In Germany, an inventor may obtain a national German patent and a national German utility model (a petty patent) by applying to the German Patent and Trademark Office (DPMA). A European patent, leading to a bundle of national patents is available from the European Patent Office (EPO) as a one-stop-shop for patent applications. A European unitary patent – ie, a “real European patent” – will most likely become available in late 2022 or early 2023.
In addition to patent protection, supplementary protection under laws prohibiting unfair competition (ergänzender wettbewerbsrechtlicher Leistungsschutz) may be available in cases of unlawful imitation of a product. Even though this protection is not usually considered a real IP right, it provides the right-holder with similar legal remedies.
Furthermore, there is a new German Trade Secrets Act through which the EU directive on the protection of trade secrets (EU 2016/943) was implemented. The law significantly improves the protection of know-how and trade secrets in and out of court proceedings. For patent infringement proceedings this directive led to better protection of trade secrets under the new Section 145a of the German Patent Act (PatG).
As a civil law jurisdiction, the law in Germany is statute-based and precedent is used mainly for the interpretation of those statutes; however, especially in IP disputes, case law plays a significant role since the statutory law is vague on many aspects.
The granting procedure for German and European patents starts with an application to the DPMA or the EPO respectively. The application is published after 18 months. Once requested by the applicant, the patent offices evaluate the patenting requirements, especially with respect to novelty and inventive step.
The patent offices may raise objections and ask for replies. The offices may also schedule hearings on the patentability of an invention. Within the limits of the original disclosure, the applicant may change the application. Once the relevant office is convinced of the patentability of an invention, it informs the applicant and then publishes the grant in its journals. With this latter publication, the patent is granted.
The German utility model grant procedure is also initiated by formal application proceedings with the DPMA. However, the DPMA does not evaluate the “patenting” requirements before the grant of the utility model. Thus, the utility model is an unexamined right. Another major difference between a patent and a utility model is that the inventor (or their successors) has a grace period of six months – ie, they may disclose the invention and may file the application later within the grace period. Furthermore, only publications effected in Germany will be considered for evaluation of novelty – eg, in infringement or revocation proceedings.
The supplementary protection of inventions in accordance with German unfair competition law does not require a formal grant procedure. If the requirements established by the courts in the interpretation of unfair competition statutes are fulfilled, the protection is given. As this is very much a case-by-case decision, it is not advisable to rely on, or plan on, protection of inventions by these rules. However, especially in cases where no IP right has been granted, considering supplementary protection could be worthwhile.
According to the new Trade Secrets Act, the person lawfully in control of information has to perform reasonable steps under the circumstances to keep the information secret. Only then can the information become a protected trade secret. Hence, no specific “grant procedure” has to be followed.
Due to the evaluation of the patenting requirements, the grant procedure for a German and/or European patent can last several years depending on the technical field, complexity and swiftness of the applicant. Representation by a patent attorney or lawyer is not required but is, in most cases, advisable. The costs depend to a great deal on the complexity of the invention and the prior art found by the examiner. As a very rough figure, one may expect EUR5,000 for a German patent or EUR7,000–8,000 for a European patent. This includes office fees as well as patent attorney’s fees up to the point of the grant of a patent.
The grant procedure for a German utility model is much quicker; normally from several weeks to a few months due to the fact that the DPMA does not evaluate patenting requirements. The costs are much lower too as discussion on protectability is shifted to a later point in time (usually in the case of enforcement only). Thus, a utility model may be obtained with an investment of EUR2,000 or possibly even less.
The term of a German and a European patent is 20 years from the application date. The term of a German utility model is ten years from the application date. Supplementary protection in accordance with the statutes against unfair competition has no specific term.
Trade secrets are protected as long as they are commercially viable and as long as reasonable steps to keep them secret are taken.
The rights of an owner of a German or European patent and a German utility model against an infringer are, in particular, the right to an injunction, information about past infringing acts, damages, destruction of infringing products, recall and publication of the infringement judgment.
As regards obligations, renewal fees have to be paid from the third year after application onwards. The renewal fees are progressive and start with EUR70 for a German patent or EUR490 for a European patent and increase to, per year, EUR1,940 for a German patent or EUR1,640 for a European patent. As the European patent is divided into national patents once granted, annuities are only payable up to the point of granting. Thereafter the national rules on annuities apply. The renewal fees for a German utility model start with EUR210 from the third year and rise to EUR530 from the eighth year.
In instances of supplementary protection according to the German Act Against Unfair Competition, the right-holder has, first and foremost, claims for injunction, information and damages.
The claims of the owner of a trade secret are basically the same as those of a patent holder.
Even though there is no public information listing applicable patents in relation to certain products or processes, patents in force can be viewed on the DPMA and EPO websites, searching by various criteria – eg, a word or words appearing in the title of the patent.
An application for a Supplementary Protection Certificate (SPC) for both German and European patents may be made. SPCs may be applied for human or veterinary medicines and plant protection products. They are designed to compensate, at least in part, for longer administrative procedures before market entry and to allow for the reasonable amortisation of an invention. The SPC comes into force after the original patent expires and can give protection for a patent protected product for a maximum of five additional years.
From the publication of a patent application onwards, until the grant of a patent, any third party may file third-party observations with the relevant office (EPO or DPMA). The observations have to regard patentability – ie, in particular, novelty and the inventive step of the invention (or just prior art in case of a German patent). Filing has to be done in writing (and reasoned in the case of a European patent). In the grant procedure of a European patent, the third-party observations may even be submitted anonymously and online. The third party has no further rights to participate in the proceedings or argue its point of view and is not party to the prosecution proceedings. The applicant however is informed about third-party observations and may reply. The office may use the provided information for its assessment of patentability.
Where a German patent/German utility model is refused, the patentee receives a negative decision from the office first. German law then provides for opposition proceedings against the decision of the examiner. If the office does not change its decision, it forwards the opposition to the Federal Patent Court. The patentee may appeal to the Federal Court of Justice against a negative decision from the Federal Patent Court.
Where a European patent is refused, the patentee can appeal against a negative decision to the Board of Appeal. The patentee may appeal to the Enlarged Board of Appeal against a negative decision from the Board of Appeal.
Supplementary protection under unfair competition law does not require a grant procedure. Requirements are evaluated within infringement proceedings by civil courts.
For trade secrets, there will be no remedies if a court finds that the information in question is not secret – eg, because of lack of reasonable steps taken to keep such information secret.
When annual fees for a German patent are not paid, the application is deemed withdrawn and the patent expires. From the beginning of the third year after the application date, annual fees must be paid. The first fee is due two years after the application date (at the end of the respective month) in advance for the year to follow. Fees are payable within two months, and (for up to a further four months) a penalty of EUR50 is incurred for late payment. Early payment is allowed, but at the earliest one year before the fees are actually due. Once the six months have expired, the patent expires and no appeal against this expiration is permitted. If all deadlines are expired, only very special circumstances may justify a so-called re-establishment of the status quo before the due date (Wiedereinsetzung in den vorherigen Stand) where the payment of the fees was still in time. In particular, it is required that the due date has expired despite all due care having been taken.
As for European patents, the patent application is similarly deemed withdrawn if annual fees are not paid in time. From the beginning of the third year after the application date, annual fees must be paid. The first fee is due two years after the application date (at the end of the respective month) in advance for the following year. The annual fees may be paid with a penalty of 50% of the respective annual fee within six months of the due date. Early payment is also possible for European patents but at the earliest three months before they are actually due (apart from the first annual fee for the third year, which may be paid six months in advance). If all deadlines are expired, only very special circumstances may justify a re-establishment of the status quo before the due date where the payment of the fees was still in time. In particular, it is required that the due date expired despite all due care having been taken.
After the (European or national) patent has been granted, the patentee may limit the patent within the limits of the granted version by filing an application. Thus, if the patent is found to be invalid in its original (broader) version, for example during litigation, the patentee may limit the scope of protection to a (narrower) subclaim.
The German legal system provides several approaches for the patentee to reach an out-of-court solution for an infringement case.
Requests for Authorisation
A relatively moderate way to approach an alleged infringer to obtain an out-of-court solution is the request for authorisation (Berechtigungsanfrage). It asks the alleged infringer, why they believe they are authorised to use the patentee’s rights. The patentee does not yet threaten legal action with this letter and does not request a cease-and-desist declaration, but invites the possible infringer to present non-infringement arguments.
Alternatively, or in addition, if this approach does not work, because it is ignored or because of non-convincing arguments, a warning letter may be used to reach a settlement. This measure is often used in IP issues and aims to obtain a cease-and-desist declaration from the infringer. However, this measure has to be considered carefully because of very strict case law regarding liability in the instance of unlawful warning letters. In addition, both requests for authorisation and warning letters may trigger counter-measures – eg, “torpedo” actions.
As regards court proceedings, there are also several available remedies. German law provides for preliminary injunctions, which may even be obtained ex-parte, if the circumstances allow for it. However, recent decisions of the German constitutional court indicate that preliminary injunctions following an oral hearing, or at least the supply of information and the possibility of responding in writing, will likely become the rule.
Furthermore, according to German case law, the grant of a preliminary injunction procedurally requires that:
Both requirements can be subject to exemptions. The first requirement can be subject to exemption if the evaluation of infringement is extraordinarily time-consuming, the second requirement can be subject to exemption in cases of imminent market entry of the infringer – eg, with a generic pharmaceutical product.
In addition, it is of course possible to initiate main proceedings enforcing all claims provided by the German Patent Act (injunctions, information/rendering of accounts, damages, revocation, destruction, etc). For example, the Munich courts have established a special possibility for “patent litigation mediation” where specialised judges from the Patent Infringement Chambers act as mediators. This procedure, however, has met with some criticism.
If facts are missing to decide on infringement, the patentee can initiate proceedings solely designed to gather proof.
If the infringing product is imported, the customs authorities offer border seizures of infringing products in patent cases.
If, for example, an alleged infringer believes a patent to be invalid (eg, due to lack of novelty or inventive step) there are several remedies available to contest a patent. It is important to take note of the German bifurcation system. This means that infringement proceedings and nullity proceedings are handled separately by different courts (and in cases of nullity also by the Patent Offices).
Within nine months of the publication of the grant of the patent, any third party can initiate opposition proceedings against both a German and a European patent. The opposition has to be submitted with the DPMA or EPO respectively.
Nine months onwards from the grant of a patent, any third party can initiate nullity proceedings before the Federal Patent Court against German patents and the German part of European patents. Exceptionally, the second instance of these nullity proceedings is handled by the Federal Court of Justice, which normally only handles third instance cases.
Actions for compulsory licences are possible in Germany but are very rarely seen. An exception has been a 2021 case regarding HIV medication.
Infringement and Nullity Proceedings
If one party claims that another individual (natural person or corporate entity) infringes upon their patents, that other individual can initiate a negative declaratory action before the patent infringement chambers of the civil courts. However, in Germany such an action is only admissible if there are no active infringement proceedings already initiated by the patentee. Negative declaratory actions can also be used as so-called “torpedoes”, often initiated in countries with slow(er) working courts. This is due to European Law Regulations, which hinder a national complaint if there is a negative declaratory action pending anywhere else in Europe.
To nullify a patent that is in force, it is not necessary to show any special legal interest. If the claimant is not based in Europe, they may be required to provide security for legal costs. This depends on various international treaties and is, in particular, true for claimants from the USA and China, for example. The security is set by the court and has to be paid within a deadline set by the court. It shall be high enough to cover the reimbursable costs of two instances of litigation. For a value in dispute of EUR1 million, for example, one may expect to be ordered to pay about EUR110,000 as a security bond (by way of bank guarantee or deposit).
In Germany, because of the bifurcated system one has to differentiate between infringement and nullity proceedings as regards court competence. Nullity proceedings are handled by the Federal Patent Court in the first instance and the Federal Court of Justice in the second instance. There is no third instance.
Infringement proceedings are handled by specialised chambers of the District Courts in the first instance. There are over a dozen patent infringement chambers, although only the patent infringement chambers of the District Courts of Düsseldorf, Mannheim, Munich and Hamburg are commonly used. The second instance is handled by the respective specialised senate of the Higher Regional Courts. The Federal Court of Justice handles third instance patent infringement actions.
Germany does not have specialised bodies or organisations for the resolution of intellectual property disputes.
There are no prerequisites to filing a lawsuit. However, if there has not been an out-of-court approach to the patent infringer, and if the infringer then immediately acknowledges the complaint (partly or in full) without hesitation, the plaintiff may have to bear the corresponding court and reimbursable lawyers’ fees. Since fees are reduced in such cases of immediate acknowledgement, the costs are relatively low and some practitioners believe it is always worth suing without a warning, because one can obtain an enforceable decision quite economically. For a value in dispute of EUR1 million, for example, this may be approximately EUR29,000 in court fees and reimbursable costs.
Infringement proceedings in German courts need to be initiated by a lawyer. Also, infringement proceedings are usually handled by a team of lawyers and patent attorneys.
Within nullity proceedings, it is the other way around. While in theory a lawyer could also act in nullity proceedings, it is standard practice in Germany that nullity proceedings are led by a patent attorney. However, cases are mostly handled by a team of patent attorneys and lawyers.
Interim injunctions are available in Germany. For an interim injunction to be granted, the matter must be urgent (ie, the patent owner has only known about the infringement for less than one to two months) and the validity of the patent must be beyond doubt, which usually means that the patent must have already survived first instance validity proceedings.
Furthermore, the question of patent infringement should be clear enough to be presented and understood easily. Ex-parte injunctions may be available in rare cases – eg, in extremely time-critical cases of infringement at trade fairs, etc.
Protective briefs are accepted by German courts against the possible grant of interim injunctions, but not against normal court proceedings.
There are also several ways to achieve a stay of the enforcement of a court decision. Some of these measures require the alleged infringer to pay a bond, others do not – eg, if the enforcement of a court decision could lead to the bankruptcy of an alleged infringer.
There are no special limitation provisions for intellectual property matters. However, supplementary protection claims, according to the German Unfair Competition Act, are time-barred after six months, which is a significant exception.
With respect to the assertion of claims for patent infringement, all claims become time-barred within three years after the owner of the patent has become aware of the infringement (or has not become aware of the infringement due to gross negligence). This three-year period begins to run at the end of the year in which the patentee became aware of the patent infringement (or did not become aware of the infringement due to gross negligence).
However, even in cases where the actual claims for damages are already statute-barred, the infringer is obliged to surrender to the patent owner the profit made with the patent infringement for a period of ten years (starting with the infringement).
There is a mechanism developed by German courts that combines preliminary proceedings with inspection proceedings. These special proceedings allow the patent owner, for example, to perform an unannounced on-site visit to the infringers’ premises to evaluate potentially infringing acts. Products may be seized, experts may be allowed onto the premises to examine the products and production method, and to write a report, and lawyers may also be permitted onto the premises. These proceedings require a certain probability of patent infringement but there is no need for definite proof in advance. The courts may also order measures to secure confidential information obtained against the patentee.
Initial pleadings in Germany have to provide sufficient information to the court to allow judges to understand the allegation of infringement. The non-technical judges need to be in a position to check if all preconditions for the requests made with the complaint are met. Usually this requires:
Offers to provide proof shall be included in the initial pleadings. The actual formal proof (witness statements, expert opinions, etc) will only be required if the defendants contest the truth of the facts provided by the plaintiff. These principles apply in all German civil law proceedings. In patent cases, the burden of proof may partially shift to the defendant as they are usually more aware of the design of the products.
Representative or collective actions are not permitted within the German legal system.
As regards the enforcement of IP rights, the most common and relevant restriction applies to Standard Essential Patents (SEPs). The European Court of Justice has set special requirements that have to be fulfilled by the SEP owner in order to be able to claim for an injunction in court. In particular, the SEP owner needs to first inform the alleged infringer and make a fair, reasonable and non-discriminatory (FRAND) licence offer.
There are very few further scenarios where the enforcement of IP rights is restricted. One exception is made if the requirements for compulsory licences are fulfilled. However, these cases are very rarely seen.
The patent owner and exclusive licensees are able to initiate infringement proceedings. Both have almost the same rights regarding their right to sue. Non-owners, non-licensees and non-exclusive licensees are only allowed to initiate infringement proceedings where they are contractually allowed to do so. This usually requires an assignment of the respective rights that the non-exclusive licensee shall enforce in court. The German law mechanism for such a third-party action is called gewillkürte Prozessstandschaft and roughly translates as authorised litigation in one’s own name on another’s behalf.
Direct infringement under German law requires that the attacked embodiment fulfils all features of the asserted patent claim.
Indirect infringement may be found if the attacked embodiments are only means relating to an essential element of the invention.
In cases of direct infringement, the patentee has a claim for an injunction, damages, information about past infringements, etc. In cases of indirect infringement, this may be almost the same where the product can only and exclusively be used for an infringement. This is often the case when a patent protects a process and the attacked embodiment has to perform the process. By way of example: if a patent protects a process performed on all mobile phones, then the manufacturer/vendor of the phone does not perform the protected process (the end-user does). They are merely an indirect infringer, because they are selling a device that is an essential element for performing the protected process. If the protected process cannot be disabled and must be performed by the device when used, an injunction is granted as this is the only way to secure non-infringement and at the same time does not affect non-infringing acts. However, if the product can also be used in a non-infringing way in the instance of indirect infringement, the patent owner only has a claim for the mildest possible way to avoid infringing use. This may be a warning sign as to possible infringement. Likewise, the claim for information is restricted to infringing uses and damages are only due for infringing uses. This often leads to an empty claim for the patentee.
With respect to method claims, in principle, all steps of the method/process must be carried out within the territory of Germany. However, if some acts of use (steps of the method) take place abroad, the German infringer may still be held liable for patent infringement in Germany, if they are aware of the acts taking place abroad and intentionally or negligently take advantage of these circumstances in Germany.
The scope of protection of a patent is defined by claim construction, which starts with the wording of the claim. The courts will identify how a person skilled in the art would understand the patent claim. In doing so a functional construction is applied (ie, a construction that tries to identify the function of a feature in a patent claim for the whole invention), the description and the drawings of the patent as well as the general knowledge of the person skilled in the art are considered in particular. Only to a very limited extent may German courts look into the file history – eg, if ambiguities can be resolved by looking at prior published documents of the same patent. Other prior publications are only examined if they are named in the patent as prior art.
An alleged infringer may commence a negative declaratory action in another EU member state with slower courts to block positive infringement proceedings based on the same facts in Germany. This may delay enforcement of a patent in Germany substantially.
A defendant may also defend themselves by claiming a private prior use right if they had already begun marketing the attacked embodiment before the application date of the patent.
A defendant may be co-owner of the patent and as such is entitled to use the patent without the consent of the other owner. Alternatively, they may be a licensee.
With respect to SEPs, there is another possible defence against patent infringement, the so-called FRAND defence: a patent infringer can defend itself by arguing that the plaintiff is abusing a dominant position if it refuses to conclude a patent licence agreement with the defendant on FRAND terms.
The product may have been brought onto the market with the consent of the patentee, which could lead to an exhaustion of the rights of the patentee.
Due to the German bifurcation system, which gives the patent offices and the Federal Patent Court exclusive jurisdiction in first instance nullity proceedings, the alleged infringer cannot successfully claim the patent was not valid and therefore not infringed in the proceedings. Rather, they have to file nullity proceedings and can only then apply for a stay in the infringement proceedings. This stay, as a rule of thumb, is only granted if the patent is obviously invalid – eg, because novelty-destroying prior art, which had not yet been considered in the prosecution of the patent, is submitted.
Other defences are rarely raised and need to be evaluated carefully on a case-by-case basis.
One has to differentiate between an expert used by the parties and a court-appointed expert. The former is used by the parties to give their argument more weight. Experts may be used by the parties at any time and may support the lawyers in writing their briefs or they can write opinions that are filed as exhibits for the case. Whatever they say or write will be regarded as facts provided by the party, and as such will not constitute proof of what the parties submit.
If the other side contests the truth of the facts provided by the side that has the burden of proof, and if this is substantiated (ie, is detailed enough), the court may decide, upon request, to appoint an expert to prove that the party with the burden of proof is in the right. Such a court-appointed expert is a formal way of proving facts and if this expert confirms the arguments of one or the other of the parties, the court will have to assess if the expert is correct. If the court comes to that conclusion, sufficient proof is provided.
Expert witnesses are rarely summoned before German IP infringement courts since infringement judges are highly specialised.
There is no separate procedure under German law for construing the terms of a patent’s claims.
In Germany there is no system by which the court can seek or receive third-party opinions (amicus curiae briefs).
Intellectual property rights can be disputed post-grant in different ways:
Within nine months of the publication of the grant of a European patent, the patent can be disputed with opposition proceedings before the EPO. The same deadline of nine months exists for initiating opposition proceedings against national German patents before the DPMA.
After the expiry of the nine-month deadline for filing opposition proceedings, the German part of a European patent and the national German patent may be disputed by way of a nullity action before the German Federal Patent Court. Where opposition proceedings are pending, a nullity action cannot be filed before the German Federal Patent Court. However, in this case, a defendant in an infringement action is entitled to join the pending opposition proceedings and attack the validity of the patent.
There are some differences regarding the grounds on which an opposition or nullity action can be based before the EPO, DPMA and German Federal Patent Court. The main grounds for revocation of a patent are the following.
A partial revocation or cancellation of a patent is possible where:
This is usually done by way of auxiliary requests, which limit the scope of protection of the respective claims in view of the relevant validity attacks.
During the revocation or cancellation proceedings it is possible to limit the scope of protection and defend the respective intellectual property right with limited claims, which is done regularly by filing auxiliary requests.
The revocation of a patent can only be achieved by way of the proceedings mentioned above in 4. Revocation/Cancellation.
German infringement proceedings are usually significantly faster than opposition proceedings or nullity actions. Depending on the particular court and the workload of the competent chamber, enforceable first instance infringement decisions may be expected after 10–15 months. In contrast to that, oppositions or nullity actions typically last about two years or more. Thus, a gap (also called an “injunction gap”) of one year or even more may occur between the enforceable first instance decision in the infringement proceedings and a first instance decision in the respective validity proceedings.
One procedural interaction between the infringement proceedings and the validity action is the possibility of the infringement court staying the infringement proceeding until a decision on validity is rendered in the parallel revocation action. However, a decision to stay the proceedings requires not only a corresponding request by the defendant in the infringement proceedings and pending validity action, but also that the court concludes that it is likely that the respective patent will be revoked. German infringement courts regularly apply a high standard in this regard. Thus, a successful request to stay the infringement proceeding normally requires the submission of strong new prior art documents, which are not part of the prosecution history of the respective patent.
The situation for German utility models is slightly different to that of patents. Utility models are registered by the DPMA without examining the eligibility for protection and only formal aspects are reviewed.
Anyone may file a request for the cancellation of a utility model with the DPMA. There is no requirement for a particular legal interest. Reasons for cancellation of a utility model are similar to the reasons for revocation of a patent. The most relevant grounds for cancellation are:
A cancellation action before the DPMA is decided by a panel of one lawyer and two patent examiners from the relevant technical field. The decision of the DPMA may be challenged by an appeal to the Federal Patent Court.
Unlike patent infringement litigation, infringement litigation allows the non-protectability of a utility model to be asserted as a defence. The infringement court has to examine the validity of the utility model even if a parallel cancellation request has been filed. The decision on the validity of the utility model in infringement litigation only has effect on the parties in the relevant proceedings.
The enforcement of IP rights follows the general procedural laws of the German Civil Procedural Code. There are special competencies of some civil courts for certain intellectual property matters, but the proceedings themselves are covered by general procedural rules.
The typical timeline of civil proceedings is as follows.
Thus, there may be several oral hearings during a civil case, in particular depending on the chosen venue. Munich typically schedules two hearings in first instance, Mannheim and Dusseldorf only one.
Fact witnesses and experts can be heard. This takes place in the course of the oral proceedings in the main hearing. This usually requires an additional hearing date.
The presiding judge may permit the parties, and shall permit their attorneys upon request, to address questions directly to the witness.
In the first round of proceedings the remedies of injunction and rendering of account for past infringement are decided.
In a second round, based on the information received in the rendering of accounts, the damages are set.
The trial panels in infringement proceedings at first instance consist of three judges with a legal background. However, because patent cases are heard by specialised chambers, at least in the most popular German infringement courts, the judges are highly experienced in patent matters and technical issues.
The trial panels of the Federal Patent Court, with regard to German invalidation actions, consist of five judges, two of whom have a legal background and three judges who have a technical education and expertise (often as patent examiners) in the relevant technical field.
The appeal panel in infringement proceedings consists of three judges with a legal background. At the Federal Court of Justice, competent for appeals from the Federal Patent Court and revisions from the infringement appeal courts, the panel consists of five judges with a legal background. The parties do not have influence over the choice of judges for the respective courts.
As regards settlement, the parties to German proceedings are free to settle the litigation at any time. There are no additional formal requirements for settling the case. The parties may also jointly request a stay of proceedings if additional time for settlement negotiations is required. German procedural law provides for court settlement and mediation to enable parties to settle formally. However, these are non-mandatory options that to date have been less relevant in intellectual property matters.
Other court proceedings, domestic or foreign, do not have an influence on revocation and infringement actions, other than the potential stay of the infringement proceedings in view of the revocation action, as described in 4.4 Revocation/Cancellation and Infringement. Anti-suit injunctions are usually not granted but considered by German courts. Some plaintiffs have attempted anti anti-suit injunctions successfully in Germany.
The main remedies for the patent owner in infringement cases are injunction, damages, provision of information/rendering of accounts on infringing acts, and recall. With respect to injunctions, in cases of direct infringement in particular, the judge has no discretion and has to grant the injunction.
With regard to the plaintiff’s claim for an injunction, a new paragraph was created in the German Patent Act. It’s paragraph 139 now stipulates that such a claim shall be excluded insofar as the claim would lead to disproportionate hardship for the infringer or third parties not justified by the exclusive right due to the special circumstances of the individual case and the requirements of good faith. In this case, the infringed party shall be granted appropriate compensation in money. The claim for damages under paragraph 139 shall however remain unaffected by this.
Enhanced damages are not known in Germany. However, if the amount of damages is calculated as the infringer’s profit, the damage calculation by German courts may be regarded as a penalty because the result is far from what accountants would regard as profit.
The remedies can be enforced by the plaintiff, if the defendant does not fulfil them, by way of execution through a bailiff. Where a third party can effect enforcement, it can be done. Where not, penalties are imposed, possibly leading to imprisonment of the CEO.
Where the alleged infringer prevails in the infringement litigation, they have a claim for reimbursement of necessary legal costs against the right-holder.
The following remedies are available where a court finds infringement of an intellectual property right and apply to all intellectual property rights:
Permanent Injunction against the Infringer
This is probably the most important remedy. At the claimant’s request, the court will grant a permanent injunction if it finds the patent to be infringed. There is no requirement for irreparable harm, no weighing of interests (or other aspects) which need to be fulfilled. The injunctive relief is available for practising and non-practising entities. The injunction generally extends to all embodiments that are identical or essentially identical to the attacked embodiment.
In addition, the patent holder is entitled to damages if the infringer acted at least negligently. As the duties of care for avoiding negligence are very strict, the infringer is regularly liable for damages. No punitive damages are available and only actual damages may be recovered. According to established German case law, the right-holder can choose between three ways of calculating the damages, as set out below.
Calculation on the basis of the right-holder’s loss of profits
This method is rarely chosen as it requires disclosure of extensive information (eg, the patentee’s revenue, costs and margins) as well as proof that the respective sales would have been made by the right-holder and not another competitor.
Calculation of a reasonable royalty, which is applied to calculate the damage
This amounts to what would have been agreed between the parties for the use of the relevant intellectual property right.
Claiming the infringer’s profit as damages
The infringer’s profit is defined as the revenue, from which the directly attributable costs are deducted. Profits made with an infringing product or process are not attributed exclusively to the benefits provided by the invention, but also to other factors (eg, technical features unrelated to the infringed patent and a strong brand name). The contribution of additional factors must be deducted from the overall profits made with the infringing product or process and only the attributable profit has to be paid as damages. The courts have a relatively wide discretion in quantifying the necessary deductions. However, in practice this is often a complicated and time-consuming exercise that leads to the highest calculated damages.
The right-holder may request that the infringer provide information about past infringements, including:
Destruction and Recall
In addition to injunctive relief and damages, the right-holder may request the infringer to destroy all infringing products in its possession, unless destruction would be unreasonable. Notably, the claim for destruction extends to equipment that is exclusively, or almost exclusively, used for manufacturing the infringing product. The right-holder may also request that the infringer recall the infringing products and remove them from the distribution chain, unless this would be unreasonable. These claims for destruction and recall are available regardless of negligence or intent on behalf of the infringer.
The right-holder may further request the infringer to publish the decision confirming infringement at the infringer’s expense if they have a legitimate interest in the publication. The nature and scope of the publication will be specified in the judgment. This remedy is hardly ever granted by German courts.
Finally, if the right-holder prevails, they will have a claim for the reimbursement of the necessary legal costs against the infringer. Calculation of these costs is based on statuary law, which depends on the so-called value in dispute, which is set by the court. The reimbursement covers the court fees and normally a significant portion of the actual lawyers’ and patent attorneys’ costs incurred.
The first instance decision is preliminarily enforceable. Also, where an appeal is filed, the enforcement is not automatically stayed. The court of first instance will usually declare its judgment preliminarily enforceable, subject to the provision of security by the enforcing party. If the first instance judgment is enforced but later repealed, the enforcing party is liable for damages, including lost profits.
The appeal proceedings in infringement litigation are governed by the general provisions of the German Civil Procedural Code. There are no additional requirements with regard to intellectual property rights proceedings. In nullity cases before the German Federal Patent Court, however, the appeal is heard by the Federal Court of Justice in a rare case where this court may still be involved in fact finding and assessment.
Appellate courts are only bound to the facts established in the first instance to a certain extent and are not limited to a review of errors in law. However, new facts may be submitted in appeal proceedings only within certain limits and preconditions, in particular if it was not the party’s fault that the facts were not provided earlier.
From the plaintiff’s side, there are costs for lawyers and/or patent attorneys. These are normally calculated on an hourly rate or as statutory fees. The latter are the minimum fees for court proceedings. Fees for warning letters or protective briefs will also be reimbursed to the amount of statutory fees if the claim is justified. The court fees for filing a protective brief online with all German courts are approximately EUR100.
German statutes on court fees are complex but in general the fees are calculated on the basis of the value in dispute. The value in dispute essentially reflects the economic interest of the patent owner in enforcing their patent according to German case law.
In Germany, the losing party bears the costs of litigation up to a maximum calculated on the basis of the value in dispute. The maximum amount which reimbursable statutory fees can reach is EUR30 million. For a value in dispute of EUR1 million, the reimbursable (patent) lawyers’ fees and court fees (for one party) will be approximately EUR45,000 (plus travelling costs and possible costs for expert witnesses) at first instance.
Due to low litigation costs in Germany, hardly any cases are resolved by way of alternative dispute resolution.
Assignment of intellectual property rights may be made orally, although naturally it is advisable to do so in writing. The assignment may (but need not) be registered with the relevant offices.
To assign an intellectual property right the owner has to offer the assignment and the assignee has to accept the offer. Ideally, but not necessarily, this is done in writing.
Licensing of intellectual property rights with a few exemptions (eg, unknown types of use according to copyright law) can be done orally in Germany, although naturally it is advisable to do so in writing. An exclusive licence may (but need not) be registered with the offices. It is rarely done.
To license an intellectual property right in Germany the owner has to offer the licence and the licensor has to accept the offer. Ideally, but not necessarily, this is done in writing.
Oral Hearings by Videoconference before German Courts and the European Patent Office
It is no secret that the move towards conducting oral hearings through videoconferencing technology before German courts has not been driven by the German love of technology, but solely by the aim of preventing the judicial system from collapsing due to the backlog of cases and the failure of the courts to function in their usual manner due to the COVID-19 pandemic.
Contrary to the situation that applied before the German courts, the European Patent Office already used the option of conducting hearings by means of videoconference during patent examination, as this offered the possibility to avoid unnecessary travel costs in such cost-sensitive proceedings. However, the legal situation needed to be clarified for contentious proceedings and, in 2021, the EPO issued a ruling confirming that videoconferencing is indeed compatible with the European Patent Convention.
The legal basis
In Germany, the legislation regarding the conduct of court hearings by means of videoconference was introduced in 2002. The original legal text required that both parties should consent to the use of videoconferencing. In 2013, there was an alteration made allowing the court to decide whether or not to use videoconferencing technology without the parties’ consent.
Section 128a of the Code of Civil Procedure
Hearing for oral argument using image and sound transmission
(1) The court may permit the parties, their attorneys-in-fact, and advisers, upon their filing a corresponding application or ex officio, to stay at another location in the course of a hearing for oral argument, and to take actions in the proceedings from there. In this event, the images and sound of the hearing shall be broadcast in real time to this location and to the courtroom.
(2) The court may permit a witness, an expert, or a party to the dispute, upon a corresponding application having been filed, to stay at another location in the course of an examination. The images and sound of the examination shall be broadcast in real time to this location and to the courtroom. Should permission have been granted, pursuant to subsection (1), first sentence, for parties, attorneys-in-fact and advisers to stay at a different location, the images and sound of the examination shall be broadcast also to that location.
(3) The broadcast images and sound will not be recorded. Decisions given pursuant to subsection (1), first sentence, and subsection (2), first sentence, are incontestable.
It should be noted that it was never illegal to conduct oral proceedings by videoconference. The legality of conducting oral proceedings in the form of videoconferencing has been endorsed for many years by the Code of Civil Procedure, but it was only with the advent of COVID-19 that this legal precept came to be strongly adopted by the German courts.
Therefore, the German civil courts, as well as the German Federal Court of Justice and the German Federal Patent Court are relying on the provisions of Article 128a of the Code of Civil Procedure when they want to conduct oral hearings by means of videoconference.
The hearing procedures carried out by the European Patent Office are provided in Article 116 of the European Patent Convention. This legal provision does not mention the possibility of holding hearings through telecommunication mechanisms. For this reason, in December 2020, the President of the European Patent Office, using the powers provided for in Article 10 of the European Patent Convention, regulated the hearing proceedings for videoconferencing.
Practical implementation of the legal basis
Although the legal basis was already there, it turned out that the implementation of the law posed obstacles – as always – which had to be clarified. Beginning with questions regarding data privacy, continuing with questions as to whether all parties can attend the videoconference only from within German territory and ending with the problem of how to integrate the public into these hearings, a large number of different issues arose and were discussed.
It is safe to assume that not all the issues have been clarified, but in the experience of the authors of this chapter, practical solutions have indeed been found for most of these problems. The courts have teamed up and shared their views on these problems. As a result, it was possible to conduct oral hearing by videoconferencing before all major IP courts in Germany and help was actively offered, not only from the court clerks, but also from the judges in overcoming certain problems. As oral hearing by videoconference become more popular – or perhaps – more necessary in view of the novel coronavirus situation, Judge Zigann from the Munich District Court even gave a seminar on the legal and technical aspects and requirements of conducting oral hearings efficiently by videoconference.
The EPO solved legal issues in their own way by approval of Article 15a in the Rules Procedure of the Boards on 23 March 2021 and with the decision G 1/21 of the Enlarged Board of Appeal on 16 July 2021. However, this does not mean that no oral hearings were held by videoconferencing before this.
Not only the legal implementation, but also the technical implementation of videoconferencing in oral hearings was necessary.
Although some courts already had some technical equipment, these technical tools were not used until 2020 – at least in patent disputes.
One major reason for this is probably that the technology available until then could hardly do justice to the importance of the proceedings. After all, a videoconferencing system available to the court must be easy and reliable to operate so that the court and the parties can concentrate on the complex facts of the patent dispute. Above all, the court must be able to ensure that a sufficient legal hearing can be granted at any point in the proceedings – and that includes the technical level.
In addition, such a system must be compatible with the technical equipment of the parties involved, as well as the interested public, and scalable to a large number of participants.
After all, excellent sound and image quality must be guaranteed. It is not uncommon for hearings in validity proceedings or patent litigation to last several hours, sometimes even one or more days, so that poor sound quality quickly proves to be a particularly critical point in oral proceedings by means of videoconference.
Who does not think back with horror to videoconferences in the past, where their IT department was in constant use because technical problems regularly occurred? Against this background, it is understandable that the proposal to hold court hearings by videoconference was reflexively rejected by all sides.
In practice, different technology and videoconferencing platforms were and are used by the courts for a variety of reasons. But in this regard, the courts have not only exchanged information of their technical experiences but also adapted and improved their systems. As a rule, a test videoconference is conducted before the oral hearing so that all parties involved can ensure that the technology used works reliably.
In this context, it should be noted that at present only a limited number of participants can take part in the videoconferences at some of the courts, which makes it difficult to hold hearings by videoconference in proceedings with many participants. However, in some instances the courts offer pragmatic solutions in which one part of the participants are on-site and the other part is connected via video. Needless to say, this type of trial poses even more challenges for the courts.
Overall, it must be noted that an oral hearing via videoconference means an additional, organisational expenditure of time. For example, it must be determined in advance exactly who and how many will participate in the oral proceedings and in what capacity. Accordingly, it must be decided whether and how the oral proceedings will be conducted. The technical equipment available to a courtroom may have to be properly adapted to the circumstances and the test call prior to the proceedings must be subsequently organised and carried out.
In contrast to the German courts, the EPO was able to draw on its own many years of experience in conducting oral proceedings in grant procedures by videoconference. It uses a uniform technical platform that also allows a larger number of participants (over 40 participants) to take part in the oral proceedings. The EPO also provides test videoconferences upon request.
Despite all the organisational and technical effort that has to be made to hold oral proceedings by videoconference, hearings in validity proceedings and patent litigation – provided the appropriate technology is available – seem to be virtually predestined to be held as videoconferences. In these proceedings, the emotional aspect plays less of a role than the technical facts, which have already been explained in detail in the preceding written exchange of pleadings.
The psychological effect
Nevertheless, the German Patent Attorneys’ Association (Patentanwaltskammer) initially expressed scepticism about conducting oral proceedings by videoconference in its opinion on submission G 1/21 to the Enlarged Board of Appeal of the EPO. However, the concerns expressed therein have proven to be largely unjustified. In the above-mentioned opinion, the patent bar association had considered it a major problem that:
“a personal presentation by the parties in the oral proceedings can have a more convincing effect than the same presentation during a video conference, in particular for psychological reasons. Also, the personal impression of the adjudicating body and other parties can have a procedural effect.”
In retrospect, one must admit that the presumed psychological effect was somewhat overrated, and not only in bilateral proceedings before the European Patent Office.
Particularly in the example of opposition hearings at the European Patent Office, with its internationally staffed divisions, it is apparent, in the course of oral proceedings held on-site, that the conduct of hearings was always primarily oriented towards the framework provided by the EPC. Such procedure did not really leave any room for psychological tricks, especially since the focus of the proceedings was on the written preparation of the oral proceedings. The oral proceedings were, at best, driven by the EPO’s concern that one party might not be granted an adequate right to be heard. In the authors’ experience, applicants were more likely to convince a panel with technical arguments, a correct application of the EPC and the case law, than with an emotional presentation.
The same holds true for patent infringement proceedings at the civil courts in Germany as well as patent nullity proceedings at the Federal Patent Court and the Federal Court of Justice. Oral proceedings on-site do convey the feeling of the usual and the familiar, but in the end, with good preparation and good technical equipment, it does not make a significant difference to an on-site hearing.
Finally, from the parties’ point of view, oral hearings via videoconference – provided the transmission quality is good – offer considerable advantages. The hearing seems to be overall characterised by greater discipline on the part of the participants. It appears that the parties focus their presentation more on the essentials. The technology already imposes this on the parties.
In addition – and this is a particularly welcome development – the duration of the large number of interruptions at the EPO, and also sometimes at the Federal Patent Court, are much more predictable, so that these breaks can be used more efficiently for further preparations. Particularly pleasant is the fact that in these proceedings, the time-consuming going in and out of the hearing room by the parties is no longer necessary – especially in proceedings with many participants.
In the authors’ experience, after conducting many hearings side by side with several parties, it has proven very beneficial to have at least one parallel communication channel open throughout the hearing for internal consultation to co-ordinate the orchestration of the presentation and, during the breaks in the hearings, a further course of action.
With regard to video hearings, the only significant “psychological” disadvantage seems to be that any personal contact with the opposing side and/or the adjudicating body outside of the hearing is prevented, which could sooner or later be at the expense of collegial interaction. The exchange between colleagues, which is desirable in many respects and in which a few words can be exchanged between the parties, unfortunately takes a back seat in hearings conducted via video.
Of course, not only experiences with the EPO, but also those of numerous other hearings by videoconference, need to be considered. First and foremost, the nullity and nullity appeal hearings before the Federal Patent Court and the Federal Court of Justice should be mentioned. While the possibilities to conduct such hearings at the Federal Patent Court were only available at a few senates until recently, the technical conditions at the Federal Court of Justice are absolutely appropriate for the high reputation of this institution.
A wonderful experience of how problem-free and effective the conduct of “hybrid” hearings can be can definitely be seen at the Federal Court of Justice. Here, the representatives present in person are joined by other representatives in the hearing room via video. The impression given at such events is that a representative outside the room receives just as much attention from the senate as one physically present. However, the organisational effort for such "hybrid" hearings is significantly greater for the court, especially in times of pandemic, since in addition to the videoconference room, a pandemic-suitable hearing room must also be equipped with the appropriate technology. In addition, such hearings also require corresponding technical preparation and co-ordination in the conduct of the proceedings between the parties, since spontaneous, short-term co-ordination, as is otherwise customary on-site, is somewhat limited by the technology.
A small but subtle difference between the oral proceedings on-site or via videoconference is that the chamber or the senate in the videoconference does not have an elevated seating position. However, this is probably the only “innovation” in the procedure of oral proceedings in German courts, which is also ultimately reflected in the fact that proceedings are held as usual in robes and the parties still stand up accordingly - however in front of their own screens and from their desk chairs.
Moreover, it is of secondary importance whether the members of the panel are in the same place or in different places. The latter is regularly the case in hearings with the EPO; however, in the German jurisdiction, this can, at most, only occur in the context of a preliminary hearing. In the authors’ experience, it is extremely helpful if every party to the proceedings, and that includes every member of the panel, uses a camera. This makes it possible, even with a large number of persons involved, for the relevant persons to be sufficiently recognised on the screen.
This plea for the “institution” of video hearings, with which the authors have almost always had consistently good experiences, should not obscure the fact that we sometimes genuinely miss personal encounters. If it is justifiable from the client's point of view, we would therefore still prefer hearings on-site, especially since, even with good technical equipment, video technology demands a certain amount of attention during the oral proceedings that one would otherwise devote to the arguments. In this context, we would like to briefly point out two technical aspects in conclusion.
The influence of microphones
While a medium picture quality may be just about acceptable, very good audio quality is indispensable. Litigants should get an impression of how clearly the microphone used actually transmits the speech in the corresponding environment in good time before an oral hearing. It is vital to be understood by the adjudicating body just as well as if you were actually there. Some colleagues in the past seem to not have taken this sufficiently into account.
In order to be able to ensure sufficient audio quality, it has proven highly recommendable to use good headsets instead of table microphones in order to avoid ambient noise, particularly the rustling of papers. The EPO strongly encourages the use of a USB headset with an integrated microphone or a unidirectional USB microphone with echo cancellation, especially for oral proceedings with simultaneous interpretation. Conference phones in particular have proved unsuitable for remote interpreting, as they only reproduce the frequency range of high tones, which is important for simultaneous interpreting, to a limited extent.
Another requirement that would perhaps be surprising to outsiders is that it obviously makes simultaneous interpreting much easier if the facial features of the person speaking are recognisable to the interpreter, especially around the mouth. However, in instances in which face masks are required, this is obviously not possible. However, depending on the situation, when an interpreter is in a position to remove their face mask when social distancing can be guaranteed, this contributes to the audio quality not only acoustically, but also visually.
Dos and don’ts
Video hearings with a large group of participants – in this instance more than 40 representatives of several parties and members of the public – are no problem if the technical conditions are stable. Such large groups of participants are often found in hearings with so-called Joint Defence Groups. In these cases, the presiding judge takes special care to ensure that only the microphone of the party that is pleading is on, while respecting the right to be heard. Otherwise, the microphones of the other parties are muted. Even with a large number of parties, this automatically leads to a high degree of speech discipline between the participants and thus to an efficient hearing. Especially in such large oral hearings, we have experienced that the panel pays particularly strict attention to the observance of speech discipline.
Videoconference hearings are also usually open to the public. However, it is sometimes somewhat irritating and problematic when the “public” is connected to the hearing from an open-plan office. This could be seen as a picture and sound transmission from a courtroom, which in German courts is not permitted in this way.
Finally, an important yet probably self-evident tip is that one should always make sure that one’s microphone is muted. The microphone can of course transmit comments that were not actually intended for the oral proceedings. This is especially true when using two parallel communication channels. Here, it is also important to ensure that not only the correct microphone is muted, but also the loudspeaker of the internal communication channel when one is pleading.
We hope that the technology and the experiences of those involved in patent litigation will continue to develop positively in the future, just as it has over the last two years since the beginning of the global pandemic. At the same time, we certainly miss the personal events of hearings and hope that good experiences with videoconferences will not cause these to be permanently side-lined.