On 4/5 April 2019, professors Dr. Ohly and Dr. Leistner from the Ludwig Maximilian University of Munich welcomed international participants both from the academic world and law professionals to a two-day workshop on the topic of “Injunctions and Flexibility in Patent Law – Civil Law and Common Law Perspectives”. 21 speakers from six countries showed the outstanding international cooperation in patent law and the willingness to learn from each other.
German patent law in particular stipulates injunctive relief as a remedy in almost every case of patent infringement. The deciding judge, being bound by the written law, which does not provide for equity considerations, is not allowed to weigh up all aspects of the case and render the remedies accordingly. However, more and more voices are pointing out that Art. 3 (2) of the Enforcement Directive (2004/48/EC), which requires remedies to be “proportionate”, raises a need for an adjustment of national German law. Thus, the question is:
Does German patent law fulfil this European requirement of proportionality?
- A special, rudimental provision of proportionality can be found in section 24 Patent Act that provides a compulsory license in matters of public interest. However, its scope is – in practice – more or less limited to the medical field and cases where medication is needed to treat a serious illness (cf. Federal Court of Justice “Raltegravir” X ZB 2/17).
- In addition, a major development in the field of FRAND and SEPs has taken place in Germany in the last decade, implementing proportionality considerations in this area. Today, the owner of a SEP may not demand injunctive relief if the “infringer” has met the specific requirements established by German courts following the guidelines issued by the European Court of Justice and the European Commission (ECJ C-170/13, COMMUNICATION FROM THE COMMISSION COM/2017/0712, Düsseldorf Higher Regional Court I-15 U 36/16, Karlsruhe Higher Regional Court 6 U 55/16).
- And finally, on the level of enforcement, German law provides that remedies granted in a judgment, especially injunctive relief, shall nevertheless not be enforced if the enforcement will cause irreparable harm to the infringer, going significantly beyond the regular effects of an injunction (cf. section 712 of German Code of Civil Procedure). However, according to case law, mere loss of jobs as such would generally not be sufficient for this exception to be applied; instead, the economic existence of the infringer must be at risk, thus restricting the application of this exception to extraordinary cases.
Against the background of these rare and anything but far-reaching exceptions, the call for more flexibility and proportionality in German patent law is understandable.
On the other hand, one has to take into account that the well-intentioned introduction of general proportionality reasonings into patent law bears a risk to cut both ways. In this respect, a closer look at common law countries reveals that proportionality considerations may lead to the effect that “exceptions” from injunctive relief in patent law soon become the norm, as can be seen in particular in the United States.
In the US, in the aftermath of the “eBay vs. Merc Exchange” precedent, the rate of injunctions granted by courts has dropped significantly. Today, injunctions are not even sought by most patent owners as they will most likely not be granted by courts anyway due to proportionality considerations.
Thus, more flexibility may seem desirable for German patent law – but also if it leads to patent litigation with only 0,25% of the cases resulting in an injunction against the infringer?
Maybe German patent law only needs a small extra dose of flexibility to address exceptional cases that, at the same time, can be defined with sufficient clarity.
One of the upcoming challenges in this regard concerns cases of complex products like for example cars, being attacked by patents protecting only a specific technical solution used in a very small part of the product. Without flexibility German courts are bound to render an injunction against the production and distribution of the whole car, even if the infringement only relates to a very small part of the car. These “complex product” cases do not fit into any of the existing proportionality exceptions in German patent law. Worst of all, due to the bifurcation of the German patent court system and the very long duration of invalidity proceedings before the Federal Patent Court, injunctions granted by the civil courts will typically remain in force for quite a long time before a first instance decision on invalidity is issued.
While Sir Richard Arnold, Member of the UK High Court, had a rather simple suggestion regarding the “injunction gap” between infringement and validity decisions: more money for the Federal Patent Court, more judges, faster validity decisions, at present, there is no prospect of a simple solution for the “complex product cases” in German law. However, as Judge Dr. Grabinski from the 10th Senate of the Federal Court of Justice, competent for patent law cases, pointed out in his final statement, his senate – up to now – has not had to decide a case in which the “complex product problem” occurred, yet, and that he is already looking very much forward to the first case, the learned argumentation of the parties on both sides as well as the discussion within the senate and its prospective decision.
For the past decades written patent law and the respective case law evolving from it have made German courts well-respected and Germany a preferred place of jurisdiction in all kinds of patent law cases.
Therefore, it is allowed to be optimistic also about the future development of German patent law, in particular with so many excellent patent law experts as in this workshop in Munich, organised by professors Dr. Ohly and Dr. Leistner, reflecting and discussing the best solution for future challenges to German patent law like proportionality reasonings in “complex product cases”.
Florian Bewer, Attorney-at-Law (Germany)