Guide to Patent Litigation in Germany
What options are open to a patent owner seeking to enforce their rights in Germany?
Patents are predominantly enforced in civil courts. Patent infringement can be a criminal offence, however, in practice indictments are rare and usually reserved for clear cut product piracy cases. Seizures by custom authorities are available as an initial remedy – not only at the boarder but, for example, also at trade fairs if product samples were imported into Germany – but in case of an objection by the alleged infringer the dispute will subsequently move to civil courts. This process is completely voluntary and there are no negative consequences if a party refuses to participate in a mediation suggested by the trial judge.
Are parties obliged to undertake mediation/arbitration before bringing a case before the courts? Is this a realistic alternative to litigation?
There is no obligation to arbitrate unless the parties have previously agreed to an arbitration clause. In practice, there is also not obligation to mediate or to undertake formalised conciliation efforts in patent cases. However, German civil courts offer court assisted mediation free of costs to the parties where the mediator is a judge not involved in the contentious side of the dispute and who has mediation training and experience. In the bigger courts with significant IP case load there are often IP judges available as mediators.
Are there specialist patent or IP courts in Germany?
Patent invalidity proceedings are in first instance exclusively tried in the Federal Patent Court. Invalidity cases are decided by five judges, three of which have a science degree in the relevant field of the patent in suit, the remaining two are lawyers by training. Appeals in invalidity cases are heard by the Xth Senate of the Federal Supreme Court where the cases are decided by five judges, all lawyers by training, who predominantly hear patent cases.
Patent and other IP infringement cases are tried in general commercial courts. All of the courts hearing IP cases have specialised departments which deal exclusively or at least predominantly with IP cases. Some of the courts have specialised departments which deal exclusively with patent cases. These specialised departments and their judges all have in depth knowledge and experience in IP and patent law. They have gained considerable experience in handling complex technical facts even though their educational background normally is law rather than science. The same applies to appeal courts hearing IP cases.
Are validity and infringement dealt with together or is there a bifurcated system?
Germany has a bifurcated system where validity and infringement are tried in separate proceedings and in different courts. The final appeals are, however, heard by the same department of the Federal Supreme Court, albeit still in separate appeal proceedings.
Who represents parties engaged in a dispute?
In infringement proceedings the parties must be represented by at least one fully qualified German lawyer. In invalidity disputes heard in the Patent and Trade Mark Office or the Federal Patent Court parties can also be represented by a German patent attorney. In practice parties are represented in all types of disputes by a team of lawyers and patent attorneys.
To what extent is pre-trial discovery permitted?
Disclosure obligations in pending disputes are very limited and restricted to documents which have to specifically be identified by the requesting party and good cause for the request has to be shown. There are separate proceedings available to enforce an inspection claim (usually on the premises of the suspected infringer) or the obligation to render accounts in order to establish facts and to preserve evidence. Such proceedings usually precede the actual infringement proceedings.
Is cross-examination of witnesses allowed? If so, what form does this take?
Witness testimony in German courts is heavily supervised by the court. The court decides which witnesses named by the parties are summoned to testify and with regard to which issues. In the oral hearing the witnesses are first examined by the presiding judge and only afterwards by the party representatives.
What use of expert witnesses is permitted?
Formal expert evidence in German proceedings is taken by a court appointed expert who, upon instructions by the court, produces written expert report. The parties have subsequently the opportunity to examine the expert on the report in oral hearings. The parties assist the court in the selection of the expert as well as on the instructions for the expert.
Parties are free to submit written reports by their own party appointed experts in order to substantiate their case. Parties are also free to offer their party appointed expert as an expert witness. Due to their perceived lack of neutrality, the courts usually give less weight to the testimony of party appointed experts compared to court appointed experts.
Is the doctrine of equivalents applied by courts in Germany?
A doctrine of equivalents exists in German patent law. If an allegedly infringing embodiment departing from the literal meaning of a patent claim is to fall within its scope of protection, the following three conditions must, as a rule, be satisfied:
- the embodiment must solve the problem underlying the invention with means that, while being modified, have objectively the same effect;
- the specialist skills of the average person skilled in the art must enable him to determine that the modified embodiment with its different means has the same effect; and
- the considerations to be applied here by the person skilled in the art must be based on the semantic content of the teaching protected in the patent claim.
If these preconditions are satisfied, the different embodiment with its modified means is from the specialist point of view to be taken into consideration as a solution that is equivalent to the literal solution, and hence, pursuant to the requirement of Art. 2 of the Protocol on the Interpretation of Art. 69 of the EPC, to be taken into account when determining the extent of the protection conferred by the patent
Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?
No. The problems with business methods and software patents, in particular, are found in the grant procedures, not on the enforcement side.
To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?
There is no rule of stare decisis in German law. Previously decided cases are therefore only of persuasive value rather than legally binding. German courts usually consider the outcome and the arguments leading to this outcome of previous court decisions provided they find the issues decided sufficiently similar and, hence, relevant to the case at hand. Furthermore, the Federal Supreme Court has held that German courts are under a legal obligation to consider findings made by the European Patent Office or the Federal Patent Court in invalidity proceedings. If the infringement court wants to deviate from those findings it has to give the reasons for this in its decision.
To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?
German courts generally try to avoid rendering decisions which would lead to different outcomes in parallel multi-jurisdiction proceedings. Therefore, German courts generally give consideration to decisions from other jurisdictions if the patents are substantially the same. Furthermore, German courts have held that the European Patent Convention (EPC) has a “harmonizing effect” and that, therefore, decisions from EPC member states carry more weight than decisions from non-EPC countries.
What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?
German patent judges usually have a rather strict case management regime with only limited possibilities to delay a case. In practice, infringement cases are delayed either because the defendant successfully applies for a stay of the proceedings pending the outcome of parallel invalidity proceedings or because the court appoints an expert. A plaintiff can counter this by convincing the infringement court that there is only a low likelihood that that the invalidity complaint will lead to a revocation of the patent and to present own strong evidence in favour of infringement so that the court will not deem it necessary to appoint an expert.
Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?
For a preliminary injunction the applicant must (1) be able to show a strong case for infringement on the merits and (2) prove to the court that his interest for instant relief outweighs the legitimate interests of the defendant to defend the case in normal proceedings on the merits. The second requirement includes that the applicant (1) shows that there is a strong likelihood that the patent in suit is valid (reliance on the presumption of validity due to the grant procedure is not sufficient) and (2) that the matter is urgent (this includes that the application for the interim injunctions is made reasonably quickly after the applicant learnt of the facts he wants to base the infringement case on).
German courts regularly issue preliminary injunctions, in particular when generic pharmaceutical products enter the market for the first time; in cases of infringement at a trade fair and in counterfeit / product piracy cases, but also in other cases where the applicant can show a strong and convincing case on the merits which leads the court to the conclusion that it is unlikely that the preliminary injunction has to be revoked after a subsequent full trial.
How much should a litigant budget for in order to take a case through to a decision at first instance?
This depends on the complexity of the case, the technical area and the value of the dispute. In infringement proceedings a party’s first instance budget usually lies somewhere between 70,000 and 500,000 EUR. This includes court fees which must be paid in advance by the plaintiff and which can be substantial if the value of the dispute is high. In invalidity proceedings a normal range lies between 90,000 and 600,000 EUR, again depending on the specifics of the patent, the technical field and the facts of the case and also includes the advance of court fees.
How long should parties expect to wait for a decision to be handed down at first instance?
In infringement proceedings between 8 and 15 months after the complaint has been served upon the defendant. In invalidity proceedings between 12 and 24 months after the complaint has been served upon the patentee.
To what extent are the winning party’s costs recoverable from the losing party?
German courts apply the “the loser pays” rule. If a party succeeds but gets less than initially requested the court sets a cost quota (60:40, 70:30, etc.) rather than looking at who is the overall winner. The recoverable amount is based on the “value of the dispute” set by an estimation of the court after having heard the parties on the issue and determined by a statutory schedule stating a certain amount for a certain value of the dispute. This system applies to legal costs and to court fees.
What remedies are available to a successful plaintiff?
Injunctions (preliminary and permanent), damages, compensation based on unjustified enrichment, disclosure of past use and account of profits, destruction, recall for commercial distribution channels and, in special circumstances, publication of the judgment. In essence, these are the remedies prescribed by the European Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights.
How are damages awards calculated? Are punitive damages available?
The successful plaintiff can chose between (1) recovering own loss of profits caused by the infringement, (2) a reasonable license fee, and (3) accounts of the infringer’s profits. Punitive damages are not available under German law.
Under what circumstances might a court grant a permanent injunction? How often does this happen?
If requested by the plaintiff a permanent injunction is a direct consequence of the finding of infringement. No further requirements have to be shown. A permanent injunction is a remedy of law which is seen as a necessary component of the rights deriving from a patent as a property right.
Does the losing party at first instance have an automatic right of appeal? If not, under what circumstances might leave to appeal be granted?
For first instance decisions there is an appeal available. In infringement proceedings this requires that the gravamen of the appealing party from the appealed judgment exceeds 600 EUR, which in patent cases is practically always the case. In invalidity cases the first instance decision can be appealed directly to the Federal Supreme Court without further requirements.
How long does it typically take for the appellate decision to be handed down?
In infringement proceedings between 8 and 15 months after the complaint has been served upon the respondent. In invalidity proceedings between 12 and 24 months after the complaint has been served upon the patentee.
Is it possible to take cases beyond the second instance?
In invalidity proceedings there are only two instances available: the Federal Patent Court and on appeal the Federal Supreme Court. In infringement cases a further appeal from the appeal court to the Federal Supreme Court is possible. For such appeal either leave to appeal must have been granted by the appellate court or the appellant is successful in leave to appeal proceeding in the Supreme Court. This further appeal only considers points of law and does not reconsider the facts of the case.
To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?
The general notion is that Germany is a patentee friendly jurisdiction. This notion results from a combination of factors, such as the general availability of permanent and preliminary injunctions, the timing of infringement and invalidity proceedings within the bifurcated system, claim construction principles which lead to a broad application of the literal infringement doctrine and a long standing tradition of a doctrine of equivalents.
Have German courts handled cases relating to standard-essential patents and fair, reasonable and non-discriminatory licensing since the ECJ’s Huawei v ZTE decision?
While there has not been a German Supreme Court case decided yet, there are a number of first instance and appeal court decisions in Germany post Huawei/ZTE. These decisions address a number of issues raised, but not finally decided by the ECJ, such as the level of detail the patentee has to substantiate infringement in pre-action correspondence; whether the pre-action correspondence is dispensable if it becomes clear during the proceedings that the defendant has never been willing to take a lincense; whether the pre-action correspondence must be addressed to the specific company which commits the infringing action in Germany or whether the patentee can simply put the international holding company on notice; and whether a party can discharge of its pre-action obligations, as stipulated by the ECJ, during the pending infringement proceedings. On some of the issues the lower court decisions come to different results and only a German Supreme Court decision or a further EJC referral can bring certainty.