Patent Litigation in Germany An Introduction (I)

Transcription

1 Patent Litigation in Germany An Introduction (I) By Prof. Dr. Heinz Goddar, Dr. jur. Carl-Richard Haarmann Prof. Dr. Heinz Goddar Senior Partner, Boehmert & Boehmert, Munich, and Honorary Professor for Intellectual Property Law, University of Bremen, Germany Dr. jur. Carl-Richard Haarmann Attorney at Law, admitted at the European Trade Mark Office, Partner, Munich germany is one of the leading entry points into the European Union market, as well as being the largest marketplace in the European Union. Accordingly, Germany is the busiest and most attractive jurisdiction for an efficient patent enforcement strategy in Europe. However, the German legal system is, in some respects, different from the legal systems of many other European states and the United States, providing a unique set of circumstances for those wishing to litigate in Germany. This article seeks to help readers betters understand the procedural technicalities in German patent proceedings, a vital underpinning to any successful pleading before a German court. I. The Courts The Lower Courts Patent infringement actions fall under the exclusive jurisdiction a civil court. Consequently, filing a complaint in the civil courts is the standard method of asserting patent rights in the German legal system. The first instance hearing will be heard by one of the twelve District Courts ( Landgerichte ). Each District Court has at least one specialized patent dispute chamber ( Kammer für Patentstreitsachen ). Each chamber is composed of three judges especially trained to handle patent infringement cases. Although these judges generally do not have a technical background, many deal exclusively with patent and utility model infringement and accordingly have vast experience and technical insight. The District Courts situated in Düsseldorf and Mannheim are particularly experienced in patent infringement matters, and handle over two-thirds of the 1,400 or so first instance cases heard in Germany each year. JUVE Rechtsmarkt 04/10, 79. Decisions of the District Courts may be appealed to the second instance Higher Regional Courts ( Oberlandesgerichte ), which has concentrated IP litigation in its specialized Senate. Similar to the District Courts, three judges with legal training handle the cases in the Senate for Patent Disputes ( Patentsenat ) of the Higher Regional Courts. In principle, the Higher Regional Court handles only legal issues, but new facts in patent cases may also be, and generally are, considered at the discretion of the court. The Federal Court of Justice From the Higher Regional Courts, a further appeal may be made to the Federal Court of Justice ( Bundesgerichtshof ). Located in Karlsruhe, this is the court of last resort for both nullity and patent infringement proceedings. The court is subdivided into twenty-five senates and each case is handled by five judges. Patent appeal matters are heard by the 10th Senate of the Federal Court of Justice, the members specialize in handling intellectual property issues and are recruited from patent infringement chambers and senates of District and Appeal courts as well as the Federal Patent Court. The Federal Court of Justice, as far as patent dispute matters are concerned, only decides on points of law previously based on the facts established in the lower appellate court. Accordingly, no new facts are admitted, and writs and oral proceedings focus only on the disputed features. If sufficient relevant factual material has been collected by the previous proceedings, the Federal Court of Justice will render its judgement following 68

2 oral proceedings. The duration of the procedure, from filing the appeal to the oral proceedings, is typically 18 months to 24 months. In addition, the court may order expert opinions or scientific tests prior to the oral hearing which will add additional writs to the four to six writs typically exchanged between the parties. Federal Court of Justice patent infringement cases hearings comprise only a legal review. The decisions of the Federal Court of Justice can be unconditionally enforced without a security deposit. In most cases, only a general decision awarding damage claims can be made, with the specific amount of damage claims to be determined only following full disclosure of information. However, if the factual basis for the judgement is deemed insufficient, the Federal Court of Justice will refer the case back down to the Higher Regional Court for further proceedings to obtain further evidence. On the other hand, a nullity appeal before the Federal Court of Justice is a full review of the case both factual and legal. Judgment is rendered at the end of the oral hearing and sent for registry in the patent register if the judgment has amended or invalidated the contested patent claim(s). Furthermore, this judgment is final and effective immediately with no possibility or appeal or dissenting opinions. There are three possible outcomes: The patent remains unchanged, it is maintained with amended and limited claims, or declared invalid (which would happen under the European Patent Convention (EPC), i.e. European patents, as far as the German designation of the European patent is concerned). Written grounds are delivered two to three months following the judgment. The Federal Patent Court In patents cases, the Federal Patent Court has exclusively jurisdiction to handle nullity actions. Based in Munich, the Court handles cases by Senates with special technical focuses. Each Senate is composed of five judges, of which two have legal training and three are technically trained, with the presiding judge always being one with legal training. Unlike infringement proceedings, appeals against the decisions of the Federal Patent Court in nullity proceedings can be made directly to the Federal Court of Justice. However, in cases where the defendant has initiated an opposition or nullity suit which has been appealed to Federal Court of Justice, the latter will not render a decision on the infringement issue before a final decision on the validity of the patent has been reached. Counsel Any German attorney-at-law who has been admitted to the Bar ( Rechtsanwalt ) may represent a party in a District Court or Court of Appeals patent infringement proceeding. In addition to the attorney at law, a patent attorney may also be present in order to assist the lawyer in technical issues. However, patent infringement proceedings typically require parallel representation of each party by both a lawyer and a patent attorney, while nullity proceedings, as a matter of law, necessitate only representation by a patent attorney for each party. In-house lawyers may not represent their employer companies. Further, one criteria which is particular to the second level appeal proceedings in an infringement case at Federal Court of Justice is that the attorney at law representing each party in these proceedings must be an attorney who has been exclusively admitted to the Bar at the Federal Court of Justice. II. Bifurcation of Infringement and Validity Proceedings A fundamental feature of the German legal system is that patent infringement and validity proceedings are bifurcated that is, the patent infringement action and an action on validity are heard in separate instances and by two different, specialised courts. As stated above, validity proceedings for the German designation of a European patent or German national patent are heard exclusively by the Federal Patent Court ( Bundespatentgericht ) in Munich; appeals from these proceedings are heard by the Federal Court of Justice. On the other hand, civil courts have jurisdiction over infringement proceedings, and first instance appeals are made to the Regional Courts of Appeal. Second instance appeals are heard by the Federal Court of Justice which is the court of last resort for both infringement and validity proceedings despite the bifurcated proceedings. However, as a consequence of the separation of proceedings in Germany, a validity defence in infringement proceedings as such is only possible insofar as, if a separate attack against the validity of the patent in dispute (by opposition or nullity action) has been made, parties may motion the infringement court to stay the infringement procedure until the "A fundamental feature of the German legal system is that patent infringement and validity proceedings are bifurcated - that is, the patent infringement action and an action on validity are heard in separate instances and by two different, specialised courts." opposition/nullity procedure has reached a first instance decision on the validity of the patent in dispute, or even has come to a final decision. German infringement courts are obliged by law to assume the validity of the patent, and cannot hear validity arguments raised by the defendant in the infringement proceedings or in claim interpretation. Moreover, the court will typically not grant a preliminary injunction in preliminary proceedings if the defendant has initiated nullity proceedings or otherwise argued that the patent in question has doubtful validity. 1-2/2013 China IP 69

3 Further, the action cannot be dismissed based on a lack of validity of the plaintiff s patent. Thus, a defendant wishing to contest the validity of the plaintiff s patent must file a separate opposition or nullity action. In view of such pending opposition or nullity actions and a request by the defendant, the civil court can in principle render a decision to stay the infringement proceedings after the initial oral proceedings until a resolution has been reached. In practice, this rarely occurs, with fewer than ten percent of cases stayed in view of a pending nullity action. Of these cases, the general rule has been that the decision to stay infringement proceedings only occurs if the defendant introduces a new evidence which is clearly novel, which would definitively resolve the dispute and which was not previously considered during examination of the patent in question. This differs from the case of staying of infringement action in the appeal state, during which appeals in infringement proceedings are often stayed until the decision on a parallel opposition or nullity suit is final. III. Infringement Proceedings Pre-Trial Phase Patent protection in Germany is conferred from the publication of the grant of a German national patent (Section 58 (1) PatG), as well as from the grant of an European Patent for which German designation has been confirmed (Art. 97 (4) EPC). If a patent rights proprietor feels that his rights have been compromised, he may directly file an infringement action with the court, or serve a notice and warning to cease infringement letter on the suspected infringer before filing the writ of claims. One peculiarity of German Civil Procedural Law dictates that if the patent proprietor files an infringement action without notifying the infringer and the infringer immediately acknowledges the patent rights, the patent proprietor must bear the costs of the proceeding. These include the court fees, as well as the attorney fees of both parties. Thus, direct filing without a prior warning letter bears a degree of cost risk in Germany which, in principle, encourages the warning letter as a common practice. This warning letter is typically comprised of a short, non-detailed or technical explanation of the patent which has allegedly been infringed, a request to sign a cease and desist declaration as well as requests for "German Infringement courts are obliged by law to assume the validity of the patent, and cannot hear validity arguments raised by the defendant in the infringement proceedings or in claim interpretation." the disclosure of information, destruction of infringing items, payment of damages and compensation or cost reimbursement. After receipt of the letter, the two parties may enter into negotiations to resolve the issue. However, the lack of a sufficient response would suffice for the plaintiff the file a writ of claims without having to bear the costs of the proceedings. On the other hand, the practice of approaching an alleged infringer before initiating court proceedings brings its own risks. Faced with an accusation by the patent proprietor, the alleged infringer may initiate an action in another court in a European country, often where court proceedings are known to be quite slow, for a declaration of non-infringement involving the same parties and subject matter of litigation. Snidely termed the Italian Torpedo, after proceedings in Italian courts which, were formerly notoriously lengthy, this line of defence prevents a quick infringement proceeding and decision because Art. 27 (1) European Directive 44/2001 prevents the patent proprietor from continuing proceedings as long as the Torpedo Court remains undecided about its competence in the matter at hand, a process which can take up to seven years. However, the court selected as the place to launch the torpedo must have a clear relationship with the territory of the relevant member state. Otherwise there is a clear lack of jurisdiction and the declaration of noninfringement will be inadmissible and incapable of preventing a later patent infringement proceeding in Germany. Therefore, a patent right owner must first consider the likelihood of an infringer resorting to the Torpedo defence before serving a cease and desist letter. If it is likely, then the proprietor should directly file an action with the appropriate civil court and send the warning letter immediately after. In the alternative, the right owner should send the warning letter immediately before filing the civil action in order to avoid the cost risks of immediate acknowledgement. Selecting a Court Under German law, a civil court has jurisdiction over the physical location of where the infringement took place, including where there were offers concerning infringing products, as well as at the business seat of the defendant. Because offers for sale over the internet fall under these criteria, German law allows the plaintiffs in industries which are affected by offers via internet sale to effectually pick any of the available forums in which to plead their case. Once selected and having received the writ of claims, the court will serve the defendant with the writ of claims. Time frames and procedures will vary, however in the court of Düsseldorf, in many cases the first oral hearing takes place approximately four to six weeks after the claim has been served. Formalities and procedural issues compose the bulk of this oral hearing terms for filing defence as well as counterarguments (Replik) and the second defence (Duplik) are set in this initial oral hearing, and the date for main oral proceedings is fixed. In other courts, preliminary written proceedings substitute 70

4 for these first oral hearings, and the date for main oral proceedings is typically only fixed after the defence writ. The Writ of Claims A writ of claims ( complaint ) in Germany filed by the plaintiff typically begins with a short introduction of the parties, as well as a descriptive introduction of the invention, patent claims, and prior art. A claim analysis is conducted after this section, followed by a description of the allegedly infringing embodiment or process as well as a comparison of the claim with the allegedly infringing embodiment or process. The Defence and Subsequent Exchange of Writs In response to the writ of claim, the defendant will file a complete defence writ responding to the plaintiff s accusations. Failing to do so implies the immediate risk of the court rendering a judgement by default. After receipt of this defence writ, the plaintiff will file additional arguments in support of his infringement claim, as well as comments on the defendant s defence arguments. The defendant will then have the option to file a second defence writ in response to the plaintiff s additional arguments. In most cases no further writs are admitted after this second defence writ. The German legal system is very strict on timelines for writs the terms for filing writs are clearly fixed by the court, and requests for extensions are rarely granted. Prior to the Oral Hearing All facts and evidence must be presented in writing prior to oral hearing. Parties must concentrate their arguments on the main topics of disagreement. Often, only one or two features of the relevant claim are disputed. The plaintiff must demonstrate that all features of the relevant claim of the patent in dispute are realized by the defendant s item or process. The defendant must show that at least one feature is not realized. Additionally, the procedure for gathering evidence is another aspect which differs in the German legal system. No depositions are allowed into evidence, and each party must present all evidence in support of its claims and statements, as well as on the disputed facts, in the form of exhibits sent to the court. The court does not investigate facts autonomously, but completely relies on the facts and evidence presented by the parties. Parties may name witnesses, but witness statements are rarely given much weight by the court, there is no cross examination process, and witness statements are rarely sworn in. In addition, parties may present expert opinions and test results, but a court typically does not order expert testimony unless the two parties present contradictory expert statements (in Düsseldorf this occurs in less than 10% of the cases). On technical issues, the court typically relies on its own depth of technical insight and experience to render its decision. A consequence of the lack of court autonomous investigations is that the burden of proof is on the patent proprietor to verify that an alleged infringer has unlawfully exploited his patent by manufacturing, offering for sale, leasing, importing and exporting, or using the product or process claimed in the patent. This entails two parts proprietor must submit facts and evidence supporting that the invention as understood from the teachings of the claim has been used, as well as the details of the infringement in case the alleged infringer refutes the alleged infringement as such. For method or process patents, however, the burden is on the alleged infringer to prove that a new product which is suspected to be produced by a patented process was, in fact, not manufactured using the patented method. Oral Hearings and Enforcement of First Instance Infringement Judgements To commence, the presiding judge gives a short introduction of the case which focuses on the features of the patent disputed between the parties. In addition, the presiding judge follows with the court s preliminary opinion based on the parties writs, and then the parties may comment on the issues in dispute. The attorney at law usually takes the leading role in the pleading. However, there is no extensive pleading; the pleading is typically focused on key issues and directed by the court. Typically, in cases of normal complexity, the duration of the oral proceedings ( trial ) does not exceed one hour, with 1-2 hours generally considered as sufficient for more complex cases. Following the parties pleading, the court will render a decision. If witnesses need to be heard or an expert opinion is required by the court appointed expert, a new oral hearing will be summoned. Parties will once again have the opportunity to file writs and comment on the results of the oral proceedings, comment on the statements of the court expert, etc. The court can also decide to stay proceedings in view of pending nullity actions. However, this is rarely done. Over 90% of the time, the Düsseldorf and the Mannheim court will render a judgment within a few days, or a maximum of about four weeks, after oral hearing, and finally the written grounds will be issued a few weeks after that at the latest. This ensuing judgement is then formally served to both parties. If the Court finds patent infringement in the first instance, judgement is declared to be preliminarily enforceable. This means that the plaintiff can enforce the cease and desist order after making an initial, substantial security deposit. However, if the judgement is later lifted in an appeal, the plaintiff must pay damage compensation to the defendant for wrongfully enforcing the first instance judgement. Moreover, the defendant may rely on the plaintiff s security deposit for covering his damage compensation claims. Appeal of First Instance Judgement As initially stated, the losing party may file an appeal to the Court of Appeals ( Oberlandesgericht ). The appellate deadline is one month after the first instance judgment has been served. In this appeal, both factual and legal appeal grounds are admissible. However, there is a restriction on the introduction of new facts which were not available during first instance. If grounds are not available at the end 1-2/2013 China IP 71

5 of one month after the first instance judgement has been served, the maximum, non-extendable term during which the appeal may be filed is 6 months after judgement. However, a formal appeal without grounds is possible. Grounds of appeal are due one month after the expiration of the appellate deadline. This one month term is extendable. After the losing party has filed the appeal, the Court of Appeals will review and re-evaluate all facts and legal opinions of the first instance court. Usually, there are four writs exchanged between the parties, with terms set by the appellate court. An oral hearing is held twelve months after the appeal. Oral Proceedings and the Judgement in Appeals The proceedings are very similar to the first instance in that only disputed features are discussed, witnesses are rarely heard, and expert opinions are rarely obtained. If opposition or nullity actions are pending at the time of oral proceedings the appeal court will in most cases stay the infringement case until after oral proceedings, provided that the court finds infringement. At this stage a stay of proceedings is much more likely to be obtained by the defendant, since the plaintiff, having obtained a favourable judgement in the first instance and being able to preliminarily enforce this judgement, is now in a sufficiently secured position, so that a final decision regarding the validity of the patent can be awaited without depriving the plaintiff of his right to enforce a granted patent. After the oral hearing, and if the infringement case is not being stayed in view of pending opposition or nullity action, judgement is rendered. The court can fully or partially confirm the first instance decision or overrule the civil court and reverse its judgement. An appeal judgement may be enforced without security deposit, even if a further appeal should be filed. Further Appeal to Federal Court of Justice A further appeal against the judgement of the court of appeals can be filed with the Federal Court of Justice ( Bundesgerichtshof ) only if the court of appeals grants express permission. This only happens if the case is of principal importance or if the appeal judgement is not in line with existing case law of the Federal Court of Justice. In the majority of cases the judgement rendered by the court of appeals is final. If a further appeal is admitted in the appeal judgement and indeed filed by the losing party, no new facts and evidence can be presented, the Federal Court of Justice will solely concentrate on a legal review of the case. If this court should find an insufficient factual basis for rendering a decision the case will be transferred back to the court of appeals. Otherwise the Federal Court of Justice will render a final judgement which cannot be appealed. 72