A foreign producers supplying a customer outside of Germany can be sued for patent infringement in Germany if, for specific reasons, it is evident that his customer will deliver or offer the products to/in Germany. By this general statement, the German Federal Supreme Court made it clear that acts exclusively performed in other countries can give rise to a direct liability for patent infringing activities subsequently performed by third parties in Germany (German Federal Supreme Court, judgment of May 16, 2017, X ZR 120/15 – Abdichtsystem).

In the case decided by the German court, an Italian company supplied a customer having its place of business outside of Germany with repair kits for vehicle tires. The customer then autonomously provided a German manufacturer of automobiles with these kits. The owner of a European patent covering specific technical features of the repair kits sued the Italian manufacturer for patent infringement before the German courts.

In its judgment, the German Federal Supreme Court found that the fact that the defendant performed all of its activities outside of Germany as such does not absolve him from the plaintiff’s claims asserted for the territory of Germany. The court referred to its previous case law according to which a party is liable if it disregards general conduct obligations and thereby facilitates an autonomous third party’s infringing activities. This is the case if it is evident for the foreign supplier that his customer will further deliver the products into the territory of Germany, and if he nevertheless refrains from further clarifying his customer’s intentions and from preemptively advising him on the possibly patent infringing character of such activities.

Practical Impact:

In the scenario to be assessed by the German Federal Supreme Court, the plaintiff was not able to prove that the defendant actually knew that his customer will further distribute the patent infringing repair kits to Germany. If that would have been the case, the defendant, although exclusively acting in Italy, would have been liable for his customer’s patent infringing activities in Germany without further ado. The interesting aspect of the court’s judgment thus is that a direct liability for third party’s infringing activities does not necessarily require positive awareness of this third party’s plans. As soon as specific aspects clearly indicate such problematic behavior of his customer, the foreign supplier can no longer sit back and take it easy. He has to ask his customer if he intends to distribute or offer the products to/in Germany, and to advise him that such activities can constitute patent infringements. If the customer should admit his intention to provide the German market with the products, the supplier must refrain from the respective deal with this customer.