17 June 2021

German Parliament passes bill to modernise German patent law including providing an exception from the automatic grant of injunction against infringement, reports Jonas Smeets.

Despite criticism from some quarters of the bill’s effect of providing an exception to the automatic grant of an injunction that otherwise follows a finding of infringement, the bill was passed by the legislative body (Bundestag) after several rounds of discussions between politicians, scholars, and the industries.

For the bill to come into force it is just a matter of time: the Federal Council (Bundesrat) could object to the new bill until 2 July 2021 but this is most unlikely.After that President Steinmeier signs the bill into law and the new Patent Act comes into force when it is published in the Law Gazette. This process is likely to be completed during July or August. The revised provisions will apply as soon as the law comes into force.

An unofficial translation of the new provision reads as follows:

Any person who uses a patented invention contrary to sections 9 to 13 may, in the event of the risk of recurrent infringement, be sued by the aggrieved party for cessation and desistance. This right may also be asserted in the event of the risk of a first-time infringement.

The claim is excluded insofar as the claim due to the special circumstances of the individual case and the performance in good faith would lead to disproportionate hardship not justified by the exclusive right for the infringer or third parties. In this case, the infringed party shall be granted adequate compensation in money. The claim for damages under paragraph 2 shall remain unaffected.

Time will tell whether the courts will make use of the new provision and in practice bring the automatic injunction in Germany to a halt. However, it is already clear that the threshold for an infringer to show it is within the exemption from the automatic injunction is a high one. There will be substantial scope for argument about whether the new exception should apply in any particular case. Litigants should be mindful of the factors set out in the bill when pleading their claim or defence.

The bill also seeks to modernise the procedure used for German patent disputes. Lately Germany’s bifurcated system has been criticised for the differing timelines between the two procedures which allow a patentee to be granted an injunction prior to the Patent Court rendering the patent invalid (so-called ‘injunction gap’). Hence, the bill stipulates that the Patent Court, when a nullity claim is filed, must (i) immediately serve the nullity action on the patentee; (ii) give a first overall estimate of the outcome of the nullity action within six months from filing; and (iii) find an early date for the oral hearing. As these measures can only apply to newly filed actions, defendants currently considering a claim for nullity of a patent may be advised to wait for the law to come into effect.

Another change which comes as no surprise finally brings clarity to the German Trade Secret Act following the European Trade Secret Directive. Until now an alleged patent infringer who holds a trade secrets (that could prove that it is not infringing) was forced to choose to either disclose its trade secret or lose the case (and thus be subject to an injunction). Although some courts have tried to work around this difficulty (see e.g. the so-called Düsseldorfer Modell where only a court appointed expert was allowed to evaluate the information) the new law seeks to bring more clarity and litigants can make trade secret claims so as to allow them to defend themselves from infringement claims but also protect their trade secrets.

About the Author

jonas smeets Module

Jonas Smeets, LL.M.
Associate
As an associate in our Düsseldorf IP team, I counsel clients on industrial intellectual property rights focusing on patents, utility models, and unfair competition, as well as on the intersection with antitrust law.

Direct: +49 (0)211 2005 6000

[email protected]

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