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)
(a) National
The most important national source of law is the German Patent Act (GPA). This Act contains inter alia the requirements for patentability, the legal framework for opposition and nullity proceedings as well as the legal framework for determining patent infringement. Further details of the application procedure and opposition proceedings are set out in the Patent Regulations. Questions of inventions made by employees are dealt with in the Act on Employee Inventions.
(b) European Community law
European Community Law has had a strong influence on German law in recent years. The following Community Law is particularly relevant:
(c) International treaties
Germany is party to the following international treaties, which are particularly relevant with respect to patents:
(d) Community patent
A patent granted according to the EPC (European Patent) is a ‘bundle’ of national patents. In contrast, the Community Patent is unitary and autonomous, ie it has equal effect throughout the Community. It may only be granted, transferred or declared invalid for the whole of the Community. The intended creation of a centralised Community Intellectual Property Court guarantees unity of law and consistent case law and has exclusive jurisdiction, including infringement proceedings as well as invalidity proceedings. Although the Proposal for a Council Regulation on the Community Patent dates from August 2000, there has been no consensus yet, for there are still disagreements among the Member States, in particular over the language issue.
(e) European Patent Litigation Agreement and The London Protocol
Due to the slow progress in the development of a Community Patent, 10 Member States of the EPC (including Germany, UK and France) drafted the European Patent Litigation Agreement (EPLA) in order to unify patent litigation by creating a European Patent Court dealing with infringement and validity with exclusive jurisdiction. However, this agreement still needs to be ratified. This agreement is heavily criticised by the European Commission, which still supports the Community Patent. Therefore, its realisation seems uncertain.
In order to reduce translation costs, the Member States participating in the EPLA entered into the London Protocol. They agreed to dispense with the requirement of translating the granted patent into the respective languages of every designated country. This agreement has not been ratified by all Member States and is therefore without any legal effect at the present time.
(f) Court decisions
German law does not know the concept of binding precedence. Nevertheless, in practice, the courts of the lower instances usually follow the decisions of the courts of the higher instances.
1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?
Community Regulations have immediate effect in Germany. They prevail against any national German law. Community Directives need to be transformed into national law to have effect in Germany. However, once a national implementation act has been passed, this implementation act must be construed so as to conform with the Directive. In that sense, Community Directives prevail as well.
International treaties do not have immediate effect in Germany. They also require national implementation Acts to have effect. However, the implementation Act must be construed to comply with the relevant treaty.
On the national level, the GPA prevails against the Patent Regulations.
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?
There are 12 district courts that have jurisdiction to hear patent infringement cases in the first instance. These are the district courts of Düsseldorf, Munich, Mannheim, Berlin, Braunschweig, Erfurt, Frankfurt, Hamburg, Leipzig, Nuremberg, Magdeburg and Saarbrücken. These courts have specialised chambers, which at many of the above-mentioned courts deal exclusively with patent infringement matters. Each chamber consists of three judges. These judges are lawyers, not technical experts. However, they usually have great expertise and much experience in patent law. The patent infringement chambers at the Düsseldorf District Court enjoy a particularly great reputation. Therefore, about 50% of all patent infringement cases in Germany are heard in front of this court. Other important courts are the district courts in Munich and Mannheim. Locally, the above-mentioned courts have jurisdiction if either the defendant has its domicile/place of business within the district of the court or the alleged infringement took place in the court’s district. As most patent-infringing products are sold throughout Germany, the plaintiff can in most cases choose between any of the 12 district courts which are competent for patent infringement cases.
With respect to appeal proceedings, please refer to question 9 below.
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 already mentioned, German law does not recognise the concept of binding precedence. However, the European Court of Justice decides on the interpretation of Community law in a binding way. Furthermore, in practice, the courts of the lower instances usually follow the decisions/reasoning of the courts of higher instances. Foreign decisions in patent cases are usually considered as opinions, in particular if they come from renowned patent infringement courts.
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)?
Infringement and invalidity proceedings are separate proceedings under German law. The invalidity of the patent in suit cannot be raised as a defence in infringement proceedings. The defendant to infringement proceedings can only apply for a stay of the infringement proceedings until a decision in an invalidity action has been handed down. However, in the large majority of cases, the infringement courts reject such an application.
To invalidate a patent, an opposition can be filed with the German Patent and Trademark Office in the case of national German patents or with the European Patent Office in the case of European patents, if the opposition period for the patent in suit has not yet lapsed. If the opposition period has lapsed, a nullity action can only be filed with the German Federal Patent Court (both for national German patents and German parts of European patents). The nullity senates of the German Federal Patent Court usually comprise five members: two lawyers and three technicians.
2.4 Who can represent parties before the courts handling patent litigation and/or the government agency dealing with patent validity issues?
In infringement proceedings, each party must be represented by an attorney-at-law (Rechtsanwalt). In addition, the attorney-at-law may be assisted by a patent attorney. Under German law, a patent attorney must have a degree in science or engineering and thereafter had further training in patent law before he/she is admitted to the Bar of Patent Attorneys. Patent attorneys do not have a right of audience in infringement proceedings without an attorney-at-law.
In opposition proceedings before the German Patent and Trademark Office and nullity actions before the German Federal Patent Court, parties domiciled in Germany need not be represented by an attorney-at-law. They can also be represented by a patent attorney or an in-house counsel. However, it is usually advisable to appoint an attorney-at-law and/or patent attorney. Furthermore, parties that are not domiciled in Germany must appoint an attorney-at-law or a patent attorney to represent themselves.
In opposition proceedings before the European Patent Office, parties that are domiciled in a Member State of the European Patent Convention need not appoint a representative. Again, however, it is advisable that a representative is appointed. Furthermore, parties that are not domiciled in a Member State of the European Patent Convention must appoint an attorney-at-law or a patent attorney.
2.5 What is the language of the proceedings? Is there a choice of language?
All infringement proceedings before a German court and the German Patent and Trademark Office are held in the German language. The parties cannot choose that a different language shall apply. However, proceedings before the European Patent Office may be held in any official language of the European Patent Convention, ie in English, French or German.
2.6 To what extent are courts willing to grant cross-border or extraterritorial injunctions?
Patents are rights granted under the national laws of a jurisdiction or in case of a European Patent according to the EPC. However, as mentioned before, the European Patent is only a bundle of national patents. Accordingly, whether or not a patent is infringed will always be judged on the basis of the laws of that national jurisdiction. For example, whether a German patent (or the German part of a European patent) is infringed, will always be determined upon German patent law. Whether a French patent is infringed will always be determined upon French patent law, etc.
It is a different question, however, whether the courts of one country have jurisdiction for patent infringement occurring in another country, thereby applying foreign law. Pursuant to Art 2, para 1 of Regulation EC 44/2001 (formerly the Brussels Convention), an infringer can be sued for infringements in other countries in its country of domicile. In principle, this allows a person domiciled in Germany to be sued for infringement of, eg, a French or UK patent in front of the German courts.
On the other hand, pursuant to Art 22 No 4 of Regulation EC 44/2001, an invalidity action against a patent falls under the exclusive jurisdiction of the courts of the country in which the patent was issued. For example, the French courts have exclusive jurisdiction for invalidity actions against French patents, the UK courts for invalidity action against UK patents etc. This raises the question whether the German courts still have jurisdiction pursuant to Art 2 para 1 of the Regulation, if invalidity is raised during the proceedings. This is in particular problematic where the German court would apply the law of a country where invalidity is tried jointly with infringement (as, eg, in the UK). Due to this problem, the German courts so far have mostly refused to grant cross-border injunctions, if the validity of the patent in suit is in issue. However, the Düsseldorf Court of Appeal has recently referred this question to the ECJ in the case GAT v LuK (C-4/03). It remains to be seen how the ECJ will decide this case and whether the German courts, following such decision, will issue cross-border injunctions in the future or not.
Notwithstanding the above, German courts have rejected the ‘spider in the web’ doctrine developed by the Dutch courts. The Dutch courts developed this doctrine in relation to jurisdiction pursuant to Art 6 No1 of Regulation EC/44/2001, which allows for a common place of jurisdiction at the domicile of one of the defendants, if there is a close relationship between the grounds of complaint against the other defendants. The Dutch courts have interpreted this provision to allow for a single litigation also against defendants not based in the Netherlands for infringement of non-Dutch patents, if the main controlling entity (‘the spider in the web’) is domiciled in the Netherlands. However, the ‘spider in the web’ doctrine is also subject to review by the ECJ at the moment in the case Roche v Primus (C-539/03). The ECJ’s Advocate General in this case has already given his opinion and has rejected the Dutch ‘spider in the web’ doctrine. In the majority of cases, the ECJ follows the opinion of the Advocate General. Hence, there is high likelihood that the ECJ will reject the ‘spider in the web’ doctrine. In any event, as already mentioned, the German courts never applied this doctrine.
2.7 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?
Pursuant to Art 27 para 1 of Regulation EC 44/2001, a court must stay proceedings, if there are already proceedings pending between the parties on the same subject-matter before a court of another member state of the European Community. Potential infringers therefore often file so-called actions for declaration of non-infringement (ie actions in which the court holds that the patent is not infringed) with the courts in a slow-moving jurisdiction such as Italy or Belgium. If the patent holder then files an action for infringement in another Member State, the alleged infringer claims that these proceedings must be stayed due to the already pending action for a declaratory judgment of non-infringement. In this way, infringers have been able to block infringement proceedings for several years in the past.
Patent holders have tried to argue in front of the German courts that such a so-called ‘torpedo’ action for a declaratory judgment of non-infringement must be considered as an abuse of law and that thus no stay should be granted. However, so far, the German courts have not explicitly followed such an argument. Nevertheless, in recent decisions, German courts have indicated that they may be willing to accept this argument in such cases where it is clear that the court in which the action for declaratory non-infringement was filed does not have jurisdiction. It remains to be seen how the position of the German courts develops in the future in this respect.
However, the blocking effect of a ‘torpedo’ has only to be recognised with respect to main actions. With respect to actions for interim injunctions, Regulation EC 44/2001 provides no rule. Therefore, some German courts have even indicated that they consider the fact that the defendant has filed a ‘torpedo’ action can be considered as prima facie evidence that an interim injunction is necessary. For further details on interim injunction proceedings, please refer to question 8 below.
Finally, recent judicial reforms and new case law, in particular in Italy, have rendered torpedo actions less attractive than they were some years ago.
3.1 How is patent infringement assessed? To what extent does the doctrine of equivalence apply in an infringement action?
Under German law, a patent can be infringed either literally or ‘by equivalent means’. Literal infringement occurs when the attacked embodiment fulfils all features of at least one claim of the patent. Section 14 GPA and Art 69 EPC state that the extent of the protection is determined by the terms of the claims. Whenever there is a dispute about the meaning of a patent claim, the claim must be construed. For construction of claims, the courts first determine the meaning of the words in terms of the patent’s description. Then, the ordinary meaning of the words used in the claim and/or the meaning generally ascribed to such terms in the relevant area of technology is to be considered. Having identified the meaning, the wording of the claims is to be taken seriously. According to Art 1 of the Protocol on the Interpretation of Art 69 of the EPC, Art 69 EPC should not be interpreted in the sense that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Neither should it be interpreted in the sense that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patentee has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patentee with a reasonable degree of certainty for third parties. Section 14 GPA is interpreted similarly by the national courts.
The prosecution files must not be used for construing the claims. However, a decision in an opposition or invalidity action, in which the claims of the patent have been construed already, can be taken into account. If the attacked embodiment does not infringe the patent literally, it may nevertheless infringe by ‘equivalent means’. According to the Federal Supreme Court, ‘infringement by equivalent means’ is a matter of construction of claims. The courts use the following three-step test for determining whether there is ‘infringement by equivalent means’:
The most important defences are:
(a) Denial of the facts for infringement
The alleged infringer can attack the plaintiff’s description of the attacked embodiment in the complaint brief. However, the more detailed/substantiated the plaintiff’s statements about the attacked embodiment are, the more the defendant has to give detailed/substantiated reasons why the plaintiff’s description of the attacked embodiment is wrong.
Furthermore, in case of product-by-process-claims, there is a legal assumption that a product that is described as a new product resulting from the patented process was produced using the patented process. Hence, in this case the defendant bears the burden of proof that he did not use the protected process.
(b) False construction of claims
The defendant can argue that the plaintiff construes the claims wrongly and that the attached embodiment therefore does not fall under the patent in suit. This is one of the most important defences.
(c) Personal prior use
According to s 12 GPA, the alleged infringer has a right based on prior use if he had already used or had made all necessary preparations to use the invention claimed by the patent at the patent’s priority date. This defence is interpreted narrowly. Accordingly, it does not suffice that the alleged infringer already had the idea for the invention but was still evaluating/investigating it further. Instead, it is necessary that the alleged infringer was capable of fully using the invention. He can demonstrate this capability eg on the basis of drawings or models. The personal earlier right of use is limited to the embodiment that was used at the priority date of the patent in suit. It does not extend to improvements of the embodiment. Further, this right of use can only be transferred together with the business of the person enjoying the right of use.
(d) Older patent/utility model
The alleged infringer can defend himself successfully, if he is the owner or licensee of a patent/utility model with better priority that covers the attacked embodiment. However, this right is limited to what is covered by the older patent/utility model and does not cover any variants thereof that are covered by the patent in suit.
(e) ‘Misappropriation’
This defence is available if what is claimed in the patent in suit was illegitimately taken from drawings, descriptions etc of the alleged infringer. This defence can only be raised by the person/entity affected by such ‘misappropriation’ and not by any third party.
(f) Exhaustion
This defence is available if the patented product or a product resulting from a patented process has been put on the market in a Member State of the European Community or the European Economic Area (EEA) by or with the consent of the patent owner.
(g) Lapse of time/estoppel
Claims for patent infringement are barred due to lapse of time after three years. The three-year period begins at the end of the year in which the claim has arisen and the rights owner has obtained knowledge about the infringement or grossly negligently failed to gain such knowledge. Irrespective of his knowledge/grossly negligent failure to obtain knowledge, claims are barred due to lapse of time 10 years from the date the claim has arisen.
However, any limitation period for injunctive relief starts anew with every single act of infringement. Hence, for as long as the infringer continues to infringe, lapse of time usually is not available as a defence against claims for injunctive relief. However, lapse of time may be used to limit the infringer’s liability for damages and other claims such as the claim for rendering of information. However, even after limitation of claims for damages, the infringer would have to pay compensation for unjust enrichment in form of a reasonable royalty.
Further, even if claims are not barred due to lapse of time, the rights owner may be estopped from bringing claims. However, this defence is only available in rare circumstances. It requires that the rights owner by his conduct has given the alleged infringer reasonable grounds to believe that the rights owner would not bring any claims for patent infringement. Mere inactivity of the rights owner for some time does not suffice.
(h) No invalidity defence
As already mentioned, infringement and invalidity are dealt with in two separate actions in Germany. Accordingly, the invalidity of the patent in suit cannot be raised as a defence in an infringement action. The alleged infringer can only apply for a stay of the infringement proceedings until a decision in invalidity proceedings is handed down. However, such a stay is only granted on rare occasions, in particular if the defendant produces novelty destroying prior art which was not considered by the Patent Office in the examination of the patent application.
Notwithstanding the above, where the patent owner asserts ‘infringement by equivalent means’ – and not literal infringement – there is a defence available that is similar to an invalidity argument. This defence is called the ‘Formstein’-defence (named after a decision of the German Federal Supreme Court in Formstein [1986] GRUR 803 et seq). This defence is available if the attacked embodiment was already disclosed to the public before the priority date of the patent in suit. However, the Formstein defence has a narrow scope and thus is available in few cases only.
3.3 To what extent can enforcement of a patent expose the patent holder to liability for an antitrust violation?
The ECJ has held (Case No C-418/01 IMS/Health) that a patent holder is obliged to grant a licence to a third party, if all of the following requirements are met.
The German Federal Supreme Court (citing the ECJ’s IMS/Health judgment) is of the opinion that a patent holder which is market dominating because his patented technology has become a market standard may under certain additional circumstances be under an obligation to license the technology on equal, non-discriminatory terms (Standard-Spundfass [2004] GRUR 966, BGH).
Hence, an obligation of a market-dominating patent holder to grant a licence can arise in exceptional circumstances.
According to ss 22, 21(1) GPA, national German patents, respectively the German parts of European Patents, can be invalidated on the following grounds:
3.5 Can a court only partially invalidate a patent? Can it transform the patent into a utility model?
A court can partially invalidate a patent unless the patent holder expressly refuses a partial invalidation. If the patent holder refuses, the court can then either only uphold the patent in full or delete it completely. In case of a partial invalidation, the patent is deemed to have come into force in the amended form from the day of its issuance. Further, the grounds of the decision, in which the patent was partially invalidated, are deemed to replace the patent’s description.
A court cannot transform a patent into a utility model.
As already mentioned, infringement and invalidity are dealt with in two separate actions in Germany. Accordingly, the patent holder cannot amend the claims directly in the infringement proceedings. However, the patent holder can limit – but not extend – the claims at any time during ongoing opposition or nullity proceedings and he can then use such limited claims in an infringement action.
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 (expiry of time limit)?
There are no such grounds under German law on which an otherwise valid patent can be deemed unenforceable, owing to misconduct by the patent holder. With respect to unenforceability of claims arising from infringement due to lapse of time or due to estoppel, please refer to question 3.2 above.
3.8 Can a patent holder bring a law suit claiming both patent infringement and unfair competition for the same set of facts?
In principle, claims for unfair competition are secondary to claims for patent infringement. Hence, in principle, if there are claims for patent infringement the patent holder cannot also bring claims for unfair competition. However, this can be different in some cases. If, eg, the infringer does not just use the technical teaching of the patent but also copies design features/the get-up of the patent holder’s product, the patent holder may have both claims for patent infringement and also claims for unfair competition. Nevertheless, these claims are directed at different relief. Whereas the claims for patent infringement are directed at injunctive relief against the use of the technical teaching of the patent and related claims for damages etc, the claims for unfair competition are directed at injunctive relief against copying the design/get-up of the product and related claims for damages etc.
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?
Both the patent holder and the exclusive licensee have their own right to sue for patent infringement. The exclusive licensee does not need to have its license registered to be able to sue. Non-exclusive licensees, distributors and the like are not entitled to sue for patent infringement unless:
4.2 Under what conditions, if any, can an alleged infringer bring a law suit to obtain a declaratory judgment of non-infringement?
The alleged infringer must show a ‘legitimate’ interest to obtain a declaratory judgment of non-infringement. The alleged infringer will usually have this legitimate interest, if he has received a cease and desist letter or the patent holder has otherwise asserted that he has claims for patent infringement against the alleged infringer.
On the other hand, an action for a declaratory judgment of non-infringement is inadmissible, if the potential infringer simply fears that the patent holder might bring claims for patent infringement in the future, but the patent holder has not yet given any indication that he will actually do so.
4.3 Who can be sued for patent infringement? Can the company directors be sued personally? Under what conditions, if any, can anyone be sued for inducing or contributing to patent infringement by anyone else?
First, of course, anyone can be sued who commits acts of infringement himself. Further, anyone who aids or abets patent infringement can be sued as well. Moreover, any ‘disturber’ can be sued. A ‘disturber’ is anyone who would have had the opportunity to prevent the patent infringement and who is expected to do so because of his position and authority. For example, the Federal Supreme Court in one case even held that someone who let the infringer use his telephone line, and the infringer then offered infringing products on the telephone, was liable for patent infringement.
Also, the directors of a company are usually liable as well. However, if there is more than one director, only the director, in whose area of responsibility the infringement occurred, is liable. Any director is liable once he has been informed about the alleged infringement and does not take immediate steps to stop the infringement. The company itself is liable for any acts committed by its directors and/or its employees in the course of service for the company.
Further to the above, a patent can also be infringed by so-called ‘contributory infringement’. This head of liability arises where goods are supplied that themselves do not infringe the patent but are related to an ‘essential element’ of the patented invention and the supplier knows or it is obvious that the supplied goods are suitable and meant to be used to perform the patented invention.
A change in the parties to patent infringement litigation may occur due to operation of law or due to applications by the parties.
A change in a party due to operation of law occurs, for example, in case of the death of one the parties. In that case, the heirs become a party to the proceedings instead of the deceased.
With respect to a possible change of the defendants due to an application by the plaintiff, the following applies: Prior to an oral hearing, the plaintiff is free to withdraw an action against any defendant and therefore remove him from the action. However, after the start of the oral hearing, the removal of a defendant requires the defendant’s consent. Adding new defendants is permissible if either:
Removal of a plaintiff from the proceedings does not require the defendant’s consent until the start of the oral hearing. Thereafter, the defendant’s consent is necessary. Adding a plaintiff requires either the defendant’s consent or adding the plaintiff is expedient with respect to case management.
5.1 What options are open to a patent holder when seeking to enforce its rights in your country?
Out of court, the patent holder can send a cease and desist letter. In this letter, the patent holder usually asserts patent infringement and briefly sets out the reasons for this. Furthermore, the patent holder usually demands that the alleged infringer renders a written undertaking that:
There is no legal requirement to send a cease and desist letter before a court action. However, if the patent holder takes court action immediately, he runs the risk that he has to bear the costs of the court proceedings, if the infringer immediately acknowledges the claims for patent infringement once the court action is filed.
Nevertheless, it has to be considered carefully in each individual case whether a cease and desist letter should be sent before any court action. The cease and desist letter alerts the alleged infringer that the patent holder is seeking to enforce his rights. Sending a cease and desist letter therefore bears the risk that the alleged infringer files a ‘torpedo action’ (for further details, please refer to question 2.7 above).
In court, the patent holder can enforce its rights by means of a preliminary injunction (for further details, please refer to question 8 below) or by a main action (for further details, please refer to question 6).
Infringing a patent with intent is a criminal offence under German law. Punishment is either a fine or imprisonment up to three years. If the infringer acted ‘commercially’, punishment is either a fine or imprisonment up to five years.
Attempted patent infringement is a criminal offence as well. Unless the infringer acted ‘commercially’, punishment and the instigation of criminal proceedings requires an application for punishment by the patent holder. However, the availability of criminal proceedings is not to be over-valued as the prosecution authorities in many cases do not have sufficient capacity to prosecute patent infringements to the extent that would be desirable.
There are two kinds of procedures for customs monitoring and seizures available for a patent holder in Germany. Firstly, pursuant to Community Regulation EC/1383/2003, the patent holder can apply for customs monitoring and seizures with respect to goods imported from or exported to countries that are not Member States of the European Communities or the EEA. Secondly, under national German law, the patent holder can apply for customs monitoring and seizures of goods imported from or exported to Member States of the European Communities and the EEA. While these two types of proceedings are largely similar, they have some significant differences as well.
For example, under the procedure pursuant to Community Regulation EC 1383/2003, it suffices for a customs seizure that the goods are suspected to infringe a patent. In contrast, in the proceedings under national German law, the patent infringement must be ‘obvious’ to allow for a customs seizure. Furthermore, there are important differences in the proceedings following a seizure. If a seizure occurred under Community Law, the patent holder must show to the customs authorities within 10 days after he has been notified of the seizure that either the alleged infringer has consented to the destruction of the goods or that the patent holder has initiated civil proceedings for patent infringement. If, on the other hand, customs seize goods in proceedings under national German law, the customs authorities will automatically permanently seize and usually destroy the seized goods, unless the alleged infringer objects to this within two weeks after he has been notified of the seizure. If the alleged infringer does object, the patent holder must either provide within further two weeks a court decision ordering the seizure of the goods or declare that he consents to the release of the infringing goods.
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?
ADR methods are very rarely used to solve a patent dispute in Germany. Firstly, ADR methods in general are not very widely used in Germany. Secondly, the costs of patent litigation in Germany are rather low compared to other jurisdictions and proceedings are swift. Further, the courts’ decisions are generally of high quality. Accordingly, most parties to German patent litigation do not consider ADR methods to be preferable.
Nevertheless, these proceedings are possible in patent infringement matters and an arbitral award in such cases does have the same effect as a court decision. Foreign arbitral awards are also recognised under the European Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention 1958). It remains to be seen whether ADR methods become more popular in Germany in the future following the trend in other jurisdictions such as the UK and the US.
A patent can never be invalidated by arbitral award.
In German patent infringement proceedings, the written briefs are of particular importance. There is an oral hearing as well, which is usually the last procedural step before the court delivers its decision. However, this oral hearing does not serve to present and discuss the full case. Instead, usually, only open questions and the main issues of the case are pleaded and discussed based on the submission of the parties in their prior written briefs. Further, oral hearings can be used to hear witnesses and/or experts, if the court has ordered that evidence shall be taken.
A typical patent infringement case follows the following procedure:
Patent infringement actions in which no expert evidence is required usually take about 12–15 months in the first instance.
There is no jury in patent infringement cases in Germany. The decision is made by a chamber of the court, which consists of three professional judges. As opposed to invalidity proceedings there are no technical judges in infringement proceedings. The chamber has the option to assign the case to one of its members to decide as a single judge. However, as patent infringement matters are usually complex cases, this is very rarely done.
6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?
Written documents (including drawings and pictures of the attacked embodiment and samples of the attacked embodiment) are the most important means of evidence in infringement proceedings. Witnesses are rarely used as it is very difficult to describe orally all details of a product that are necessary to assess whether there is a patent infringement or not. Opinions of private experts are considered by the court. However, if the court comes to the conclusion that it does need the assistance of an expert to assess a question, it will appoint an expert on its own. Some courts, such as the Düsseldorf District Court, do not often appoint experts; other courts do so quite regularly.
Cross-examination as practiced in Anglo-American legal systems is not used in Germany. However, each party can ask questions to every witness.
6.4 To what extent is a 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?
It is one of the fundamental principles of German Civil Procedure Law that each party has to obtain the evidence it needs itself. A pre-trial discovery is not permitted under German law. However, new provisions were recently introduced in the German Civil Procedure Act. These provisions allow a court to order one of the parties or a third party to submit to the court documents or other materials to which one of the parties has referred. However, so far, the courts have handled this possibility of obtaining evidence restrictively. Furthermore, according to s 809 German Civil Code, the plaintiff may be entitled to ask for an inspection of the alleged infringing product. As this right has to be enforced separately, it is not equal to pre-trial discovery.
Further, the Düsseldorf District Court has in recent years developed a mechanism to allow for inspection of potentially infringing goods before or during trial. For further details, please refer to question 8.3 below.
However, the difficulties in obtaining evidence in patent infringement proceedings are subject to Directive 2004/48/EC on the Enforcement of Intellectual Property Rights. According to Art 7(1) of the Directive, the Member States have to ensure that even before proceedings on the merits of the case the courts may order provisional measures to preserve relevant evidence. Such measures may include detailed description, taking samples or even physical seizure of the infringing goods. The implementation is subject to current legislation in Germany. A first draft has been published recently.
6.5 What level of proof is required for establishing infringement or invalidity?
The court must be convinced that there is infringement or invalidity, as applicable. As there can be no absolute certainty, a degree of certainty that leaves no reasonable doubts that there is infringement/invalidity suffices.
6.6 How long do patent infringement proceedings typically last? Is it possible to expedite this process?
The length of infringement proceedings in the first instance depends on the respective court hearing the case. Generally, proceedings take about 12 months from the filing of the complaint until the court issues its decision.
There are no means to expedite this process.
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 a defendant?
The most severe way to delay proceedings is to file a ‘torpedo action’ as already described in question 2.7 above. To avoid a ‘torpedo action’ blocking the infringement proceedings, the plaintiff can immediately file the complaint without any prior warning. However, this may result in cost disadvantages.
Further, the defendant can apply for a stay of the proceedings if there are opposition proceedings or a nullity action pending. However, the German infringement courts rarely grant such stays (please refer also to question 3.2 above).
Also, the defendant can try to delay proceedings by applying for extensions of deadlines to file briefs. However, the courts are usually only prepared to grant such extensions, if the grant of the extension does not jeopardise the date of the hearing as scheduled in the early stages of the proceedings. Hence, such delaying tactics are usually not successful.
Finally, the defendant can try to convince the court that an expert opinion must be obtained. If the court follows this, the proceedings are in fact delayed by several months and in some cases for even longer than a year. However, most German courts will only obtain expert opinions in few, complex cases. The plaintiff can try to avoid the court ordering an expert opinion by presenting the case in such detail that no technical questions remain open.
7.1 What remedies are available against a patent infringer (final injunction, delivery up or destruction of infringing products, publication of the decision, recall-order, monetary damages, etc)?
Most remedies that are available in the event of patent infringement are regulated by s 139 et seq GPA. The patent holder is entitled to the following relief against a patent infringer:
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 customers?
A court decision ordering injunctive relief can only be enforced against the defendants involved in the infringement action. Hence, unless the infringer’s suppliers or customers were included as defendants in the action, the decision cannot be enforced against them.
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?
The plaintiff can choose one of the three following methods of calculation for damages:
These three methods of calculation of damages have been generally accepted by the courts, even though they are not explicitly mentioned in the German Patent Act. According to the intended implementation of the provisions of the Directive 2004/48/EC, these methods will be incorporated.
As already mentioned, the patent holder, instead of claiming payment of damages, can claim that the infringer surrenders his ‘unjust enrichments’. In particular, this claim is brought in cases where the infringer did not act at least negligently or where claims for damages have become time-barred after three years. The ‘unjust enrichment’ to be surrendered is calculated in accordance with the licence analogy method outlined above.
Finally, for the time period between publication of the patent application plus one month allowed for reasonable information and the patent grant, the patent holder cannot claim payment of damages but only payment of ‘reasonable compensation’. This ‘reasonable compensation’ equals the amount of a reasonable royalty.
8.1 Is preliminary relief available? If so, what preliminary measures are available (eg, preliminary injunction) and under what conditions?
The following preliminary measures can be obtained:
However, the courts are very reluctant to grant such preliminary measures. Patent infringement cases are usually complex matters. Also, the validity of the patent in suit is usually difficult to assess for the court. Hence, courts are usually only prepared to grant preliminary measures if:
Furthermore, the patent holder must not wait too long to file an application for interim relief. Depending on the individual court, the patent holder must file the application within one to six months after he has obtained knowledge of all relevant facts or he will loose the chance to obtain preliminary relief.
8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?
German courts can issue preliminary injunctions and further preliminary relief ex parte. However, due to the complexity of questions of patent infringement and validity and also due to the significant impact that interim relief may have on the alleged infringer’s business, German courts are very reluctant to grant interim relief ex parte. Accordingly, the grant of ex parte preliminary relief requires that the matter is so urgent that it is necessary not to wait for a hearing to prevent severe damages of the patent holder.
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-contrefacon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?
As indicated before, it was extremely difficult for a patent holder to gain access to a potentially infringing device in the possession of a third party without the third party’s cooperation. Until recently, the Federal Supreme Court had held that there must be a ‘high degree of likelihood’ that the device infringes the patent (see Druckbalken [1985] GRUR 512 et seq, [1987] IIC 108 et seq, Federal Supreme Court). It was very difficult for the patent holder to show that there was such ‘high degree of likelihood’ for infringement:
Finally, the Federal Supreme Court in 2002 decided in the field of copyright law that it would suffice if the plaintiff can show a ‘certain degree of likelihood’ for the infringement (see Faxkarte [2002] GRUR 1046 at 1048 et seq, [2003] IIC 331 et seq, Federal Supreme Court).
The Düsseldorf District Court developed a procedure to allow inspection of potentially infringing goods before or during trial. Procedurally, the claim for inspection can be enforced as follows:
This procedure has been a significant improvement for potential plaintiffs in obtaining pre-action evidence.
As mentioned before, the intended implementation of the provisions of Directive 2004/48/EC will establish consistent conditions for preserving evidence. Preliminary measures, possibly without the other party having been heard, will be available as well.
8.4 Can the defendant put the validity of a patent in issue in preliminary injunction proceedings?
As already mentioned, infringement and validity proceedings are usually separate under German law. Accordingly, invalidity of the patent in suit cannot be raised in the main action for a patent infringement. However, the courts do consider the question of validity in preliminary injunction proceedings. The reason for this is that a preliminary injunction usually has a significant impact on the alleged infringer’s business and is issued without a full analysis of all details of the case. Therefore, the courts are careful in granting such an injunction, in particular if the validity of the patent in suit is not beyond reasonable doubts. The courts consider that the grant of a preliminary injunction on the basis of a possibly invalid patent can cause irreparable harm.
As in main proceedings, the emphasis is on written briefs to the court. If the court grants a preliminary injunction ex parte, there is even no hearing at all.
An action for preliminary relief is started by a written application of the patent holder. The court will then decide whether it:
(1) rejects the application,
(2) requires that a hearing is held or
(3) grants the injunction without a hearing, ie ex parte.
If the court decides that a hearing will be held, the alleged infringer can usually submit a written defence brief to the court. If there is sufficient time before the hearing, the applicant can also submit a further brief in response to the alleged infringer’s defence brief.
8.6 To what extent are documents, affidavits, witnesses, and/or (court-appointed or private) experts used in preliminary injunction proceedings?
Documents and affidavits are the most important means of evidence in preliminary injunction proceedings. Witnesses can be heard. However, they will only be heard if they are present at the oral hearing. Hence, contrary to main action proceedings, the court will not allow a witness to be heard at a later point in time following the hearing. Furthermore, as preliminary injunction proceedings are fast-moving proceedings, expert opinions are not obtained by the court but the parties may (at least theoretically) bring their own experts as witnesses to the hearing.
8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?
Preliminary injunctions for patent infringement can have a severe effect on the business of the alleged infringer. Therefore, the courts do not grant a preliminary injunction unless there is a clear-cut case of infringement and the validity of the patent in suit is without doubt. The courts will usually consider the validity of the patent to be without doubt only in cases where the patent in suit has already been upheld in an opposition and/or an invalidity action.
If the court grants the injunction ex parte, ie without hearing the alleged infringer, it will grant the injunction within a few days, sometimes even within a few hours. If the court orders that the injunction will not be granted without a hearing, such hearing will usually take place within three to six weeks of the application for the preliminary injunction. The court will then decide either at the end of the hearing or within a few days thereafter.
8.9 Where a preliminary injunction is granted, is it necessary to start main action proceedings to confirm the preliminary injunction?
It is not necessary per se to start main proceedings following the grant of a preliminary injunction. However, the defendant can apply to the court to set a deadline for the patent holder to start main infringement proceedings. If the patent holder fails to start main proceedings within the deadline set by the court, the preliminary injunction becomes unenforceable.
9.1. What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?
A District Court’s decision in main infringement proceedings may be appealed to the respective Regional Court of Appeal. The appeal must be filed within one month of the written decision being served. The appellant does not need any leave of the District Court or the Court of Appeal for the appeal. The Court of Appeal reviews both the facts and the law. However, the parties may only introduce new facts under certain circumstances, eg if the facts were not yet known during the trial before the District Court.
The decision of the Regional Courts of Appeal can be further appealed to the Federal Supreme Court. However, the appellant needs either the Court of Appeal’s or the Federal Supreme Court’s leave for the appeal. This further appeal is limited to a review of questions of law. Fact-finding is not reviewed.
In preliminary injunction proceedings, the avenue of appeal available depends on what decision the court issued. If it granted the preliminary injunction without a hearing (ex parte), the defendant can file an opposition. In this case, the District Court, which has issued the preliminary injunction, will schedule a hearing and then decide whether it upholds its preliminary injunction. The District Court’s decision following the hearing can then be further appealed to the respective Regional Court of Appeal.
Further, the respective Regional Court of Appeal hears appeals against the decisions of the District Court rejecting an application for a preliminary injunction and any decisions in which the District Court granted a preliminary injunction following a hearing. Neither the District Court nor the Regional Court of Appeal need to grant leave for the appeal. As in main proceedings, the Court of Appeal undertakes a full review of both the facts and the law. There is no further appeal against the Court of Appeal’s decisions in preliminary injunction proceedings.
9.2 How long do appeal proceedings typically last?
Appeal proceedings before a Court of Appeal usually last between 15 to 18 months. A further appeal before the Federal Supreme Court usually takes about two to three years.
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?
Firstly, the plaintiff has to pay the court fees upfront. The court fees depend on the so-called ‘value in dispute’. The ‘value in dispute’ is the (estimated) economic interest that the plaintiff has in pursuing the case but is not equal to the estimated damages. Accordingly, the value in dispute varies depending on the individual case. In patent infringement matters, the value in dispute typically is within the range of €250,000 to €5m. In high value litigation, it may also be in excess of €10m.
The minimum amount for lawyer’s fees is regulated by the Code of Lawyer’s Fees (Rechtsanwaltsvergütungsgesetz, RVG). Court fees are regulated as well. Both statutory lawyer’s and court fees relate to the respective value in dispute: the higher the value in dispute the higher the costs, although the relationship is not linear. For example, the court fees at a value in dispute of €500,000 amount to approximately €8,900. At a value in dispute of €3m, court fees are approximately €31,400. Statutory lawyer’s fees in first instance at a value in dispute of €500,000 amount to approximately €7,500 net, at a value in dispute of €3m, they amount to approximately €26,200 net, in each case plus expenses and value added tax for German clients (currently 16% but increasing to 19% in 2007). Furthermore, fees for taking evidence or fees for settlements may incur as well.
Fees for appeal proceedings are higher, both for court fees and lawyer’s fees. At a value in dispute of €500,000, court fees amount to about €8,400 and lawyer’s fees amount to about €13,300 net. At a value in dispute of €3m, fees add up to about €47,000 (court) and about €29,400 net (lawyer). Expenses have to be considered as well.
The said principle is also applied in preliminary injunction proceedings. However, as preliminary injunction proceedings are of preliminary nature only, the ‘value in dispute’ usually is about 25–50 % lower than it would be for a main action based on the same set of facts.
In order to relate lawyer’s fees to the efforts made in each individual case, many specialised law firms handling patent infringement cases charge fees based on the time spent in cases where the time needed is not sufficiently covered by the statutory minimum fees according to the RVG. This can in particular on complex patent infringement cases result in significantly higher lawyer’s fees than the fees according to the value-based RVG.
Furthermore, in many patent infringement cases, patent attorneys are also involved. The fees of patent attorneys are calculated in the same way as the lawyer’s fees.
10.2 Are costs recoverable from the losing party?
The losing party has to reimburse the winning party for all court fees paid. Furthermore, the losing party has to reimburse the winning party’s lawyers fees. However, the amount of fees that can be recovered is limited by the statutory fees according to the above-mentioned Code of Lawyer’s Fees. For sample calculations, please refer to question 10.1.
11. FORTHCOMING LEGISLATION
11.1 What are the important developing and emerging trends in your country’s patent law?
As already mentioned in the answer to question 7.3 above, the Federal Supreme Court in its Gemeinkostenanteil decision held that overheads may not be deducted from the profit which the patent holder may claim as compensation for damages. Following this decision, it is perceived that the amount of damages that can be claimed might be significantly increased. However, many details are still open like which costs can be deducted from the infringer’s profits to be surrendered and cannot. It will remain to be seen whether in the long run patent holders will be able to recover substantially higher damages following the Gemeinkostenanteil decision of the Federal Supreme Court.
11.2 To the extent it relates to patent enforcement, please outline any major patent legislation in the pipeline.
As mentioned above, Community Directive EC 2004/78 on the Enforcement of Intellectual Property Rights has yet to be implemented in Germany. However, a first draft of the respective implementation Act provides for the following:
12.1 Please identify any useful works of reference relating to patent law and patent litigation in your country including useful websites.
www.dpma.de (the German Patent and Trademark Office)
www.bundespatentgericht.de (the German Federal Patent Court)
www.european-patent-office.org (the European Patent Office)
www.transpatent.com (full text of the German Patent Act and other important pieces of
legislation relating to patent law)
Kühnen/Geschke Die Durchsetzung von Patenten in der Praxis (2nd edn, 2005) (in German)
Benkard Commentary on the German Patent Act (10th edn, 2006) (in German)
Schulte Commentary on the German Patent Act (7th edn, 2005) (in German)
Busse Commentary on the German Patent Act (6th edn, 2003) (in German)
International Review of Intellectual Property and Competition Law (IIC)
European Intellectual Property Review (EIPR)
Gewerblicher Rechtsschutz und Urherberrecht (GRUR) (in German)
