Exhibitions have had a more than 100 years of history in Germany. As the “No. 1” for exhibitions in the world, Germany has held two-thirds of the top exhibitions which could represent the latest trends of the world’s industries. In recent years, with China’s rapid economic development as well as the accelerating implement of “Going Out” Strategy, more and more Chinese enterprises started to participate in Germany’s exhibitions to seek more export orders. However, the recent years’ “Raid Events” on German Exhibitions have been carried out in high profile in an unconventional way especially against Chinese enterprises. In this article, the author will briefly introduce some IP enforcement risks on German Exhibitions and bring forward some strategies to cope with these risks.
I. Enforcement tools against infringing exhibitor in Germany mainly include the following three types:
1) Administrative Enforcement: seizing and confiscating the exhibits by the Customs. The main international legal basis is Article 51-60 of TRIPS Agreement and EC1383/2003 of EU Council Regulation; the domestic legal basis is the German Patent Law, Trademark Law, Copyright Law and Anti-Unfair Competition Law. In Germany, when a patentee files a seizure application, he/she only needs to submit a statement of liability without paying any enforcement fees or deposit. Therefore, the barrier to apply for detaining alleged infringing product to German Customs is very low. According to Article 11 of EC1383/2003, after the Customs detaining the alleged infringing exhibits, the patentee can also ask for the implementation of “Simplified procedure for destruction” to these exhibits.
2) Civil enforcement: Temporary Injunction Order(“Einstweilige Verfuegung”) by the Court. The international legal basis is Article 44-50 of TRIPS Agreement and No. 2004/48/EC Order of EU; domestic legal basis is German Patent Law, Trademark Law, Copyright Law, Anti-unfair Competition Law(UWG) and Civil Procedure Law(ZPO), etc. Usually, the court has two requirements to meet for applying for a temporary injunction order: I). stating the possibility of infringement in a relatively credible way(“glaubhaft machen”); II). in an urgent situation. The patentee who applies for an (Exhibition) temporary injunction order, does not need to pay any fees nor deposit to the court, and the court usually gives no advance notice to the defendant. The temporary injunction order will be issued very fast (1-2 days, sometimes even 4-6 hours from the application to the issue of orders). In addition, a temporary injunction order is often accompanied by a temporary property seizure order(“Arrestbefehl”) so as to ensure a compensation for the court’s enforcement cost as well as the applicant’s attorney cost. Therefore, the temporary injunction order has been frequently used on international exhibitions in Germany with extremely great “lethality”.
3) Criminal Enforcement: Criminal investigation and evidence collection by Procuratorate together with the Police and the Customs officer. International legal basis is: Article 61 of TRIPS Agreement and ACTA Agreement; the domestic legal basis is: German Patent Law, Trademark Law, Copyright Law, etc. According to the provisions of German penal code, if the infringement reaches to the “preliminary suspicion(“Anfangsverdacht”)” level stipulated by the German Criminal Procedure Law, a criminal offense may be occurred. However, it usually happens in the situations of same infringement or intentional infringement. In Europe, criminal investigation is more often used by France and Italy (in trademark and copyright infringement fields), but in recent years, it is also adopted by Germany occasionally. Only in the year of 2009’s CeBIT Exhibition, there were 29 criminal reports regarding IP infringement. Although the criminal investigation procedures against exhibition infringements usually automatically concluded because of the minor crimes, the exhibitors can hardly take any defensive measures to this kind of criminal investigation and their involved exhibits will be seized or confiscated as the evidences.
II. How to cope with IP enforcement risk in German exhibition
1) Long-term strategies include: proactively prosecuting patent applications and conducting patent layout in Europe and Germany; enhancing patent warning system to acquire the product and IP information of competitors; positively seeking for necessary license, including cross license with the competitors.
2) Pre-exhibition strategies: preparing the Protective Writ and submitting it to relevant court in advance, so as to take part in the exhibition smoothly because the court shall not issue temporary injunction quickly without oral procedures once the request for junction has been received. The defense grounds in the Protective Writ may include: analysis report about comparison between the suspected infringing exhibits and associated patents; license obtained; plea of non-emergency; plea of unstable right (may be invalidated); FRAND defence about SEP. In principle, the Protective Writ may be submitted to the customs, but it is less effective than being submitted to the court in practice. In order to enhance its effect of impeding quick issue of injunction, the Protective Writ may also be submitted to the court together with a written pledge for declaration of non-infringement and deposit for security.
3) Strategies during and after exhibition:
- with regard to the exhibits which are apparently known to be an infringement, the exhibitor may consider signing of a written pledge of non-infringement and withdrawal of the infringing exhibits after receiving the warning letter from the right holder, so as to prevent greater adverse effect caused by the subsequent injunction issued by the court;
- if it is not assured whether the exhibits involve infringement or not and the German market with regard to the accused infringing products is insignificant for the accused exhibitor, the exhibitor may consider voluntarily making a written commitment to not displaying the exhibits or consider indicating on the exhibits the exclusive use in the markets of other countries (e.g. USA), while refusing to admit the tort liability and negotiating with the counterpart over the penalty and attorney’s fee raised in the warning letter;
- expressing writing dissent on the application of “simplified procedure for destruction” to the confiscated exhibits by the customs enforcement;
- proposing opposition to the temporary injunction; since the first instance of opposition will not be completed until a couple of days or two weeks later while the duration of the exhibition is very short, the fate of being confiscated in this exhibition will not be changed, but opposition may also be considerable because of its responsibility of eliminating the injunction effectiveness and investigating the abuse of injunction by the right holder.
- applying to the court for a time limit for the counterpart to bring a formal suit; this option is normally considered when the exhibitor as defendant believes that the abuse of injunction damages his own rights and interests. If the right holder fails to bring the suit on schedule due to the litigation costs, deficient ground or other reasons, the exhibitor may request the court to revoke the injunction. If the right holder brings the suit, the exhibitor shall respond actively to the action, otherwise the result may be unfavorable to the defendant because no substantive investigation shall be conducted during trail by default.