1. German Supreme Court’s decision Spannungsversorgungsvorrichtung
With the decision Spannungsversorgungsvorrichtung, the German Supreme Court strengthens the position of the patentee with regard to the amount of damages for patent infringement.
According to Section 141 sent 2 German Patent Act in connection with Section 852 German Civil Code, the patentee can generally claim damages even if the claim for damages as such is time-barred. The prerequisite for this is that the infringer is still enriched. Even after the statutory limitation of the claim to damages has come into effect after basically three years, the infringer still has to surrender to the patentee the enrichment that has taken place within a maximum period of 10 years into the past. The corresponding claim of the patentee is referred to in the German Civil Code as the “residual damage claim”.
German case law, however, has so far determined the extent of the infringer's enrichment within the scope of the residual damage claim in a restrictive way. In practice, the patentee was only granted the calculation method "license analogy" in order to calculate the amount of the residual damage claim. German case law orientated on the interpretation of “unjust enrichment” in the sense of Section 812 et seq. German Civil Code. In the context of unjust enrichment under Section 812 German Civil Code, only the method “license analogy” was applied and, as a result, only a claim to the adequate license fee was granted for past acts of e.g. patent use.
In the context of the residual damage claim, the German Courts regularly refused to grant a damage claim using the calculation method "surrendering of the infringer's profit" as a basis, although this calculation method may from an economic viewpoint be more favorable for the patentee. One of the German Courts’ main arguments in this regard was that without the limitation of the claim to residual damages to the adequate license fee, the statutory limitation that has taken place would virtually have no effect at all.
With its decision Spannungsversorgungsvorrichtung, the German Supreme Court has now put a stop to this adjudication. According to this decision, with the help of the claim to residual damages, the patentee can also demand from the infringer the surrender of the profit it has achieved by the infringement for and during the time-barred period.
The German Supreme Court merely excludes the calculation method "concrete damage calculation" (of the patentee). Under the latter aspect, an enrichment of the infringer does not take place. This argument is convincing.
In addition, according to the decision Spannungsversorgungsvorrichtung, the patentee can also assert the parallel claim to information and accounting in order to be able to calculate the amount of the infringer's profit for the past. This leads to a broader obligation (in comparison to the previous legal situation) of the infringer to provide information and accounting up to ten years into the past. In this (longer) time frame, the infringer owes comprehensive information inter alia on the production costs of its infringing product (broken down to individual cost factors), the profit and (in order to make a plausibility check possible) on the amount of advertising.
2. Consequences of the decision Spannungsversorgungsvorrichtung
It is likely that the German Courts will adopt the new line of argumentation introduced by the Federal Supreme Court and in the future may force the defendant to pay infringer’s profit (alongside the adequate license fee; the calculation method is eventually up to the patentee to decide), to provide information and to render accounts for a period up to ten years back in the past.
The patentee should, therefore, consider in appropriate cases to sue for residual damages without a respective limitation to the adequate license fee. This may eventually constitute a considerable economic gain in terms of the amount of damages.
The patent user, on the other hand, will have to deal with the problem that the information necessary to fulfill the claim to rendering of information and accounts for a considerable time period of ten years may not be available anymore. In this case, the patent user is well advised to take the now longer period into account and keep the necessary information/documents available; if possible also in digital form.
If the required information and accounting is not or not completely possible for the patent user e.g. due to lack of available information, German case law requires that the patent user provides for an estimation with regard to the period of time for which he can only provide insufficient information. In addition, the patent user has to disclose the basis for the estimation (see e.g. German Supreme Court NJW 1984, 2822 - Dampffrisierstab II; Düsseldorf Court of Appeal, decision dated 20 April 1998 – 2 W 12/98). This adjudication is likely to continue to be applied by the German Courts also with regard to the now extended claim to residual damages.