Patent Litigation 2020

Last Updated February 10, 2020

Austria

Law and Practice

Authors



Gassauer-Fleissner Rechtsanwälte has a patent litigation team consisting of four members, with a client base comprised of hi-tech enterprises, manufacturers of brand-name pharmaceutical products and big players in the food and beverages industry. The core areas of the firm’s services are IP, unfair competition, IT and e-commerce, corporate and M&A, real estate, general business law and civil law, public business law, private client and private foundations, dispute resolution and labour law. It advises Austrian and international enterprises and institutions in a wide variety of areas related to IP, unfair competition, IT and e-commerce, including: patents; utility models; trade marks; domains; designs; copyright; prosecution of trade marks, designs and domains before national and international offices; combating product piracy; licence, exploitation, co-operation, R&D, software licensing and confidentiality agreements; protection of business secrets; redesigning advertising and PR campaigns; software project contracts; online standard terms and conditions; and social media.

Inventions are primarily protected by patents and utility models under Austrian law. As a member state of the EU, Austria also provides supplementary protection certificates for medicinal products and plant protection products. Additionally, three-dimensional structures of microelectronic semiconductor products may – as far as they have distinctive features – be protected under Austrian law on semi-conductor protection.

In the following, when referring to intellectual property rights for the protection of inventions, the term "patents" is used to improve readability and should be read as also including utility models and supplementary protection certificates unless indicated otherwise.

Austria has a civil law system where laws are primarily based on statutory provisions and not on precedent. It must nevertheless be stressed that case law as well as court and official practice, play an important role in the practical application of intellectual property (IP) law in Austria.

Patents

An application for a patent has to be filed at the Patent Office in writing. The day the application is received at the Patent Office is the day of filing; from this day the applicant has priority over any later application of the same invention (if the later applicant is not entitled to the right of priority of an earlier patent application).

The Technical Department (Technische Abteilung) of the Patent Office examines the conformity of application with the law. There is, however, no examination of whether the applicant is entitled to the grant of the patent. If the application does not comply with the formal requirements, the applicant is requested to eliminate any deficiencies within a set time limit. If the examination reveals that the invention is not patentable, the applicant is notified on the reasons with the instruction to respond within the time limit set.

If the examination reveals the inadmissibility of the grant of the patent, the application is rejected. If the conditions apply only partially, only the respective part of the application is rejected. In any event, the application is rejected in whole if time limits elapse without use and no comment is received by the time the decision on rejection has been made.

The application is published 18 months after the day of filing or, if priority has been claimed, after the priority date. Upon the request of the applicant, the application can be published before the expiry of that period.

Following publication of the application, any third party may present observations concerning the patentability of the filed invention.

The Technical Department grants the patent if no objections exist and if the publication fee for the patent specification has been paid. The grant of the patent and the patent specification is published in the Patent Gazette. At the same time, the patent is entered in the Patent Register and the patent is issued to the patentee. With the publication in the Patent Gazette the legal effects of the patent enter into force.

Utility Models

The grant procedure for utility models is similar to the above-described grant procedure for patents. However, although applications are subject to an examination of conformity with the law, there is no examination for novelty or inventive step made during the application proceeding. Nor is there an examination of industrial applicability or whether the applicant is the person entitled to utility model protection.

If no objections exist against the publication and registration of the utility model, the Patent Office will provide a search report, which indicates the documents ascertained by the Patent Office and which can be used to assess novelty and inventive step. Unless the applicant files a request for accelerated publication and registration, the search report is served on the applicant with the request to pay the publication fee within a time limit of two months from service of the report and to duly prove the payment. Upon justified request the time limit can be extended.

If the application complies with all requirements, the Patent Office orders the publication of the utility model in the Utility Model Gazette and its registration in the Utility Model Register.

Supplementary Protection Certificate (SPC)

The application for a Supplementary Protection Certificate has to be lodged within six months after the authorisation to place the product on the Austrian market as a medical product is granted. If the authorisation to place the product on the market is granted before the basic patent, the application for the certificate has to be filed within six months after the patent is granted. Applications for an extension of the certificate have to be filed with the Austrian Patent Office at least two years prior to expiry of the certificate.

If the application does not meet the requirements, the applicant is requested to eliminate the deficiencies within an appropriate (extendable) time limit; otherwise, the application will be rejected.

The Austrian Patent Office does not examine whether a certificate for the product already exists or whether the marketing authorisation is the first marketing authorisation to place the product on the Austrian market as required.

Lawyers, patent attorneys and notaries are authorised to represent parties before the Austrian Patent Office and in the appeal proceedings before the Higher Regional Court of Vienna. In practice, patent applications are typically handled by patent attorneys.

In principle, parties do not need to have representation in first and second instance hearings. As an exception, parties without a residence or place of business in an EEA country or in Switzerland need to be represented.

In a third instance hearing before the Austrian Supreme Court, parties need to be represented by a lawyer or a notary.

The average costs to grant are difficult to estimate, as costs vary considerably depending on the type of technology, the quality of the patent application, the prior art, official actions and other factors: approximately EUR5,000 for the application phase and approximately EUR5,000 for the prosecution phase may be used as rough guidelines; this may vary considerably depending on the individual case.

The duration of the prosecution phase also varies considerably depending on the individual case, a timeframe of about three years can be taken as a rough estimate.

The maximum term of a patent is 20 years from the date of the filing of the application. The duration of the protection conferred by the patent begins on the date of filing at midnight. The patent expires after 20 years, again at midnight.

Extended protection of patents for medicinal or plant protection products can be granted through SPCs granted under the general EU SPC Regulations, which provide for an additional protection right for a maximum of five years, and the Paediatric Regulation, which can extend pharmaceutical SPCs for another six months. Terms may be rectified in line with the Seattle Genetics (C-471/15) judgment.

The maximum terms of utility models and semiconductor protections are ten years from filing of the application and cannot be extended.

The owner of an intellectual property (IP) right may initiate civil and criminal proceedings against infringers, although criminal proceedings do not play a role in practice. Remedies available in civil proceedings are final and comprise preliminary injunctions, monetary compensation, removal from the channels of commerce and destruction of infringing objects. The owner of the IP right is also entitled to information about the origin and channels of distribution of infringing items and courts may allow the winning party to have the verdict of the judgment published at the losing party’s expense. Declaratory judgments are also available. See 6.1 Remedies for the Patentee for more details.

In order to maintain a patent, an SPC or a utility model, annual fees have to be paid with the Austrian Patent Office.

Extended protection of patents for medicinal or plant protection products may be granted through SPCs granted under general EU SPC Regulations and the Paediatric Regulation. See 1.4 Term of Each Intellectual Property Right.

Following publication of the application any third party may present observations concerning the patentability of the invention (Austrian Patent Act, Section 101b). Third parties are not party to the proceedings before the Patent Office and are not entitled to be compensated for costs.

Such third-party observations are communicated to the applicant, who may comment on them.

The Technical Department of the Austrian Patent Office presides over patent application and opposition proceedings. Its decisions may be appealed to the Higher Regional Court of Vienna in the second instance and to the Austrian Supreme Court in the third instance.

Annual fees are due at the end of the same month in which the application was filed. After the expiry date, payments may still be made within the next six months to maintain the patent, subject to a fee increase of 20%.

Failure to pay the annual fees within these six months leads to the revocation of the patent.

If the failure to pay the fees within this time limit is due to an unforeseeable or unavoidable event, a restoration of the deadline is possible pursuant to the Austrian Patent Act, Section 129. The law states that minor negligence does not impede the restoration of the deadline.

The request for restoration must be submitted within two months after the impediment ceases to exist but, in any case, no later than twelve months after the expiration of the deadline. The requesting party must indicate the circumstances on which the request is based and substantiate them, unless they are obvious to the Technical Office. The payment of the annual fee must be made at the same time the request is filed.

The owner of a technical intellectual property right (and possibly its licensee; see 3.1 Necessary Parties to an Action for Infringement) can bring a civil action for patent infringement. For more detailed information regarding infringement proceedings and available remedies please see 3 Infringement, 4 Revocation/Cancellation and 5 Trial & Settlement. Criminal proceedings against infringers are also possible under Austrian law, although they do not play a role in practice.

In addition, an application for customs seizure of imported infringing goods is possible under the Austrian Product Piracy Act and the applicable European regulations. The application should be accompanied by adequate information to allow the identification of the relevant counterfeits.

There are no arbitration or mandatory mediation proceedings available for intellectual property right infringement proceedings in Austria.

Invalidation Action

Generally, anyone can bring an invalidation action against a patent during its lifetime. In case the patent expires during invalidity proceedings, legal interest to continue the proceedings has to be established, otherwise the proceedings are discontinued. A legal interest may be based in pending parallel infringement proceedings, for example, or in the fact that the patent owner could still bring payment claims forward against the applicant relating to the term when the patent was in force.

For the grounds for an invalidation action, see 4.1 Reasons and Remedies for Revocation/Cancellation.

Opposition

Within four months of the announcement of the grant of a patent, anyone may file a written opposition with the Patent Office. It may be based on the same grounds as invalidation actions (see 4.1 Reasons and Remedies for Revocation/Cancellation).

A copy of the opposition is served to the patentee, enabling him or her to submit a written comment within a time limit of two months, which may be extended on reasonable grounds.

As soon as the comment has been submitted, or the deadline has expired, the referee in charge of the case communicates instructions concerning further correspondence, a hearing, obtaining evidence offered by the parties, the taking of evidence, etc; with the purpose of establishing the facts.

The chair may order an oral proceeding on request or ex officio, if he or she considers this to be necessary in the particular case. The oral proceedings are public.

Request for Disentitlement/Transfer of the Patent Right

A patentee may be deprived of a patent if:

  • it has been proven that the patentee was not entitled to the grant of the patent; or
  • that the substantial contents of the application had been taken from the descriptions, drawings, models, implements or installations of a third person, or from a process used by a third party without his or her consent.

In the former, only the person entitled to the grant of the patent has the right to a declaration of lack of title. In the latter, only the injured party has such a right.

A claim against a bona fide patentee becomes statute-barred after three years from the entry of the patent in the Patent Register.

The patentee can also be deprived, but only partially, if one of the aforementioned conditions only applies in part.

Mutual claims for compensation and reimbursement arising from a disentitlement are governed by civil law and are asserted in civil proceedings.

Instead of a request for disentitlement, the transfer of the patent right may be requested. If the claim for transfer exists only regarding a share of the patent, the patent is partly transferred.

If no transfer is requested and the lack of title is declared for the entire patent, the patent protection ends once the decision becomes final.

In the case of a transfer, the licensing rights lawfully granted by the earlier patentee and acquired in good faith by third parties, entered in the Patent Register for one year and not the subject of any legally founded entry relating to disputes, remain binding on the new patentee, irrespective of any claims for compensation arising therefrom against the earlier patentee.

The request for a disentitlement or transfer may already be filed before the patent application is granted. If a transfer of the patent application is requested, the application proceedings are interrupted until a binding decision about the request is made and is continued only with the applicant’s consent before that time.

Compulsory Licences

Sections 36 and 37 of the Austrian Patent Act provide for compulsory licences, but this measure is rarely used in practice. There is only one decision on compulsory licences, dating back to 1972.

The law provides for three grounds for compulsory licences:

  • a patented invention cannot be exploited without infringing an invention patented beforehand, and the invention protected by the later patent represents important technical progress of considerable economic significance compared to the invention protected by the earlier patent;
  • the patented invention is not exploited to an appropriate extent in Austria and the patent proprietor has not done everything necessary for such exploitation, (unless the patent proprietor proves that the exploitation of the invention in Austria would be an undue burden); or
  • the granting of a licence for a patented invention is in the public interest.

Under the first scenario, only the holder of a previous patent may request a compulsory licence. Under the subsequent scenarios, anyone may be granted the non-exclusive licence to use the invention “in the course of his or her business.”

Under the second scenario, an application for a licence may be submitted only upon the later of:

  • four years after filing the application; or
  • three years after publication of the grant of the patent in respect of which the licence is sought (import by the patent owner also qualifies as exploitation for this purpose).

The requirement to obtain authorisation from a person entitled to grant a licence may be disregarded in the third scenario, where there is a national emergency or other circumstances of extreme urgency. Here, a preliminary permission to use the invention shall be granted by way of an interim decision. If a licence is granted, an adequate compensation is determined, wherein the economic value of the licence is taken into consideration. The extent and duration of the licence are predominantly determined by the needs of the Austrian market and are limited to the purpose requiring the licence. All licences under this provision are granted on a non-exclusive basis.

A compulsory licence is terminated upon request, subject to adequate protection of the legitimate interests of the licensee, if the circumstances that led to it cease to exist and are unlikely to recur. The Patent Office decides on this request

Declaratory Petitions According to the Austrian Patent Act, Section 163; Negative Declaratory Actions

An alleged infringer may bring declaratory petitions before the Patent Office to obtain a declaratory judgment on non-infringement. These proceedings are "abstract" because they are limited to the actual subject matter of the declaratory proceedings and the question of whether the patent has been validly granted is not examined.

An alleged infringer may bring proceedings to obtain a declaratory judgment on non-infringement if he or she:

  • places an article on the market;
  • offers an article for sale;
  • uses an article;
  • uses a method in the course of business; or
  • intends to undertake any of the above activities.

The alleged infringer may file a petition with the Patent Office against the owner of a patent or the exclusive licensee demanding a declaratory judgment to the effect that its article or method is not subject to the patent in whole or in part.

The owner of a patent or the exclusive licensee can also file a positive declaratory petition against an alleged infringer for a declaratory judgment to the effect that the infringer's article or method is subject to its patent in whole or in part.

When evaluating the scope of protection of the patent subject to the declaratory proceedings, the Patent Office will take into consideration the prior art evidenced by the parties and the basis on which the patent was originally granted.

A declaratory petition will be dismissed if infringement proceedings between the same litigants, and relating to the same product or method, are pending before the court (Patent Act, section 163(3)). Therefore, a declaratory petition can only be used as a defence against an infringement action if it is filed with the Patent Office before court proceedings are issued. Even in this case, under current case law, a final decision by the Patent Office should not have a binding effect on infringement proceedings brought after it. Scholars have criticised this outcome, and there is disagreement over whether a court can suspend infringement proceedings pending the decision on the declaratory petition.

At any rate, a patent holder may always apply for a preliminary injunction against an alleged infringer if a declaratory petition is pending with the Patent Office. In addition, a different outcome of declaratory proceedings conducted before the Patent Office does not constitute grounds for filing a motion for a new trial before the court. Therefore, the practical importance of declaratory petitions before the Patent Office is limited.

There is also an option to file declaratory actions with the courts instead of the Patent Office. However, the Supreme Court has not yet clarified the exact interaction between these two types of declaratory action.

Austria has a (semi-) bifurcated legal system. Patent infringement disputes are decided exclusively within the court system, while matters relating to the validity of patents are decided by the Patent Office's Nullity Division in the first instance, but may be appealed to the Higher Regional Court of Vienna in the second instance and to the Supreme Court in the third instance. The second and third instances are the same institutions that decide on appeals in infringement cases.

For infringement matters, the Commercial Court of Vienna has exclusive jurisdiction in the first instance to hear all civil cases based on Austrian patents, including European patents validated for Austria.

For remedies under criminal law, the Criminal Court of Vienna has exclusive jurisdiction in first instance in patent matters. 

There are no specialised bodies or organisations, apart from the Patent Office (see above) and the court system. Both the Vienna Commercial Court and the Higher Regional Court of Vienna have senates specialised in intellectual property matters. In patent infringement disputes in the first and second instance, senates are always composed of two legal judges and one lay judge (in most cases an Austrian patent attorney with expertise in the relevant field).

There are no prerequisites to filing a lawsuit; neither engaging in mediation nor sending warning letters is obligatory. Recordal of licence rights is recommended but not mandatory. Licence rights need not be registered before an action but have to be evidenced in the proceedings (see 3.1. Necessary Parties to an Action for Infringement).

For court infringement proceedings regarding intellectual property matters, all parties need to be represented by a lawyer authorised to practise in Austria. In patent matters, a patent attorney is usually involved as a co-representative in the proceedings for support on the technical aspects of the case.

Representation in front of the Patent Office is recommended but generally not required by law, save for certain exceptions (ie, persons/entities without a seat within the EEA or Switzerland).

Preliminary injunctions (PI) are common practice in Austrian patent litigation. PIs are granted on the basis of validity (to be presumed) and infringement. No specific urgency needs to be demonstrated. Preliminary injunctions may be applied for at any time; even after the main proceedings have been initiated. The law does not require a balance of convenience test. In practice, courts tend to consider the interests of the defendant by ordering a security bond if the PI is granted.

Provisional proceedings are generally held inter partes, although without-notice proceedings are possible in certain exceptional circumstances, for example trade fair cases and/or cases where there is a launch of an infringing product shortly before the expiry of a patent.

It is customary that proceedings are in writing only, with the exception that informed persons may be heard. All arguments and evidence are presented in one or two rounds of briefs.

The plaintiff does not have to provide full proof that his or her rights are in jeopardy; he or she only needs to give prima facie evidence. This type of evidence requires a lower degree of judicial persuasion.

Only readily available evidence may be submitted in provisional proceedings, but the court is not bound by specific rules of evidence. In general, the applicant only has to demonstrate ownership of the patent and its infringement. It is not a requirement under Austrian law to demonstrate that the applicant would suffer irrecoverable harm if a PI is not granted.

The infringement court cannot suspend the PI proceedings if the defendant raises the defence of invalidity. It must decide on the PI request independently. The court, in granting a PI, must have come to the prima facie view that the patent is valid (but can safeguard the defendant's interests by ordering payment of a bond).

PI proceedings may be initiated together with, or independent from, main proceedings. If initiated jointly, the main proceedings are stayed until a final outcome is reached in PI proceedings.

If a PI is granted, it will be necessary to defend it in the principal proceedings. If not filed together, the deadline to file a main action is set by the court after grant of the PI. If this deadline is missed, the PI will lose effect and is treated as wrongfully granted, which may have consequences in terms of liability.

Protective briefs do not exist in Austria. They are neither provided for by statutory patent law or the Rules of Civil Procedure, nor recognised by case law. Preliminary injunctions in patent matters are, however, very rarely granted ex parte; rather, the court will serve the PI application upon the defendant and grant a right to respond.

Since PIs in patent matters are rarely granted without the defendant being heard, the fact that it is not possible to file protective letters is not usually an issue for the defendant. Since deadlines to respond to PI applications are usually quite short (two-four weeks, but they can also be shorter), timely preparation of a defence strategy, including a draft of a defence statement, which should normally include private expert opinions against validity and/or infringement, is key to a successful defence against a PI application.

A PI can be granted on the condition that the applicant provides a security against possible future damages the defendant might suffer due to a PI that later turns out to be unfounded. Such securities are usually provided in the form of a bank guarantee.

The court has a broad margin of discretion to set the amount of a security deposit and usually does not state, in its reasons, how this amount was calculated.

The Austrian Civil Code provides for general limitation provisions, although various special provisions are found in other laws. The Austrian Civil Code, Section 1489 stipulates that a party loses the right to claim damages within:

  • three years after becoming aware of the injuring party and damage; or
  • 30 years after the damaging act takes place (absolute time limit) if:
    1. the damaged person is not aware of the damage or the injuring party; or
    2. the damage results from a wilful criminal offence for which the criminal courts are competent, and which is punishable with a prison sentence of more than one year,

unless court proceedings are commenced before the end of this time limit.

The Austrian Patent Act, Section 154 explicitly declares the above limitations applicable to all monetary claims due for patent infringement, the claim to rendering of accounts and the claim to information. The limitation of all of these claims is interrupted by the commencement of court proceedings, even if the action is (in a first stage only) directed at the rendering of accounts or a request for a declaratory decision.

Due to the explicit nature of Section 154, the short limitation period not only applies to payment claims in the form of compensation for damages actually suffered and infringer’s profits, but also to payments calculated under the adequate remuneration method (hypothetical licence).

The courts apply these limitation rules by analogy to claims for injunction and removal.

Austrian law contains, broadly speaking, two types of rules allowing a party to obtain evidence from the opponent or a third party. There are “traditional” rules contained in the Civil Procedure Code and there is the possibility to obtain a preliminary injunction securing evidence. The latter provisions were introduced in the Patent Act (as well as in the Copyright and Trademark Act) in the course of the implementation of Article 7 of the Enforcement Directive. The main difference between these two types of provisions is that the “traditional” rules cannot be enforced by coercively seizing the evidence if the other party does not comply with orders. Contrarily, preliminary injunctions securing evidence may be enforced by coercive measures just like any other preliminary injunction.

The “traditional” measures to obtain and preserve evidence consist in the right to order a presentation of evidence (Civil Procedure Code, Sections 303-307 and 369) and the possibility of a pre-trial on-site inspection or questioning of witnesses and private experts by the court (Civil Procedure Code, Section 369).

However, these measures cannot be coercively enforced, as there are no effective sanctions for non-compliance. The only consequence is that the court may consider the party’s behaviour in the judgment on the merits of the case, which in certain instances may lead the court to believe the other party’s allegations. Furthermore, the ordered party may invoke confidentiality interests such as trade secrets. 

Consequently, these measures are largely toothless and it is doubtful if they are in compliance with the Enforcement Directive, which also demands effective measures to obtain evidence during the main proceedings. 

More effective measures may be obtained through the securing of evidence via a preliminary injunction. If granted, the court will instruct the bailiff to carry out the relevant measures on-site, who may also engage the support of local police or experts. Furthermore, there is no statutory restriction on what kind of evidence and what sort of preservation measures (eg, dawn raids or the taking of samples) may be demanded.

However, there is some uncertainty as to what an applicant has to show to obtain a preliminary injunction to secure evidence. Statutory law does not contain any explicit requirements. Case law has so far stated that questions of infringement as well as of the validity of the underlying right need not be assessed by the court. Furthermore, the Supreme Court has clarified that the danger of evidence destruction or irreparable harm is a requirement for an ex parte grant only, not for inter parte proceedings.   

An initial brief must contain at the very least a specific plea and the assertion of the facts from which the plea can be derived. Therefore, in IP infringement actions, a party must assert ownership of the IP right (or a licence conferring the right to sue) as well as infringement. It is sufficient to show that an infringing act is imminent. There is no legal requirement that evidence is already offered in the initial brief, however it is advisable to do so.

Contrarily, in PI proceedings all available prima facie evidence should be provided in the first brief. Although it is customary that, in inter partes cases, the court grants a second round of briefs, the court is not legally required to do so. Therefore, where the applicant expects to be challenged by the opponent on any particular point, it is advisable to pre-emptively rebut the arguments in the PI application. Consequently, initial briefs in PI proceedings generally contain all relevant evidence and arguments.

In PI proceedings the law stipulates that validity of the patent is presumed. In practice, however, this presumption can be rebutted – eg, with private expert opinions or references to decisions from other jurisdictions.

In PI proceedings, the plaintiff does not have to provide full proof that his or her rights are in jeopardy; he or she only needs to give prima facie evidence. This prima facie evidence requires a lower degree of judicial persuasion.

Regarding infringement, the patent owner basically has to show that infringement is more likely than not, while the defendant has to show that its invalidity is more likely than its validity.

Only readily available evidence may be submitted in provisional proceedings, but the court is not bound by specific rules of evidence. Private expert opinions, which are usually drafted by Austrian patent attorneys, are generally used to support the allegations made by the parties. Traditionally, scientific experts or inventors’ testimonies have played only a minor role in Austrian patent infringement proceedings, but this is slightly shifting given the increasing complexity of cases.

Main patent infringement or invalidity proceedings require a higher level of proof in comparison to PI proceedings; the claimant must prove infringement with high probability.

Supplementing Pleadings with Additional Arguments

PI proceedings are, barring exceptions, conducted inter partes (ie, the defendant is allowed to respond to the application for a preliminary injunction). It is customary that the court grants the applicant a reply to the defendant’s response, which may again be answered by a rejoinder. However, this is at the discretion of the court and there is no statutory right to a second brief. Traditionally, oral hearings have been very rare in patent PI proceedings.

In main infringement proceedings, supplements to the pleading can, in principle, be made at any time until the end of the oral hearing when the court closes the proceedings. The court can, however, deny the submission of supplementary arguments or evidence if they would lead to a delay of the proceedings and the late submission is due to the gross negligence of the party.

The Austrian Code of Civil Procedure does not provide for collective actions or a special proceeding for class actions. Certain organisations, however, have the right to sue on behalf of consumers in some matters. Also, the Austrian Supreme Court has recognised the legal admissibility of lawsuits where multiple individuals assign their claims to one entity, who then brings an ordinary (two-party) lawsuit over the assigned claims, provided that all claims are essentially based on the same legal grounds. The monetary benefits are then redistributed among the individuals. This technique has been labelled as "class action Austrian style".

Such actions have not yet played a role in litigation on intellectual property rights.

There are no special provisions restricting patent owners when asserting rights against others, although generally the law against unfair competition and antitrust law must still be observed. Under unfair competition law, all communications regarding, or allegations of, patent infringement, in particular if raised vis-à-vis third parties, such as customers of the alleged infringer (eg, in warning letters) must comply with strict standards on objectiveness, completeness and veracity. If the person who makes these allegations is not able to prove the validity of the patent and its infringement in court, he or she will be liable for damages.

A further important restriction applies to Standard Essential Patents (SEP) – ie, a patent that must be used to comply with a technical standard. Under the case law of the CJEU, such patents may only be enforced once the patent proprietor has offered a licence to the alleged infringer. However, so far there have been no publicly available SEP cases in Austria. 

Capacity to Sue

The registered patent-holder may bring an action for patent infringement. A new patent holder that is not yet registered may also bring such an action, if the chain of title can be proved.

Any licensee (exclusive or non-exclusive) may sue for infringement if the right to sue is expressly confirmed in a licence agreement. Under longstanding case law, an exclusive licensee may also sue for infringement even without express confirmation.

Licence rights do not need to be registered but must be evidenced if an action is lodged.

Parties other than the patent owner (registered and unregistered) or its licensees (and sub-licensees) are not entitled to bring an action. A patent holder cannot transfer the right to make a claim to a third party without first granting the third party a patent licence.

Capacity to be Sued

The patent-owner can enforce his or her claims against all persons committing any of the actions referred to in the Austria Patent Act, Section 22.

Infringement actions can also be taken against the accomplices, instigators and accessories of the infringer as well as persons indirectly infringing the patent (see 3.2 Direct and Indirect Infringement).

New parties can only join proceedings as a consequence of a succession in law under the relevant Austrian statutes, such as in cases of merger, spin-off or where all parties to the litigation consent to the changing of parties.

In addition, persons who have legal interest in the litigation can join as intervening parties on either the claimant's or defendant's side.

Indirect Infringement

The Austrian Patent Act, Section 22, paragraphs 3-5 prohibit the offering for sale and supplying of means relating to an essential element of the invention to persons not authorised to use the invention, if the supplier knows – or it is obvious from the circumstances – that these means are suitable and intended for putting that invention into effect.

This provision is modelled on Article 26 of the European Community Patent Convention (CPC) and thus is similar to the rules on indirect infringement in several other European countries. Although the provision has been part of the Austrian Patent Act for approximately ten years, case law on this provision has yet to arise.

Contributory Infringement

Apart from, and independent of, the concept of indirect infringement as described above, it is also possible to take legal action against accomplices, instigators and assistants of the (direct) infringer under the general rules of the Austrian Civil Code, Section 1301. This requires, however, that the assistant consciously supports the acts of infringement, which means that the assistant must know about, or knowingly accept, the intended acts of infringement of the third party. It is therefore necessary, to take legal action, to prove the intent of the assistant.

Provided that intent can be proven, the qualifications of the Austrian Patent Act, Section 22, paragraph 3 (eg, to the essential elements) need not be met.

There are no differences with respect to the remedies. See a detailed description of available remedies at 6.1 Remedies for the Patentee.

The extent of the protection of a patent and a published application is determined by the terms of the claims. The description and drawings of the patent will be used to interpret the claims (Act Revising the European Patent Convention 2000, Article 69; Patent Act, Section 22a (1)). For this purpose, the Protocol on the Interpretation of Article 69 of the European Patent Convention 1973 (Federal Law Gazette No 350/1979), as amended, applies mutatis mutandis.

Therefore, Austrian courts must always consider the description and the drawings of the patent in determining the scope of a patent's protection.

According to a decision of the Austrian Supreme Court, the prosecution history of a patent is not a source for claim construction. However, the Patent Office files must be considered as a source of interpretation of the scope of the patent during declaratory proceedings before the Patent Office (Patent Act, Section 163, paragraph 5).

Generally, a patent is infringed when all features of the patent are fulfilled by the infringing product (or process). In practice, the courts will apply a two-stage approach:

  • Establish whether or not a literal infringement is to be presumed – this assessment is based on the claims, the description or the drawings (and potentially the Patent Office files for declaratory actions), the starting point is the plain and ordinary meaning of the claims.
  • Determine an adequate understanding of the claims from the point of view of an "average expert", with the assistance of technical dictionaries and relevant publications in the applicable fields.

In addition to this "literal" infringement, the Austrian courts will consider equivalent infringement if literal infringement of the patent cannot be established.

The courts apply the following three-stage test set out in the Austrian Supreme Court decision of Bicalutamide (influenced by German case law (see 13.10.2014 - BGH GRUR 2002, 515 – Schneidemesser) to assess equivalent infringement:

  • Does the variant solve the problem underlying the invention by using means that are modified but have the same technical effect (same effect)?
  • Would the skilled practitioner, based on his or her knowledge of the field at the priority date, have been able to detect that these different means have the same technical effect (obviousness)?
  • Are the skilled practitioner's considerations sufficiently closely related to the technical teaching of the patent that the skilled practitioner considers the variant, with its modified means, as equivalent to the solution claimed by the patent (parity)?

The Austrian Patent Act also provides for the possibility of indirect infringement. For further information see 3.2 Direct and Indirect Infringement.

Apart from contesting the infringement itself, the defence of nullity – ie, that the invention is: (i) not novel; (ii) obvious; or (iii) that matter was added to the original disclosure, plays an important role.

Other defences include own prior use, that the alleged infringer only practises the prior art (Formstein defence), relying on (implied) licences and invoking the statute of limitations. Exhaustion of rights can be invoked as a defence in cases regarding products placed on the market in the European Economic Area by or with the consent of the patent holder.

In pharmaceutical cases, the "BOLAR" exemption (that is, protection for drug manufacturers when preparing their products for regulatory approval) may be available.

Anti-competitive enforcement is possible but has rarely been argued in Austria. The same applies to compulsory licences.

Experts play a crucial role in Austrian patent infringement proceedings. The court in (main) infringement proceedings will, in most cases, appoint an expert, usually a patent attorney, to render an opinion of validity and/or infringement on the issues in dispute. Although the findings of the court-appointed expert can be challenged, and the parties have the right to pose additional questions to the expert in writing and in an oral hearing, it is difficult in practice to change the initial assessment of the expert.

The court senate in the majority of cases follows the opinion rendered by the court-appointed expert, and even in the second instance the opinion of the court-appointed expert is rarely overturned.

In preliminary injunction proceedings, the court will not appoint an expert, as only readily available evidence is considered. Thus, in PI proceedings both parties regularly submit the opinions of private experts on validity and/or infringement as evidence.

There is no separate procedure for construing the terms of the patent’s claims.

Generally, anyone can bring an invalidation action against a patent during its lifetime. In case the patent expires during invalidity proceedings, legal interest to continue the proceedings has to be established; otherwise the proceedings will be discontinued. Legal interest may be based in pending parallel infringement proceedings, for example, or in the fact that the patent owner could still bring payment claims forward against the applicant relating to the term when the patent was in force.

An invalidation action can be brought on the following grounds:

  • lack of novelty;
  • lack of an inventive step;
  • lack of industrial applicability;
  • breach of good morals;
  • insufficient disclosure; or
  • added matter:
    1. computer programs, therapeutic methods, plant and animal varieties excluded from patentability (Articles 52 and 53 of the Act Revising the European Patent Convention 2000); or
    2. inventions excluded from patentability in accordance with Directive 98/44/EC on the legal protection of biotechnological inventions.

The legally binding declaration of nullity is effective retroactively to the day of filing.

Partial revocation or cancellation is possible. A patent may be partially limited in the course of revocation proceedings if the hearing applies to only part of a patent

The Austrian Patent Act does not provide for limitation proceedings. According to the Patent Act, Section 46 the patent-owner may, however, waive his or her right to the patent in whole or in part.

Therefore, the only method of obtaining a post-grant claim limitation is to file a so-called partial waiver with the Patent Office. Whereas, according to the old case law of the Patent Office, this waiver was only found admissible if entire claims were cancelled or features of dependent claims were drawn into independent claims, the Austrian Supreme Court has rejected this formalistic approach in a number of decisions. It has held that a limitation of a patent claim is always admissible if it leads to a narrower scope of protection and does not go beyond the original disclosure of the patent.

Under these conditions, the patent-owner is even free to base an infringement action on a limited version of its claims, irrespective of filing a formal waiver with the Patent Office.

It is also possible to submit amended/limited patent claims as auxiliary requests in nullity proceedings.

Infringement and validity proceedings are bifurcated in Austria (ie, they are decided in different forums). The infringement proceedings are conducted in the first instance before the Commercial Court of Vienna and invalidity proceedings are brought before the Austrian Patent Office.

Only in preliminary injunction proceedings, must the infringement court – on a preliminary basis – also decide on the validity of the patent.

If the invalidity of a patent is invoked in the main proceedings, the infringement court must stay the infringement proceedings if it considers the patent likely to be invalid. In this case, the defendant must file or join cancellation proceedings within one month of the decision to stay, or prove that such proceedings are already pending.

If the court does not consider the patent likely to be invalid, it may continue the infringement proceedings on the basis of the assessment that the patent is valid. If this result later differs from the outcome of the validity proceedings, the infringement proceedings may be reopened.

The decision to stay or not to stay the infringement proceedings, depending on the likelihood of invalidity, is usually the first subject of debate at the beginning of (main) infringement proceedings.

Validity proceedings in front of the Patent Office typically take two to four years until a final decision is reached. If validity is not at issue, court (main) infringement proceedings are typically faster, yielding a final decision after one to two and a half years. PI proceedings in court are usually decided much faster, yielding a final decision after six to 18 months, depending on the complexity of the case and whether the case runs through two or three instances.

There are no special procedural provisions for main proceedings in intellectual property rights cases.

Preliminary injunction (PI) proceedings in intellectual property matters differ from PI proceedings in other civil matters to the extent that the applicant has neither to demonstrate urgency, nor that it would suffer irreparable harm were no PI granted, see 2.6 Legal Representation.

Cases are determined by senates of three or five judges. In the proceedings of first instance before the Commercial Court of Vienna, the case is determined by specialist senates, which consist of two professional judges as well as one lay judge with technical expertise, usually a patent attorney.

As described in 2.3 Courts with Jurisdiction, decisions by the Commercial Court can be appealed to the Higher Regional Court of Vienna, where the case is decided by another three-judge panel, including a technical lay judge.

Provided that fundamental issues of law, of importance beyond the particular case, are to be resolved, a final appeal to the Austrian Supreme Court is possible, where the patent senate consists of five professional judges, two of whom are lay judges, again typically patent attorneys.

Parties do not have any influence on the decision-makers, with the exception of rejecting a judge in case of an actual conflict. Incoming patent matters are assigned to the specialised senates by a routine parties cannot influence.

The parties can enter into a settlement, in or out of court, at any stage of the proceedings until a final decision is reached. There are no mandatory settlement conferences or mandatory court mediation, although the court often inquires, at the beginning of oral hearings, whether the parties could reach an agreement and will informally encourage them to conclude a settlement if that possibility arises.

See 4.4 Revocation/Cancellation and Infringement for the influence of parallel national (Austrian) revocation proceedings on infringement proceedings.

Parallel infringement proceedings against other defendants generally do not have an influence on infringement proceedings.

Proceedings in front of foreign national courts or other bodies do not have a direct influence on revocation/infringement proceedings, although the reasoning from such decisions may be taken into account.

The following remedies are available under Austrian law:

  • Preliminary injunctions (PIs) – a PI can be issued on the basis of validity and infringement without taking further considerations into account, there is no need to demonstrate that the case is of particular urgency, in order to be eligible for a PI.
  • Final injunctions – the main difference between the issuance of a PI and a final injunction is that the latter requires a higher level of proof in comparison to prima facie evidence, which – in practice – usually means that the court has to appoint an expert.
  • Monetary claims – the patentee is also entitled to payment claims, different claims for payment exist in Austrian patent infringement proceedings, which can be claimed alternatively.

There are three different ways of calculating the amount of monetary payment the claimants are entitled to in case of patent infringement:

  • "reasonable compensation", meaning a hypothetical licence fee (or double the amount of this hypothetical fee if intent or gross negligence can be proven);
  • the actual damages suffered by the claimant(s) including loss of profits; or
  • surrender of profits, which the infringer generated by infringing the patent.

The claimant is free to choose between these three methods and is also entitled to a claim for rendering of accounts, which is typically asserted as a first step. Depending on the result, the patent holder may choose the most favourable option.

Removal and Destruction

In addition to injunctive relief and monetary compensation, removal from the channels of commerce and destruction of infringing objects can be ordered on the proviso that rights of third parties are respected.

The patentee is also entitled to information about the origin and channels of distribution of infringing items.

Publication

Furthermore, courts may allow the winning party to have the verdict of the judgment published in appropriate media at the losing party’s expense.

Remedies under criminal law are also available, but do not play a role in practice, since if validity and/or infringement can be subject to debate (essentially in every patent dispute), it is difficult, if not impossible, to prove criminal intent.

At the end of the main proceedings, the losing party must reimburse the winning party’s court fees as well as legal fees on the basis of the Attorney Tariff Act (see also 8.2 Calculation of Court Fees). In exceptional cases, a publication of the judgment can be ordered to the benefit of the prevailing defendant.

If a PI turns out to be unfounded, the defendant is entitled to compensation of all damages caused by the PI, regardless of the applicant’s fault.

The remedies, as described in 6.1 Remedies for the Patentee, do not differ between the technical intellectual property rights.

An appeal in (main) infringement proceedings has suspensive effect; the injunction would therefore only be effective once a final decision has been reached. In principle, this also applies to appeals in the third instance to the Austrian Supreme Court. As an exception, so-called “extraordinary appeals” (ie, appeals that are not formally allowed by the court of second instance due to a lack of significance beyond the case at issue (see 7.1 Special Provisions for Intellectual Property Proceedings and 7.2 Type of Review)) do not have suspensive effect anymore.

To the contrary, appeals in preliminary proceedings generally do not have suspensive effect and decisions are therefore effective immediately. In special circumstances, the court can, however, grant an appeal with suspensive effect, if the purpose of the appeal would otherwise be made impossible or significantly more difficult.

There are no special provisions concerning appeals in intellectual property rights proceedings.

The statutory deadline for an appeal is four weeks (two in PI proceedings) and cannot be extended. The appeal must already be complete and reasoned at this stage. In order to be able to appeal the decision of the second instance court to the Austrian Supreme Court, questions of law, of significance beyond the case at issue, must be at stake. Appeal proceedings usually take six to nine months in each instance (three to six months in PI proceedings).

The appeal in second instance is a full review, where the reasons for appeal available to the applicant include inaccurate factual findings (ie, an incorrect evaluation of evidence by the court). At third instance, the appeal is limited to a legal review and to questions of law of significance beyond the case at issue.

Costs incurred before court proceedings are formally commenced relate mainly to the drafting of litigation documents and the preparation of private expert opinions. There are no particular costs that necessarily arise before filing a lawsuit apart from these costs. Warning letters are neither required by statutory law nor by case law in Austria. However, they are not uncommon where European patents are concerned, and patent litigation is pending in several member states. As mentioned, in 2.7 Interim Injunctions, protective briefs are not recognised in Austria.

The court fees, as well as the lawyer’s fees, to be reimbursed to the prevailing party depend on the amount claimed, which is set by the plaintiff when filing the PI request or complaint. Court fees are due upon the commencement of legal proceedings in court. The amount claimed is a value to be chosen by the plaintiff more or less according to his or her own discretion. In most cases, this value is lower than the actual business value of the item and may be challenged by the defendant.

Court fees have to be paid separately for the first instance (Vienna Commercial Court), the second instance (Higher Regional Court of Vienna) and the third instance (Austrian Supreme Court). With regard to the second and third instance, the party filing an appeal must pay the fees for the second and third instance upfront. A response to an appeal does not trigger any court fees.

The chosen amount claimed only serves the purpose of calculating court fees and reimbursable fees under the Attorney Tariff Act and does not limit the actual monetary claims sought.

The losing party is required to reimburse the winning party’s court fees as well as reimbursable legal fees on the basis of the Attorney Tariff Act.

The Attorney Tariff Act generally does not provide for adequate compensation for the efforts required in patent matters. In most cases the reimbursable fees are therefore lower than the actual legal fees.

Arbitration and alternative dispute resolution are available but uncommon in patent infringement matters. This is likely because a defence based on the nullity and the invalidity of the patent is not permitted. In addition, Austrian courts are assisted by technical lay judges, so that parties do not have to seek a technically qualified panel outside the regular court system.

Arbitration is more common in other fields of technology law, such as disputes regarding IT contracts or trade secret/know-how protection, where the obvious advantages of it are expertise and enhanced confidentiality.

There are no special requirements or restrictions for the assignment itself to be valid. However, in order to register the transfer of right with the Austrian Patent Office, the assignment must comply with the following formal requirements:

  • the assignment document must be in written form, and the signature of each assignor must be notarised;
  • if the assignor is not an individual, evidence must be provided that the person signing for and on behalf of the assignor is authorised to do so on the day the signature was affixed by the Notarial Certificate (the signature of the assignee need not be notarised); and
  • the signatures also have to be legalised or apostilled, depending on the country in which the assignment document is signed and notarised.

Under a recently introduced amendment to the Patent Act, the recordal of an assignment is facilitated. Instead of filing the assignment document, assignor and assignee may also file a joint declaration confirming the assignment. The declaration may also be made by the parties’ representatives.

In order to register the assignment with the Austrian Patent Office, the licence agreement needs to comply with the formal requirements described in 10.1 Requirements or Restrictions for Assignment of Intellectual Property Rights. The documentation is then registered with the Austrian Patent Office. The registration process is slow and can take several months. Although the registration has constitutive effect, pursuant to the relevant case law and practice, the new proprietor has standing to sue even before such a registration has been completed (OGH 4 Ob 173/90 – Duschtrennwände).

Licences can be registered with the Austrian Patent Office, although there is no obligation to do so. There are no special requirements or restrictions for the licence agreement itself to be valid. However, in order to register the transfer of right with the Austrian Patent Office, the assignment must comply with the same formal requirements as assignment agreements, outlined in 10.1 Requirements or Restrictions for Assignment of Intellectual Property Rights. The privilege of a "joint declaration" of both parties set forth there applies to assignments only, but not to licences.

By registering a licence, it becomes binding and enforceable against third parties. The licence is then "connected" to the patent number in the patent register. If the licence is recorded before a new owner files for registration of its ownership, the new owner is treated as the licensor.

As mentioned, there is no obligation to register licences. If the licensee has the right to bring suit, the licensee will have to provide evidence of this fact when initiating infringement proceedings.

If joint patent owners wish to grant a licence, they must exercise their right jointly.

If the licence needs to be registered with the Austrian Patent Office, as described above in 10.3 Requirements for Restrictions to License an Intellectual Property Right, the licence agreement needs to comply with the formal requirements as described for assignment agreements under 10.1 Requirements or Restrictions for Assignment of Intellectual Property Rights. The documentation is then registered with the Austrian Patent Office. The registration process is slow and can take several months.

Gassauer-Fleissner Rechtsanwälte

Wollzeile 3 / Lugeck 6
1010 Vienna
Austria

+43 1 205 206 0

+43 1 205 206 207

office@gassauer.com www.gassauer.com
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Law and Practice

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Gassauer-Fleissner Rechtsanwälte has a patent litigation team consisting of four members, with a client base comprised of hi-tech enterprises, manufacturers of brand-name pharmaceutical products and big players in the food and beverages industry. The core areas of the firm’s services are IP, unfair competition, IT and e-commerce, corporate and M&A, real estate, general business law and civil law, public business law, private client and private foundations, dispute resolution and labour law. It advises Austrian and international enterprises and institutions in a wide variety of areas related to IP, unfair competition, IT and e-commerce, including: patents; utility models; trade marks; domains; designs; copyright; prosecution of trade marks, designs and domains before national and international offices; combating product piracy; licence, exploitation, co-operation, R&D, software licensing and confidentiality agreements; protection of business secrets; redesigning advertising and PR campaigns; software project contracts; online standard terms and conditions; and social media.

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