Changes to German patent law now on the horizon
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Today the Bundesrat (the higher house of parliament) decided not to oppose this new Act, and therefore it will likely enter into force immediately after its promulgation as planned.
There are three main changes in the area of patent litigation (infringement and nullity proceedings):
First, the legislator has attempted to make nullity proceedings more efficient. For example, the deadline for the patentee's defense brief, which is now regularly two months, may only be extended by a further month at most, and only if there are substantial reasons.
Also, the Federal Patent Court's duty to provide a preliminary opinion in Sec. 83 Patent Act has also been supplemented with a new, albeit soft, deadline. According to this provision, the court "shall" (not must) inform the parties of the aspects relevant for the decision within six months after service of the nullity action. These six months are calculated in such a way that the Federal Patent Court will be able to take into account the arguments of both parties. However, the main reason for this provision is the hope of the legislator that the preliminary opinions dealing with the parties' arguments, regularly issued in a so-called interim order, are available in time before the infringement trial, so that the infringement court can take into account the view of the Federal Patent Court on the prospects of success of the nullity action in its decision about the possible stay of the infringement.
It remains to be seen whether the latter provision in particular will have an impact in future disputes. The current situation in most litigations, in which the Federal Patent Court's preliminary opinion is not available before the infringement trial, is due to the considerable overload of most nullity senates at the Federal Patent Court. The new law does not address the obvious lack of personnel in the court, and also not the need to create additional nullity senates that could absorb the workload of the existing senates. In the opinion of many observers, however, this is precisely what would have to happen in order to speed up the nullity proceedings considerably. It will also be interesting to see whether the infringement courts will change their current practice with regard to stays and suspend the infringement dispute based on grounds for invalidity that have so far only rarely played a role, such as lack of inventive step or inadmissible extension, if such nullity grounds are considered promising in the preliminary opinion of the Federal Patent Court. So far the infringement courts have considered only novelty attacks in most cases, but if a preliminary opinion is available, a more informed stay decision is possible.
Another significant amendment to the Patent Act relates to the injunctive relief claim in Section 139. According to the amended version, claims for injunctive relief may be excluded in the future "insofar as, due to the particular circumstances of the individual case and the requirements of good faith, the claim would lead to disproportionate hardship for the infringer or third parties which is not justified by the exclusive right." The legislator's intention with this addition is to encourage the infringement courts to observe the principle of proportionality more frequently and in appropriate cases to either restrict injunctive relief (e.g. by granting a grace period after pronouncement of the judgment) or to reject it altogether. It is also clear from the legislative materials for the draft Act that the legislator was guided in its choice of words for the amendment by the Federal Court of Justice's Wärmetauscher ("Heat Exchanger") decision of 2016. In this judgment, in which the plaintiff's claim for injunctive relief was ultimately not limited, the Federal Court of Justice discussed in detail the terms now codified in the law – "circumstances of the individual case," "disproportionate hardship," "good faith" – which shows that such a proportionality review was already required in individual cases under the existing law at the time. This is because claims under the Patent Act, including the right to injunctive relief, already had to be interpreted in light of European law, and the 2004 EU Enforcement Directive had expressly mentioned the principle of proportionality as applicable to the enforcement of all claims arising from intellectual property rights.
In the opinion of many practitioners and judges, a limitation of the right to injunctive relief will continue to be considered only in extremely exceptional cases in the future. It is to be expected that defendants in patent infringement proceedings will object more frequently than before that the injunctive relief in their individual case would mean a disproportionate hardship. It remains to be seen how the courts will deal with this in the various different scenarios.
The third area in which there will be a significant change relates to the measures that infringement courts may take in the future to protect confidential information. Under the new Section 145a Patent Act, the procedural provisions in Sections 16 to 20 of the Act on the Protection of Trade Secrets will be applicable. These regulations will not only make it possible to partially exclude the public from oral hearings and the pronouncement of judgments, which is already common practice, and to restrict file inspection claims according to Section 299 of the German Code of Civil Procedure. Rather, in the future it will also be possible in patent infringement proceedings to limit access to confidential information to the legal representatives and at least one in-house individual of the opposing party. According to the law, this will be possible as soon as the action is pending, i.e. even before the service of the complaint, and it remains to be seen how the courts will deal with such requests and, in this context, with the opposing party's right to be heard. In any event, this amendment to the Patent Act allows for a much better protection of confidential information than before, which will in principle benefit both parties in those cases where the submission of facts containing confidential information is important.
Finally, it should be noted that both the possible limitation of the right to injunctive relief and the application of the measures to protect confidential information will be applied in the same way in utility model infringement proceedings.
We anticipate the promulgation and therefore the entering into force of this act in the course of this summer.