The case law of the German courts of lower instance for patent law and utility model law since the year 2013

Daniel Hoppe-JänischLocal PartnerHamburg

T + 49 40 35005 0 E dhoppe-jaenisch@whitecase.com

ContentsI. Substantive law 2

1. The right to sue under substantive law (Aktivlegitimation) and the right of action under procedural law (Prozessführungsbefugnis) 2

2. Capacity to be sued (Passivlegitimation) 3

3. Interpretation of the patent 3

4. Use of the teaching of the patent 4

5. Facts of infringement 7

7. Right of use 12

8. Exhaustion 13

9. Employee inventions 14

II. Procedural law 161. Main proceedings 16

3. Enforcement and stay of execution 22

4. Action for restitution 22

III. Miscellaneous 231. Costs and value of the claim 23

2. Warning notice 24

3. Security for legal costs 25

This article was published in a shortened version1 in December 2014 in GRUR-RR, a leading German legal magazine for intellectual property law and copyright law.2 It reports on the case law of the German courts3 on patent law and utility model law since mid 2013 until August 2014.

The article is divided into three main parts. The first part (i) deals with the substantive law, the second part (ii) deals with procedural law and the third part (iii) deals primarily with the question of costs and cost recovery. Where necessary and reasonable, explanations for a better understanding have been included, unlike in the German original.

1 Unlike the German original text, the present version contains explanations for a better understanding.

2 The present report follows up on a similar report by the author covering the period from 2011 to 2013, which was published in the GRUR-RR in October 2013.

3 In Germany, 12 district courts have the competent jurisdiction of the first instance for patent infringement matters (Düsseldorf, Hamburg, Munich I, Braunschweig, Freiburg, Mannheim, Berlin, Erfurt, Leipzig, Saarbrücken, Nuremberg-Fürth and Magdeburg). Their respective superior Higher Regional Courts rule on appeals.

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I. Substantive law

1. The right to sue under substantive law (Aktivlegitimation) and the right of action under procedural law (Prozessführungsbefugnis)

According to German law, a prerequisite for a patent infringement claim is that either the claimant is entitled to the asserted rights or that the claimant is entitled for another reason to claim rights resulting from a (alleged) patent infringement. Here, the “right to sue” means generally the basic substantive right to sue with regards to the asserted rights. It does not matter whether these rights actually exist. The question is: Is the claimant entitled to assert the potential claims in court? If this is the case, the claimant has a right to sue.

Unlike the right to sue, the right of action is a requirement for the admissibility of a patent infringement action and thus actually part of the procedural law, which is covered in part two (ii). However, due to the close link between issues of the right to sue and those of the right of action, this is covered here. In principle, only the person or legal entity asserting their own legal rights in their own name has the right of action. However, if the requirements of the so-called statutory or designated representative action are met, the claimant may assert someone else’s rights in their own name.

Under German law, the transfer of a patent does not need to be entered in the patent register, so that the transfer of rights can take place outside of the register. However, the entry in the register is important for the assessment of who has the right to sue and the right of action. In recent years, the courts had primarily ruled that whoever was entered in the register has the right to sue even if it has been established that they are no longer entitled to the patent because they had sold the patent. The true substantive legal position was irrelevant.

However, following the German Federal Court of Justice’s (Bundesgerichtshof [BGH]) decision Milling process4, the Düsseldorf Higher Regional Court (OLG Düsseldorf) now agrees with the Federal Court of Justice that the legitimizing effect of the entry in the register is limited to the procedural right to action and that, with regards to substantive law, it is a considerable indication for the claimant’s substantive entitlement and thus for the right to sue.5 As a result, the claimant would not have the right to sue if the defendant can prove that the claimant who is registered in the patent register is not the actual patent holder. The legitimizing effect extends to the previously registered person or legal entity if they assert claims for their registration period.6 The court has not answered the question whether the currently registered patent holder instead of the previously registered patent holder can assert claims for the past.7

The assertion of another person’s rights in the claimant’s own name (representative action [Prozessstandschaft]) requires that the rights holder authorizes the claimant to litigate and that the claimant has their own, legitimate interest in the assertion of such legal rights. According to the Karlsruhe Higher Regional Court (OLG Karlsruhe), a simple licensee has no legitimate interest because the claimant can have the asserted claims transferred to them.8 This is difficult to understand because the exercise of a right is a requirement for the admissibility of a representative action.9

According to the Düsseldorf District Court (LG Düsseldorf), the patent holder is entitled to bring their own claim for a cease-and-desist order against an infringer if they had granted an exclusive license for the proprietary right.10

4 BGH, GRUR 2013, 713 – Milling process; skeptical with regards to this: Kühnen, GRUR 2014, 137.5 OLG Düsseldorf, 19 September 2013 – case I-2 U 19/09, BeckRS 2013, 17381; generally focusing on the status of the register

LG Düsseldorf, 2 August 2013 – case 4b O 230/10, BeckRS 2013, 15651; imprecise also LG Düsseldorf, 12 June 2014 – case 4a O 27/13, BeckRS 2014, 20316; without further discussion LG Hamburg, 24 January 2014 – case 315 O 234/12, BeckRS 2014, 20356.

6 OLG Düsseldorf, 19 September 2013 – case I-2 U 19/09, BeckRS 2013, 17381, referring to OLG Düsseldorf, InstGE 12, 261 = BeckRS 2011, 07499 – “Television menu control”; similar LG Düsseldorf, 2 August 2013 – case 4b O 230/10, BeckRS 2013, 15651, according to which the right of action under Section 30 para 3 of the German Patent Act (§ 30 Abs. 3 PatG) refers to the period of registration; differing LG Mannheim, 17 April 2012 – case 2 O 129/09, BeckRS 2013, 16099.

7 Negative LG Mannheim, 17 April 2012 – case 2 O 129/09, BeckRS 2013, 16099, with the hardly justifiable assumption that in addition to the currently registered rights holder the previous rights holder has the right to sue if their substantive rights are concerned.

8 OLG Karlsruhe, 26 February 2014 – case 6 U 51/13.9 BGH, NJW 1964, 2296.10 LG Düsseldorf, 27 May 2014 – case 4a O 14/14 referring to BGH, GRUR 2008, 896 – “Ink cartridge”.

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An infringer cannot rely on the claimant having concluded an exclusive license agreement with a third party according to which only the licensee is entitled to assert claims for infringements. This is because such an agreement only applies to the parties of the license agreement and does not grant any rights to third parties (including the defendant).11

2. Capacity to be sued (Passivlegitimation)

The capacity to be sued is the counterpart to the right to sue. The capacity to be sued requires the ascertainment of whether the asserted patent rights can be claimed against the defendant. The capacity to be sued is usually linked to the defendant’s own act of infringement but may also be established by a separate attribution of facts by virtue of which the defendant is responsible for the actions of a third party. Of course specific requirements must be met for this.

According to the Düsseldorf District Court, an employed sales manager must assess whether products infringe proprietary rights. If the distribution of infringing products is in the sales manager’s area of responsibility, they have committed the act of infringement themselves.12 However, employees are not liable for infringements if they are not obliged to assess the situation with regards to proprietary rights.13 In contrast, a sole managing director of a trading company is liable because they have to ensure that third-party rights are observed.14

On the other hand, a company is liable for its commercial agent’s actions.15 The person who commits a merely preparatory action to facilitate a deal with a patented product is also liable for offering a patent infringing product. This included advertising on a website and the mere linking to the website where the infringing product is offered.16

3. Interpretation of the patent

The patent specification contains the patent claims, the description and potentially drawings. The patent claims state what protects the patent. The content of the patent claims also determines the scope of protection conferred by the patent.

The defendant in infringement proceedings cannot attack the legal validity of the patent. Rather, this happens in nullity proceedings before the German Federal Patent Court (Bundespatentgericht) and at the appeal stage before the Federal Court of Justice. The Düsseldorf Higher Regional Court has confirmed that the judge in infringement proceedings is virtually bound by the Federal Court of Justice’s interpretation of the patent in nullity proceedings.17 According to the Mannheim District Court (LG Mannheim), the grounds of a decision for a limitation of a patent in nullity proceedings supplement or replace the description of a patent and must therefore be considered when interpreting a claim.18

The Düsseldorf District Court has shown that it very reluctantly considers the European Patent Office’s statements in opposition proceedings. In the present case, it had to interpret a patent claim, which was directed at the use of an agent containing acetic acid. The court interpreted the claim to mean that the acetic acid does not have to be added separately but that the patent would also be infringed if the acetic acid can arise after the agent was placed on the market by oxidation of the ethanol contained in the agent.19

11 LG Düsseldorf, 27 May 2014 – case 4a O 17/14.12 LG Düsseldorf, 14 November 2013 – case 4b O 132/09, BeckRS 2014, 14408.13 LG Düsseldorf, 3 December 2013 – case 4a O 199/12.14 LG Düsseldorf, 3 December 2013 – case 4a O 199/12.15 LG Düsseldorf, 25 March 2014 – case 4a O 7/13.16 LG Düsseldorf, 19 September 2013 – case 4c O 14/13.17 OLG Düsseldorf, 8 August 2013 – case I-2 U 22/12, BeckRS 2013, 16787 = GRUR-RR 2014, 8 Ls.18 LG Mannheim, 28 February 2014 – case 2 O 53/12, BeckRS 2014, 06209 = NJOZ 2014, 1146.19 LG Düsseldorf, 3 April 2014 – case 4c O 81/13, BeckRS 2014, 19177.

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According to the Düsseldorf District Court, if a feature of the patent claim refers to a technical standard for certain dimensions, the feature can be met although a relevant technical standard does not exist but a mere customary usage of the dimensions has developed in practice.20 However, this way the scope of the patent is determined by circumstances beyond the patent specification, which conflicts with the requirement of legal certainty. The Hamburg District Court (LG Hamburg) had a comparable approach to the interpretation of a patent directed at a manufacturing process for an implant, where it referred to a brochure published after the priority date. The brochure stated that the design, which was merely similar to the attacked embodiment, was covered by the patent.21

The Düsseldorf District Court has maintained that features should not be interpreted as a mere implicitness.22 The Munich I District Court (LG München I) has a similar approach, which avoids an interpretation that would render a feature superfluous.23 The Hamburg District Court has not joined in on this effort but stated that the inclusion of features in the claim as a matter of course does not violate principles of patent interpretation.24

4. Use of the teaching of the patent

A prerequisite for the successful assertion of claims under a patent is an infringement. The claimant must assert that the defendant has infringed the patent-in-suit by using the teaching of the patent or that—for particular claims such as the right of presentation and inspection—an infringement is at least probable. A distinction is made between direct infringement on the one hand and contributory infringement on the other hand. Direct infringement usually requires the existence of all features of the asserted patent claim. Contributory infringement refers to situations in

which someone facilitates a direct infringement through the offering and provision of materials which relate to the essential features of an invention. The recipient of said materials which were offered and provided is the direct infringer.

Contributory infringement is to be distinguished from equivalent infringement. Equivalent infringement may occur if not all features of the asserted patent claim exist but equivalent materials use the teachings of the patent-in-suit. This refers to exchange means which differ from the literal meaning of the patent claim’s features.

i) Direct infringement

The Karlsruhe Higher Regional Court has dealt with the infringement of a patent which protects a process for the encoding and decoding of data. It ruled that the user of a decoder uses the whole patented method even if, as a part of the protected method, the data was previously coded in accordance with the patent by broadcasting organizations and TV stations without the user’s assistance. According to the court, it is irrelevant whether the user can be held responsible for the TV station or broadcasting organization’s actions. The court held that it was sufficient that the TV station or broadcasting organization can be held responsible for the user’s actions because the user can be considered as their instrument.25

The Düsseldorf Higher Regional Court has clarified that there is no direct infringement in the absence of a feature of the claim if there is no need for the buyers to supplement the delivered device with the missing feature according to the invention. This is the case when the device comes with a manual that includes an opposing warning and there is no indication that buyers would ignore this.26

20 LG Düsseldorf, 25 March 2014 – case 4a O 7/13.21 LG Hamburg, 24 January 2014 – case 315 O 234/12.22 LG Düsseldorf, 14 February 2014 – case 4a O 67/12.23 LG München I, 20 December 2013 – case 7 O 5327/13, BeckRS 2014, 05284.24 LG Hamburg, 22 January 2013 – case 315 O 505/11, referring to BGH, GRUR 2010, 605 – “Joint arrangement”.25 OLG Karlsruhe, 8 May 2013 – case 6 U 34/12, BeckRS 2013, 13968 = extract in GRUR 2014, 59; Overall, the infringement situation

appears to be inconsistent. In particular, it cannot be reconciled with the right of use, which has been assessed elsewhere. Despite the buyers’ alleged function as the broadcasting organizations’ “instruments”, the court wants to relate the broadcasting organizations’ undisputed license to the coding process only but not to the decoding process carried out by the “instruments”. Furthermore, at this point, the court does not establish the buyers’ position as the responsible persons committing the act but that of the (licensed) broadcasting organizations, which have been directly provided with the material in question.

26 OLG Düsseldorf, 13 February 2014 – case I-2 U 93/12, BeckRS 2014, 05736, in contrast OLG Düsseldorf, 24 February 2011 – case I-2 U 122/09, BeckRS 2011, 08375.

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With reference to the Federal Court of Justice’s decision Shunting trolley 27, the Hamburg District Court ruled that it is sufficient for the implementation of the feature “electrostatically charged” if the object is merely “electrostatically chargeable.” This amounts to the protection of a sub-combination.28 The court has overlooked that in Shunting trolley the Federal Court of Justice did not forgo the implementation of individual features. Rather, the Federal Court of Justice requires that all features are implemented and that attacked embodiment is objectively fit to achieve the characteristics and effects according to the patent.29

The Düsseldorf District Court has demonstrated that, in the interest of legal certainty, claims with vague features must be interpreted strictly in accordance with the description.30

According, to the Düsseldorf District Court, the further development of technology is irrelevant for the determination of the scope of protection conferred by the patent.31 In the case, due to the patent’s distinction between laptops on the one hand and protected devices on the other hand, the scope of protection could not extend to laptops, which were described as unfavorable. However, the court unjustly focused on terminology and did not address the fundamental issue of whether today’s laptops have evolved from the laptops known on the priority date to the extent that they now can be deemed to be devices according to the patent-in-suit. The court also chose a questionable approach in a case in which a production machine for dental equipment was discussed.

According to the court, due to the open wording of the claim, a machine based on 3D printing technology developed after the patent application would be a production machine in accordance with the claim.32

ii) Contributory infringement

A patent is contributorily infringed if materials are offered or provided which do not implement the patented invention but which relate to an essential feature of the invention. The accused materials do not have to be mentioned in the patent claim. They must merely be suitable for the functional interacting with a feature of the invention. The Düsseldorf District Court confirmed this for kits (which were not mentioned in the claim) serving the performance of a patented procedure because they facilitated the implementation of an important method step.33 According to the Düsseldorf Higher Regional Court, in a case of a two-part cutting tooth arrangement consisting of a cutting tooth and a mounting, a cutting tooth adapted to the mounting relates to an essential element of the invention because the mounting and the tooth functionally interact in the implementation of the inventive concept.34

According to the Karlsruhe Higher Regional Court, if the decoding of data is an essential element of the invention, the provision of demodulators without decoding software also contributorily infringes the patent because by extracting the signal needed by the decoder, the demodulators create the necessary condition for the decoding and thus provide an essential contribution to the decoding process.35

27 BGH, GRUR 2006, 399 – Shunting trolley.28 LG Hamburg, 22 January 2013 – case 315 O 505/11.29 See the correct observations in OLG Düsseldorf, 13 February 2014 – case I-2 U 93/12, BeckRS 2014, 05736; Ultimately, the decision of

the LG Hamburg may be correct but the same cannot be said for the grounds of the decision; also incorrect remarks on the question whether the awarded cease-and-desist order exceeds the patent protection. The court overlooks here that the cease-and-desist order in the award cannot extend beyond the patent’s scope of protection.

30 LG Düsseldorf, 12 December 2013 – case 4 c O 20/13, BeckRS 2014, 20323, which dealt with a component’s “very high mechanical characteristics”.

31 LG Düsseldorf, 14 January 2014 – case 4 a O 207/12, BeckRS 2014, 20324.32 LG Düsseldorf, 4 July 2013 – case 4b O 7/12, BeckRS 2013, 14543; 4 July 2013 – case 4b O 201/11. 33 LG Düsseldorf, 14 November 2013 – case 4b O 132/09, BeckRS 2014, 14408.34 OLG Düsseldorf, 13 February 2014 – case I-2 U 90/12, BeckRS 2014, 05734; similar LG Düsseldorf, 2 August 2013 – case 4b O 230/10,

BeckRS 2013, 15651.35 OLG Karlsruhe, 8 May 2013 – case 6 U 34/12, BeckRS 2013, 13968 = extract in GRUR 2014, 59, the differentiation from BGH, GRUR

2012, 1230 – “Video signal coding” is difficult to understand because the demodulation as well as the data transfer to DVD are ultimately a neutral part of the transfer process under patent law. The OLG’s argument that in the present case, the data signal that needs to be decoded is obtained from the received broadcast signal, which would require a technical focus on the encoded data signal, does not relate to the specific functionality under the patent.

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The contributory infringement of a patent requires a so-called double domestic nexus. On the one hand, this means that the offering or provision of the materials must take place in Germany; on the other hand, the respective buyers’ use of the invention must be expected in Germany. The Karlsruhe Higher Regional Court has clarified that a foreign manufacturer or trader of patent infringing devices is already responsible for the infringement if they provide their products to another foreign buyer and if they know that the buyer intends to distribute the product within Germany where it will serve the use of the invention.36

iii) Equivalent infringement

An equivalent patent infringement has three requirements:

�� The attacked embodiment must solve the problem on which the invention is based with modified materials objectively having an equal effect as those protected under the patent (so-called replacement means).

�� Based on their expert knowledge, an expert must be able to locate the modified embodiment with its modified means as having an equal effect. This assessment is based on the state of the art known on the priority date.

�� An expert must regard the replacement means as equivalent to those listed in the patent claim.

According to the German Federal Court of Justice’s decision Occlusion device, there is no equivalent infringement if the patent claim reflects a deliberate decision to select a particular feature but the attacked embodiment does not use that particular feature.37

The Düsseldorf Higher Regional Court has ruled that selecting only one of two terms (here: acid/base) may mean that by including only one category (acids instead of bases) in the claim, the other

category is excluded.38 It is not possible to reverse a limitation which the patent received in validity proceedings. In particular, the patent cannot be extended under equivalence aspects to something that was removed in validity proceedings.39 The court even found that a selection decision was made in a case where the patent revealed no possible alternative at all. A decisive factor in the case was the fact that an expert would have to consider the suitability of the interchangeable parts.40

The Düsseldorf District Court has reached the conclusion that the mentioning of a single derivative in the patent claim does not constitute a selection from a group of unnamed derivatives. Hence the use of a different derivative could constitute an equivalent infringement.41

According to the Düsseldorf Higher Regional Court, the mere obviousness of a replacement means for an expert is not equivalent to the explicit mentioning of the replacement means in the patent specification.42

According to the Düsseldorf District Court, the absence of a replacement means does not necessarily exclude an equivalent infringement.43

The Munich Higher Regional Court has corrected the approach of the Munich I District Court, according to which a claim feature that contributes nothing to solve the technical problem cannot be replaced with a feature of equal effect.44 The Mannheim District Court has ruled with regards to the lack of equal effect that there is no equivalence in a case where an increase of the transmission capacity, to be avoided according to the description of the patent-in-suit, was achieved with a coding of three bits instead of one bit.45

36 OLG Karlsruhe, 8 May 2013 – case 6 U 34/12, BeckRS 2013, 13968 = extract in GRUR 2014, 59 – MP2 devices.37 BGH, 10 May 2011 – case X ZR 16/09 – Occlusion device; see also BGH, 13 September 2011 – case X ZR 69/10 – Diglycid composition.38 OLG Düsseldorf, 13 September 2013 – case I-2 U 23/13, BeckRS 2013, 18740; similar for heterogeneous and homogenous solutions:

LG Düsseldorf, 19 December 2013 – case 4c O 49/13.39 OLG Düsseldorf, 13 September 2013 – case I-2 U 23/13, BeckRS 2013, 18740; similar OLG München, 20 March 2014 – case 6 U 1561/13,

BeckRS 2014, 20359.40 OLG Düsseldorf, 13 September 2013 – case I-2 U 26/13, BeckRS 2013, 18743. 41 LG Düsseldorf, 3 April 2014 – case 4b O 114/12 U., BeckRS 2014, 08590; contrary the High Court in Actavis ./. Eli Lilly & Company, 2014.42 OLG Düsseldorf, GRUR-RR 2014, 185 – Toilet seat joint; of a different opinion: LG Düsseldorf, 13 February 2014 – case 4b O 144/13,

BeckRS 2014, 20327.43 LG Düsseldorf, 1 October 2013 – case 4b O 91/12, BeckRS 2014, 2032644 OLG München, 20 March 2014 – case 6 U 1561/13; contrary LG München I, 20 March 2013 – case 21 O 13347/11, BeckRS 2013, 16072. 45 LG Mannheim, 28 February 2014 – case 2 O 53/12, BeckRS 2014, 06209; as well as LG Düsseldorf, 13 February 2014 –

case 4b O 144/13.

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5. Facts of infringement

A patent infringement requires an infringing act committed in the Federal Republic of Germany.

i) Offering

According to the Düsseldorf District Court, a domestic connection may occur if an offer on the Internet is written in a foreign language and if the domestic potential buyers are able to understand that language. English is the dominant language in the field of electronic engineering.46 A company’s presentation that gives no indication of that company’s intention to supply products to Germany cannot be construed as a domestic offering.47

The Düsseldorf Higher Regional Court has ruled that the exhibition of products at a domestic trade fair constitutes an offering if the trade fair is not a mere exhibition. The defendant bears the burden of proof for this.48 According to the court, the mere organizer of a trade fair stand is responsible for the actions of the companies exhibiting their products at this trade fair stand, independently of whether or not the organizer was present. The organizer has an obligation to check the exhibited products.49 The display of another company’s advertising flyer at the organizer’s own trade fair stand also constitutes an offering of the products depicted in the flyer.50

ii) “Obvious arrangement”

German law recognizes the so-called use patent as a subcategory of the method patent. A use patent may be granted for the instruction regarding the specific use of a substance or a mixture of substances of the prior art in a method. The use of a specific product, in particular a chemical substance, for a specific purpose (i.e., as drugs or pesticides) is also the subject of use patents. According

to the Federal Court of Justice, use patents are not to be treated like method patents with regard to their protective effects. For example, the “obvious arrangement” of a substance for the protected use, regardless of whether the product is eventually used in accordance with the patent, constitutes an act of infringement of the use patent. The “obvious arrangement” of the substance for the protected use is deemed to be the commencement of the use itself. For example, a patent that protects the medical use of a certain substance can be infringed by a manufacturer’s formulating, customizing, dosing and packing ready for use the substance as a pharmaceutical for the patented purpose.

The Karlsruhe Higher Regional Court also assumes an “obvious arrangement” under the use patent if the relevant substance has the characteristics listed in the patent claim and is offered for a use which generally requires that the patented purpose be satisfied, based on an assessment at the time of the offering. In this case, another manifestation of the intention to use the relevant object as intended under the patent claim is not necessary.51

6. Claims

In the case of patent infringement, the claimant may assert various claims side by side. The most important claim in practice is the claim for injunctive relief.

i) Injunctive relief

The injunction is an automatic consequence of an infringement. The court has no discretion in deciding on an injunction. If there is a danger of a first-time or repeated infringement of the asserted patent, the court has to grant the injunction.

46 LG Düsseldorf, 17 April 2014 – case 4c O 33/13, BeckRS 2014, 20328. 47 LG Düsseldorf, 25 July 2013 – case 4c O 26/13, BeckRS 2014, 20329.48 OLG Düsseldorf, 27 March 2014 – case I-15 U 29/14, BeckRS 2014, 14729; 27 March 2014 – case I-15 U 19/14, BeckRS 2014, 16067;

contrary LG Mannheim, GRUR-RR 2011, 83 – Suction gripper; as well as LG Düsseldorf, 12 June 2014 – case 4a O 19/13; Wuttke, Mitt. 2014, 452, 454.

49 OLG Düsseldorf, 27 March 2014 – case I-15 U 29/14, BeckRS 2014, 14729. 50 OLG Düsseldorf, 13 February 2013 – case I-2 U 42/13, BeckRS 2014, 05732. 51 OLG Karlsruhe, GRUR 2014, 764 – Use patent; Wuttke, Mitt. 2014, 452, 454.

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In case of a contributory infringement, a total prohibition, meaning an unrestricted injunction, is only appropriate if no effective steps for the prevention of the use of the invention are available. This is the case, for example, if the objects supplied cannot reasonably be used in any other way. The Düsseldorf District Court has imposed a total prohibition in a case of contributory infringement and noted that mere “theoretical” uses are irrelevant for the possibility of non-infringing use of the patent. The defendant must demonstrate a specific, possible alternative.52

a) Risk of recurrent infringement

If an infringement already took place, the infringer can only dispel the suspected risk of recurrence if they give a cease-and-desist undertaking and submit to a sufficient contractual penalty in case of noncompliance.

According to the Düsseldorf District Court, as long as no such undertaking has been given, the risk of recurrence still exists if the defendant is no longer in possession of the attacked embodiment and has stopped its distribution. Even if the rights holder is now the only supplier, this would not permit a prognosis which excludes a patent infringement, unless the defendant would clearly not be able to produce and distribute the patented product.53

b) Risk of first infringement

According to the Düsseldorf Higher Regional Court, a patent infringing offering constitutes the risk of first infringement also with regards to other types of infringement such as placing the infringing object on the market, its use, import or possession for these purposes.54 According to the Düsseldorf District Court, the risk of first infringement still exists if the claimant but not the European Medicines Agency (EMA)55 is notified

of the withdrawal of a distribution notice regarding a planned parallel import of pharmaceuticals.56 The reason for this is that the defendant could still commence the parallel import, of which they had originally notified both the claimant and the EMA, since the EMA is in possession of proof of the patent holder’s notification of the parallel import. This is one of the requirements for the EMA’s authorization of the parallel import.

The risk of first infringement cannot be per se denied on the grounds that a market placement of the objected product will only occur in more than three years.57 The risk of first infringement assumed to be posed by a group company cannot be transferred to another group.58

According to the Hamburg District Court, the exhibition of a non-marketable medicinal product due to a lack of a CE Certification does not constitute a risk of first infringement for the market placement of an identical, marketable end product.59

ii) Damages

Another important claim is the claim for damages. Unlike the claim for injunctive relief, the claim for damages requires that the infringement occurred through the infringer’s fault (intent or negligence). During infringement proceedings, this claim is usually initially only made on its merits. If the court finds that an infringement occurred and if the parties subsequently cannot agree on the amount of damages, the claim will be pursued in a new lawsuit for the amount of damages.

The claimant can base the calculation of the amount of compensation on one of three methods. They can claim compensation for specific damages incurred (for example, for loss of business), account of profits made by the infringer from the patent infringement or a notional license fee.

52 LG Düsseldorf, 24 October 2013 – case 4c O 3/12, BeckRS 2014, 20395.53 LG Düsseldorf, 5 November 2013 – case 4a O 8/13. 54 OLG Düsseldorf, 27 March 2014 – case I-15 U 29/14, BeckRS 2014, 14729.55 Parallel importers must report annually to the EMA from which countries and to which countries they want to import a specific, centrally

authorized product.56 LG Düsseldorf, 26 August 2014 – case 4c O 116/13, BeckRS 2014, 17689. 57 LG Düsseldorf, 3 April 2014 – case 4b O 114/12 U., BeckRS 2014, 08590. 58 LG Düsseldorf, 3 April 2014 – case 4b O 114/12 U., BeckRS 2014, 08590. 59 LG Hamburg, GRUR-RR 2014, 137 – Coronary stent.

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a) Fault

One of the requirements of a claim for damages is that the infringer is at fault. This means that the infringer must have committed the infringing act intently or negligently. However, so far the courts have only in very rare exceptional cases assumed that there has been no such fault. Generally, a defense cannot successfully be based on the objection that there is no fault.

When assessing a negligent infringement, usually the question arises whether the infringer had an obligation to assess the proprietary rights situation and if so, what efforts can be expected of the infringer. In the absence of such an obligation the act of infringement was not carried out negligently.60

According to the Düsseldorf District Court, even a pure marketing company must assess the proprietary rights situation. This also applies in case of a very complex technology.61 Specific steps must be taken to prevent future infringements after a cease-and-desist undertaking containing a penalty clause has been given. The mere submission of requirements to the manufacturer is not sufficient if their observance is not monitored regularly.62 A re-importer of pesticides cannot rely on the allegation that the pesticides were placed on the market with the rights holder’s consent. If it is known that counterfeit products are on the market, the re-importer must investigate the pesticides’ origin regularly.63

b) Infringer’s profit

The determination of the infringer’s profit requires the determination of the portion of the profit that is attributable to the patent infringement. The claimant is not entitled to the portion of the profit that is attributable to other factors.

According to the Düsseldorf District Court, attention should be paid if the infringer has chosen a patented design despite technical alternatives being available. This documents that the infringer has considered the invention important for the success of sales. A low price for the infringing products could reduce the causal share in the infringement if it cannot be determined that the use of the invention has made it possible to sell the products at such low prices. In this context, the court has noted that an individual proprietary right becomes less important in relation to the profit if the product also utilizes other proprietary rights (designs, copyrights, etc.). However, additional proprietary rights may only be considered if they were valid and were actually used. The infringer bears the burden of proof for this.64 According to the Düsseldorf District Court, the claim for damages is limited to the patent infringing product itself, unless any additional revenue from non-infringing parts is primarily based on the revenue generated from the infringing parts.65

c) License analogy

Another method of calculating damages is the license analogy. According to this, a fictitious license fee is determined which the infringer will owe as compensation for damages. The fictitious license fee must be appropriate. In this context, appropriate is what reasonable contractual parties would have agreed as a license fee for the act of use carried out by the infringer. Existing license agreements, if any, on the infringed proprietary right or on similar proprietary rights can be considered as factors for the determination of an appropriate license fee. However, under certain circumstances the license fees stated in such agreements cannot be transferred one to one; the contractual licensee’s and the infringer’s different positions must be considered as increasing or reducing factor with regards to the license fee.66 In principle, the infringer cannot be put in a better or worse position than a contractual licensee.

60 On the other hand, if all other requirements of the claim have been met, intent leads to the infringer’s obligation to indemnify the rights holder even if the infringer had no obligation to assess the proprietary rights situation.

61 LG Düsseldorf, 3 December 2013 – case 4a O 199/12. 62 LG Düsseldorf, 19 November 2013 – case 4a O 20/10, BeckRS 2014, 20331.63 LG Düsseldorf, 24 October 2013 – case 4c O 3/13, BeckRS 2014, 03837.64 LG Düsseldorf, 3 September 2013 – case 4a O 112/12, BeckRS 2014, 20332.65 LG Düsseldorf, 17 July 2014 – case 4b O 23/13, BeckRS 2014, 20333.66 For example, the fictitious license fee can increase if the contractual licensee has to provide other payments or services to the rights

holder in addition to paying the license fee. The license fee can be reduced if the license agreements cover all acts of use but the infringer has only carried out one act of use.

10 White & Case

According to the Karlsruhe Higher Regional Court, license fees, which the patent holder had already agreed in license agreements, can form the basis of the calculation of damages without further assessment. The amount of damages should be increased by the loss of interest if a due date would have been agreed during free license negotiations.67 The reason for this is the principle that the infringer cannot be put in a better position than a contractual licensee because the infringer pays considerably later than licensees. For the purpose of calculating the damages, an appropriate reference basis has to be determined. Usually, the technical and economical reference unit is chosen, e.g., the delimitable component which incorporates the invention. However, if an entire device is usually only supplied as a whole, the entire device can be the reference basis for the license fee.68

d) Damages due to contributory infringement

In the event of a contributory infringement, compensation for damages can only be claimed if a direct infringement has already occurred (e.g., the contributory infringer’s customers). However, for the courts to determine that the claimant has a claim for damages on its merits against a contributory infringer, the probability of at least one direct act of infringement is sufficient.

According to the Karlsruhe Higher Regional Court, the finding of the occurrence of at least one direct act of infringement during basic proceedings is not necessary for assuming the probability that damage has occurred.69 The occurrence of damage is even considered probable if the contributory infringement occurs in the form of a mere offering.70

c) Destruction

A further important claim is the entitlement to destruction of the infringing objects in the infringer’s possession or ownership. The claim for destruction requires domestic possession/ownership. The courts generally grant an order for destruction only in the case of direct (and/or equivalent) patent infringement.

With regards to the claim for destruction, the Düsseldorf District Court has maintained its view that the claimant bears the burden of proof for the infringer’s possession or ownership of the infringing objects. If the defendant responds with the submission of specific facts from which it follows that and through which events the defendant has ceased entirely to have the infringing objects in their possession or ownership, the claimant bears the burden of proof again. The claimant can then not merely deny the facts submitted by the defendant.71

d) Recall and removal from the distribution channels

A further claim, which is important in practice, is the claim for recall and removal of infringing goods from the distribution channels. This claim generally exists as a result of the infringement. The court has no discretion in the matter.

There is a disagreement between the courts on whether the claimant is entitled to a claim for recall against an infringer residing abroad. The answer depends on the purpose of the claim for recall. In some cases, the purpose of the recall claim is to restore the conditions for a claim for destruction regarding infringing objects that, as a result of a sale, are no longer owned/held by the infringer. This is because, due to a lack of the infringer’s possession/ownership of those objects, the claimant would not be entitled to a claim for destruction.

A claim for destruction requires domestic possession by the infringer. For this reason, infringers based abroad cannot be subject to a claim for destruction even if they possess/own infringing objects. Assuming that the recall claim only serves the restoration of the conditions for a claim for destruction, infringers based abroad would not be obliged to recall the infringing objects because the recall would only establish foreign possession/ownership which would not be sufficient for a claim for destruction. Hence the recall claim would not be justified because it would not achieve the intended purpose.

67 An agreement on a due date determines the specific date or time period on which or within which a payment must be made (it is “due”). If this does not happen, the monetary debt shall bear interest from the due date (possibly in addition to other conditions).

68 OLG Karlsruhe, GRUR-RR 2014, 55 – Foil printing method.69 “Basic proceedings” means the proceedings in which the existence of a claim for damages is determined on its merits but in which no

decision is made on the amount of damages.70 OLG Karlsruhe, 8 May 2013 – case 6 U 34/12, BeckRS 2013, 13968 = in extracts GRUR 2014, 59, referring to BGH, GRUR 2013, 713 –

Milling process. 71 LG Düsseldorf, 5 November 2013 – case 4a O 8/13, BeckRS 2014, 20330.

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According to the Düsseldorf District Court, a recall claim has at least the purpose to raise awareness within the distribution chain so that this alone justifies the recall claim regardless of a claim for destruction.72 According to the court, it is not justifiable to regard the recall claim as a mere pre-stage of the claim for destruction and to imply that domestic possession or ownership of the infringing object is a requirement of the claim.73 The Düsseldorf Higher Regional Court counters that an infringer based abroad, who is not subject to a claim for destruction and for whom a recall only establishes insufficient foreign possession/ownership, is not subject to a recall claim.74

e) Joint rights holders

If several individuals jointly create a new invention, they are so-called co-inventors. Co-inventors are jointly entitled to the patent or utility model for their invention. However, not every act of support during the development of the invention establishes co-inventor status. Only those individuals are co-inventors who were creatively active during the development of the invention to the extent that their contribution was a cause for the existence of the future invention or its specific design. The courts have to consider the question whether a creative contribution was made and whether an individual is a co-inventor when an alleged co-inventor requires another (co)-inventor to grant them rights to the invention, i.e., the joint right to a patent registration.

According to the Munich Higher Regional Court, a joint right to an invention arises when a sample sent by the alleged co-inventor is included in the patent application in the same composition as the sole exemplary embodiment. In this context, the court’s assumption is noteworthy that the mere notification of the prior art can constitute creative contribution leading to the status of a co-inventor.75

Only natural persons can be inventors. However, other legal entities, including companies, can be entitled to rights relating to inventions made by natural persons, in particular the right to and under a patent or a patent application. The Düsseldorf Higher Regional Court had to rule on a case in which a company requested its managing partner and co-shareholder to transfer the right to an invention to the company without remuneration. The managing partner had made the invention in the context of the corporate purpose. The court ruled that the company has a claim against its managing partner if he is responsible for the company’s technical sector, the invention was made in the context of a joint project and the other shareholders have contributed their labor in their assigned areas without remuneration.76

f) Miscellaneous

The limitation period for patent infringement claims is three years. The period commences at the end of the year in which the relevant claim arose and the rights holder becomes aware of the circumstances giving rise to the claim and gains knowledge of the infringing person. It also commences when the rights holder is unaware of the above but their unawareness is due to gross negligence. The limitation period for claims for cease-and-desist orders commences anew with each violation.

The Düsseldorf District Court has clarified that the continuous advertising of an attacked embodiment constitutes a continuous infringement in the form of an enduring act. As long as the infringement persists, the limitation period cannot start to run. In contrast, for claims referring to past actions, such as a claim for damages, the limitation period starts to run with the respective part of the enduring act, meaning on the date the infringing act is committed.77

72 LG Düsseldorf, 5 November 2013 – case 4a O 8/13; as well as LG Mannheim, 10 December 2013, BeckRS 2014, 06642.73 LG Düsseldorf, 19 September 2013 – case 4c O 14/13; 19 September 2013 – case 4c O 15/13.74 OLG Düsseldorf, 18 July 2013 – case I-2 U 99/11, BeckRS 2013, 18748.75 OLG München, 19 December 2013 – case 6 U 4586/10.76 OLG Düsseldorf, Mitt. 2014, 337.77 LG Düsseldorf, 5 November 2013 – case 4a O 8/13.

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Pursuant to Article II Section 1 Para I of the Law on International Patent Conventions (Art. II § 1 I IntPatÜG) the applicant of a published European patent application covering the Federal Republic of Germany can request compensation of those who, in knowledge of the application or grossly negligent lack of such knowledge, have used the invention on which the patent application is based. However, pursuant to Article II Section 1 Para II of the Law on International Patent Conventions (Art. II § 1 I IntPatÜG), compensation is only due from the date on which a German translation of the application has been published or has been submitted by the applicant to the user. According to the Düsseldorf Higher Regional Court, the translation requirement under Article II Section 1 Para II of the Law on International Patent Conventions (Art. II § 1 I IntPatÜG) exists regardless of the other party’s foreign language skills and is a general requirement of the claim for compensation.78

The winning party in patent infringement proceedings (including the defendant) may be entitled to have the judgment published if they have a legitimate interest in the publication of the judgment and can sufficiently demonstrate this. The Düsseldorf District Court requested publication of a judgment that the claimant demonstrated that at the time of the decision the confusion of the market persisted and this confusion exceeds the extent of confusion involved with any “normal” infringement.79

7. Right of use

The defendant may counter the allegation of an unlawful patent infringement by arguing that they have a right of use because they had already made and used the invention prior to the filing of the patent-in-suit (right of prior use) or because they were granted a license for the patent. However, the defendant must substantiate this clearly and in detail and prove it if the claimant disputes this.

i) Right of prior use

The defendant is entitled to a right of prior use if he has used the invention prior to the patent application in Germany or made the necessary arrangements for the use of the invention. The Düsseldorf District Court has ruled that a right of prior use requires actions which demonstrate the strong and genuine intention to use the invention immediately. The decision to use the invention for commercial purposes must have been made.80 The court seems to have a stricter view than the Federal Court of Justice in its decision Europe journey, which at least stated that the fact should be considered that the introduction of innovations often requires significant effort which in turn requires time.81 In the case decided by the Düsseldorf District Court, the defendants planned to place springs to connect laminate or hardwood floor elements on the market. For this purpose they carried out tests with a spring covered by a utility model but also tested another version. Since the actions related to various embodiments of which only one was covered by a utility model, the court denied the defendant a right of prior use.

ii) Licenses

A license does not necessarily have to be granted explicitly; it can also be granted by implication. According to the Düsseldorf District Court, a precondition of an implied grant of license is that the rights holder clearly indicates that they want to grant a right of use. As in copyright law, in patent law the principle applies that the proprietary rights holder usually confers only the necessary rights of use to third parties.82

In recent years, the question of whether and under which circumstances simple licenses are insolvency-proof was the subject of intense debates. The Munich I District Court has confirmed that simple licenses, which were granted without limitation under so-called cross-licensing agreements against payment of a one-off license fee, are insolvency-proof. Licenses which did not exist upon conclusion of the license agreement (because they were granted for future inventions) but which came into existence prior to the commencement of licensing proceedings are also insolvency-proof.83

78 OLG Düsseldorf, 5 September 2013 – case I-2 U 108/11, BeckRS 2014, 01151. 79 LG Düsseldorf, 27 August 2013 – case 4a O 181/12.80 LG Düsseldorf, 24 April 2014 – case 4b O 129/11, in reference to BGH, GRUR 1969, 35, 36 – Europe journey; see also on the identity of a

previously used embodiment LG Düsseldorf, 29 April 2014 – case 4b O 56/12. 81 BGH, GRUR 1969, 35, 36 – Europe journey.82 LG Düsseldorf, 19 November 2013 – case 4a O 173/12. 83 LG München I, 21 August 2014 – case 7 O 11811/12.

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The defendant can use the so-called compulsory license defense under antitrust law as a defense against the patent holder’s claim for an injunction. This requires that the patent holder refuses to grant the defendant a license under non-discriminatory conditions and thus abuses their dominant position on the market. According to the Federal Court of Justice’s Orange-Book decision, the patent holder’s conduct in bad faith can only be considered if the defendant made an unconditional offer to the patent holder to enter into a license agreement. In the absence of such an offer, the compulsory license defense cannot successfully be used. According to the Karlsruhe Higher Regional Court, the defendant’s request to be notified of specific contractual conditions under which a single license is offered does not constitute the compulsory license defense. The court assumes that even if the ECJ modifies the criteria of the Orange-Book decision, an acceptable offer and the accounting for the past remain requirements of the compulsory license defense.84 It seems now that the developments within Europe undermine this.

iii) Experimental privilege

The so-called market authorization privilege states that the effect of a patent does not extend to experiments which are necessary to obtain an authorization or approval under pharmaceutical law. The experimental privilege permits experimental activities relating to the subject matter of the patented invention.

The Düsseldorf Higher Regional Court had referred to the ECJ the question of whether Article 10 of the Directive 2001/83/EC should be interpreted to mean that the protection under a patent is also excluded if a third party for purely commercial reasons offers or supplies a patented active ingredient to a manufacturer

of generics for use for privileged purposes.85 The dispute was settled.86 The court has assumed that such acts of provision fall under the market authorization privilege. However, it had to use significant dogmatic creativity to get to this conclusion.87

8. Exhaustion

If a patent holder or any other party authorized by the patent holder brings a product covered by the patent on the market within Germany or the EC/EEA, everyone can sell, offer, use, purchase, possess, etc. that product, even without the patent holder’s consent. The patent holder’s consent is not required. The patent holder’s right with regards to the product is not infringed; it is exhausted. The background of the exhaustion doctrine is the consideration that the patent holder should only once have the opportunity to enjoy the benefits of the proprietary right.

German courts deal with issues regarding exhaustion on a regular basis during proceedings. Exhaustion raises a number of problems that still have not been satisfactorily solved in detail. The German courts still tend to rule primarily in favor of the patent holder. Despite isolated approaches to the contrary in legal literature, case law strictly applies the principle that exhaustion can only be considered if the patent holder in Germany or the EC/EEA has consented to have the patented product placed on the market. The German patent law has not yet established a practice guided by substance, as has been represented, for example, in the US Supreme Court’s Quanta v. LGE decision. However, a certain shift in favor of competition and to the detriment of proprietary rights holders has emerged lately.

84 OLG Karlsruhe, WuW 2014, 519.85 OLG Düsseldorf, GRUR-RR 2014, 100 – “Market approval privilege”.86 Wuttke, Mitt. 2014, 452. 87 OLG Düsseldorf, GRUR-RR 2014, 100 – “Market approval privilege”, contrary LG Düsseldorf, 3 July 2012 – case 4a O 282/10, BeckRS

2013, 01711; see note of Hoppe-Jänisch, GRUR-RR 2014, 108.

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Exhaustion requires that the entire patented product has been placed on the market. If only parts of a product were placed on the market, exhaustion occurs only with regards to these parts but not with regards to the entire product. There are patents which, in addition to a component, protect whole systems which are produced with the component. If only the component (i.e., a chip) is placed on the market, the question arises whether the integration of the component into a system (i.e., a mobile phone) infringes the system patent or whether the alleged infringer can rely on an “extended exhaustion.” According to the Düsseldorf District Court, an “extended exhaustion” of a patent on a system can be considered when the invention is practically fully realized with the part that was placed on the market. If the part that is not placed on the market is merely a marginal ingredient for the concept of the invention, which the customer can easily combine with the part that was placed on the market, then exhaustion occurs with respect to the complete, patented product.88

The “Specific Mechanism” constitutes an exception from the principle of exhaustion for parallel imports of pharmaceuticals.89 It states that a patent for pharmaceutical substances is not exhausted with regards to products that were placed on the market in certain countries in Central and Eastern Europe before these countries joined the EU in 2004. However, this is subject to the condition that prior to those countries’ accession, no “equivalent protection” comparable to a patent could be obtained for the respective pharmaceutical substance. According to the Düsseldorf District Court, “equivalent protection” in the context of the “Specific Mechanism” requires an absolute protection of pharmaceutical substances. Protection certificates issued on the basis of method patents are not sufficient.90

Although the protection conferred by the patent is limited to the products that have been intentionally placed on the market, the right to remanufacture such products remains with the patent holder. However, the defense of exhaustion in relation to the maintenance and restoration of a product is only justified if such actions are merely carried out for maintenance or repair purposes but not to remanufacture the product. The Düsseldorf Higher Regional Court has indicated that the decisive factor for the differentiation between remanufacturing

and maintenance can be whether the replaced part was known in the prior art or whether it was at least obvious.91 According to the Düsseldorf District Court, the public’s expectations are irrelevant when balancing the patent holder’s legitimate interests against the buyer’s legitimate interests.92 The balancing of said interests is necessary for the differentiation between remanufacturing and maintenance.

Exhaustion does not apply if a software program implementing the teaching of the patent is publicly available for download but refers to the existing patent rights because it is obvious to the downloader that the patent holder has not consented to the use of such downloads.93

9. Employee inventions

The German Law on Employees’ Inventions (Arbeitnehmererfindungsgesetz) governs the legal relationship of employer and employee with regards to inventions an employee makes in the course of their employment (employee inventions). The German Law on Employees’ Inventions contains primarily provisions for the employees’ protection.

Although the employer is entitled to the employee inventions or the rights and assets arising from the invention, the employer does not per se acquire these by law. Rather, the employer has the opportunity to acquire the rights to an invention after the employee has notified the employer of the employee invention. The acquisition happens through the so-called claiming of an invention. The employee has a statutory obligation to notify the employer of the invention.

The rights to future employee inventions cannot be transferred effectively to the employer in advance. This is because the law prevents the parties to an employment contract from entering agreements that deviate from statutory provisions to the employee’s detriment prior to the notification of an invention. “IP Assignment Agreements” in employment contracts, which are standard in the United States, are therefore not effective in Germany with regards to inventions.

88 LG Düsseldorf, 3 June 2014 – case 4c O 98/13.89 The “Specific Mechanism” is regulated in the EU Accession Treaty of 16 April 2003.90 LG Düsseldorf, 26 August 2014 – case 4c O 116/13, BeckRS 2014, 17689.91 OLG Düsseldorf, 13 February 2014 – case I-2 U 90/12, BeckRS 2014, 05734.92 LG Düsseldorf, 3 June 2014 – case 4c O 98/13; insofar probably not compatible with OLG München, 13 June 2013 – case 6 U 3412/10.93 LG Düsseldorf, 3 December 2013 – case 4a O 199/12.

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The employer is obliged to pay to the employee a reasonable remuneration for claimed employee inventions in addition to and irrespective of their regular salary. The amount of the remuneration is based on the economic value of the invention. Employee and employer must agree the type and amount of the remuneration promptly after the claiming of the invention. If circumstances that were decisive for determining the amount of the remuneration change later materially, both employer and employee can request the respective other party’s consent to enter into a new agreement on the remuneration which reflects the changed circumstances. The Düsseldorf District Court has ruled that the termination or expiry of an employment relationship can constitute a material change of circumstances. If the parties to an employment convert the remuneration into a part of the employee’s continuous salary, the employee may be entitled to request the amendment of the agreed remuneration arrangement in the event of the employment relationship’s termination.94

The employer has a statutory obligation to register a claimed employee invention for the grant of a proprietary right (patent or utility model) in Germany. Generally, the employee’s entitlement to remuneration only refers to acts of utilization up to the expiry of the proprietary right granted with regards to their invention. The reason for this is that the employer loses the monopoly conferred by the proprietary right upon the expiry of said proprietary right.95 The entitlement to remuneration can survive the term of the proprietary right only in exceptional cases, for example, if the employer’s privileged position on the market conferred by the patent continues to exist after the expiry of the patent.

For the purpose of calculating remuneration and/or plausibility checks, the employee is entitled to information and financial reporting on turnover obtained by the employer through the invention. The entitlement to information and financial reporting is an annex to the claim for remuneration. Hence it can only exist for as long as the employee is entitled to receive remuneration. According to the Düsseldorf District Court, the employee’s entitlement to inventor’s remuneration and to information and financial reporting also do not extend beyond the term of the proprietary right if the proprietary right was abandoned prior to the expiry of its maximum term of protection with the employee’s consent by non-payment of the annual fees.96

In the view of the Düsseldorf Higher Regional Court, the right to information includes information on production quantities97 if the employee has a need to check these. This is the case if the employer has neglected their obligation to determine the employee’s remuneration, for a very long time.98 (If the employee and the employer cannot come to an agreement on the amount of remuneration, the employer has to determine the remuneration unilaterally.) However, there is no need99 for information on the volume of use.100 In the case decided by the court, the claimant’s new employer was a direct competitor of the old employer who was now the defendant. The court protected the defendant’s legitimate interest in maintaining confidentiality by granting an auditor’s qualified opinion. An auditor’s qualified opinion allows the defendant who is obliged to disclose information to disclose the names of their buyers and suppliers to a neutral auditor sworn to secrecy rather than to the claimant. In another case, the parties had entered into an agreement on remuneration but the turnover that was the basis for the calculation of the remuneration remained unclear. The court assumed by way of interpretation of the contract that the employer is not obliged to disclose information on payments unrelated to the invention.101

94 LG Düsseldorf, 25 March 2014 – case 4a O 122/12, BeckRS 2014, 19050. 95 The obligation to remunerate employee inventions is based on the monopoly principle which is the basis of the German law on

employee inventions. For example, the US law primarily follows the special payments principle.96 LG Düsseldorf, 3 December 2013 – case 4a O 13/12. 97 “Production quantity” means the quantity of the products manufactured by applying the patented method.98 OLG Düsseldorf, 24 October 2013 – case I-2 U 63/12, BeckRS 2013, 18744 = GRUR-RR 2014, 240 Ls., with reference to BGH,

GRUR 2010, 223, 227 – “Inner door reinforcement”.99 OLG Düsseldorf, 24 October 2013 – case 2 U 63/12, BeckRS 2013, 18744 = GRUR-RR 2014, 240 Ls. 100 “Volume of use” means the number of times the patented method is applied.101 OLG Düsseldorf, 28 February 2014 – case I-2 U 109/11, BeckRS 2014, 05729.

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Following the Federal Court of Justice’s decision Initial idea,102 the court has clarified that in case of an invalid claiming of the invention, the employer’s proprietary rights application does not automatically transfer to the employee.103 Rather, the employee must request the transfer of the patent application. This must be done in accordance with Section 8 of the German Patent Act (§ 8 PatG) within two years from the publication of the grant of the patent, unless the employer acted in bad faith. The employer did not act in bad faith if the patent application was prepared together with the employee and the employee did not notify the employer of their rights. It may be doubtful that bad faith can also be excluded when a company has the common misconception that the employer is per se entitled to an invention made by the employee in the course of their employment.104

The employee’s claims for appropriate remuneration lapse within the limitation period of three years. The limitation period commences at the end of the year in which the claim arose and the claimant (in case of remuneration claims the employee) becomes aware of the circumstances giving rise to the claim and gains knowledge of the debtor’s identity. It also commences when the claimant is unaware of the above but their unawareness is due to gross negligence. According to the Düsseldorf District Court, knowledge of the inventorship, the invention’s nature as employee invention, the claiming of the invention and the fact that the employer has used the invention are sufficient for the commencement of the limitation period even if only the essentials of these facts are known.105

II. Procedural law

According to German practice, two essential points on procedural law have to be made. One is to emphasize that with the possibility of summary proceedings, the German civil procedure law hands the affected patent owner a sharp sword to speedily enforce their rights. Within a

few weeks, the patent owner can obtain an enforceable preliminary injunction if the matter is urgent and the patent owner is entitled to the claim. The courts respond even faster to disputes in connection with trade fairs. On the other hand, the German patent litigation is still ruled by the principle of the bifurcation of infringement and invalidity proceedings. In infringement proceedings, the alleged infringer cannot successfully bring the argument that the claimed patent was granted wrongly. Although the infringement court can suspend the infringement dispute with regard to parallel pending proceedings regarding the legal validity of the patent, it very rarely does so. Given the significantly longer duration of validity proceedings compared to the duration of infringement proceedings, in many cases this is a strategic advantage for the patent owners, who often can enforce their rights without regard to their legal validity.

1. Main proceedings

The infringement proceedings follow very clear rules, which are written down in the German Civil Procedure Code (Zivilprozessordnung). Mostly, the procedural law leaves no room for judicial discretionary decisions.

i) Jurisdiction

The court will only deal with the matter if it has jurisdiction under the civil procedure rules.

According to Section 32 of the German Civil Procedure Code (§ 32 ZPO), the court within whose district an act was committed has jurisdiction for actions in tort. According to the Düsseldorf District Court, the fact that an offer on the Internet is worded in English does not preclude the court’s jurisdiction in accordance with Section 32 of the German Civil Procedure Code (§ 32 ZPO). Experience has shown that users within the court’s jurisdiction who are in command of the English language make use of the offer. Whether this also applies to other languages remains unclear.106

102 BGH, GRUR 2011, 733 – Initial idea.103 OLG Düsseldorf, 24 October 2013 – case I-2 U 24/12, BeckRS 2013, 18741. 104 Unclear OLG Düsseldorf, 24 October 2013 – case I-2 U 24/12, BeckRS 2013, 18741, with the thought that a certain level of knowledge

brought on by a patent department or legal department could conflict with this; without differentiation: Wuttke, Mitt. 2014, 452, 458. 105 LG Düsseldorf, 3 December 2013 – case 4a O 13/12.106 LG Düsseldorf, 8 May 2014 – case 4a O 195/12, BeckRS 2014, 09990.

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In the event of parallel proceedings abroad, the court has no international jurisdiction if the claim and the parties of the foreign proceedings are identical to those in German proceedings. According to the Düsseldorf District Court, the parties are not automatically identical if one is a GmbH and the other is its managing director. According to the court, the identity of the parties cannot be argued based on the general assumption of identical and inseparable interests. The fact that both courts assess whether the attacked products are covered by the patent-in-suit does not constitute a close enough connection to render joint proceedings and a joint decision necessary107 under Article 28 Para II of the European Jurisdiction and Enforcement Regulation (Art. 28 II EuGVVO)108.

According to the Munich I District Court, a dispute over the continuous existence of patent licenses following the licensor’s insolvency constitutes a patent dispute.109

ii) Specification of the heads of claim (Klageantrag)

The claim must be submitted with a specific application that clarifies what exactly the claimant wants. The application must state with sufficient clarity which embodiments should be the subject of the injunction. In practice, this is not always complied with because the courts usually deem it sufficient that the patent owner simply repeats the wording of the asserted patent claim and applies for the opponent to be banned from, for example, distributing embodiments which meet these features.

According to the Düsseldorf Higher Regional Court, it is sufficient to repeat the wording of the patent claim in the heads of claim.110 To enforce the judgment, the operative part of the judgment can be interpreted on the basis of the grounds of the decision.111 However, the Munich Higher

Regional Court strongly agrees with the Federal Court of Justice’s decision Blown film extrusion and requests specified heads of claim.112 According to the Düsseldorf Higher Regional Court, if the patent claim contains alternative features, the heads of claim that merely repeat the wording of the patent claim must be interpreted as a request for a judgment with regards to all alternatives.113

iii) Substantiation, denial and standard of evidence

To what extent and in what depth the parties have to plead questions of patent infringement is often disputed between the parties involved.

Pursuant to Section 296 Para II of the German Civil Procedure Code (§ 296 II ZPO), evidence that was submitted late may be rejected if the delay was caused by gross negligence and if its admission would delay the settlement of the dispute. According to the Düsseldorf District Court, the claimant must submit evidence on time with regards to their right to sue (Aktivlegitimation). In the case in question, the claimant applied at the hearing to have their right to sue confirmed through the hearing of a witness. In the court’s view, this required at least an additional hearing on another date. The delay of the submission of the evidence was caused by the claimant’s gross negligence.114 As a precaution, the evidence must be submitted at the latest when the reply is submitted if it cannot be ruled out that the fact for which evidence is required will be denied in the rejoinder.

It should also be noted that, according to the Düsseldorf Higher Regional Court, a general denial without submitting statements on individual features of the patent claim results in the opposite party’s statement of facts is deemed to be admitted.115

107 LG Düsseldorf, 3 April 2014 – case 4b O 114/12, BeckRS 2014, 08590. 108 (EU) Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.109 LG München I, 21 August 2014 – case 7 O 11811/12, BeckRS 2014, 16898. 110 OLG Düsseldorf, 15 May 2014 – case I-2 U 74/13, BeckRS 2014, 14360; also LG Düsseldorf, 24 October 2013 – case 4c O 3/12

with reference to Kühnen, GRUR 2006, 180; contrary BGH, GRUR 2005, 569 – Blown film extrusion; in agreement with the Federal Court of Justice is probably the LG München I, 30 December 2013 – case 7 O 5327/13, BeckRS 2014, 05284.

111 OLG Düsseldorf, 15 May 2014 – case I-2 U 74/13, BeckRS 2014, 14360.112 OLG München, 14 November 2013 – case 6 U 317/12. 113 OLG Düsseldorf, 15 May 2014 – case I-2 U 74/13, BeckRS 2014, 14360. 114 LG Düsseldorf, 28 March 2014 – case 4a O 11/13.115 OLG Düsseldorf, 27 March 2014 – case I-15 U 29/14, BeckRS 2014, 14729.

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In principle, each party to civil proceedings must submit statements on the facts alleged by the respective other party. However, a party can plead ignorance regarding facts that are neither based on the party’s own actions nor on their own perception. However, the courts are very reluctant in allowing a party to plead ignorance in patent infringement proceedings. Pleading ignorance with regards to the design of the attacked embodiment is not even permitted if the embodiment is neither manufactured nor distributed by the defendant. This applies at least if the disputed products are freely available.116 According to the Düsseldorf District Court, the defendant’s argument that the patent’s scope of protection is unclear does not constitute a denial of the infringement allegation.117 The defendant cannot effectively dispute the implementation of a feature by merely doubting the claimant’s findings if the defendant fails to demonstrate in addition that the attacked embodiment has actually not been implemented.118

In the event that a method for the manufacturing of a new product is the subject of a patent-in-suit, the following applies in accordance with Section 139 Para III of the German Patent Act (§ 139 III PatG): The same product manufactured by the defendant is deemed to have been manufactured in accordance with the patented method unless the defendant proves that this is not the case. Hence it is presumed in favor of the patent holder that the patent is infringed. The Hamburg District Court has deemed the claimant’s reference to a patent office’s research report sufficient proof of the product’s novelty under Section 139 Para III of the German Patent Act (§ 139 III PatG).119 The Düsseldorf Higher Regional Court’s view that the use of a patented method can be demonstrated indirectly with indications that allow conclusions on the use of that method is important with regards to the proof of an infringement.120

The Düsseldorf District Court has made it clear once again that a patent infringement cannot be deemed undisputed like a pure statement of fact. Hence it is the claimant’s responsibility to present facts that enable the court to

assess the infringement of the patent-in-suit.121 The decision does not question the courts’ sensible practice to refrain from addressing undisputed features unless the parties’ unanimity is based on evidently wrong assessments.

iv) Criteria for suspension

As previously stated, the issue of the suspension of an ongoing infringement dispute with regard to parallel pending proceedings regarding the legal validity of the patent is of considerable importance due to the separation principle that is in force in Germany. However, the obstacles to a suspension are large.

a) Patent

In patent infringement proceedings, most courts require a high prospect of success in a pending nullity action before granting a suspension.

In contrast to other courts, the Braunschweig District Court has fewer requirements and considers the fact that statistically the majority of patents do not survive nullity proceedings undamaged. The court had also focused on the fact that the relevant patent-in-suit had not yet been successfully enforced through litigation and nullity proceedings had not been successfully disputed abroad.122

A decision of the Düsseldorf District Court confirms the reluctance to suspend with regards to the lack of an inventive step. In the decision in question, the court rejected a suspension with the dubious argument that the expert may have made an intellectual effort in combining prior art references.123 The court overlooks the fact that a mere intellectual performance cannot be equated with an inventive step. In other proceedings, the court has shown that it considers foreign judgments on parallel proprietary rights very cautiously.124 Conflicting expert opinions on the inventive step also exclude a suspension.125 Even an interim decision of the Federal Patent Court that is favorable for the defendant is no guarantee of a suspension, especially not if the court takes a different view on patent interpretation.126

116 OLG Düsseldorf, 13 February 2014 – case I-2 U 42/13, BeckRS 2014, 05732. 117 LG Düsseldorf, 5 December 2013 – case 4b O 78/13. 118 LG Düsseldorf, 7 November 2013 – case 4b O 199/11. 119 LG Hamburg, 24 January 2014 – case 315 O 234/12. 120 OLG Düsseldorf, 18 July 2013 – case I-2 U 99/11, BeckRS 2013, 18748. 121 LG Düsseldorf, 18 March 2014 – case 4c O 73/13.122 LG Braunschweig, 20 November 2013 – case 9 O 88/13. 123 LG Düsseldorf, 29 April 2014 – case 4b O 56/12. 124 LG Düsseldorf, 4 July 2013 – case 4b O 9/12, eventually contrary to the decision of the US FCCA, 30 August 2006 – case 05-1426. 125 LG Düsseldorf, 3 September 2013 – case 4a O 108/12 U., BeckRS 2014, 00495; The LG Düsseldorf seems to rely on interim decisions

of the EPO that are in favor of keeping the patent: LG Düsseldorf, 5 December 2013 – case 4b O 168/11. 126 LG Düsseldorf, 22 July 2014 – case 4c O 70/13.

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The Munich Higher Regional Court deems it sufficient in appeal proceedings if the nullity proceedings have an overwhelming prospect of success. However, this does not apply if the nullity action was filed late without good reason. In this case, a requirement for a suspension is that a summary assessment already shows that the late attack on the patent’s validity will certainly destroy the patent.127

The Munich I District Court has stated that the defendant should attack the patent-in-suit at the latest in response to a pre-trial warning. A later attack by the defendant on the patent-in-suit tends to negate a suspension.128

According to the Düsseldorf District Court, the suspension of infringement proceedings due to other proceedings, which are preliminary, may even be permitted if the other proceedings have no legal effect on the infringement proceedings because the parties in the respective proceedings are different.129 The subject of the other proceedings was an action for a declaratory judgment regarding a license agreement between the claimant in the infringement proceedings and a third party from which the defendant in the infringement proceedings derived their right of use.

b) Utility model

If cancellation proceedings are pending at the German Patent and Trade Mark Office (DPMA) with regards to a utility model, the court of the infringement proceedings may order the suspension until the DPMA has found a decision. If the infringement court deems the disputed utility model invalid, it must order the suspension.

The Munich I District Court now takes the view that a suspension should be ordered if it can be doubted that the DPMA will confirm the attacked utility model’s protectability.130 In contrast, the Karlsruhe Higher Regional Court has found that a suspension requires a substantial probability of destruction of the utility model if the DPMA has already ruled favorably on the legal validity of the disputed utility model.131

v) Miscellaneous

At a party’s request, the court may order the other party to present certain documents as evidence. On several occasions the Düsseldorf District Court has taken a view on applications for an order to produce documents that were seized in parallel proceedings in the USA. Those were seized as part of a “discovery” and were subject to a “protective order.” In one case, the court has acknowledged that in such a situation, the party who bore the burden of proof must not disclose the content of documents under a “protective order” of which it gained knowledge via the “discovery” as this would violate the “protective order” and it would result in immense procedural disadvantages for the claimant in the US proceedings. However, the court requested that the party perform their procedural obligations and thus specifies, although without reference to individual sources of knowledge, which facts they intend to make the subject of the proceedings.132 It is not very clear how this is supposed to work. In another case, the court has rejected the application for an order to produce documents. The court did not take into account that the party who bears the burden of proof faces the risk of prosecution in the United States. According to the court, the requesting party would have to substantiate clearly the content of those documents whose production is requested. If the requesting party feels barred from this substantiation in view of the “protective order,” this would not justify an order to produce documents in Germany. The court did not state why.133

According to the Düsseldorf Higher Regional Court, the defendant in case of a cease-and-desist order is not obliged to ensure that products already sold by him but not yet distributed by the defendant’s buyers are removed from the market.134

127 OLG München, 7 November 2013 – case 6 U 5165/12. 128 LG München I, 30 December 2013 – case 7 O 5327/13, BeckRS 2014, 05284. 129 LG Düsseldorf, 11 July 2013 – case 4b O 164/11, BeckRS 2013, 17113.130 LG München I, 17 July 2013 – case 21 O 22131/12; contrary LG München I, 19 May 2011 – case 7 O 6033/10, BeckRS 2012, 04008. 131 OLG Karlsruhe, GRUR 2014, 352 – “Punching tool”.132 LG Düsseldorf, 25 July 2013 – case 4c O 26/13. 133 LG Düsseldorf, 12 December 2013 – case 4b O 87/12, BeckRS 2014, 01803.134 OLG Düsseldorf, 22 September 2013 – case 2 W 37/11, BeckRS 2013, 21057; contrary OLG Köln, GRUR-RR 2008, 365 –

“Furniture dealer”.

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Pursuant to Section 140c of the German Patent Act (§ 140c PatG), the court may order the defendant at the claimant’s request to produce certain deeds or to submit for inspection items in the defendant’s possession or to enable the inspection if this is necessary for the claimant’s evidence. The Munich Higher Regional Court has held that an application for a production order under Section 140c of the German Patent Act (§ 140c PatG) may be made either via an application for a preliminary injunction or by way of an action (by stages).135

2. Summary proceedings

In summary proceedings, the applicant has to substantiate two things: on the one hand, the existing claim in its merits and on the other hand, the reason why the matter should be decided in summary proceedings. The question of the grounds for a preliminary injunction and the question of urgency contained therein belong to this second aspect.

i) Grounds for a preliminary injunction

In addition to the urgency, the grounds for a preliminary injunction require that the patent or the utility model is likely to be valid. Unlike in the main proceedings, the court must consider this in its decision in summary proceedings. The courts request that the legal validity of the patent is sufficiently assured. According to the practice of the Düsseldorf courts, which do not always strictly abide by this principle, this requires that the patent has already survived opposition or nullity proceedings.

The Düsseldorf District Court makes another exception from the principle that the applicant must prove the validity of the patent. This time, the exception refers to the case that the defendant’s possibilities of defense are not limited because they lodged an opposition against the court order several months after they were served with it. In that case, the patent’s secured legal validity can already be assumed if the prior art would not have presented grounds for a suspension of the main proceedings. It is irrelevant that the defendant is a Chinese company for

which time-consuming translations had to be written. However, the grounds of the decision stating that such translations would also have been necessary in principal proceedings are questionable. This means that the court refrains from determining the actually relevant issue of whether the defendant was able to defend themselves sufficiently in light of the circumstances (even in fictitious principal proceedings).136

The Düsseldorf District Court seems to waive the requirement of a positive decision on the patent’s legal validity if the legal validity was accepted by a company, the business of which the defendant took over via an asset deal.137

In cases where manufacturers of generics asserted a patent infringement, the courts have sometimes waived the requirement of a positive decision on the patent’s validity as evidence for a sufficient legal validity. The reason for this was often the enormous damage the generics companies would cause if the patent would later be upheld. In such exceptional situations, it is unreasonable for the claimant to await the outcome of opposition or nullity proceedings. According to the Düsseldorf District Court, the case law developed on generics cannot be transferred to other cases where competitor drug manufacturers are involved who undergo authorization procedures for the attacked product based on their own research. In such cases, the courts still require in summary proceedings that the legal validity of the patent is sufficiently solid. This usually means that the patent must have already survived opposition or nullity proceedings.138

According to the Düsseldorf District Court, the mere fact that the defendant is a generics manufacturer does not justify the grant of a preliminary injunction based on a utility model. The case law applicable to patents cannot be transferred to generics manufacturers’ acts of infringements regarding a utility model, as a utility model is an unexamined proprietary right.139

135 OLG München, 14 January 2014 – case 6 W 393/13. 136 LG Düsseldorf, 8 May 2014 – case 4a O 68/13, BeckRS 2014, 10849, in this case a period of more than five months lapsed until

opposition proceedings were initiated. 137 LG Düsseldorf, Urt. v. 5.11.2013 – 4a O 69/13. 138 LG Düsseldorf, Urt. v. 24.10.2013 – 4c O 84/13. 139 LG Düsseldorf, Urt. v. 12.9.2013 – 4b O 43/13, BeckRS 2013, 16501; Urt. v. 12.9.2013 – 4b O 44/13.

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The fact that an attacked embodiment has already been on the market for several years does not mean that there are no grounds for a preliminary injunction. According to the Düsseldorf District Court, there is no principle stating that once a product has been on the market for a long time it can no longer be attacked by way of summary proceedings regardless of whether the applicant’s knowledge of the relevant circumstance or grossly negligent lack of such knowledge can be determined. Such protection against an application for a preliminary injunction regardless of the applicant’s knowledge of the product has no legal basis.140

The Düsseldorf Higher Regional Court has defused the sometimes inconsistent handling of urgency in cases concerning generics that was criticized in the last report. Thus, in a case in which the defendants in summary proceedings had lodged a nullity action only a few months previously and relatively shortly before the expiry of the proprietary right, the court rejected the Düsseldorf District Court’s approach. The district court had held that the defendant’s attack on the proprietary right’s validity must be evident to refute the grounds for an injunction.141 In case of an (supposed) attack on the proprietary right’s validity, sufficiently solid validity of the right should not be assumed if only the opposition or nullity proceedings initiated by a generics manufacturer have no evident prospect of success. In principle, it cannot be of notable interest to enforce an injunction that is based on a proprietary right whose validity the court does not regard as highly probable.142

ii) Urgency

The aspect of urgency is treated with rigor. The courts generally require that the owner of an infringed patent act against the infringement without undue delay. If they hesitate, they can only pursue their rights successfully in the main proceedings. In these cases this is called

self-refutation. The patent owner usually cannot delay for more than approximately six weeks until they apply for injunctive relief. The time period is calculated from the date on which an application with a chance for success could be filed against the alleged infringer. However, it is not always easy to determine when the time period begins in individual cases. It is also important in terms of urgency that the applicant pursues the proceedings without delay following the filing of the application. Hence it may conflict with the urgency requirement if the applicant applies for considerable deadline extensions for the submission of written statements.

On the question of urgency, the Düsseldorf District Court took the view that the applicant in summary proceedings does not have to take action against the patent immediately after obtaining knowledge of the opposition division’s decision in opposition proceedings. At least this applies in cases where the decision was appealed. However, the applicant must take action upon gaining knowledge of the operative part of the appeal chamber’s decision in order to swiftly assess the prospects of success of an application for an injunction and prepare the application. In any event, the urgency may be denied if seven weeks have lapsed since the applicant gained knowledge of the complete appeal judgment.143 If a utility model is the subject of an application for a preliminary injunction, the utility model’s registration date is relevant for the assessment of the urgency since the utility model owner’s right to sue (Aktivlegitimation) comes into existence at that point in time and only then do third parties need to observe the proprietary right.144 The patent holder may thoroughly examine the attacked embodiment and, for this purpose, wait for the alleged infringer’s upcoming appearance at a trade fair.145

140 LG Düsseldorf, Urt. v. 26.9.2013 – 4c O 78/13. 141 LG Düsseldorf, 15 November 2012 – case 4b O 123/12, BeckRS 2013, 02222.142 OLG Düsseldorf, 7 November 2013 – case I-2 U 94/12, BeckRS 2014, 04902 = GRUR-RR 2014, 240 Ls. 143 LG Düsseldorf, 22 April 2014 – case 4c O 3/14, BeckRS 2014, 19176. 144 LG Düsseldorf, 5 December 2013 – case 4b O 78/13.145 LG Düsseldorf, 5 December 2013 – case 4b O 78/13.

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The Hamburg District Court took the view that the advertising of a product at a trade fair abroad is not sufficient to set an urgency period in motion. Information obtained at a trade fair abroad does not indicate if—and if so, where—an act of infringement may take place in the form of the product being placed on the market.146 With regards to the urgency, it may be true that the patent holder does not already have to apply for a preliminary injunction upon gaining knowledge of an infringing product at a trade fair abroad. However, the court’s view that trade fairs abroad do not usually bear the risk of a first offering (of the infringing product) in Germany cannot generally be agreed upon.147 The court also assumed that the parent company’s management’s knowledge that is detrimental for the required urgency is attributable148 to the applicant of a preliminary injunction in analogy to Section 166 Para I of the German Civil Code (analog § 166 I BGB)149

3. Enforcement and stay of execution

In connection with the appeal, there is the option to make an application for an interim stay of execution. According to the Karlsruhe Higher Regional Court, a stay of execution cannot be ordered merely because of the possibility that the ECJ may change the criteria for the compulsory license defense under antitrust law.150 The court’s view that the claimant is a collecting society and thus not a player on the market is irrelevant.151

According to the Karlsruhe Higher Regional Court, a qualified note (interim assessment of the merits) of the Federal Patent Court (BPatG) must be considered as expert judgment in the context of an application for a stay of execution. Concerns regarding the legal validity of the patent-in-suit resulting from the qualified note usually lead to a stay of execution.152

The alleged infringer does not have to wait for an appeal in order to try to ward off the detriments of an impending enforcement. This is already possible in the first instance via an application for a stay of execution, which has to meet very high standards. A stay of execution pursuant to Section 712 of the German Civil Procedure Code (§ 712 ZPO) requires a situation threatening the existence of the alleged infringer.

The Düsseldorf District Court takes the view that it is not sufficient for an irreversible detriment under Section 712 Para I of the German Civil Procedure Code (§ 712 I ZPO) that the defendant operates a “one-product company.” The defendant must state to what extent an alternative to the attacked embodiment they can use. This includes a comparison of the revenues, costs and/or profits in case of the continued use of the attacked embodiment and the use of a technical alternative.153 The defendant does not face an irreversible detriment if the risk of insolvency through enforcement is eliminated154 via a letter of comfort from the defendant’s managing director. The court has not decided on the question of whether the mere possibility of a letter of comfort precludes the granting of a stay of execution. The general allegation of irreversible damage due to an interruption of the supply chain and a permanent exit from the market is not sufficient to assume damage in the amount of €100 million. Rather, the defendant must submit specific numbers in terms of revenue.155

4. Action for restitution

In principle, a final judgment cannot be attacked under German law. The judicial review of a final judgment is only possible in exceptional cases. The so-called action for restitution is admissible in the event that the patent-in-suit is eliminated retroactively, i.e., restricted or destroyed in opposition or nullity proceedings.

146 LG Hamburg, GRUR-RR 2014, 137 – Coronary stent.147 Wuttke, Mitt. 2014, 452, 453, with reference to the differentiated view of the OLG Düsseldorf, 23 February 2012 – case I-2 U 134/10,

BeckRS 2012, 07640.148 LG Hamburg, GRUR-RR 2014, 137 – Coronary stent; very cautiously Schramm/MüKo, BGB, 6.edition, 2012, § 166 marginal note 22.149 According to Section 166 Para I of the German Civil Code (§ 166 I BGB) a representative’s knowledge is attributable to the person

they represent.150 OLG Karlsruhe, WuW 2014, 519; EuGH C-170/13 – Huawei Technologies; see the referral decision of the LG Düsseldorf,

GRUR-RR 2013, 196.151 OLG Karlsruhe, WuW 2014, 519.152 OLG Karlsruhe, 29 August 2013 – case 6 U 15/12.153 LG Düsseldorf, 4 July 2013 – cases 4b O 13/12, 4b O 10/12, 4b O 201/11. 154 LG Düsseldorf, 4 July 2013 – cases 4b O 13/12, 4b O 10/12. 155 LG Düsseldorf, 7 November 2013 – case 4b O 199/11.

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The Düsseldorf Higher Regional Court has clarified that a ground for restitution is the final destruction of the patent-in-suit. If the ground for restitution occurs within the period for appeal the appeal, must be filed to bring the ground for restitution into the ongoing proceedings. However, the defendant in infringement proceedings is not obliged to keep the infringement dispute going by filing an appeal in the hope of obtaining a positive decision in nullity proceedings.156 The Munich I District Court takes the view that it is also irrelevant for the admissibility of an action for restitution whether the claimant in restitution proceedings could have achieved a suspension of the infringement proceedings with regards to ongoing nullity proceedings.157

III. Miscellaneous

1. Costs and value of the claim

The costs of patent litigation means in particular the respective legal fees and court costs. In addition, this includes extrajudicial costs such as, for example, the costs for the determination of the facts of the infringement including the costs for experts, translations and travel expenses. With regards to the costs, the German procedural law is led by the principle that the losing party pays the succeeding party’s incurred costs to the extent that they are necessary for their legal defense or the assertion of their legal rights. Pursuant to Section 93 of the German Civil Code (§ 93 ZPO), an exception to this is when the losing party did not give rise to the initiation of legal proceedings and acknowledges the asserted claims immediately. By acknowledging the asserted claims immediately, the defendant can shift the burden of legal costs to the claimant. An infringer gives rise to the initiation of legal proceedings if they do not respond

adequately to an extrajudicial warning by providing a cease-and-desist undertaking. Conversely, it is no cause for the initiation of legal proceedings if the patent owner refrains from issuing a warning unless the issuance of a warning would have been unacceptable to the patent owner.

The Düsseldorf District Court took the view that a breach of a cease-and-desist undertaking taking place between the pendency of an action158 and the service of the statement of claim on the defendant159 does not give rise to the initiation of legal proceedings under Section 93 of the German Civil Procedure Code (§ 93 ZPO). The court stated that only the defendant’s conduct prior to filing an action is relevant and subsequent behavior cannot give rise to the initiation of legal proceedings.160

With regards to the extent to which costs have to be reimbursed, it is to be noted that legal fees are determined on the basis of a statutory fee schedule depending on the value of the claim. In most cases, this fee is significantly below the actual costs incurred on the basis of hourly fee agreements. Thus, even the successful party can have a significant risk of costs.

According to the Düsseldorf Higher Regional Court, the increase of the value of a claim must be treated with particular caution if the application for an increase of the value of the claim is only made once it is obvious which party will win the dispute. The applying party must explain why they have not previously objected to the value of the claim.161 In the event of parallel claims against a legal entity and its legal representative, a significant reduction, here 70 percent, of the value of the claim concerning the legal representative is justified.162

156 OLG Düsseldorf, 16 January 2014 – case I-2 U 19/13, BeckRS 2014, 04506; in agreement LG München I, 13 December 2013 – case 21 O 19618/12.

157 LG München I, 13 December 2013 – case 21 O 19618/12.158 An action is pending on the date on which it is filed with the court.159 Pendency occurs when the action is served on the defendant.160 LG Düsseldorf, 17 April 2014 – case 4c O 33/13.161 OLG Düsseldorf, 15 May 2014 – case I-2 U 27/13.162 OLG Düsseldorf, 15 May 2014 – case I-2 U 27/13.

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2. Warning notice

In a warning notice, the proprietary rights holder denies that the alleged infringer is entitled to carry out commercial activities that are deemed to infringe the patent or utility model in question and requires the alleged infringer to issue a cease-and-desist undertaking with a penalty clause. The infringer must reimburse the proprietary rights holder for the costs of the warning notice based on the statutory fee schedule. In addition, the alleged infringer gives the proprietary rights holder cause to file an action if they do not respond to the warning notice.163 However, a warning notice also bears risks for the proprietary rights holder if the warning notice is unjustified and thus unlawful. The costs for an unjustified warning notice are not recoverable. In addition, an unlawful warning notice may render the proprietary rights holder liable for damages.164 The alleged infringer may file a negative declaratory action with the aim to have the court determine that the disputed activities do not infringe the proprietary right.

The Düsseldorf District Court has ruled again in several cases on the lawfulness of a warning notice. Regardless of the proprietorship under substantive law, the rights holder who sends a warning notice must be listed in the patent register.165 This is not conclusive if, in accordance with the Federal Court of Justice’s decision Milling process, the rules on registration are seen as rules on the right of action under procedural law.166 Moreover, the court requires that the scope of protection conferred by the patent/utility model is correctly described in its entirety; stating the number and title of the proprietary right as well as the attacked embodiment is not sufficient.167 In addition, the facts of the infringement and the realization of all characteristics must be explained

to the alleged infringer.168 It is not easy to reconcile this with the fact that the infringer is generally required his or herself to investigate third-party proprietary rights prior to the commencement of the use of the relevant product.169

According to the Düsseldorf District Court, the reimbursement of costs for the defense against a warning notice includes lawyer fees and patent agent fees, regardless of the complexity of the matter. It is irrelevant whether the alleged infringer could have considered the question of the validity of the proprietary right and thus the involvement of a patent agent as subordinate because the infringement claim was not justified.170

As already mentioned above, pursuant to Section 93 of the German Civil Procedure Code (§ 93 ZPO), the claimant shall bear all legal costs if the defendant has given no cause for legal action and accepts the asserted claims immediately. This also applies to preliminary injunctions. In patent infringement matters, the lack of response to a warning notice usually gives rise to the initiation of legal proceedings. In principle, if the proprietary rights owner does not serve a warning notice on the alleged infringer prior to filing an action, the latter cannot give rise to the initiation of legal proceedings or an application for a preliminary injunction. If then the defendant accepts the claim immediately, the claimant/applicant usually bears the legal costs. However, in exceptional cases a warning notice is dispensable to avoid a decision on costs in accordance with Section 93 of the German Civil Procedure Code (§ 93 ZPO). This is the case if it was unreasonable to expect the proprietary rights holder to send a warning notice or if this would have jeopardized the enforcement of their claims.171 The Düsseldorf District Court considers

163 This has the consequence that the defendant still has to bear the legal costs if they accept the asserted claims immediately.164 For example, if a company that wrongly received a warning notice ceases to manufacture or distribute the allegedly infringing

products and thereby incurs a loss.165 LG Düsseldorf, 11 February 2014 – case 4a O 88/12, BeckRS 2014, 14357; Cepl, GRUR-Prax. 2014, 387; of a different view Kühnen,

Hdb der Patentverletzung, 7. edition, 2014, Rn. 727, who does not assume an unlawful warning notice if an entry in the register does not exist but considers a notice of the transfer of rights necessary.

166 BGH, GRUR 2013, 713, 716 – Milling process. 167 LG Düsseldorf, 11 February 2014 – case 4a O 88/12, BeckRS 2014, 14357. 168 LG Düsseldorf, 12 June 2014 – case 4a O 19/13; less strict Kühnen, Hdb der Patentverletzung, 7. edition, 2014, Rn. 733, according to

which the facts of the infringement should be explained. 169 Kühnen, HdB der Patentverletzung, 7. edition, 2014, Rn. 1197.170 LG Düsseldorf, 22 October 2013 – case 4a O 14/13. 171 The background of this exception is the warning associated with a warning notice. As a consequence of the warning notice, the alleged

infringer could “dispose of” the (allegedly) infringing items and thus make it difficult or impossible to prove the infringement.

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a warning notice to be entirely unnecessary if the infringing items, in this case pharmaceuticals, can easily be disposed of and a claim for sequestration172 is asserted. Section 93 of the German Civil Procedure Code (§ 93 ZPO) is not applicable in this case.173

A warning notice must be distinguished from a so-called notice for production of legitimacy claim. In a notice for production of legitimacy claim, the proprietary right holder notifies the alleged infringer of the patent/utility model and requests notice as to why the alleged infringer feels entitled to manufacture a certain product or place it on the market. In contrast to the warning notice, the notice for production of legitimacy claim is for information only. It is not a request to refrain from carrying out a particular activity but a request to exchange views. The costs for a notice for production of legitimacy claim are not recoverable. A negative declaratory action filed by the recipient of a notice for production of legitimacy claim is usually not admissible due to lack of legally protectable interest.174 Due to the different consequences of a warning notice on the one hand and a notice for production of legitimacy claim on the other hand, the courts must clarify which of the two is the subject of the dispute, if in doubt.

According to the Düsseldorf Higher Regional Court, a document is a warning notice if it is partially worded as a notice for production of legitimacy claim but refers to an enclosed cease-and-desist undertaking draft. The enclosure of such an undertaking makes it clear that the proprietary rights holder expects a certain conduct. This is not changed by the fact that the cease-and-desist undertaking is only required in case there is no justification

for the use of the product in question.175 According to the Düsseldorf District Court, the classification of a document as a warning notice does not require an explicit threat of legal action if the context allows the conclusion of a serious and final cease-and-desist request, but in any case, if it is obvious, then the defendant may also take legal action.176

3. Security for legal costs

If the defendant is not domiciled in the EU or the EEA, they must provide security for legal costs at the defendant’s request under Section 110 of the German Civil Procedure Code (§ 110 ZPO). This shall save the defendant in the event of their winning the dispute from having to enforce a favorable decision on costs outside the EU/EEA.

The Düsseldorf District Court takes the view that the location of the claimant company’s administrative headquarters is irrelevant if it has a registered office with a permanent delivery address in an EU or EEA member state.177 It is also irrelevant if the address is that of a law firm if the engagement of a law firm for the receipt of documents is common practice. Section 110 of the German Civil Procedure Code (§ 110 ZPO) does not protect the defendant from the risk of not being able to enforce a claim for reimbursement. In any legal dispute, the opposing party bears the risk of an unsuccessful enforcement due to the other party’s lack of assets.178 The Munich Higher Regional Court takes the view that the claimant must provide security payment in (usually) three instances for all possible legal costs.179

172 In the context of a preliminary injunction, a sequestration means the safekeeping and managing of the subject of the dispute by a trusted third party, e.g., a bailiff. It serves the purpose to prevent the opposing party from taking the subject/s of the dispute away. In the present case, all allegedly infringing pharmaceuticals were meant to be kept safe until an agreement or a decision was reached on the actual existence of the proprietary right holder’s/applicant’s claim for destruction.

173 LG Düsseldorf, 22 October 2013 – case 4a O 14/13. 174 After receipt of a warning notice, a legally protectable interest for the filing of a negative declaratory action usually exists. This is the case

on the one hand because due to the “strict” warning notice, the alleged infringer is at risk of facing a patent infringement action; on the other hand, because they are liable to pay a contractual penalty if they do not refrain from carrying out the disputed activity despite having issued a cease-and-desist undertaking with a penalty clause.

175 OLG Düsseldorf, GRUR-RR 2014, 315, 316 – “Urn”.176 LG Düsseldorf, 22 October 2013 – case 4a O 14/13; eventually in agreement 11 February 2014 – case 4a O 88/12, BeckRS 2014, 14357. 177 LG Düsseldorf, 29 July 2014 – case 4b O 24/14, BeckRS 2014, 15304; contrary BGH, NJW 2002, 3539, 3540; BGH, NJW-RR 2005, 148;

OLG München, 24 June 2010 – case 29 U 3381/09, BeckRS 2010, 18320. 178 LG Düsseldorf, 29 July 2014 – case 4b O 24/14, BeckRS 2014, 15304. 179 OLG München, 20 March 2014 – case 6 U 187/13.

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