Nora Keßler January 16 2012 Supreme Court in Civil Matters rules on stay of infringement litigation in nullity action Klinkert Rechtsanwälte PartGmbB | Intellectual Property - Germany Nora Keßler Intellectual Property BackgroundDecisionCommentThe Supreme Court in Civil Matters recently considered whether infringement litigation must be stayed because of a nullity proceeding that had been initiated much later than the infringement litigation.(1)BackgroundIn Germany, infringement actions and nullity proceedings are brought before different courts. While infringement actions are handled by specialised patent chambers of civil courts (regional courts at first instance and higher regional courts at second instance), nullity proceedings fall under the jurisdiction of the Federal Patent Court in Munich. The disputes finally "meet" at the Supreme Court in Civil Matters, which is competent for both proceedings as the court of final instance.Nullity proceedings can be filed at any time, independently from the status of the infringement litigation. However, in most cases the nullity proceeding is filed rather quickly as a reaction to the infringement suit. The proceedings often reach the Supreme Court at different points in time. If the infringement litigation reaches the Supreme Court first, the Supreme Court will usually stay the litigation until it has rendered a decision on the validity of the patent, thereby avoiding contradictory decisions.In the case at hand, the nullity action was filed much later than the infringement litigation – several months after the second instance court had found that the defendant infringed on the patent in suit.In their appeal against the decision of the second instance court, the defendant requested that the Supreme Court stay its decision until it had decided on the validity of the patent in suit.DecisionThe Supreme Court dismissed the defendant's request for a stay of the proceeding. It elaborated on the principle that a decision on the admissibility of an appeal in the infringement litigation may be stayed if a nullity proceeding is pending against the patent in suit. Thus a possible total or partial revocation of the patent can be taken into account and contradictory decisions can be avoided.The Supreme Court explained that it is at the discretion of the court as to whether a stay is appropriate. In making this decision, the court will consider the merits of the nullity proceeding. If it is likely that the patent in suit will be revoked, the infringement litigation may be stayed even if the nullity proceeding has been filed at a late stage of the infringement litigation.However, the Supreme Court emphasised that it is not sufficient to consider the defendant's interest in not being found in breach of a patent that is indeed invalid. Rather, the plaintiff's interest in a timely termination of the infringement litigation must be considered. This interest becomes more important the later the nullity proceeding has been filed. If the defendant has refrained from filing a nullity proceeding throughout the entire first and second instances of the infringement proceeding and even until several months after the second instance decision has been issued, a stay can be justified only if the nullity action's chances of success are evident. If this is not the case, as in the matter at hand, it is appropriate to refuse the stay in the infringement dispute.The Supreme Court added that if the patent is later found to be invalid, the defendant can contest the final decision in the infringement litigation by means of a restitution proceeding.CommentThe decision is well balanced. It is positive for patent owners, as it shows that the Supreme Court respects the plaintiff's interest in the speedy conduct of the infringement litigation, and that this interest can prevail unless the invalidity of the patent is evident. On the other hand, it does not leave the defendant unaided, as even if the nullity proceeding is filed at a very late stage of the infringement litigation, the court will consider the merits of the nullity action and eventually issue a stay.For further information on this topic please contact Nora Keßler at Klinkert Zindel Partner by telephone (+49 69 972 65 600), fax (+49 69 972 65 6099) or email ([email protected]).Endnotes(1) Case X ZR 68/10, September 28 2011.