement (patent holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?
The parties having capacity to sue, ie those who are entitled to bring an action before the courts include the patent owner, the holder of an exclusive licence, and the holder of an exclusive sublicence. Licence rights need not be registered with the patent register for establishing capacity to sue but merely have to be evidenced if an action is lodged. The same applies to the transfer of a patent to a new (not yet registered) owner.
Basically rights can only be derived from registered patents. However, s 158 PatG referring to so-called provisional patent protection improves the patent applicant’s position in this regard. Put in a simplified way (without addressing the details of the grant procedure), if the Patent Office considers the patent application to have been duly effected and the grant of the patent to be not precluded, it orders the application to be made public (so-called ‘public notice’). From the day on which the patent gazette containing the relevant publication is issued, the patent owner is entitled to receive adequate consideration in accordance with s 101(5) but not yet to a cease and desist claim. If such claim for adequate consideration is raised the court may suspend the proceedings pursuant to s 158 PatG until the grant of the patent is published. Section 4 PatV-EG provides that upon the publication of a European patent application (Art 93 EPC) the applicant is provisionally entitled to a claim to rendering of accounts and to adequate consideration in compliance with the relevant circumstances against any person who used the subject matter of the invention without authorisation. If the application has not been published in German such a claim only arises after receipt by the Patent Office of a German translation and after payment of the publication fee.
4.2 Under what conditions, if any, can an alleged infringer bring a law suit to obtain a declaratory judgment on non-infringement?
Austrian law provides for a specific ‘abstract’ declaratory petition to be litigated before the Patent Office. In connection with such petitions in accordance with s 163 PatG the respective competences of the Patent Office and the courts are somewhat intermingled. Section 163 PatG reads as follows:
‘(1) Whoever professionally manufactures, places on the market, offers for sale or uses an article, professionally uses a method, or intends to undertake any such activity, shall have the right to file a petition with the patent office against the owner of a patent or the exclusive licensee demanding a declaratory judgment to the effect that the article or method is not subject to the patent in whole or in part. [= negative declaratory petition].
(2) The owner of a patent or the exclusive licensee shall have the right to file a petition with the patent office against a party who professionally manufactures, places on the market, offers for sale or uses an article, professionally uses a method, or intends to undertake any such activity, demanding a declaratory judgment to the effect that the article or method is subject to the patent in whole or in part. [= positive declaratory petition].’
Declaratory proceedings constitute purely ‘abstract’ infringement proceedings, given that, firstly, they are always limited to the actual subject matter of the declaratory proceedings and, secondly, the question whether the patent has been validly granted is not examined. When evaluating the scope of protection of the patent subject to the declaratory proceedings, the content of the files on the basis of which the patent had been granted and the prior art evidenced by the parties shall be taken into account.
The interaction between declaratory proceedings on the one hand and infringement proceedings and revocation proceedings on the other hand can be summarised as follows: Pursuant to s 163(3) a declaratory petition is dismissed if infringement proceedings between the same litigants and relating to the same product or method, which have been initiated prior to the filing of the declaratory petition, are pending before the court. A declaratory petition is therefore particularly useful as a defence against an imminent infringement action if a ‘negative declaratory petition’ is filed with the Patent Office before court proceedings are initiated. Even though the court is not obliged to take into account the declaratory proceedings in deciding on the matter, it has the optional right to suspend the proceedings in accordance with s 156(1) PatG in order to await the decision on the declaratory petition. By establishing the instrument of a negative declaratory petition the legislator intended to prevent infringement actions against the petitioner. A recent decision by the Supreme Court however jeopardises this intention; the decision held that declaratory proceedings pursuant to s 163 PatG did not constitute grounds for filing a motion for a new trial, thus (given that the suspension of proceedings is merely optional) decreasing to a certain extent the practical importance of declaratory proceedings. The declaratory judgment is only effective between the litigants, and only in favour of the party that obtained it. The filing of a positive declaratory petition (but not of a negative declaratory petition) causes the suspension of the limitation period. As regards the connection between declaratory petitions and revocation proceedings on the grounds of nullity it should be noted that in the event the patent is revoked before the completion of the declaratory proceedings, the latter must be terminated for lack of grounds, and it is therefore generally advisable in view of procedural economy to suspend the declaratory proceedings once a petition for revocation has been filed.
What remains unclear is whether there is the option to file a declaratory action with the courts and not the Patent Office. Under traditional teaching such a possibility did not exist due to the greater importance that in the past was generally attributed to declaratory petitions before the Patent Office. This opinion is now under review following the Supreme Court decision mentioned above, which generally denied the strict precedence of declaratory petition proceedings before the Patent Office in relation to the civil courts. A case revolving around these questions is currently pending before the Supreme Court.
4.3 Who can be sued for patent infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to patent infringement by someone else?
The ‘infringer’ interfering with the protected rights has the capacity to be sued. The patent owner is entitled to enforce its claims against all persons committing any of the infringing actions set out in s 22 PatG. Therefore, cease and desist claims exist against the infringing manufacturer and/or dealer and/or user. Besides the enterprise charged with a patent infringement, the responsible bodies (managing directors, members of the board), are also liable jointly and severally.
Moreover, an infringement action may be directed not only against the direct offender but (in line with the general rule on civil liability pursuant to s 1301 of the General Civil Code) but also against accomplices, instigators and accessories.
As mentioned above, a provision covering indirect patent infringement has lately been introduced in addition to the general civil law rules: In accordance with s 22(3) PatG a patent now has the additional effect of prohibiting any third party from offering or supplying, without the approval of the patent owner, any means relating to a material element of the invention to any unauthorised persons for the purpose of using the invention, if such third party knows or it is obvious from the given circumstances that such means are suitable and intended for being employed for the purpose of using the invention. This provision is important for the owners of process, use and combination patents in considerably facilitating the prosecution of infringements of their rights, as they are not required to raise their claims against the (often unknown) buyers but can bring an action directly against the supplier. The concept of an indirect patent infringement does not apply to products generally available on the market unless the supplied party is deliberately induced to use the means in a patent infringing manner. In the opinion of the Supreme Court a liability of the supplier based on s 1301 is also to be considered in cases where ‘means for patent infringement’ are supplied, whereby malice aforethought on the part of the accomplice in respect of the deliberate promotion of a (later) patent infringement is essential in the court’s view. Thus, other than in the case of an indirect patent infringement, the ‘obviousness’ per se of the use of the supplied ‘means’ for the purpose of a patent infringement does not give rise to liability.
Generally, and besides a withdrawal of the claim with precedence, new parties can only join the proceedings as a consequence of a succession in law under the relevant Austrian statutes, such as in case of mergers, spin-offs etc or where all parties to the litigation consent to the changing of parties. Besides that, an adding or subtracting of the main parties is not possible, persons who have legal interest in the litigation may however join as supporting parties on either the plaintiff’s or defendant’s side; a judgment will not be enforceable against such supporting parties but is a binding precedent with regard to the factual grounds for future litigation involving the supporters.
5.1 What options are open to a patent holder when seeking to enforce its rights in your country?
The enforcement options are civil proceedings, criminal proceedings and border measures.
Criminal proceedings are available and are heard before the Vienna Criminal Court. Wilful patent infringement constitutes a criminal offence and may be subject to a fine of up to €180,000 or up to two years of imprisonment. In addition, further sanctions equivalent to the final remedies under civil law (destruction, monetary compensation etc) are provided for.
According to the Austrian Product Piracy Act and in accordance with the applicable European Regulations, border protection for patents is possible. Austrian border control has been successful in setting up an effective system to stop and destroy counterfeited products at the borders. To benefit from this system, an application for permanent surveillance, accompanied by adequate information to allow the identification of counterfeits, may be filed with the national customs authorities by patentees and exclusive licensees.
5.4 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve patent disputes? If arbitration is available to assess invalidity, will your Patent Office recognise and execute an arbitral award declaring a patent invalid?
Arbitration is available but rather uncommon in patent infringement matters, although the Vienna Chamber of Commerce offers an experienced and professional arbitration tribunal. A patent’s nullity would not be eligible for arbitration under the respective Austrian provisions.
As mentioned above, all main proceedings in patent infringement cases are heard before the Vienna Commercial Court. The proceedings are initiated by a brief of action lodged by the plaintiff. Such brief in the first phase of the proceedings is served upon the defendant, who – normally within a period of four weeks – is ordered to file a reply with the court. Following this exchange of briefs (more briefs can be filed until one week before the introductory hearing), the court will set a date for a first hearing, which exclusively serves the purpose of setting up the further programme for the proceedings, including, inter alia, the retaining of a court-appointed expert and the decision on which witnesses to hear before court. Further hearings may be held to take evidence. Upon completion of this process, the court will close the proceedings and normally render a judgment in writing.
There is no jury system available for patent infringement proceedings in Austria. Cases are heard by senates of three judges (one of them a patent attorney) in first and second instance.
6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?
Austrian law offers a broad range of means of evidence, such as all kinds of documents, witnesses, which may be cross-interrogated (though not in a formal way comparable to common law systems), and private expert opinions. The most important piece of evidence, however, is the opinion rendered by the court-appointed expert (usually a patent attorney): its impact on the outcome of an infringement suit cannot be overestimated, as in nearly all cases the senate will follow the expert and will render a judgment in accordance with the expert’s assessment.
Thus, it is the primary goal of litigation for each party to support its position by suitable documentation so as to obtain a favourable opinion by the court-appointed expert. Although the findings of the court-appointed expert can usually be called into question in a separate hearing, scheduled exclusively for this purpose, it has turned out difficult in practice to change the expert’s assessment once it has been presented to the court. Also, the opinion of the court-appointed expert is only rarely overturned in appeal proceedings.
6.4 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?
Until very recently, it has been a specific problem of the Austrian system that evidence from the defendant has been difficult to obtain. Austrian law did not provide for a discovery procedure or instruments like saisie. Frequently the only remaining way was to apply for a house search in criminal proceedings, a mode of operation which often was felt to be inadequate in standard cases. Following the implementation of the Enforcement Directive, there now exists the option of applying for a preliminary injunction for the purpose of securing evidence. Also, the provisions of the Directive relating to the defendant’s obligation to provide documentation under certain circumstances are generally viewed as a huge improvement to the plaintiff’s position as compared to the previous legal situation.
6.5 What level of proof is required for establishing infringement or invalidity?
In main proceedings plaintiff is required to prove the highest probability (near certainty) of the infringement; the court needs to be convinced that an infringement has taken place. This applies mutatis mutandis to nullity proceedings before the Patent Office.
6.6 How long do patent infringement proceedings typically last? Is it possible to expedite this process?
Patent litigation proceedings are usually quite lengthy in Austria. Even if the suit is not suspended following a nullity defence, a first instance judgment would regularly take up to two years. There is no specific legal instrument to speed up the proceedings. (This is different for nullity proceedings, where there is an expedited process route if the nullity application refers to a patent under infringement litigation.)
6.7 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?
Besides submitting a lot of material and applying for extensions of time whenever possible, the most promising strategy for a delay is the raising of the nullity defence, which ultimately may lead to a suspension of the suit under s 156 PatG as mentioned above. There are no specific counter-delaying tactics, especially in case of a nullity defence.
7.1 What remedies are available against a patent infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)?
The PatG provides for a broad range of final remedies as follows:
Claims to cease and desist – irrespective of whether included in a final order or in a preliminary injunction – are enforced in accordance with s 355 EO, whereby a petition must be filed with the court of enforcement in respect of each act of non-compliance following the enforceability of the claim (ie in the case of an interlocutory injunction its service) and the court must then impose a fine on the liable party without prior warning. For each further act of non-compliance the court must impose a further fine or a custodial sentence up to a total duration of one year. The party at risk may also request that the court order the provision of security in respect of the damage incurred by further non-compliance. In accordance with s 359 EO the fine imposed must not exceed €100,000 for each individual petition. The petition for enforcement must include a concrete and conclusive allegation of the act of noncompliance with the interlocutory injunction; it is not required to submit prima facie evidence for the allegation, and no examination of its content is carried out; the so-called ‘enforcement permission’ based on which the bailiff will enforce the claim is granted solely on the basis of the petitioner’s allegation. The liable party in enforcement proceedings can (essentially) choose one of two counterstrategies: On the one hand, an appeal can be filed against incorrect enforcement permission, eg if it is not in accordance with the petitioner’s allegations or if the alleged infringements were committed prior to the service of the interlocutory injunction. Objections to the claim itself or to the enforcement permission, on the other hand, must be raised not by way of an appeal but by way of a separate ‘opposition’ or ‘impugnation’ action pursuant to ss 35 and 36 EO. In such cases, separate proceedings before the court of enforcement will be instituted in which the plaintiff (being the defendant in the patent infringement proceedings) is liable to prove that it is not guilty of any noncompliance with the enforcement order (other than alleged in the enforcement petition).
Payment claims (which include the claim to payment of the costs in connection with the publication of the judgment by plaintiff in accordance with the court’s decision) are collectible in various ways (enforcement against movables, enforcement against personal property and salary, etc). Claims to rendering of accounts are enforced (comparable to the enforcement of cease and desist claims) by the imposition of coercive fines in accordance with s 354 EO.
7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or consumers?
Any final injunction will cover (only) future infringement; it is never effective against suppliers or customers, as these have not been a party to the litigation.
7.3 What monetary remedies are available against a patent infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?
Payment claims under the PatG are to be calculated at the patentee’s sole discretion in one of the following ways:
Whilst Austrian law generally does not provide for punitive damages, the patentee may claim the double amount of adequate remuneration if the infringement is a consequence of gross negligence.
8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?
In cases of patent infringement an immediate remedy is often required; in order to provisionally secure the plaintiff’s claims. Legislation provides the instrument of an interlocutory injunction, which can be obtained in preliminary proceedings.
The law does not provide for an exhaustive list of the relevant means of security, ie the instruments available to the court for putting a stop to further unlawful actions. As a rule, a cease and desist claim is secured by the court’s order to the alleged infringer to forthwith cease and desist from committing further infringing actions. Claims under s 48 PatG for removal of infringing products are secured by an interlocutory injunction ordering the provisional impounding of the infringing articles.
Other than the main proceedings, a petition for an interlocutory injunction is decided on in summary proceedings, which do not require full proof of the patent infringement but merely prima facie evidence. It is also not required to evidence the risk to which the petitioner is exposed in respect of the cease and desist claim. The legislator accommodates the patent owner in so far as s 147(2) PatG expressly provides that interlocutory injunctions must be issued even in the absence of a risk. The ‘urgency’ problem under German law, which requires the patent owner to act with utmost swiftness so as to not lose its claims, is therefore not relevant under Austrian law.
8.2 Is ex parte relief available where defendant is given no notice at all? If so, under what conditions?
Ex parte relief is available, but granted in very rare cases only. One of the few scenarios in practice is the stopping of infringements at a trade fair if there is no sufficient time to enter into regular inter parte proceedings.
8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?
As mentioned above, such orders were – with the exception of house searches in criminal proceedings – practically not available in the past (whilst it needs to be mentioned for the sake of completeness that in one single case the Vienna Court of Appeals granted a seizure injunction in a copyright counterfeiting scenario). Following the implementation of the Enforcement Directive, respective legal instruments will be available generally in the future, whereas it remains to be seen in which way these new instruments will be applied by the courts.
8.4 Can the defendant put the validity of a patent in issue in preliminary injunction proceedings?
The defendant may question the validity of the patent also in preliminary proceedings. One of the most important differences as compared to the main proceedings is the fact that interlocutory proceedings will never be suspended where the defence of nullity is raised. The validity of the patent in suit will be autonomously assessed by the senate – the patent attorney being part of the senate playing the most important role in this regard – since Austrian civil procedural law does not allow an independent court-appointed expert to be used in the interlocutory phase of the proceedings. As a general rule, courts will thoroughly consider private opinions submitted by the parties and – if such opinions are of equal quality and are contradicting – dismiss the claim if a question of infringement is at stake and grant it if a question of nullity is decisive.
Upon receipt of a petition for the issuance of an interlocutory injunction the court may – but is not obliged to – forward it to the opponent for filing a reply. The period stipulated by the court for filing a reply is usually between 7 and 14 days. This period can basically be extended upon application by the opponent. In the rare cases where the court does not instruct the opponent to file a reply and the requested interlocutory injunction is issued, the opponent is entitled not only to file an appeal as the ‘regular’ legal remedy but also to file a protest within 14 days from being served the decision. In the protest proceedings the original court conducts an oral hearing to examine whether the issuance of the injunction is admissible and must then decide whether the injunction must be upheld or the petition must be dismissed on the basis of the prima facie evidence submitted by the opponent.
Following the court’s decision in injunction proceedings the unsuccessful party has the right to file an appeal within 14 days of the service of the decision. It should be noted in this context that an appeal filed against an interlocutory injunction does not have a suspensive effect on its enforceability; where reasons of particular relevance exist; however, such suspensive effect may be petitioned for.
Interlocutory injunctions are usually issued for the entire duration of the main proceedings. They may be lifted under certain circumstances, however. Whichever grounds may be invoked for such dissolution of an interlocutory injunction, they are admissible only if they have become applicable after the injunction has been issued. If the issuing of the injunction was erroneous, such claim must be raised in an appeal or protest. A dissolution is possible inter alia in the following cases:
In accordance with s 147(2) PatG the court may optionally suspend an interlocutory injunction if the opponent provides adequate security. The suspension of an interlocutory injunction upon the provision of security by the opponent, which may also be effected for a limited period, is subject to the filing of a petition setting out the grounds for suspension in sufficient detail. In accordance with prevailing judicial practice the value of the claim to be secured is to be used as a basis for the determination of the discharge amount; the plaintiff is deemed to be sufficiently secured if the amount enables the re-establishment of the former state in case the plaintiff should be successful in the proceedings. The discharge amount should not be too low as this might tempt the opponent to pay the amount and nevertheless continue its unlawful conduct. The suspension order by the court does not dissolve the interlocutory injunction itself but only stops its enforcement; therefore the right to exercise legal remedies against the injunction is not affected. It is also possible to challenge the suspension order by an independent appeal; since the injunction itself is not dissolved it will again become enforceable if the appeal is granted.
Even though the instrument of an interlocutory injunction is the most effective means of legal protection against further patent infringements it nevertheless involves a considerable risk that should only be assumed if it appears certain that the petitioner will win the main proceedings. This is due to the provisions of s 394 of the Austrian Enforcement Act (‘EO’), pursuant to which the opponent is entitled to claim damages if it is found that the issuance of the interlocutory injunction was not justified. Section 394 EO reads as follows:
‘If the party at risk is finally denied the alleged claim in respect of which the interlocutory injunction had been granted, if such party’s petition is otherwise found to be unjustified, or if such party fails to comply with the delay for filing a complaint or instituting enforcement proceedings, the party upon whose petition the interlocutory injunction had been granted shall be liable to pay damages to its opponent in respect of any and all property loss incurred by such opponent as a result of the interlocutory injunction. The amount of damages shall be determined by the court in its discretion upon a relevant petition (s 273 ZPO) by way of a decision. If such decision has become final it shall be enforced against the property of the party that petitioned for the interlocutory injunction’.
Moreover, if the interlocutory injunction has obviously been obtained maliciously the court may impose an additional fine for abuse of process on the petitioner upon application by the opponent.
A liability under s 394 EO is therefore subject to the prerequisite that the opponent has suffered a property loss essentially caused by the interlocutory injunction. A claim to damages exists not only if the petition for the issuance of an interlocutory injunction is found to have been unjustified but also if the opponent obtains the dissolution of the injunction by way of an appeal or protest, and also on the grounds of insufficient prima facie evidence of the claim. Damages are payable for any and all property losses including lost profits, such as in particular lawyers’ fees and other costs of the proceedings to the extent they were necessary for an adequate defence in the injunction proceedings. No reimbursement is, however, provided for coercive fines imposed due to any non-compliance with the interlocutory injunction. In accordance with s 273 ZPO the amount of damages is determined by the court in its discretion, whereby any evidence submitted by the opponent relating to individual items of the loss incurred only provide clues as to the determination of the amount. The greatest risk of a property loss in connection with claims under s 394 EO concerns expenditures incurred by the opponent in complying with the interlocutory injunction, eg in connection with the discontinuation of the sale of alleged infringing articles or the adaptation of production facilities.
8.6 To what extent are documents, affidavits, witnesses, and/or (court-appointed or private) experts used in preliminary injunction proceedings?
Documents, affidavits and private expert opinions are the most important factor in preliminary proceedings; as provided by the regulations of the EO, there will be no oral hearings and if (very rarely) witnesses are interrogated, then there is no formal hearing and no possibility for cross-examination, as the parties’ representatives are not admitted to the interrogation sessions in preliminary proceedings.
8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?
In preliminary proceedings, prima facie proof is sufficient, which generally is understood as a proof that the infringement is more likely than the non-infringement.
Depending on the complexity of the case the duration of preliminary proceedings typically ranges between one and four months.
8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?
Traditionally, the application for injunctive relief and the main action are filed together in the same brief. Where this is not the case, the court will set a deadline for the subsequent filing of the main action (usually four weeks); if this deadline is not complied with, then the injunction loses effect automatically.
9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?
Any first instance decision – be it in main or in preliminary proceedings – can be appealed before the Vienna Court of Appeals. If the question at stake is of general importance and interest, there is the possibility of filing a third instance appeal to the Supreme Court.
The appeal deadlines generally are four weeks in main proceedings and 14 days in preliminary proceedings; within the same periods of time the opponent to the appeal may file counter-statements. Oral proceedings in the appeal stage are very rare.
9.2 How long do appeal proceedings typically last?
Appeal proceedings typically last between three and nine months.
10. LITIGATION COSTS
10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?
Generally, litigating patents in Austria is rather inexpensive. The actual costs will naturally depend on the complexity of the case and the value in litigation. In most cases, the values in litigation are rather low irrespective of the actual scope of the case, this being a consequence of the guiding principles of the Austrian law on procedural costs. Traditionally, a cease and desist claim is rated at €36,000 and a full-scale action at approximately €75,000–100,000; a higher rating by the plaintiff is possible, but rather uncommon in standard cases.
The court fees amount to approximately 0.2% of the value in litigation. The actual lawyers’ fees in most cases depend on the time spent and the respective fee arrangements, which typically exceed the minimum fees awarded by the Austrian Attorneys Tariff (‘RAO’), as described below.
10.2 Are costs recoverable from the losing party?
A refund of a part of the lawyer’s fees by the losing party is available, which refund is calculated on the basis of the minimum fees defined by the RAO. With standard values in litigation, a refund would normally range between €7,500–15,000 in interlocutory proceedings and €15,000–30,000 in main proceedings, always considering that the amount of refund may differ hugely from case to case depending on the complexity of the proceedings, the number of briefs filed and the number of hearings.
11.1 What are the important developing and emerging trends in your country’s patent law?
Following the implementation of the Biotech Directive and the Enforcement Directive, no considerable amendments to the PatG are to be expected in the near future. Austrian law is in line with the prerequisites of the EU and the applicable international conventions and follows a traditional continental European path. The next developments that are awaited by patentees and counsel are connected to the internationalisation of the patent litigation system under the EPC and the Community Patent.
11.2 To the extent it relates to patent enforcement, please outline any major patent legislation in the pipeline.
As mentioned above, the Enforcement Directive has already been implemented; thus, there is no substantial forthcoming legislation in this respect.
12. USEFUL REFERENCES
There is not a wealth of reference works in Austria. However, the following publications are of high relevance in day-to-day practice:
Weiser Patentgesetz – Gebrauchsmustergesetz (2005)
Wiltschek Patentgesetz (2006)
Friebel/Pulitzer Österreichisches Patentrecht (2nd edn, 1972)
Furthermore, the website of the Austrian Patent Office provides useful information (www.patentamt.at) and the complete body of Austrian law is accessible for free at www.ris.bka.gv.at.
