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Enforcement through the courts

Strategy

What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?

The most common way to enforce patent rights is by initiating proceedings on the merits, which are usually directed to injunctive relief, among other things. Further available remedies include claims for:

  • information and rendering of accounts;
  • damages;
  • destruction of the infringing products;
  • recall and removal of the infringing products from the distribution channels; and
  •  publication of the judgment.

In urgent cases, a preliminary injunction may be granted. However, due to its preliminary nature, such an injunction is not equivalent to a permanent injunction following proceedings on the merits. Therefore, either patent owners should seek confirmation of the preliminary injunction in proceedings on the merits or the defendant must declare that the preliminary injunction is accepted as being equivalent to a judgment on the merits, upon which all remedies and appeals are waived. The latter is a formalised procedure out of court which is governed by case law.

A further strategy is the initiation of inspection proceedings pursuant to Section 140(c) of the Patent Act. The inspection can also be enforced with a preliminary injunction. The requirements for obtaining a preliminary injunction for an inspection are low (eg, it is sufficient merely to demonstrate a probability of patent infringement). In addition, its enforcement allows:

  • the patent owner’s attorney, as well as a court appointed expert, to enter the premises of the potential infringer; and
  • the seizure of possible infringing products and records.

This puts considerable pressure on potential infringers. Further, if the subsequently rendered expert opinion considers a patent infringement to be present, infringers will often be willing to negotiate a settlement without proceedings on the merits. 

What scope is there for forum selection?

First-instance patent infringement proceedings must be tried before one of twelve district courts, which have been awarded special competence by law. In general, each federal state has at least one patent infringement court; however, some federal states share courts.

In principle, the patent infringement court of the district in which the defendant is domiciled has jurisdiction. In addition, under Section 32 of the Code of Civil Procedure, any court has jurisdiction if the infringement was committed in its district. This is the case if the infringement (ie, the making, offering, placing on the market or using of the product) was committed in the district of the court. In cases of nation-wide infringement via the Internet, all German patent infringement courts have jurisdiction.

Finally, the parties can agree that a specific patent infringement court will have jurisdiction. This agreement is binding for the court.

If the patent owner files a complaint with a patent infringement court which has no jurisdiction and the defendant does not object to this choice in the first oral hearing, the court is also awarded jurisdiction.

Pre-trial

What are the stages in the litigation process leading up to a full trial?

 The proceedings on the merits commence with the filing of a statement of complaint with the court. The statement of complaint contains the requests and a detailed account of the infringement.

The statement of complaint is then formally served on the defendant, usually with a summons to an early oral hearing, which may also be a case management conference in which only the deadline regime is set and the motions are made. Some courts use this hearing to try to negotiate a settlement between the parties.

Before the main oral hearing, each party usually files two briefs:

  • the plaintiff – a statement of complaint and a rejoinder; and
  • the defendant – a statement of reply and a counter rejoinder).

Due to this detailed preparation, cases are often tried in one main oral hearing before the first-instance decision is rendered. 

How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?

 In patent infringement cases, the courts usually impose a strict deadline regime which sets out the dates for filing all major court submissions (eg, the statement of reply, rejoinder and counter rejoinder), as well as the date of the oral hearing. Term extensions will be granted only if there are sufficient and justifiable reasons or the other party agrees to the extension. Therefore, defendants have very little room for delay.

How might a party challenge the validity of a patent through the courts in anticipation of a potential suit for infringement being issued against it?

Nullity actions may be filed with the Federal Patent Court in Munich at any time. However, if the deadline for filing an opposition has not expired, a nullity action is not admissible.

At trial

What level of expertise can a patent owner expect from the courts?

Patents owners can expect an extremely  high level of expertise from the courts. Germany has twelve district courts with a special competence for patent infringement suits. All patent infringement cases must be tried before these specialised courts.

Are cases decided by one judge, a panel of judges or a jury?

Cases at first instance are decided by a panel of three judges. In theory, a decision by one judge is possible; however, in practice, this does not happen. No decisions are issued by juries.

Appeals are decided by a panel of three judges.

In ex parte preliminary injunction cases, the presiding judge may issue the preliminary injunction. 

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

In Germany, there are no jury trials.

What role can and do expert witnesses play in proceedings?

Expert witnesses are an important means of evidence. However, if the court deems that an expert witness opinion is necessary to hand down a judgment, it will appoint its own expert witness. Such expert witnesses are the most common means of evidence in patent infringement cases. Expert witnesses appointed or submitted by the parties have less importance.

The court will carefully consider the expert opinion rendered by its appointed expert witness. However, it is not bound by this opinion and may deviate from it.

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

Yes, German patent law applies the doctrine of equivalents. The requirements are as follows:

  • The accused product must solve the problem of the invention with objectively equal means;
  • The skilled person must be able – based on his or her specialist knowledge – to find the technical solution of the altered version of the accused product as objectively equal; and
  • The skilled person must determine that the altered accused product is equivalent to the objective (literal) solution of the patent.

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

 Yes, it is possible. The threshold for granting preliminary injunctions varies from court to court. However, the standard of proof is generally lower than that in proceedings on the merits. Additional means of proof (eg, sworn affidavits) are admissible.

The patent owner must show that the patent has been infringed and that the matter is urgent (ie, that awaiting a decision on the merits is not justified).

The patent owner must initiate the preliminary injunction proceedings without undue delay upon positive knowledge of the patent infringement (ie, it must show that it has taken appropriate measures to obtain a speedy decision). The case law varies from court to court regarding what constitutes an undue delay. In general, if the preliminary injunction proceedings commence within four to six weeks following knowledge of the infringement, there is no undue delay.

The validity of the disputed patent must be beyond a reasonable doubt. According to case law, the patent must have survived opposition proceedings or nullity proceedings.

How are issues around infringement and validity treated in your jurisdiction?

Germany has a bifurcated system (ie, the patent’s validity cannot be challenged in the infringement proceedings). Defendants in infringement proceedings will usually initiate a nullity action against the relevant patent before the Federal Patent Court in Munich, which has sole jurisdiction over validity attacks after the opposition period has expired.

In an infringement proceeding, the defendant may request a stay of the proceedings until the Federal Patents Court has decided on the validity of the disputed patent. The threshold is extremely high and such requests are successful in only 5% to 10% of cases. New prior art which has not been considered in the grant proceedings or possible prior opposition proceedings must usually be presented.

Will courts consider decisions in cases involving similar issues from other jurisdictions?

Yes, these will be considered but are not binding. For example, in the Federal Supreme Court Pallet container II (X ZR 97/11) decision, the court discussed a parallel British decision in great detail.

Damages and remedies

Can the successful party obtain costs from the losing party?

Yes, but not the entire costs incurred by the successful party. The recoverable costs depend on the disputed value and are set out in a statutory fee schedule. In addition, adequate expenses which have been incurred (eg, travel, translation, copy and postage costs) can be recovered.

What are the typical remedies granted to a successful plaintiff?

Typical remedies include:

  • injunctive relief;
  • claims to information and rendering of accounts in order to calculate the damages;
  • damages;
  • destruction of infringing products in the possession or comprising the property of the defendant, as well as material and devices which are the property (possession is not sufficient) of the infringing party and served mainly for the manufacture of the infringing products;
  • recall and removal of infringing products from the distribution channels; and
  • publication of the judgment.

How are damages awards calculated? Are punitive damages available?

Damages may be calculated in three ways:

  • lost profits of the patent owner;
  • licence analogy – damages calculated on the basis of the amount that the infringer would have paid as an appropriate licence fee if it had obtained permission to use the infringed right; or
  • infringer’s profit – the profits that the infringer made as a result of the infringement (product-related costs incurred specifically through the manufacture or distribution of the infringing products are deductible; overhead costs are not).

The patent owner may choose between the above calculation methods. It may alternate between these methods until a final decision on the damages is handed down. Lost profits of the patent owner is seldom chosen due to the difficulty of proving what profits the patent owner would have made absent the infringement.

Punitive damages are not available.

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

Granting permanent injunctions is a standard statutory remedy for patent infringement under German law. If the plaintiff files a motion for permanent injunction and the court holds for patent infringement, a permanent injunction will be granted.

Timescale and costs

How long does it take to obtain a decision at first instance and is it possible to expedite this process?

It takes around 12 to 15 months from the service of the statement of complaint on the defendant until a first-instance decision is handed down by the court. Where evidence is taken, the procedure will take six to 12 months longer.

As the court sets a strict deadline regime, there is little scope for expediting the process.

How much should a litigant plan to pay to take a case through to a first-instance decision?

This depends on the disputed value of the court costs. In general, the total cost of an average case should be calculated at a minimum of €70,000 to €100,000.

Appeal

Under what circumstances will the losing party in a first-instance case be granted the right to appeal? How long does an appeal typically take?

The right to appeal is available by law if the value of the subject matter of the appeal is greater than €600, which will commonly be the case in patent infringement proceedings or if the court of first instance grants leave to appeal.

New arguments or evidence are admissible under strict conditions only.

The appeal proceedings usually take 12 to 18 months.

Options away from court

Are there other dispute resolution options open to parties that believe their patents to be infringed outside the courts?

Arbitration procedures are available before a non-state arbitration court. Arbitration is available only if an arbitration agreement exists between the parties. This precludes judicial recourse to the civil courts. Disputes between arbitrators are settled by a decision of one or more arbitrators. This decision replaces a state court judgment. It is binding on the parties and can be declared enforceable.

Without an arbitration agreement, patent infringement suits must be brought before a patent infringement court.  

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