The Intellectual Property Review: Germany
Forms of intellectual property protection
Trademarks can be registered with the German Patent and Trademark Office (GPTO) as a national trademark or with the European Union Intellectual Property Office (EUIPO) as an EU trademark. In addition, there is the possibility of obtaining trademark protection for Germany via international registrations designating Germany. Although a national trademark (and an international registration designating Germany) has effect only for Germany, the EU trademark has a unitary effect in the EU.
Irrespective of the difference in the geographical scope and the fact that national law allows non-registered trademarks, the legal situation is similar, as trademark law is strongly harmonised in the EU. Nevertheless, there are further differences in details, so it is worth considering whether a German registered or non-registered trademark with its geographical limitations is the better choice.
Designs can be protected under the German Design Act, which was formerly known as Geschmacksmuster but was renamed in 2014 to provide a more understandable name, although the scope of protection was not changed.
Similar to trademark law, designs can be registered in Germany with the GPTO as a national design or with the EUIPO as a European design, so considerations similar to the trademark law apply. In addition, there is also the possibility to obtain design protection for Germany via international registrations designating Germany.
Copyright law protects works in the literary, scientific and artistic domains, in particular literary works and musical works, but also illustrations of a scientific or technical nature such as drawings, plans, maps, etc. (Section 2(1), German Copyright Act). In addition, software is protected under copyright law, to name an example of copyright protection with a strong economic impact.
Copyrights are non-registered rights and originate with the work. They are not transferable in Germany, as the work has a strong connection to the author and their personality. Thus, economic exploitation is possible only by granting licences, and the copyright itself, in particular the moral rights, remains with the author. This can be relevant if, for instance, the work becomes a blockbuster, as the author has a claim for further participation (Section 32a, Copyright Act). Other relevant moral rights are the author's right of publication, the right of recognition of authorship, and the right to prohibit the distortion of their work.
iv Utility patents and supplementary protection certificates
Patents are registered and fully proven rights for any inventions in all fields of technology, provided that they are new, involve an inventive step and are susceptible to industrial application (Section 1, German Patent Act, Article 52(1), European Patent Convention (EPC)). They are registered with the GPTO or with the European Patent Office (EPO). As for the scope of protection, see below.
A registration with the EPO does not lead to European protection similar to European trademarks or designs. The EPC rather grants a uniform examination proceeding before the EPO. Once the European patent has been granted, the competence of the EPO lapses. The European patent then has to be validated in each Member State of the EPC where protection is sought. Another difference from European trademarks and designs is that the EPC includes countries that are not part of the EU.
A peculiarity for pharmaceuticals is the possibility to extend the term of protection by a supplementary protection certificate at the end of the patent's lifetime for a period of another five years. This compensates for a delayed market entry of the patented product owing to time-consuming approval procedures for obtaining the necessary marketing authorisations.
v Utility models
Utility models are registered but unexamined rights for any inventions that are new and are based on an inventive step. There is no parallel European protection.
The utility model is kind of a 'small patent', which has the advantage that the registration procedure is much quicker because there are no examination proceedings. On the other hand, in infringement proceedings, the proprietor has to prove that their right is valid.
vi Trade secrets
Trade secrets have always been protected under the German Act Against Unfair Competition and thus did not qualify as an IP right. In 2019, the Trade Secrets Act entered into force and implemented the EU directive on trade secrets. In addition to comprehensive regulations on how to protect trade secrets and (new) legal obligations for the secret holder, it has become unclear whether the protection of trade secrets is still part of competition law or whether it has become a new IP right.
i Proportionality of injunction relief
The plaintiff of a patent infringement proceeding can file a request for an injunction. According to Section 139, Paragraph 1 of the German Patent Law, this leads to an 'automatic injunction', as the court did not have to consider whether the injunction would be proportional to the infringer. In its judgment from 2016, the Federal Court of Justice (judgment from 10 May 2016, File No. X ZR 114/13 – heat exchanger) raised the question whether proportionality of the injunctive relief would lead to granting a grace period. As the Federal Court of Justice set a high burden for such a case, it dismissed a grace period in this case.
In 2021, the legislator added the aspect of proportionality in Section 139, Paragraph 1 of the German Patent Law, which went into effect immediately. A request for an injunctive relief can now be denied if it would be disproportional to the infringer or to third party interests. In this case, the infringer has to pay a monetary compensation in lieu.
As this new section refers to the case law of the Federal Court of Justice, the burden of dismissing the request of injunctive relief will remain high. Hence, it is expected that this new section will have only a small impact and the cases of disproportionality will be very rare. In addition, in these cases, courts will first consider granting a grace period instead of denying the injunctive relief completely.
ii Preliminary opinion of the Federal Patent Court
Further, the legislator changed the timeline of nullity proceedings. Nullity proceedings before the Federal Patent Court take about two years. During this time, the faster first instance and the appeal proceedings of the infringement proceedings could be finished and the defendants may be ordered to an injunction. This would lead to the 'injunction gap'.
In the infringement proceedings, the courts could not base their decision to suspend the proceedings with regard to an invalid patent on a judgment from the Federal Patent Court. Even the written preliminary opinion of the Federal Patent Court often would be too late to be considered in the first instance decision of the infringement procedure.
The legislator changed Section 83 of the German Patent Act. The Federal Patent Court now 'should' announce its preliminary opinion of the nullity case within six months of its filing. This will make it easier for the non-technical judges in the infringement proceedings to anticipate the decision of the Federal Patent Court and suspend the procedure if the patent will be found void by the Federal Patent Court. However, this will put pressure on the Federal Patent Court to meet the deadline. It remains open whether the quality of the written preliminary opinion will suffer from this pressure. This new section will be in effect in May 2022.
iii Protection of trade secrets
In a third change of the German patent law, Section 145a now declares the applicability of the Trade Secrets Act. Every party now can request protective orders from the court for trade secrets. This includes an order from the court to the parties to undertake the information confidentially and not use the information beyond the proceedings. It allows the court to order that only a limited number of people have access to the information and the oral proceedings. In rare cases, the court could also order to exclude the opposite party from the information and the oral proceedings.
iv Anti-anti-suit injunctions
In some worldwide standard essential patent (SEP) disputes, it was part of the infringer's strategy to request an anti-suit injunction or an anti-enforcement injunction before a foreign court. The strategy included also main proceedings in the same jurisdiction to determine worldwide royalties. German courts have reacted to the anti-suit injunctions and granted protection to the SEP holders by issuing anti-anti-suit injunctions.
The Regional Court of Munich I (judgment from 28 January 2021, Case No. 7 O 14276/20) ruled that an anti-anti-suit injunction can be granted in cases where:
- the patent user has threatened a request for an anti-suit injunction against the patentee;
- the patent user has filed an action for an anti-suit injunction directed against the patentee;
- the patent user has filed or threatened to file an action in the merits for the grant of a licence or for the determination of a reasonable global royalty for such a licence in a jurisdiction that generally provides anti-suit injunctions;
- the patent user has threatened to issue an anti-suit injunction against other patentees or has already filed for an anti-suit injunction and there is no evidence that the patent user, recognisable to the patentee, has renounced this practice for the future, at least in relation to the patentee; and
- the patent user has not declared in text form within the time limit set by the patentee, for example in the context of the first infringer's notice, not to file a request for an anti-suit injunction.
The Higher Regional Court of Düsseldorf (judgment from 7 February 2022, Case No. I-2 U 27/21) partially disagreed and argued that there is no objective necessity for a purely precautionary anti-anti-suit injunction if no anti-suit injunction has been filed or there is no indication that the patent user intends to do so (e.g., a serious threat) and if there are no proceedings in the merits pending between the parties in a jurisdiction that provides the legal institution of an anti-suit injunction. In addition, a patent user does not have to declare in text form that they are unwilling to file for an anti-suit injunction. Hence, such an anti-anti-suit injunction is inadmissible.
In addition, both courts came to the conclusion that the patent user requesting an anti-suit injunction is not willing to take a licence. Hence, the patent user will not have a fair, reasonable and non-discriminatory (FRAND) defence in infringement proceedings against the patentee.
As stated above, patent protection can be provided by the EPO as a European patent, which is validated in Germany or as a (purely) German patent granted by the GPTO. The scope of protection under the EPC and the German Patent Act is identical.
In addition to the principles above, patents will be granted if they concern a product consisting of or containing biological material or a process by means of which biological material is produced, processed or used. The specific requirements can be complicated in each individual case.
Furthermore, the Patent Act and the EPC explicitly exclude some categories. Some of these are protected by other IP rights, such as aesthetic creations or computer programs, which fall under the protection of the copyright law, whereas some, such as doing business, are not protectable under IP law at all (but may be protected to a certain extent by unfair competition law).
As for genetic material, the German Patent Act contains a specific and differentiated regulation in Section 1a. It stipulates that the human body at various stages of its formation and development, including germ cells including the sequence or partial sequence of genes, cannot constitute patentable inventions. On the other hand, an element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention even if the structure of that element is identical to the structure of the natural element.
Plants or animal varieties are excluded from protection under patent law. However, protection can be obtained under the Plant Variety Act. The specification on what is protectable under patent law can be complicated in each individual case.
Irrespective of potential differentiations in the eligibility of protection under national patent law and European patent law, the EPO and the GPTO apply different standards in the grant procedures on what they understand as novel and inventive. These differences might have an impact on the specific case at hand.
With regard to the latest developments, artificial intelligence (AI) is a highly discussed issue in patent law, which leads to several effects. On the one hand, it might change the examination process on the state of the art. If certain solutions can be found easily with AI, they might qualify as being obvious.2 In addition, it remains unclear who owns an invention made by AI: the software programmer or its proprietor?
Thus far, the EPO has refused the grant of two patent applications that list Dabus, an AI tool, as the inventor. The EPO stated that AI systems or machines have no rights at present because they have no legal personality comparable to a natural or legal person and thus cannot be considered an inventor. The applicant lodged an appeal on 27 May 2020, which is still pending.
This matter also arose before the UK Intellectual Property Office, which came to the same conclusion. An appeal was not successful. Against this background, and in view of the fact that the US Patent and Trademark Office also refused a Dabus patent application, AI cannot currently be considered an inventor.
Enforcement of rights
i Possible venues for enforcement
In Germany, patent (and utility model) rights can be enforced in legal proceedings before the regional courts, by way of either preliminary injunction proceedings or main proceedings on the merits.
In order to ensure that there is a group of judges with a frequent workload of patent cases and thus adequate competence and technical expertise, patent infringement matters are concentrated by law on the specific patent chambers of 12 regional courts: Munich I, Nuremberg, Mannheim, Frankfurt, Saarbrucken, Erfurt, Leipzig, Magdeburg, Dusseldorf, Braunschweig, Berlin and Hamburg.
In general, each federal state has at least one patent infringement court; however, some federal states share courts.
The most prominent – and busiest – courts are Dusseldorf, Mannheim, Munich I and Hamburg.
As further outlined below, all venues differ a little in respect of timelines, the number of oral hearings and technical competence. Depending on the case, it might be favourable to file a complaint with a court that allows a fast track to an infringement judgment but offers less opportunity to discuss the case orally. However, in another case, it might be better to choose a court that customarily runs two oral hearings to allow for a deeper oral discussion on the relevant aspects (e.g., cases where a more sophisticated technical discussion is required).
ii Requirements for jurisdiction and venue
The patent owner and a licensee (exclusive and non-exclusive) may file a motion for patent infringement. In respect of the latter, the extent of the right to sue and the respective remedies depend on the scope of the licence.
An accused infringer may bring a declaratory action of non-infringement.
First instance patent infringement proceedings must be tried before one of the 12 regional courts.
In principle, the patent infringement court of the region in which the defendant is domiciled has jurisdiction. In addition, under Section 32 of the Code of Civil Procedure, any court has jurisdiction if the infringement was committed in its district. This is the case if the infringement (i.e., the making, offering, placing on the market or using of the product) was committed in the district of the regional court. In cases of nationwide infringement via the internet, all German patent infringement courts have jurisdiction.
Also, the parties can agree that a specific patent infringement court will have jurisdiction. This agreement is binding for the court.
If the patent owner files a complaint with a patent infringement court that has no jurisdiction and the defendant does not object to this choice in the first oral hearing, the court is also awarded jurisdiction.
iii Obtaining relevant evidence of infringement and discovery
The concept of discovery is unknown in German procedural rules.
However, in order to obtain evidence, the initiation of inspection proceedings pursuant to Section 140(c) of the Patent Act is available. The inspection can also be enforced with a preliminary injunction. The requirements for obtaining a preliminary injunction for an inspection are low. It is sufficient merely to demonstrate a probability of patent infringement and to substantiate why it is necessary to carry out the inspection.
Usually, prior to initiating any inspection proceeding, the use of private investigators is a common, helpful and accepted tool to obtain evidence.
iv Trial decision-maker
There are no jury trials in Germany.
Disputed issues are decided by a panel of three (non-technical) judges (one presiding judge and two assessors). The presiding judge conducts the proceedings and is the primary decision-maker. The decision is prepared by the rapporteur, who usually also makes a concrete proposal for a decision to the presiding judge. Although the judges are lawyers, not technicians, they are familiar with technical matters. However, owing to the varying workload of the courts, they have different levels of experience in different technical fields.
v Structure of the trial
Germany runs a bifurcated system of infringement and nullity proceedings.
German patent infringement trials are front loaded. The proceedings on the merits therefore commence with the filing of a statement of complaint with the court. The statement of complaint contains the requests and a detailed account of the infringement. After the court fees have been paid by the plaintiff, the statement is then formally served on the defendant, usually with a summons to an early oral hearing, which may also be a case management conference in which only the deadline regime is set and the motions are made. Some courts use this hearing to try to negotiate a settlement between the parties, structure the further proceeding, and give guidance on and clarify procedural aspects (e.g., Dusseldorf) or give a first sight on infringement (Munich I).
Before the main oral hearing, each party usually files two briefs: (1) the plaintiff – a statement of complaint and a rejoinder; and (2) the defendant – a statement of reply and a counter rejoinder.
Owing to this detailed preparation, cases are often tried in one main oral hearing before the first instance decision is rendered.
In general, each party must set out and prove the actual features of the legal rule favourable to this party. The plaintiff must prove the conditions on which their claims are based, and the alleged infringer must prove the facts that deny the claims, whereas the concrete distribution and extent of the burden of proof in the course of the proceedings depend on the submissions in the specific case. The more detailed the submission in respect of one fact, the more detailed must be the response.
This means that it is the plaintiff's duty to first substantiate all facts relevant to the decision (e.g., the right to sue, infringement acts, features of the patent claim, etc.), so all facts should be presented precisely and, if possible, with indication of the source of knowledge.
It is then the responsibility of the defendant to respond to this submission conclusively and substantively and, in case of dispute, to provide proof for the allegations. This also includes any defence they might rely on (e.g., invalidity of the patent).
Only in the case that specific facts of the submission of one party are substantially disputed by the other party is it the burden of the party to provide sufficient proof for this fact, by way of documents, witnesses or experts.
Documents, affidavits and live testimony are used as evidence to prove or rebut the infringement. Further, expert witnesses are an important means of evidence. However, if the court deems that an expert witness opinion is necessary to hand down a judgment, it will appoint its own expert witness. Such expert witnesses are the most common means of providing evidence in patent infringement cases. Expert witnesses appointed or submitted by the parties have less importance. The court will carefully consider the expert opinion rendered by its appointed expert witness. However, it is not bound by this opinion and may deviate from it.
In general, the German infringement courts can be considered patent owner friendly owing to their generally very broad functional interpretation of claims. There are some slight differences between the infringement courts. The current tendency is that the Dusseldorf courts follow the most liberal claim interpretation.
Furthermore, the German infringement courts also apply the doctrine of equivalents, albeit in very rare cases. The requirements are as follows:
- the accused product must solve the problem of the invention with objectively equal means;
- the skilled person must be able – based on their specialist knowledge – to find the technical solution of the altered version of the accused product as objectively equal; and
- the skilled person must determine that the altered accused product is equivalent to the objective (literal) solution of the patent.
A typical defence to an infringement allegation (e.g., by a cease-and-desist letter or an infringement complaint) is filing a nullity action before the German Federal Patents Court or opposition proceedings with the GPTO or EPO if the opposition window of nine months is still open. If an opposition (or a nullity action) is already pending, the alleged infringer may intervene or join in the pending proceedings. Such a party will be a full independent party to those proceedings. The infringement court, if a nullity action or an opposition is pending, will determine only the likelihood of whether or not that action will be successful based on a summary examination of the main attacks against the patent. Therefore, obviousness and inventiveness play only subordinate roles in the infringement proceedings.
There are a number of further available defences against an accused infringement, such as:
- no right to sue (e.g., no proper assignment of IP rights);
- lack of jurisdiction;
- exhaustion of rights;
- compulsory licence defence or FRAND; and
- right of prior use.
viii Time to first-level decision
Depending on the court, it currently takes approximately 10 months (e.g., Mannheim RC and Hamburg Court) to 15 months (e.g., Munich I and Dusseldorf RC) from the service of the statement of complaint on the defendant until a first instance decision is handed down by the court.
In respect of pretrial remedies, there is the option to issue a warning letter, including the request to sign a cease-and-desist declaration with a penalty clause. Attorneys' fees in relation to this are reimbursable from the other side.
The most prominent remedies are:
- injunctive relief;
- recall and removal of the infringing products from the distribution channels;
- destruction of the infringing products;
- claims for information and rendering of accounts; and
- publication of the judgment (which is, however, almost never granted).
Damages can be calculated in three ways:
- lost profits of the patent owner;
- licence analogy – damages calculated on the basis of the amount that the infringer would have paid as an appropriate licence fee if it had obtained permission to use the infringed right; and
- infringer's profit – the profits that the infringer made as a result of the infringement (product-related costs incurred specifically through the manufacture or distribution of the infringing products are deductible; overhead costs are not).
The patent owner may choose between the above calculation methods. They may alternate between these methods until a final decision on the damages is handed down; the plaintiff may even split it and choose one method for past use of the patent and another for future use. Lost profit of the patent owner is seldom chosen owing to the difficulty of proving what profits the patent owner would have made absent the infringement. Damages do not tend to be punitive in nature.
Furthermore, there is the option to file for a preliminary injunction. The threshold for granting preliminary injunctions varies from court to court. However, the standard of proof is generally lower than that in proceedings on the merits. Additional means of proof (e.g., sworn affidavits) are admissible.
The patent owner must show that the patent has been infringed and that the matter is urgent (i.e., that awaiting a decision on the merits is not justified).
The patent owner must initiate the preliminary injunction proceedings without undue delay on positive knowledge of the patent infringement (i.e., it must show that it has taken appropriate measures to obtain a speedy decision). Case law varies from court to court regarding what constitutes an undue delay. In general, if the preliminary injunction proceedings commence within four to six weeks of knowledge of the infringement, there is no undue delay.
The validity of the disputed patent must be beyond reasonable doubt. The hurdle has recently been raised: a patent should have survived opposition proceedings or nullity proceedings already to be suitable for an injunction proceeding. As described above, the Munich I RC recently had doubts with regard to this practice and has asked the Court of Justice of the European Union whether it is in line with the Enforcement Directive.
x Appellate review
An adverse (or partly adverse) decision on the merits in the first instance can be appealed to the Higher Regional Court, which will be a full legal review of the case. Therefore, generally, the appeals court has to base its review on the facts and evidence determined by the first instance court. However, under very narrow circumstances are new facts and evidence allowed:
- in the case of doubts in relation to the correctness and completeness of the facts determined by the first instance court based on concrete indications; or
- if explicitly allowed by law, in particular by Section 531(2) of the Code of Civil Procedure, if:
- the court has apparently overlooked one aspect or inaccurately determined it as not relevant;
- the new facts were not considered because of a procedural error; or
- the delayed submission of the new fact is not due to negligence.
xi Alternatives to litigation
Some of the patent infringement courts particularly foresee mediation processes for suitable cases; the Munich courts, for example, propose an internal court mediation to use the time between the dates of the oral hearings to achieve an amicable, appropriate and interest-based solution. The preliminary view of the case given by the chamber in the early first appointment often gives the parties reason to try mediation.
Besides that, it is possible to resolve patent matters by (out-of-court) mediation or arbitration proceedings.
Trends and outlook
In January 2022, the provisional application period of the Protocol on Provisional Application of the Unitary Patent Court (UPC) Agreement began.
The preliminary work will be finished in the second half of 2022. Germany will then deposit its instrument ratification. The UPC is expected to start operating in late 2022 or early 2023. The UPC will be responsible for all European patents if the patentees do not decide to opt out of the UPC system. In addition, patentees will be able to validate European patents with unitary effect.
The UPC will have a first and a second instance. The first instance will comprise a central division and local or regional divisions. Germany will host part of the central division in Munich and four local divisions in Munich, Düsseldorf, Mannheim and Hamburg. The second instance will be hosted in Luxembourg.
The new UPC system will make the enforcement of patentees' rights easier in the participating Member States. In its judgment, the UPC will decide upon the infringement in all UPC Member States. Correspondingly, the judgment of the UPC will be directly enforceable in all Member States. However, the challenge of the validity of a patent will also be easier. The UPC will be able to revoke European and unitary patents in cases of a direct attack or a counterclaim.
However, during a transitional period of seven to 14 years, national courts will still be able to handle cases, including European patents.