1. Is there no centralized procedure for obtaining an EU-wide injunction?

The European Patent Office seated in Munich grants European patents. These patents are often called “bundle patents,” because upon validation they disperse into national patents. Put differently, the granted European patent is converted into a portfolio of essentially independent patents that enjoy protection in individual states (German patent, French patent, UK patent, Italian patent, etc.). With the exception of oppositions before the European Patent Office, which may only be brought during a period of nine months after grant, there are no centralized proceedings in Europe. Instead, national courts have jurisdiction to decide on the validity and infringement of the national parts of European patents. So the German Federal Patent Court, for example, would only have jurisdiction over the validity of the German part of the European patent, and German civil courts would generally only have jurisdiction to decide on infringement of that patent. While decisions of the Düsseldorf, Paris and London courts may be considered persuasive abroad, they are only binding in their local jurisdictions

2. When will the new European patent litigation system rules go into effect?

The proposed European patent litigation system will enable rights holders to enforce their patents in centralized proceedings. The Unified Patent Court will have jurisdiction to grant injunctions enforceable in all EU Member States that participate in the new system. Originally this court was supposed to be set up before the end of 2017. However, in the wake of a complaint recently filed with the German Constitutional Court, nobody can predict when the new rules will come into effect.

3. Why do international companies from the medical technology sector litigate in Germany?

In the absence of a centralized enforcement procedure, claimants need to make a decision about where they want to bring a single or perhaps a series of national infringement cases. Germany will almost always be on the list of venues, because it is the biggest market in Europe. Moreover, it has courts with specialized judges who exclusively practice patent law. The Düsseldorf judges, in particular, are well-known for their expertise in the pharmaceutical and medical technology area. While the business press may perhaps be more interested in following mega disputes between players from the telecommunications sector, German courts decide a significant share of patent disputes relating to medicinal products every year.

4. Which are the main courts in Germany?

There are a total of 12 Regional Courts with jurisdiction over patent cases. The main courts are Düsseldorf (Europe’s busiest “patent court”), Mannheim, Munich and Hamburg. Judgments issued by first-instance courts (the Regional Courts) and, to a limited extent, second-instance courts (the Higher Regional Courts), can be appealed.

5. Are injunctions available?

Under German law, injunctions are granted as of right, and judges do not have any discretion. If the court finds in favor of the patentee, it will issue an injunction. The availability of injunctions and, correspondingly, the threat of having one’s business shut down, are among the reasons that parties often settle after the first-instance decision has been handed down.

6. Can the patentee ask for a preliminary injunction?

In recent years, German courts have cast off their reluctance to grant preliminary injunctions in patent cases. The Higher Regional Court of Düsseldorf surprised the patent world when it granted a preliminary injunction in the Olanzapin case (GRUR 2008, 1077), although parallel nullification proceedings were pending and the Federal Patent Court had revoked the patent at first instance. However, the bar for a preliminary injunction is set high. First, the technical background of the case must not be too complex for preliminary proceedings. Second, the applicant must convince the judges that infringement is clear. Third, some courts will in principle only issue a preliminary injunction if the validity of the patent is beyond doubt. This requires that the patent must already have survived a validity attack, i.e., an opposition or nullification proceeding (Higher Regional Court of Düsseldorf, BeckRS 2010, 15862 – Harnkathetertest). Therefore, if the patent and its validity have not yet been tested, it may be preferable to bring the case before a more “lenient” court, such as Munich or Hamburg, or to initiate proceedings on the merits instead.

7. Is patent validity an issue in proceedings on the merits?

It generally is not. Lack of validity is not a permissible defense in proceedings on the merits. Germany has a bifurcated court system. This means that the European Patent Office and the Federal Patent Court examine validity, whereas the civil courts have jurisdiction regarding infringement. The civil judges start from the assumption that a granted patent is valid. They do have discretion to suspend infringement proceedings to await the outcome of a parallel validity attack. However, defendants seeking to convince the civil court that proceedings ought to be suspended must demonstrate a high likelihood of invalidation. Moreover, from the defendant’s perspective, it is unfortunate that the timeline for invalidation is usually longer than that for infringement proceedings. Therefore, the accused infringer waiting for the patent to be invalidated still has the granted injunction hanging overhead like the sword of Damocles. From the claimant’s perspective, the bifurcated system is patentee-friendly, because first-instance infringement decisions are speedily issued. Even if the injunction is not enforced, it can be used as leverage in licensing negotiations.

8. How long does it take until the first-instance decision is issued?

This largely depends on the venue and the workload of the judges. A first-instance decision may be issued as quickly as within eight months of the service of the complaint. If the court asks an expert to prepare an opinion, this may slow down proceedings somewhat. As a rule of thumb, first-instance proceedings take between eight and 24 months.

9. Do the courts always appoint experts?

The courts do not always appoint experts. Counsel for the claimant must try to explain the subject-matter of the patent in a comprehensible manner, and to convince the judges that the accused medical product clearly falls into the scope of protection. Having said this, unless the accused device is a blatant copy, it may prove difficult to demonstrate that infringement is obvious. If counsel for the defendant raises doubts about infringement, and perhaps also submits a good private expert report, the judges may be more inclined to appoint an expert.

10. If the dispute is multi-jurisdictional, does this have any impact on strategy?

Patent disputes in Europe will often have a multi-jurisdictional nature. If products are distributed throughout the entire EU, this may imply the alleged infringement involves several national parts of the same European patent. Both the accused infringer and the patentee are well advised to bear this in mind when they develop their strategies. For example, the potential defendant could consider delaying an anticipated infringement case by proactively launching a so-called “Italian torpedo.” The torpedo is an application filed in Italy for a declaratory decision of non-infringement. While the case is pending in Italy, German judges will suspend subsequent infringement proceedings in Germany, provided that both cases relate to the same parties, the same patents, and the same accused devices. From the claimant’s perspective, the patent enforcement landscape in Europe offers manifold strategic opportunities. To give but one example, if the claimant wishes to obtain an injunction in Germany but faces difficulties in establishing the facts of the case, it may be helpful to take action in France. French law famously provides for the Saisie-contrefaçon, i.e., proceedings for the gathering of evidence widely used in patent infringement cases. Not only may that evidence be used in France – but it could also prove pivotal for the success of parallel cases in Germany and other European countries.

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To sum up, while from the U.S. perspective, Germany may not seem to be an obvious choice, there are good reasons that the vast majority of European patent infringement cases are brought in that country. Germany not only is the biggest market, but its patent judges are also known for their legal and technological expertise. In addition, the jurisdiction is patentee-friendly, given that injunctions are granted as of right and within a relatively short time span. This, in effect, facilitates settlement negotiations. When designing a strategy (be it a defense or an enforcement strategy), it is vital to bear in mind that patent cases usually have a cross-border element. Both parties can use the fragmented European litigation system to their advantage.

Client Alert 2017-176