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Patent infringement litigation in Germany

A brief outline by Peter-Michael Weisse, LL.M. (Tulane Univ.) Attorney-at-law (Germany)

Why Germany?

Your company does business in the European Union. Protecting and asserting intellectual property rights may be a critical part of this. German courts are known for handling patent suits quickly. They are authoritative and keep costs low. That is why more than half of all patent infringement suits in the European Union are submitted at German courts. When it comes to test cases in matters of patent infringement that may serve as a model case for other courts in other countries, many international corporations rely on the high efficiency of German courts. In a significant number of cases both plaintiff and defendant are not from Germany.

Venue

Patent infringement litigation is basically possible before 11 different district courts, but essentially concentrated at the courts of Duesseldorf, Mannheim and Munich.

Preliminary Injunctions/Border seizure

In patent matters, preliminary injuctions may be passed very quick, sometimes even within only a few hours, and without hearing the opponent (ex parte). Its purpose is to safeguard the claims of the patentee for the time being. It can include an order to seize the products challenged. Also, the court will order that the alleged infringer bears the costs of the proceedings.

Border seizures by German customs authorities (Zoll) are a quick and efficient measure to stop the import of infringing products.

Discovery Proceedings?

There is no discovery similar to the US legal system. This makes proceedings in Germany quick and cost efficient. On the other hand, the newly introduced “Besichtigungsverfahren” (inspection procedure) enables patentee to have a court apointed expert enter the premises of an alleged infringer together with a bailiff (and police officers, if necessary) and inspect the presumably infringing product or production method. The court order may be passed very quick within only a few hours, and without hearing the opponent (ex parte). The report of the expert and the documentation may be used as evidence for a law suit. The expert report will not be handed over to the patentee without giving the other party an opportunity to respond in advance and request that such parts of the report be deleted which concern secret know how.

Main Court Proceedings

It is the actual lawsuit where the court will make a final decision (subject to an appeal) concerning the claims, e.g. for injunctive relief, disclosure of accounting data, damages, destruction of products, callback from the distribution channels, costs of proceedings.

The court is composed of 3 judges, all with a legal education only. It is an important part of our work to boil down complex technical issues to make it plain for the judges.

The district courts (“Landgericht”) of Düsseldorf and of Mannheim are the busiest courts in Germany (and Europe) when it comes to matters of patent infringement litigation. The Dusseldorf court usually needs about 9 to 18 month from the moment a suit is filed to pass a judgment, Mannheim 8 to 12 month (Munich about 12 month).

The proceedings very much rely on the written briefs, normally 4 in total: Complaint (Klage), response to complaint (Klagererwiderung), “Replik” by plaintiff and “Duplik” by defendant. The oral hearing regularly lasts no longer than a couple of hours on one day only. The courts are generally very well prepared and the presiding judge, at the beginning of the hearing, explains the preliminary opinion of the court. This helps the attorneys to focus on the issues which are relevant to the court.

Challenge of Validity

The competent infringement court may not rule about the validity of a patent. That sort of decision is incumbent upon the German Patent Office or European Patent Office and/or the Federal Patent Court at Munich (Germany). If there are neither pending oppositions nor pending nullity suits, the infringement court will not even look at the validity of the patent in litigation. On the other hand, if there are any pending matters, the court will check on their chances to succeed. If there is a reasonable chance that the patent is revoked, the court may stay the infringement proceedings. Such stay, however, is rather rare. Conditions for a stay usually are:
The defendant relies on prior art which the patent office, when granting the patent, did not consider.
The prior art clearly prejudices the novelty of the invention; or
the prior art makes the invention so obvious that no reasonable arguments can be found at all to recognize an inventive step.

Costs

It is the losing party that must pay the costs of the proceedings. These costs consist of the legal fees of the court and attorneys’ fees of the opponent (attorney and possibly a patent attorney plus travel expenses etc.). Law firms calculate their fees very differently, regularly on the basis of hourly rates. In order to set a somewhat reliable standard for the evaluation of costs, there is an official table of fees. The court and attorneys’ fees the losing party must pay are thus calculated on the basis of the so-called ‘litigation value for calculation purposes’ which is, in truth, a rather coarse estimate that is supposed to reflect the plaintiff’s commercial interest in the claims brought forward.

Enforcement of Judgement

The judgment of the first instance court becomes enforceable the moment it becomes final. The judgment becomes final if the defendant (who lost the suit) does not appeal against it within one month after service of the written judgement. If the first instance judgment did not become final, prerequisite for enforceability is a security. The plaintiff (who won the suit) must provide a security to the defendant (who lost). Usually, that’s a bank guarantee. The amount is set by the court in the judgment. It usually corresponds to the ‘litigation value’ mentioned above.

Damages

Once a patent infringement has been positively determined, the infringer is obliged to disclose information about his infringements. That includes volumes supplied and delivered, delivery times, buyers, offers passed, advertising, sales and profits. When all information is on the table, there are two relevant methods of calculating damages:

With the so-called “license analogy method”, defendant has to pay a retrospective license for the period of time the infringement occurred. The amount is determined on the basis of what reasonable partners would have agreed in a normal license agreement. License fees can be very different and depend on the technology concerned and the significance of the invention. There are no tripled or punitive damages (as in the U.S.)

For the other method of calculation, the infringer must surrender the profits he realized thanks to the infringement. In this case the amount depends on the question which expenses may be deducted from the profits realized, and to what extent the profit calculated is really due to the use of the invention.

In theory, there is a third possibility. The patentee could base his claims on lost profit. This hardly ever happens, however, because lost profit is difficult to determine and patentees usually do not want to disclose their figures.

Disclaimer:
All information given herein has been worked out to the best of our knowledge and belief. Nevertheless, errors, mistakes, omissions etc. cannot be ruled out. The editor shall not be held liable in any way for any and all errors, mistakes, omissions etc. whatsoever. It must be emphasized, furthermore, that this document is not an exhaustive treatment of the subject matter but covers only a restricted number of important aspects. This outline is not a substitute for competent advice given by professional counsel in due consideration of concrete circumstances. Version: March 2017.

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