Executive Summary:
Four major changes
- Synchronisation of patent infringement and nullity proceedings improved*
- Claims to injunctive relief under patent and utility model law limited in exceptional cases**
- German Trade Secret Law to be applied in patent and utility model disputes**
- Term for entering national phase from a PCT application in Germany extended from 30 to 31 months*
* Entering into force on 1 May 2022
** Entered into force on 18 August 2021
Detailed:
More than 10 years have passed since the last major modernisation of German intellectual property law. Germany continues to be a popular location for IP, both in Europe and internationally. Key factors include swift court procedures, good predictability and comparatively low costs of the proceedings as well as sound and internationally pioneering case law. In order to maintain these advantages in the future, German parliament has reviewed whether the current legal situation still meets the requirements that are placed on effective and balanced protection of intellectual property rights. As a result, the above-mentioned amendments 1. to 4. have been or will be implemented. Legal basis for this is the 2nd German Patent Law Modernization Act (PatModA2) of August 10, 2021. Among others, this bill amends the German Patent Act (PatG; see PatModA2, Art. 1), the German Act on International Patent Treaties (IntPatÜbkG; see PatModA2, Art. 2), and the GermanUtility Model Act (GebrMG; see PatModA2, Art. 3).
1. Improved synchronisation of patent infringement and nullity proceedings*
In Germany, infringement on the one hand and the legal validity of a patent on the other hand are decided by different courts due to the principle of bifurcation: infringement proceedings are conducted in the first instance by district courts (Landgerichte) with specialized patent litigation chambers, while validity is decided by the Federal Patent Court (Bundespatentgericht). Obviously, validity of the patent is highly relevant to the infringement proceedings. However, it is the Federal Patent Court that decides on the validity, where revocation proceedings can take several years due to personnel shortages.
The district court is thus put into the awkward situation of either deciding on legal validity of the patent on their own or staying the infringement proceedings. In the first scenario, it is not unlikely that a patent found valid by the district court will ultimately be revoked by the Federal Patent Court. Staying the proceedings, on the other hand, is a measure that is unpopular with all parties to the proceedings. Following the modernization, both scenarios may still occur, but hopefully less frequently.
To this end, §§ 82 and 83 PatG were amended to include terms for filing pleadings to ensure that the Federal Patent Court issues its provisional opinion within 6 months. The opinion shall then be transmitted ex officio to the district court which has to decide on infringement of the patent (see Art. 1 No. 31 a) PatModA2). Although this is optional , it is expected that summary examination of the prospects of success of the invalidity proceedings will be facilitated for the infringement court.
The practical effects of these new regulations remain to be seen, although cautious optimism seems to be in order, provided that the personnel capacities of the Federal Patent Court are increased to be able to cope with the expected additional workload.
2. Limited claims to injunctive relief under patent and utility model law in exceptional cases**
§ 139 (1) PatG and § 24 (1) GebrMG now provide that infringement of an IP right does not necessarily give rise to a claim for injunctive relief (see Art. 1 No. 36 and Art. 3 No. 9 PatModA2). This has already been decided in principle by the German Federal Court of Justice (Bundesgerichtshof) in 2016 in its decision "Wärmetauscher". A claim to injunctive relief is precluded,
≫ … insofar as the claim would lead to disproportionate hardship for the infringer or third parties not justified by the exclusive right due to the special circumstances of the individual case and the requirements of good faith.≪
Such disproportionality seems to be confirmed, for example, if smallest parts of a complex product infringe a patent, but a corresponding change in production would be accompanied by costs for e.g., new development or stop in production stoppage, which would clearly exceed the value of the infringing parts.
If such injunctive relief is limited or excluded,
≫ … the injured party shall be granted appropriate monetary compensation.≪
Claims for damages pursuant to § 139 (2) PatG or § 24 (2) GebrMG remain unaffected.
At present, it is expected that a limitation or exclusion of the right to injunctive relief will only be applied very cautiously, because such a finding requires special circumstances and thus should represent an exception.
3. German Trade Secret Law to be applied in patent and utility model disputes**
In patent or utility model infringement proceedings, an alleged infringer oftentimes has to strike a careful balance between defending themselves against the infringement claim and disclosing technical details which they would not publish under other circumstances due to their trade secret character.
Against this background, the legislator has created a protective space in which §§ 16 to 20 of the German Trade Secret Law (GeschGehG) are to be applied mutatis mutandis in patent or utility model litigation pursuant to § 145a PatG or § 26a GebrMG (see Art. 1 No. 38 and Art. 3 No. 11 PatModA2). These enable the court to classify information submitted in the proceedings as confidential and to punishably oblige the parties to maintain secrecy even beyond the patent or utility model dispute proceedings.
How often this option will be used in practice is hard to guess. Obviously, the respective opponent cannot be completely excluded because of the right to be heard. On the other hand, by limiting access to certain information, it can at least be ensured that the information is not disclosed to the public. Once information has been classified, there are now extensive options available to the informant to ensure that it is treated as such by the informed. This a significant improvement over the past.
4. Term for entering national phase from a PCT application in Germany extended from 30 to 31 months*
For PCT applications with a priority date on or after November 01, 2019, a term of 31 months for entering the national phase in Germany now applies according to § 4 IntPatÜbkG (see Art. 2 No. 1 PatModA2). The previous deadline in this context was 30 months, so applicants now have one month more to nationalise their PCT application in Germany.
* Entering into force on 1 May 2022
** Entered into force on 18 August 2021
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