Patent litigation in Germany: overview

A Q&A guide to patent litigation in Germany.

The Q&A gives a high level overview of patent disputes, including how patent infringement is assessed; the conditions for a declaratory judgment; invalidation proceedings; preliminary relief and enforcement options.

To compare answers across multiple jurisdictions visit the patent litigation Country Q&A tool.

This Q&A is part of the global guide to Patent Litigation. For a full list of jurisdictional Q&As visit www.practicallaw.com/patentlitigation-guide.

Contents

Sources of law

1. What are the principal sources of law and regulation relating to patents and patent litigation?

National law

The most important source of national law is the German Patent Act (Patentgesetz), which contains provisions on the following:

  • Patentability.

  • Opposition and invalidity proceedings.

  • Licensing.

  • Infringement.

Additional details on the patent application procedure and opposition proceedings are contained in the Patent Regulation (Patentverordnung) and provisions regarding inventions made by employees in the course of their work are contained in the Act on Employee Inventions (Gesetz über Arbeitnehmererfindungen). In addition, the German Utility Model Act (Gebrauchsmustergesetz) regulates the protection of utility models.

EU law

EU legislation in the form of directives and regulations has a strong influence on IP law in Germany and other EU member states. Regulations are immediately effective in the member states. However, directives require formal implementation into national law. In general, EU legislation has resulted in a noticeable degree of harmonisation in substantive patent law across Europe. The most recent EU legislation concerning patent litigation includes the following:

  • Regulation (EU) 608/2013 concerning customs enforcement of intellectual property rights.

  • Regulations concerning the Unified Patent Court, including:

    • Regulation (EU) 1257/2012 concerning the creation of unitary patent protection;

    • Regulation (EU) 1260/2012 concerning translation arrangements in the area of the creation of unitary patent protection;

    • Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast Brussels Regulation).

International treaties

Germany is party to the following international treaties relating to patents:

  • WIPO Paris Convention for the Protection of Industrial Property 1883, which, among other things, contains important provisions on priority.

  • Patent Cooperation Treaty 1970, which regulates a common application procedure for the contracting states.

  • Act Revising the European Patent Convention 2000, which provides for a uniform and centralised application and patent grant procedure.

  • Agreement on a Unified Patent Court (UPC Agreement), which provides for a pan-European patent court system and substantive law regarding, among other things, the validity and infringement of certain European patents. Germany has not yet ratified the UPC Agreement.

Court decisions

German law does not provide for a concept of binding precedents. However, in practice, the lower instance courts usually follow the rulings of the higher instance courts and in particular the rulings of the Federal High Court of Justice (Bundesgerichtshof).

Priority of the relevant sources

Generally, EU law takes precedence over national law, which must be interpreted in accordance with applicable EU legislation. In addition, national legislation implementing international treaties must be interpreted in accordance with the underlying treaties. On a national level, the German Patent Act takes precedence over the Patent Regulation.

 

Court system

2. In which courts/government bodies are patents enforced?

In Germany, patents are enforced in courts instead of patent offices or other government agencies. There are 12 regional courts (Landgerichte) that have jurisdiction to hear patent infringement cases in the first instance. However, the vast majority of cases are brought in only four of these courts (that is, in order of priority, the regional courts of Düsseldorf, Mannheim, Munich and Hamburg). For example, roughly 600 new patent cases are brought in Düsseldorf each year, which amounts to more than half of all new patent litigation cases in Germany.

Each of the regional courts has one or more specialist patent litigation panels consisting of three judges. The judges are all legally qualified and although they do not have a formal technical background, they are typically very experienced in patent matters.

Appeals against judgments of the regional courts are heard by the higher regional courts (Oberlandesgerichte), which have similar specialist panels for patent litigation comprised of three judges. There is one higher regional court for each regional court. On appeal, the higher regional courts can review issues of law and fact. However, the parties can introduce new facts only under limited circumstances, (for example, if the facts were unknown during the first instance).

Subject to certain restrictions, judgments of the higher regional courts can be further appealed on issues of law and brought before the Federal High Court of Justice (Bundesgerichtshof) as the court of third and final instance. Incidentally, the Federal High Court of Justice is also the court of final instance in patent validity proceedings (see Question 3).

Germany is one of the signatory states of the Agreement on a Unified Patent Court and will set up a total of four local divisions in Düsseldorf, Mannheim, Munich and Hamburg. In addition, one of the three sections of the central division will be based in Munich and be competent for patents relating to mechanical engineering, lighting, heating, weapons and blasting matters.

 
3. Do the courts/government bodies deal with infringement and invalidity simultaneously or must invalidity actions be brought in separate proceedings?

In Germany, jurisdiction over patent litigation and patent validity cases is split between different courts (bifurcated system). The regional and higher regional courts have exclusive jurisdiction over patent litigation matters (such as infringement). However, the German Federal Patent Court (Bundespatentgericht) has exclusive jurisdiction over first instance invalidity proceedings and the Federal High Court of Justice (Bundesgerichtshof) has exclusive jurisdiction over appeals.

Therefore, invalidity cannot be raised as a direct defence in infringement proceedings. The defendant can only request a stay of the infringement proceedings on the basis that the patent is highly likely to be invalidated in pending invalidity proceedings. In practice, this typically requires a novelty destroying document or a very clear lack of inventiveness.

 
4. Who can represent parties before the court and/or government body?

In infringement proceedings, each party must be represented by a German qualified lawyer (Rechtsanwalt). Patent attorneys do not have a right of audience in infringement proceedings and therefore cannot represent a client before an infringement court without a German qualified lawyer.

In opposition proceedings before the German Patent and Trademark Office and invalidity proceedings before the German Federal Patent Court, legal representation by a lawyer or a patent attorney is not mandatory (though recommendable) for parties domiciled in Germany. Parties who are not domiciled in Germany must appoint a qualified lawyer or a patent attorney as representative.

In opposition proceedings before the European Patent Office (EPO), parties who are domiciled in a member state of the European Patent Convention (EPC) do not need to appoint a representative. Parties who are not domiciled in a member state of the EPC must appoint a legal representative who is authorised to practise before the EPO.

 
5. What is the language of the proceedings? Is there a choice of language?

German is the mandatory language of all proceedings before a German court and the German Patent and Trademark Office. Proceedings before the European Patent Office can be held in English, French or German.

In the Unified Patent Court, the language of proceedings in the German local divisions will be German. However, English can be designated as an additional (optional) language of proceedings (Article 49(2), UPC Agreement).

 
6. To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts, or other national or international bodies, that have handed down decisions in similar cases?

Germany is a member state of the European Union. Therefore, German courts are formally bound by decisions of the European Court of Justice on the interpretation of EU law. Otherwise, there is no concept of binding precedent in Germany. However, in practice the courts do take into account relevant decisions from other courts and, typically, follow the rulings of the courts of higher instance (that is, the higher regional courts (Oberlandesgerichte) and, in particular, the Federal High Court of Justice (Bundesgerichtshof)).

With respect to judgments of foreign courts or international bodies, the Federal High Court of Justice held that German courts must take into account (but are not bound by) decisions of the European Patent Office or courts of member states of the European Patent Convention that deal with issues essentially identical to those brought before the German court.

 

Substantive law

7. How is patent infringement assessed?

The scope of protection of a patent is defined by its claim(s) (section 14, German Patent Act and Article 69, European Patent Convention (EPC)). Therefore, patent infringement is assessed by comparing the features of a product or process to the features of a patent claim. If the product or process reads on all features of the claim, the patent is infringed by anyone who, in Germany and without the consent of the patentee (see Question 8):

  • In the case of a product claim, manufactures, offers for sale or places the product on the market (or imports or possesses the product for such purposes).

  • In the case of a process claim, implements the process, offers the process for implementation or, in the case of a manufacturing process, does any of the acts mentioned above in relation to a product directly obtained by the process.

In order to determine whether a product or process reads on a patent claim, the court must determine the meaning of the claim through the eyes of a notional person of average skill in the relevant art. Article 1 of the Protocol on the Interpretation of Article 69 EPC sets out the general principles that should guide the court in its claim construction. German courts apply these principles both to national German and European patents. In essence, Article 1 provides that the court should read the language of the relevant patent claim against the background of the patent description and the drawings and should seek to strike a balance between a fair protection for the patent holder and a reasonable degree of legal certainty for third parties.

If the court concludes that the relevant product or process falls within the meaning of the claim as construed on that basis, it will consider the patent to be ''literally infringed'' (wortsinngemäß verletzt), subject to any applicable defences of the alleged infringer (see Question 8).

If the relevant product or process does not fall within the meaning of the claim as construed by the court, it may still infringe the patent by ''equivalent means'' under the doctrine of equivalents. This is determined by the following three-step test:

  • Is the technical problem underlying the invention solved by an alternative means which is different from that claimed in the patent but which nevertheless solves the problem with the same technical effect?

  • Would the common general knowledge have enabled the skilled person to identify the alternative means without inventive step on the priority date?

  • Are the considerations leading the skilled person to the alternative means closely linked to the essence of the technical teaching protected by the claim so that the skilled person would consider an implementation using the alternative means to be equivalent to the original (literal) implementation?

 
8. What defences are available to an alleged infringer?

The most important defence is that the allegedly infringing act does not fall within the patent's scope of protection because the patent holder is relying on incorrect facts and/or an incorrect construction of the asserted patent claim(s). Other defences available to an alleged infringer include:

  • Right to use invention. The alleged infringer may be entitled to practise the invention, for example on the basis of a valid licence agreement or ''prior use''. The term ''prior use'' generally refers to a situation where the alleged infringer has been aware of the inventive concept underlying the patent and has been using the invention before the priority date of the patent asserted against him.

  • Exhaustion. If the infringing product has been put on the market in a member state of the European Union or the European Economic Area (EEA) with the consent of the patent owner, then the patent holder's rights in relation to that product are exhausted with effect for the entire EU/EEA.

  • Unlawful abstraction (widerrechtliche Entnahme). If the invention for which the patent has been granted was unlawfully abstracted from the alleged infringer, the patent is unenforceable against the alleged infringer.

  • Statute of limitation. Claims for patent infringement generally become unenforceable under the statute of limitations after three years. The three-year period begins with the end of the year in which the claim has arisen and the right holder has gained (or should have gained) knowledge of the infringing act and the identity of the infringer. However, even after the expiry of the three-year limitation period, the patent holder can still enforce claims against the infringer for unjust enrichment. This is a claim for minimum compensation calculated on the basis of a notional reasonable royalty (see Question 35). This claim for unjust enrichment becomes unenforceable ten years after the claim has arisen, but in any case 30 years after the infringing act was committed.

  • Estoppel. If the patent holder has given the alleged infringer reasonable grounds to believe that he will not bring any claims for patent infringement in the future, the patent holder may be estopped from suing for infringement.

  • Anti-trust defence. This applies if the enforcement of a patent constitutes an abuse of a dominant market position in violation of applicable anti-trust law. In the context of standard essential patents (SEPs) the Federal High Court of Justice held that the anti-trust defence is subject to certain strict criteria (Orange Book-Criteria) (Orange Book Standard (GRUR 2009, 801)). Based on the principle of good faith, the Federal High Court of Justice specifically required the defendant to:

    • show its intention to take a licence by making an unconditional, comprehensive offer to the patent holder, which the patent holder could not reject without violating applicable anti-trust provisions; and

    • if he is already using the invention, comply with the obligations under the licence agreement yet to be concluded in advance (that is, by paying or depositing appropriate licence fees and providing regular royalty reports).

However, in Huawei v ZTE (Case C-170/13), the European Court of Justice addressed the issue of anti-trust violation through SEP enforcement and set out criteria, which differ to some extent from the Orange Book Criteria. The first national decisions implementing and building on Huawei v ZTE were published in 2016 (see Question 23).

As explained in Question 3, there is no invalidity defence and an alleged infringer cannot raise a substantive defence on the basis that the asserted patent is invalid.

 
9. On what grounds can a patent be invalidated?

National German patents and the German parts of European patents can be invalidated on the following grounds (sections 21(1) and 22, German Patent Act):

  • Lack of novelty. The claimed invention was already in the public domain on or before the priority date.

  • Lack of inventiveness. The claimed invention was obvious to the notional skilled person on the priority date.

  • Lack of industrial applicability. It is impossible to use the invention in any kind of industry.

  • Excluded subject matter. The patent relates to subject matter that is excluded from patent protection (such as business methods, the human body and its elements).

  • Insufficiency. The patent does not enable the skilled person to practise the invention because it does not disclose the invention in a sufficiently clear and complete manner.

  • Added matter. The granted patent is wider than the underlying patent application as originally filed.

  • Inadmissible extension. The patent claim has been amended so that its scope of protection is wider than the scope of the claim as originally granted.

  • Unlawful abstraction (widerrechtliche Entnahme). The invention for which the patent was granted has been unlawfully abstracted from a third party. This ground of invalidity is specific to national German patents and can only be asserted by the person from whom the invention was unlawfully abstracted.

 
10. Can a court only partially invalidate a patent or transform it into a utility model?

A court can partially invalidate a patent if:

  • The claimant requests partial invalidation only.

  • The patent holder defends the patent in part only.

  • The claimant applies for full invalidation, but the court takes the view that the asserted grounds of invalidity justify only a partial invalidation.

Notably, in the third scenario, the court cannot partially invalidate the patent if the patent holder expressly refuses to accept the patent in a limited form. In that case, the court can only either uphold or invalidate the patent in its entirety.

German courts cannot transform a patent into a utility model.

 
11. Is it possible to amend patent claims during proceedings?

Patent infringement and patent validity matters must be heard in separate proceedings (see Question 3). Therefore, the patent holder cannot amend the claims directly in the infringement proceedings. However, the patent holder can amend the claims at any time during pending opposition or nullity proceedings and can then seek to rely on the amended claims in the infringement proceedings.

 
12. Are there any grounds on which an otherwise valid patent can be deemed unenforceable?
 

Parties to litigation

13. Who can sue for patent infringement?

In order to be able to sue for patent infringement in Germany, the claimant must be generally entitled to the asserted claim and have standing to sue.

Patent holder

The patent holder is generally entitled to all claims for patent infringement but only has standing to sue if he is also the registered owner identified in the German patent register.

Exclusive licensee

The exclusive licensee is also generally entitled to all claims for patent infringement and does not need to be registered.

Non-exclusive licensee

The non-exclusive licensee is not generally entitled to claims for patent infringement. As a consequence, he can only:

  • Bring claims for injunctive relief if he has been authorised to sue by the patent holder or an exclusive licensee and has a legitimate interest in bringing the claim.

  • Bring claims for damages or information if he has been assigned the claims by the patent holder.

Distributor

The distributor cannot sue for patent infringement.

 
14. Under what conditions, if any, can an alleged infringer bring proceedings to obtain a declaratory judgment on non-infringement?

The person seeking a declaratory judgment of non-infringement must show a ''legitimate interest'' in obtaining the declaration. This typically requires the patent holder to have previously asserted claims for patent infringement against that person (for example, in a cease and desist-letter).

 
15. Who can be sued for patent infringement?

Claims for patent infringement can be brought against anyone who infringes a patent, or intentionally assists in or abets an intentional patent infringement. The infringement can be either direct or indirect. Indirect infringement is defined as the supply of goods that are essential for implementing the patented invention where the supplier knows, or it is objectively clear, that the supplied goods are both suitable and destined for implementing the invention.

If the infringer is a company, the director(s) are also personally liable if either:

  • The infringement occurred within the director(s) area of responsibility.

  • The director(s) knew of the infringement.

In addition, a company is liable for infringement committed by its management in the course of their work (Organhaftung).

Furthermore, claims for injunctive relief (but no other claims) can be brought against anyone who (without being liable for direct or indirect infringement) has in some way caused an infringement and, under the particular circumstances, could have been expected to check for and prevent such infringement (Störerhaftung). An example includes the provider of file-hosting services.

 
16. Is it possible to add or remove parties during litigation?

Prior to the oral hearing in the first instance, the claimant can remove a defendant by withdrawing the complaint against that defendant. The proceeding will then continue against the remaining defendant(s) (if any). Once the oral hearing has commenced, this route is only possible with the consent of the defendant who is to be removed from the proceeding.

Adding a new defendant is possible in both the first and second instance if the new defendant consents. In addition, adding a new defendant to first instance proceedings is possible even without the new defendant's consent if it will avoid new, separate litigation over the same or similar matter (principle of procedural economy).

The same general principles apply with regard to removing or adding a claimant in pending proceedings.

 

Enforcement options

17. What options are open to a patent holder when seeking to enforce its rights in your jurisdiction?

Civil proceedings

A patent can be enforced in civil courts. There are two general types of civil proceedings, preliminary and main proceedings. Both types of proceedings are independent and separate of each other and can even be brought in parallel over the same subject matter (see Questions 24 and 31).

Criminal proceedings

Infringing a patent intentionally is a criminal offence under German law, which is subject to either a fine or imprisonment. However, patents are only rarely enforced through criminal proceedings because the prosecution authorities often lack the means and expertise to properly assess complex technical matters within a reasonable time.

Border measures

Border measures are available under Regulation (EU) 608/2013 concerning customs enforcement of intellectual property rights and the subsidiary national provisions in section 142a of the German Patent Act. Under both procedures, the customs authorities can generally detain or suspend the release (seizure) of certain goods. However, there are the following key differences between both procedures.

European procedure. This applies to imports from countries outside the EU or Europan Economic Area (EEA) into Germany and exports from Germany into countries outside the EU or EEA. The requirement for the European procedure is suspected infringement and a formal application from the patent holder or an exclusive licensee. However, under certain circumstances, the customs authorities can detain and suspend the release of goods, which they suspect to be patent infringing even with a formal application (ex officio).

Under the European procedure, there will be an automatic release of seized goods unless the applicant demonstrates within ten days of notification of the seizure that either:

  • The alleged infringer has consented to the destruction of the goods.

  • The right holder has brought civil proceedings for infringement in relation to the goods.

German procedure. This applies to imports from EU or EEA member states into Germany and exports from Germany into EU or EEA member states. The requirement for the German procedure is obvious infringement and a forward application by the patent holder, an exclusive or a non-exclusive licensee. The customs authorities cannot act ex officio.

Under the German procedure, there will be a permanent seizure of the goods unless the alleged infringer objects within two weeks of notification of the seizure. If the alleged infringer objects, the applicant must present a court decision ordering a detention of the goods within a maximum of four weeks. Otherwise, the goods will be released.

 
18. Is it compulsory to send a cease and desist letter to an alleged infringer before commencing patent proceedings?

There is no general requirement of sending a cease and desist letter or other warning to the alleged infringer before commencing infringement proceedings. However, there is one notable exception with regard to standard essential patents (SEPs) for which a FRAND declaration (a declaration to license the patent on fair, reasonable and non-discriminatory terms) was rendered. In Huawei v ZTE (Case No C-170/13), the European Court of Justice held that the proprietor of such an SEP violates competition law if he brings proceedings for injunctive relief without first having informed the prospective defendant of the alleged infringement and given him the opportunity to enter into a licence agreement (see Question 23).

If the patent holder asserts claims for patent infringement by way of a cease and desist letter and the assertion is objectively unjustified or the letter does not meet certain requirements with regard to form, the recipient may be entitled to reimbursement of legal costs, injunctive relief and (if the patent holder acted at least negligently), damages.

 
19. To what extent are courts willing to grant cross-border or extra-territorial injunctions (preliminary or permanent)?

The availability of cross-border or extra-territorial injunctions in Germany is essentially a question of (international) jurisdiction. Persons domiciled in an EU member state can be sued in the courts of that member state, among other things, for patent infringements committed in another EU member state (Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters). In principle, this allows for a person domiciled in Germany to be sued in a German court for infringement of, for example, a French or UK patent.

However, the exclusive jurisdiction for proceedings relating to patent validity lies with the courts of the member state where the patent is registered. This applies irrespective of whether invalidity is asserted in separate proceedings or by way of counterclaim. Therefore, if the law of the member state where the patent is registered enables the defendant to counterclaim for invalidity, the German court loses jurisdiction as soon as the defendant brings the counterclaim.

For the reason above and because the need to apply foreign substantive law will often result in a delay of the proceeding, claims for cross-border injunctions are rarely brought in Germany.

 
20. To what extent do courts recognise the blocking effect of "torpedo" actions abroad?

A German court must stay proceedings if there already are proceedings pending between the same parties on the same subject matter before a court of another EU member state (Article 29, Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) (Recast Brussels Regulation)). In that sense, German courts must generally recognise the blocking effects of ''torpedo'' actions.

Patent holders have issued proceedings in Germany on the basis that torpedo actions constituted an abuse of law and therefore that the courts should not stay proceedings under the Recast Brussels Regulation. However, they have not been successful.

However, torpedo actions do not block preliminary proceedings in Germany (Article 35, Recast Brussels Regulation). For further details on preliminary proceedings, see Question 31.

 
21. To what extent are arbitration, and alternative dispute resolution (ADR) methods (such as mediation), available to resolve patent disputes?

Arbitration

Whilst arbitration and other alternative dispute resolution (ADR) methods are generally available in Germany, they are rarely used in patent disputes. One of the reasons may be that the costs of regular patent litigation in Germany are relatively low compared to other jurisdictions and that the proceedings are generally swift. In addition, the local courts' specialist patent panels are very experienced and have a good reputation.

Arbitral awards generally have the same effect as a court decision. However, a patent cannot be invalidated by way of arbitration. Foreign arbitral awards are recognised under the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

ADR

See above, Arbitration.

See Litigation and enforcement in Germany: overview ( www.practicallaw.com/1-502-0728) .

 

Competition and anti-trust

22. Can a patent holder bring proceedings claiming both patent infringement and unfair competition for the same set of facts?

In principle, claims for unfair competition are subsidiary to claims for patent infringement. Therefore, a patent holder cannot bring claims for both patent infringement and unfair competition for the same set of facts. However, even if claims for patent infringement and unfair competition relate to the same product, they do not necessarily also relate to the same set of facts. For example, if the technical features of a product infringe a patent while the product's design is a copy of the patent holder's own product, the resulting claims for patent infringement (technical features) and unfair competition (design features) are based on separate facts and, therefore, can be brought in parallel.

 
23. To what extent can enforcement of a patent expose the patent holder to liability for an anti-trust violation?

By definition, a patent creates a statutory monopoly according to the legislator's express intent. Therefore, the existence and enforcement of this monopoly cannot generally fall foul of anti-trust law. However, under some very limited circumstances, enforcing a patent can be considered an abuse of a dominant position on the market in violation of applicable anti-trust provisions (Article 102, Treaty on the Functioning of the European Union (TFEU) and section 19, German Anti-trust Act (GWB)), for which the patent holder may be fined and/or be liable for damages.

Over the past decade, the relationship between patent and anti-trust law (in particular, in the field of standard essential patents (SEPs)) has been a prominent topic. SEPs are patents that must be practised in order to comply with a certain industry standard for a particular category of products. The key questions have been:

  • Whether, and under what conditions, enforcing an SEP through patent infringement litigation (in particular, by seeking injunctive relief) can constitute an abuse of a dominant market position against the defendant.

  • Whether, and under what circumstances, the defendant to SEP litigation can defend against infringement claims on the basis of an (alleged) anti-trust violation by the patent holder.

In Germany, the Federal High Court of Justice confirmed the existence of an ''anti-trust defence'', subject to a number of strict requirements that must be met by the infringer (such as the ''Orange Book'' criteria (see Question 8)). The ''Orange Book'' criteria were subsequently applied and further developed by the German patent infringement courts in the context of the infamous ''patent wars'', which involved many patents that were declared essential to a telecommunication standard (for example, Global System for Mobile Communication (GSM) and Universal Mobile Telecommunications System (UMTS)). In addition, those patents were also subject to undertakings by the respective proprietor to license the patents to any interested party on fair, reasonable and non-discriminatory terms (see Question 18).

In 2013, the issue was brought before the European Court of Justice (ECJ) in Huawei v ZTE (Case No C-170/13) by way of a referral from the Regional Court of Düsseldorf. The issue regarded the interpretation of Article 102 of the TFEU in light of differences between the German ''Orange Book'' criteria and the position subsequently taken by the European Commission in proceedings against Motorola (Case AT 39985) and Samsung (Case AT 39939). The ECJ handed down judgment in summer 2015 holding that the owner of an SEP for which a FRAND declaration was rendered will not abuse a dominant position on the market under Article 102 TFEU by seeking injunctive relief provided that, before commencing litigation:

  • The patent holder alerts the alleged infringer of the infringement by specifying the relevant patent and the asserted infringement.

  • After the alleged infringer expresses its willingness to take a licence on FRAND terms, the patent holder presents the infringer with a specific, written offer for a FRAND licence, specifying, in particular, the royalty and the way in which it is calculated.

The ECJ also held that that the alleged infringer (if he continues to use the SEP) must diligently respond to the patent holder's licence offer in accordance with accepted commercial practice and in good faith and must not employ delaying tactics. If he declines the patent holder's offer, he must:

  • Make a FRAND counter-offer.

  • If the counter-offer is rejected, provide appropriate security by way of a bank guarantee or a deposit, taking into consideration the past acts of use (for which account must be rendered).

If the alleged infringer fails to comply with these requirements, he cannot rely on Article 102 of TFEU in defence to the patent holder's claim.

In addition, claims seeking non-exclusionary relief cannot be considered an abuse of a dominant market position under Article 102 of TFEU, because they will not directly prevent competitors from bringing or maintaining products complying with the relevant standard on the market.

In 2016, the Regional and Higher Regional Courts of Düsseldorf and Mannheim/Karlsruhe published the first decisions implementing Huawei v ZTE. The decisions also addressed a variety of questions raised by the ECJ’s decision, for example, whether the alleged infringer has to make a FRAND counter-offer even if the patentee’s initial offer was not FRAND. Following some controversy between the Regional Courts of Düsseldorf and Mannheim, the respective Higher Regional Courts both ruled that the alleged infringer is only required to make a FRAND counter-offer if (under full judicial scrutiny) the patentee’s initial offer was indeed FRAND. However, this and other issues concerning the anti-trust defence after Huawei v ZTE are still far from finally settled and will likely become the subject of future decisions by the Federal High Court of Justice.

 

Procedure in civil courts

24. What is the format of patent infringement proceedings?

Patent infringement cases are decided by judges. There are no jury trials in patent (or any other) litigation in Germany.

The proceedings have a strong focus on written pleadings. The parties make detailed written submissions to the court, setting out the facts and legal arguments on which they seek to rely. Therefore, the subsequent oral hearing is relatively short (typically between one and three hours) and focused. The general procedure in terms of timing and submissions follows a relatively fixed structure that is set out in the German Civil Procedure Rules (Zivilprozessordnung) with the specific dates and deadlines being set by the court.

The following is a typical structure and timeframe of a German patent infringement case:

  • The claimant files the complaint with the court and pays the court fees. The complaint must specify the relief sought and the full facts on which the claimant seeks to rely. It must also include the relevant legal arguments, although this is not a formal requirement.

  • The court serves the complaint on the defendant and sets a deadline for a reply (typically between three and four months). Often, the court will also issue a binding timetable with deadlines for written submissions up to the oral hearing by way of a written order, possibly after a short case management hearing. The exact procedure varies from court to court.

  • The defendant submits the defence pleading within the deadline specified by the court.

  • The claimant submits a written reply within the deadline specified by the court (typically between two and three months).

  • The defendant submits his final response within the deadline specified by the court (typically between two and three months).

  • The oral hearing is typically held between nine and 12 months after service of the complaint.

  • The court hands down the judgment typically between six and eight weeks after the oral hearing.

The above outline assumes that the court will not consider it necessary to appoint a neutral expert in order to decide the case. If expert evidence is required, the proceedings will often be delayed by between six and 12 months.

 
25. What are the rules and practice concerning evidence in patent infringement proceedings in your jurisdiction?

Documents

In addition to samples of the infringing items, documents that originate from the alleged infringer and verbally and/or visually describe the accused embodiment (such as product brochures, manuals and photographs) are the most important means of evidence in practice. Affidavits (eidestattliche Versicherungen) play an important role in preliminary injunction proceedings only, as they are one of the means for establishing prima facie proof (Glaubhaftmachung).

Witness evidence

The court can and will hear witnesses identified by the parties if it is necessary to establish relevant facts and will ask all the questions that it considers relevant. There is no cross-examination of witnesses but parties can put questions to the witness. However, this is to a much lesser extent than, for example, in the US or the UK.

Expert evidence

The court can and will appoint a neutral expert if, after having heard the parties, it considers expert assistance necessary in relation to certain facts that are in dispute. Some courts, such as the Düsseldorf Regional Court, rarely appoint experts while other courts do so more regularly.

Whilst private expert opinions commissioned by the parties are considered by the court, their evidential value does not exceed that of a statement made by the respective party. In addition, the court will not hear the parties' private experts or allow the parties to put questions to the opponent's private expert.

 
26. Is evidence obtained in criminal proceedings admissible in civil proceedings and vice versa?

Every court must independently examine and consider the facts and evidence presented before it by the parties in the proceeding. It is not bound by evidence obtained in other proceedings or the conclusions made by another court on the basis of such evidence. In particular, a civil court is not bound by a criminal court's finding of infringement and vice versa.

However, in practice, if a party can present evidence obtained in other proceedings, the court will typically attach significant weight to that evidence.

 
27. Is evidence obtained in civil proceedings admissible in other civil proceedings?
 
28. To what extent is pre-trial disclosure permitted and what other mechanisms are available for obtaining evidence from an adverse party or third parties?

Pre-trial discovery

One of the fundamental principles of German Civil Procedure Law is that each party is responsible for obtaining its own evidence. Therefore, there is no pre-trial disclosure under German law.

Other mechanisms

The court can order a party to the proceeding or a third party to submit a document or object that has been referred to in the proceeding. This is a discretionary, procedural tool of the courts, which is used very restrictively.

In addition, subject to certain requirements, the patent holder can also obtain a search and preservation order against the suspected infringer (see Question 31).

 
29. What level of proof is required for establishing infringement or invalidity?

The court must be convinced that there is infringement or invalidity. As there can be no absolute certainty in practice, the level of proof required is effectively a very high level of probability that an infringement has taken place or that invalidity is rightly claimed.

 
30. How long do patent infringement proceedings typically last?

The exact length of infringement proceedings in the first instance depends on the complexity of the matter and the particular court hearing the case. Generally, proceedings take between 12 and 15 months from the filing of the complaint until the court issues its decision (see Question 24).

Fast-track procedures

There are no fast-track procedures available in Germany (with the exception of preliminary injunction procedures).

Timetable

The specific timetable is determined by the court at its discretion and cannot be agreed upon between the parties alone.

Delay

The most severe method of delaying infringement proceedings available to a (prospective) defendant is filing a ''torpedo action'' (see Question 20). However, this method is dependent on the defendant knowing that a patent infringement action is imminent. As it is not mandatory for the patent holder to send a warning letter before commencing litigation, this method may not always be available.

Another option is to apply for a stay of the infringement proceedings on the basis of pending revocation or invalidity proceedings. However, German infringement courts will only grant a stay on that basis if either (see Question 3):

  • The patent has already been invalidated in first instance (pending appeal).

  • The defendant can show that the invalidation of the patent is highly likely.

The defendant can also delay proceedings by applying for extensions of deadlines for filing written pleadings. However, the courts are usually only prepared to grant extensions if it does not jeopardise the date of the hearing, which is scheduled in the early stages of the proceedings. Therefore, this tactic is usually not successful.

In addition, the defendant can try to convince the court that it should appoint a neutral expert in order to verify certain relevant questions of fact. If the court does appoint an expert, the proceedings will be delayed by several months and in some cases by even more than a year. However, most German courts will only appoint experts in particularly complex technical cases where relevant technical issues are in dispute and cannot be verified by the court without expert evidence (see Question 25).

 

Preliminary relief

31. Is preliminary relief available, and if so what measures are available and under what conditions?

Search and preservation orders

There may be situations where a patent holder has reasonable suspicions that his patent is being infringed, but he lacks access to the allegedly infringing product or process (such as a manufacturing process or plant on the suspected infringer's premises) to verify his suspicions. These situations can be particularly difficult for the patent holder because German law does not allow pre-trial discovery. In addition, there may be situations where the patent holder fears that relevant evidence of infringement may be destroyed or become otherwise unavailable. In order to overcome these practical difficulties, German law enables the patent holder to obtain an order from the court to:

  • Allow a court-appointed expert to enter the suspected infringer's premises.

  • Inspect specific products, processes or documents in relation to certain features relevant for assessing patent infringement.

  • Prepare a written report of his findings.

The court will consider any submissions by the suspected infringer regarding confidential information contained in the report and establish an appropriate confidentiality procedure to protect any legitimate interests (including redactions to the report).

The court will not grant a search or preservation order on a mere assertion of infringement by the patent holder. The patent holder must file a reasoned request establishing both:

  • A sufficient likelihood of infringement of a valid patent on the basis of the available information.

  • The search or preservation order is necessary because without it the patent holder could not obtain the relevant information or preserve the evidence.

In particular, the court will not grant a search or preservation order if the patent holder could readily purchase and analyse the allegedly infringing product. In addition, if the patent holder's request is in relation to commercial or financial documents, the request must provide evidence of obvious infringement on a commercial scale.

If the search or preservation order ultimately turns out to be unjustified, the suspected infringer is entitled to a reimbursement of its costs and possibly damages.

Injunctions

General principles. Preliminary injunctive relief is generally available in patent infringement matters under German law. However, the requirements for obtaining relief are usually relatively strict and depend on the individual court.

In order to obtain a preliminary injunction, the claimant must present clear, objective evidence of the relevant facts (for example, the defendant's product brochures, publications or product samples). Complicated analytical reports commissioned by the claimant are usually unsuitable because they are not readily verifiable. Therefore, the courts are often generally wary of reports by party experts.

In addition, the claimant must convince the court of the patent's validity beyond reasonable doubt. Most courts require the patent to have been previously upheld in a national or European opposition or invalidity proceeding. The court will only make an exception if:

  • The pre-grant examination procedure was similar to an opposition proceeding because substantive objections were raised by third parties and the defendant.

  • The validity of the patent is widely accepted in the relevant industry.

  • A summary review shows that the pending attacks on the patent's validity are obviously unfounded.

  • The claimant cannot reasonably be expected to wait for the outcome of validity proceedings because of ''exceptional circumstances'' (for example, an imminent expiry of the patent or an imminent generic entry in the case of pharma patents).

In addition, the claimant must demonstrate that the matter is urgent and that he has acted accordingly. In particular, as soon as the claimant has learned of the alleged infringement, he must swiftly and without undue delay:

  • Investigate the facts.

  • Obtain the relevant evidence.

  • Prepare and file the request for the preliminary injunction.

Although there is no generally accepted absolute time limit and the practice of the courts varies, a period of one month is commonly cited as a ''safe harbour''.

The court can grant a preliminary injunction either ex parte or after hearing the defendant. However, ex parte injunctions are the exception and are generally only granted if either:

  • Any delay would deny the claimant effective relief (for example, in a trade show context or if the patent is near expiry).

  • The court is aware of and can readily reject the defendant's arguments (for example, because of a protective writ (see Question 32)).

If the court has granted a preliminary injunction, the claimant must formally serve it on the defendant in order to enforce it. There is no general requirement to bring main proceedings to confirm or maintain the injunction. However, the defendant can demand that the claimant brings main proceedings within a specific deadline set by the court otherwise the preliminary injunction will be lifted by the court.

Cross-border preliminary injunctions. A German infringement court can grant cross-border preliminary injunctions if it has international jurisdiction (for example, if the alleged infringer is domiciled in Germany) (Article 4, Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters). Although in main proceedings the German court can lose jurisdiction if the defendant counterclaims for invalidity (see Question 19), this is not the case in preliminary injunction proceedings (Solvay (Case No C-616/10)).

 
32. Can a protective writ be filed at the court at which an ex parte application may be filed against that defendant?

A protective writ can be filed at the court at which an ex parte application may be filed against that defendant. In addition, a protective writ can be filed electronically with the central German electronic registry for protective writs. The court will review the writ and only provide it to the claimant when a request for a preliminary injunction is actually filed with that court.

The protective writ does not automatically prevent the court from granting an ex parte injunction. It is only a means for bringing counter-arguments to the court's attention, which may or may not convince the court to order a hearing or reject the preliminary injunction request altogether. Therefore, a protective brief should only be filed if the (prospective) defendant has good defence arguments. Otherwise the court may be more likely to grant an ex parte injunction because it has already heard both sides of the case (see Question 31).

 
33. What is the format/procedure of preliminary injunction proceedings?

General

The emphasis in preliminary proceedings (as in main proceedings) is on written submissions to the court. Preliminary injunction proceedings are initiated by the patent holder submitting a reasoned written request for a preliminary injunction. The court can then:

  • Reject the request.

  • Summon both parties to an oral hearing before deciding on the application.

  • Grant the preliminary injunction without a hearing (ex parte).

If the court decides to summon the parties to an oral hearing, the defendant can submit a written defence pleading. There is no limit to the number of written pleadings submitted by either party before (or during) the oral hearing.

At the oral hearing, the court will hear both parties and any witnesses present at the hearing. The judgment is usually handed down at the end of the hearing or within the next few days.

If the court has granted the preliminary injunction ex parte and the defendant appeals that decision, the court will schedule an oral hearing and the matter will proceed in the manner outlined above. Following the oral hearing, the court will confirm or repeal its previous decision by way of a judgment.

First instance judgments in preliminary injunction proceedings can be appealed against as a matter of law (that is, the right to appeal is not subject to the courts' permission). The appeal court (Oberlandesgericht) will typically decide on the appeal within three to nine months. Contrary to main proceedings, parties cannot appeal against an appellate judgment.

Level of proof

The claimant must present a clear-cut case of infringement and convince the court of the patent's validity, beyond reasonable doubt (see Question 31). The threshold for proving relevant facts is a ''more likely than not test''. This is a lower threshold than in main proceedings, where at least a very high probability is required (see Question 29).

Evidence

Documents and affidavits are the most important forms of evidence in preliminary injunction proceedings. Witnesses can be heard by the court if they are present at the oral hearing. The courts will regard private expert reports submitted by a party as direct party pleading. Contrary to main proceedings, evidence by way of a court-appointed neutral expert is unavailable in preliminary injunction proceedings because of the inherent time constraints.

Patent validity

The defendant cannot bring a counterclaim for invalidity in preliminary injunction proceedings. However, the court will only grant a preliminary injunction if the validity of the asserted patent is beyond reasonable doubt. This generally requires the patent to have previously been upheld in a national or European opposition and/or invalidity proceeding (see Question 31).

Length of proceedings

Ex parte preliminary injunctions are typically granted within a few days after the reasoned request has been filed with the court and sometimes even within a few hours. If the court decides that it must schedule a hearing before reaching a decision, the proceedings will usually take between two to six weeks.

 
34. If a preliminary injunction is granted and the main infringement action is finally lost, can the defendant claim damages for the unjustified preliminary injunction?

If a preliminary injunction is granted and enforced but ultimately turns out to have been unjustified, the claimant will be liable for damages, including loss of profits.

Before granting a preliminary injunction, the court will usually require the claimant to post a bond into court, in order to secure the defendant's potential claims for damages.

 

Final remedies

35. What remedies are available against a patent infringer?

Permanent injunction

One of the most important remedies for patent infringement is a permanent injunction against the infringer. On the claimant's request, the court will grant a permanent injunction if it finds the patent to be infringed. There is no requirement for irreparable harm, no weighing of interests or other test that needs to be satisfied by the claimant. This applies irrespective of the claimant's business model (that is, injunctive relief is equally available to both practising and non-practising entities).

The injunction has legal effect against the defendant to the infringement proceedings only and generally extends to all embodiments that are identical or essentially identical (kerngleich) to the accused product or process in relation to the features of the asserted patent claim.

Monetary remedies

The patent holder is entitled to damages if the infringer acted at least negligently. As the duties of care for avoiding negligence are very strict, it is generally difficult for the infringer to escape liability for damages. Under German law, damages have an exclusively compensatory function. There is no concept of punitive damages.

The claimant can quantify its claim for damages by either one of the following three methods at his free discretion:

  • Loss of profits. Damages are calculated on the basis of the claimant's loss of profits. This method is rarely chosen as it requires the claimant to disclose to the infringer information such as its revenues, costs and margins.

  • Licence analogy. Damages are calculated on the basis of a notional royalty as it would have been agreed between reasonable parties for the use of the patent. The notional royalty is typically determined by reference to existing arm's-length licence agreements for the same or a comparable patent.

  • Account of profits. Damages are calculated based on the profits made by the infringer because of the infringement. ''Profit'' is defined as revenue less directly attributable costs. Profits generated by an infringing product or process may not exclusively be due to the benefits provided by the invention, but also other factors (for example, technical features unrelated to the infringed patent and a strong brand name). The contribution of additional factors must be deducted from the overall profits made with the infringing product or process and only the remaining portion must be surrendered to the claimant. Although the courts have a relatively wide discretion in quantifying the necessary deductions, this can still be an extremely complicated exercise in practice.

All three calculation methods require information that is not readily available to the patent holder (such as the number of infringing products sold and other financial data of the infringer). The patent holder will usually bring a claim for a declaration of liability for damages and a claim for rendering information about the scope of the infringement (that is, products sold and directly attributable costs). Once the infringer has been found liable for damages and has rendered the information, the patent holder can quantify and enforce its claim for damages.

Delivery up or destruction of infringing goods

The patent holder can require the infringer to destroy all infringing products in his possession, unless the goods can be modified so as to be non-infringing or destruction would be unreasonable. Notably, the claim for destruction extends to equipment that is exclusively or almost exclusively used for manufacturing the infringing product. This remedy is available regardless of negligence or intent.

Publication of the decision

The patent holder can require the infringer to publish the decision confirming patent infringement at the infringer's expense if he has a legitimate interest in the publication. The nature and scope of the publication will be specified in the judgment. This remedy is available regardless of negligence or intent.

Recall order

The claimant can require the infringer to recall the infringing products and remove them from the distribution chain, unless this would be unreasonable (taking into account the legitimate interests of the infringer and third parties). This remedy is available regardless of negligence or intent.

Declaration of infringement and validity

Under German law, the patent holder cannot separately claim for a declaration of infringement and/or validity. However, he can seek a judgment declaring the infringer liable for damages, which implies a finding of infringement.

Others

The patent holder can require the infringer to provide information about past infringements, including the:

  • Origin and the distribution chain of the infringing products.

  • Number of infringing products manufactured, supplied, obtained and ordered.

  • Prices paid for the infringing products.

This remedy is available regardless of negligence or intent.

In addition, in order to enable the patent holder to choose between the three methods for calculating damages (see above, Monetary remedies), the patent holder can also require the infringer to render information about turnover and profits (including disclosure of the cost deducted) made with the infringing product or process. As this information is only relevant if the infringer is liable for damages, the claim for such information requires that the infringer acted at least negligently.

 

Appeal procedure

36. What avenues of appeal are available for a defeated party and under what conditions?

For the avenue of appeal in main proceedings, see Question 2. For the avenue of appeal in preliminary proceedings, see Question 33.

If an appeal is filed, enforcement is not automatically stayed. The court of first instance will usually declare its decision to be provisionally enforceable, subject to the provision of a security by the enforcing party. If the first instance judgment is enforced but later repealed, the enforcing party is liable for damages, including lost profits. This applies to both main and preliminary proceedings.

 

Litigation costs

37. What level of cost should a party expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and appeal proceedings?

The overall costs for litigating patents in Germany essentially consist of court fees, fees for legal counsel (lawyers and patent attorneys) and ancillary expenses (such as private experts, translations and travel expenses).

The court fees for each case are determined on the basis of a statutory fee schedule, which defines the applicable fee in relation to the ''value in dispute'' (that is, the estimated financial interest of the claimant in the relief sought). Accordingly, the value in dispute varies from case to case. In patent infringement matters, the value in dispute is usually between EUR500,000 and EUR5 million but can even be up to EUR30 million, which is the statutory cap. The court fee must be paid by the claimant upfront so that the court serves the complaint on the defendant. The applicable court fees increase with each instance.

The fees for legal counsel (lawyers and patent attorneys) are also governed by a statutory fee schedule. The schedule defines the applicable fee in relation to the ''value of the matter'', which is usually identical to the value in dispute underlying the court fee. The legal fees also increase with each instance. The following is an example of how the legal fees (court, lawyers and patent attorney fees) vary according to the value of the claim:

  • A claim with a value of EUR1 million can incur legal fees of approximately EUR40,000 at first instance and approximately EUR47,000 at second instance.

  • A claim with a value of EUR5 million can incur legal fees of approximately EUR143,000 at first instance and approximately EUR173,000 at second instance.

  • A claim with a value of EUR30 million can incur legal fees of approximately EUR775,000 at first instance and approximately EUR953,000 at second instance.

This applies to both main and preliminary proceedings. However, the ''value in dispute'' in preliminary proceedings is typically assessed at between 25% and 50% below the value of corresponding main proceedings, due to the preliminary nature of the relief sought.

The losing party must reimburse the winning party for all court fees paid and incurred legal fees, as determined on the basis of the statutory fee schedule. Ancillary costs such as expenses for private experts, travelling to meetings and hearings and translation costs are assessed and reimbursed at their actual value subject to reasonableness.

 

Reform

38. What are the important developing and emerging trends in your country's patent law?

One of the important developing and emerging trends in Germany stems from the Agreement on a Unified Patent Court and the European Court of Justice's judgment in Huawei v ZTE (Case No C-170/13) on standard essential patents in national infringement proceedings.

 

Online resources

Federal Ministry of Justice

W www.gesetze-im-internet.de

Description. Official website of the Federal Ministry of Justice with up-to-date information on German statutory law.

German Federal Court of Justice

W www.bundesgerichtshof.de/EN/Home/home_node.html

Description. Official website of the German Federal Court of Justice where German language judgments of the court can be retrieved.

German Federal Patent Court

Wwww.bundespatentgericht.de/cms/index.php?option=com_content&view=article&id=9&Itemid=3&lang=en

Description. Official website of the German Federal Patent Court where German language judgments of the court can be retrieved.

European Union

W eur-lex.europa.eu

Description. Official website of the European Union offering access to a variety of legal documents including statutory law and case law.

Federal Ministry of Justice (translations of legislation)

W www.gesetze-im-internet.de/Teilliste_translations.html

Description. Translation of, among other things, the German Patent Act and the Code of Civil Procedure. Official website of the Federal Ministry of Justice, translations are not binding and not necessarily up-to-date.



Contributor profile

Wolfgang Kellenter

Hengeler Mueller

T +49 211 8304-198
F +49 211 8304-7333
E wolfgang.kellenter@hengeler.com
W www.hengeler.com

Professional qualifications. Germany, Rechtsanwalt, Germany Attorney-at-law, 1990; England and Wales, Solicitor,1992

Areas of practice. Patent litigation, IP.

Non-professional qualifications. Dr jur, Universities of Erlangen and Bayreuth; LLM, London School of Economics and Political Science

Languages. German, English

Professional associations/memberships. EPLAW; AIPPI; INTA; LES; GRUR.


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