Update: Recent Developments in German Patent Law – Automatic Injunction and Injunction Gap
Proposed Amendments to the German Patent Act by the German Government
The German government published its draft proposal for a revision of the German Patent Act (GPA) this week, inter alia, introducing statutory proportionality limitations to the automatic injunction remedy under the GPA and procedural measures for the protection of confidential information disclosed in court proceedings (Draft Proposal).
In the explanatory notes, the draft clarifies that the statutory proportionality limitations are not intended to change the law, but to simply codify existing fundamental legal principles as already applied by the German Supreme Court in its 2016 Wärmetauscher decision (docket no. X ZR 114/13). As a consequence, its application is limited to very exceptional cases only. The threshold to successfully argue this defense will still be extremely high. Automatic injunction in case of patent infringement remains the rule. This is good news for patent owners and Germany's patent system.
It is further good news, that the draft addresses the so called injunction gap issue caused by Germany's bifurcation system in patent matters (different courts dealing with patent infringement and its invalidity). Although the bifurcation system is one of the reasons why Germany has become such a hotspot for patent enforcement over the years, it also has its weak points. In particular, the backlog of pending nullity proceedings before the Federal Patent Court leading to the injunction gap leaves the defendant in a state of legal uncertainty for too long. Besides other concerns, this is seen as a severe threat to innovation and investment.
Whereas first instance infringement proceedings only take about a year, average nullity proceedings before the Federal Patent Court take between two and three years. Also, the courts dealing with patent infringement are very reluctant to stay the proceedings just because of parallel pending oppositions or nullity proceedings. They will only do so, if the defendant provides sufficient evidence and arguments to convince the court, that there is a substantial likelihood for the patent to be invalidated in the parallel proceedings. As a matter of fact, the courts stay the proceedings in approximately ten to twenty percent of the cases only.
The government's intention now is to streamline nullity proceedings in such a way, that the Federal Patent Court should provide to the parties and to any German court dealing with an infringement of the patent, its preliminary but detailed written assessment on the patent's validity within six months after the filing of the nullity suit. This proposal could be a very helpful approach to limit the negative effects of the injunction gap. However, this issue cannot be resolved by only setting a stricter statutory procedural framework. The Federal Patent Court's present staffing shortage remains a major problem. There is a strong need to significantly increase the number of judges. Further, it is important to ensure high quality standards. Otherwise, the courts dealing with patent infringement will not give too much notice to any of the Federal Patent Court's preliminary assessments.
For further information please contact Dr Sebastian Heim.
Dr Sebastian Heim
Lawyer, LL.M., Licensed Specialist for Intellectual Property Law