Declaratory Judgment of Damages Liability for Indirect Patent Infringement in Germany: The Fräsverfahren Judgment

On May 7, 2013, the German Federal Supreme Court (BGH) handed down its judgment in Case No. X ZR 69/11 (Fräsverfahren), on appeal from the Munich Oberlandesgericht.  The case is reported in GRUR 7/2013, pp. 713-17, under the title "Hinreichende Wahrscheinlichtkeit des Schadenseintritts bei mittelbarer Patentverletzung" (Adequate Probability of Damages by Indirect Infringement).  The decision can also be accessed from the BGH's website, here, and in an English-language translation found in 44 IIC 837-843 (2013) (or so I understand; I haven't received my copy of the November issue yet).  In addition, Professor Siebrasse has alerted me to a recent English-language article on the decision by Nadine Heiartz and Diana Fichtner of Bardele Pagenberg, available here; and here's another short write-up from the Grünecker firm. 

The following points of substantive law are helpful in understanding the decision.  First, as reflected in this case (and contrary to the general rule in the U.S.) is that someone can be liable for indirect infringement even if there is no evidence that anyone directly infringed.  Specifically, section 10 of the German Patent Act (English translation available on WIPO's website) states:

(1) A patent shall have the further effect that any third party not having the consent of the patentee shall be prohibited from offering or supplying within the territory to which this Act applies to any other persons, other than such persons authorized to use the patented invention, means relating to an essential element of said invention for use of the invention within the territory to which this Act applies, if said third party knows or it is obvious from the circumstances that such means are suitable and intended for use of the invention.
(2) Subsection (1) shall not apply when the means are products generally available in commerce, except if said third party intentionally induces the person supplied to commit acts prohibited by the second sentence of Section 9.
(3) Persons performing the acts referred to in Section 11, nos. 1 to 3, shall not be considered within the terms of subsection (1) as persons entitled to use the invention.

For more on contributory patent infringement under German law, see Thomas Kühnen, Patent Litigation Proceedings in Germany paras. 228 et seq. (6th ed., Frank Peterreins tr. 2013). 

Second, the reason the plaintiff is asking for a declaratory judgment of damages liability is that this is one way for the plaintiff to proceed to the next step of obtaining discovery and proving up those damages.  For an overview of the procedural issues involved, see Kühnen, supra, paras. 1048-49.  

Third, if the plaintiff succeeds in obtaining the declaratory judgment, the final set of issues would involve quantifying those damages.  Generally, the patentee is entitled to recover the damages caused by the customer for which the contributory infringer is responsible.  See Kuhnen, supra, para. 1028. 

Returning to the Fräsverfahren case, the defendant made and sold software which, the court concluded,  was suitable and intended for use in the practice of the plaintiff's patented milling process.  The plaintiff sued the defendant for indirect infringement and prevailed on liability.  On the declaratory judgment issue, the BGH held that the plaintiff didn't have to prove that the defendant had delivered infringing merchandise to customers, in order to obtain the declaratory judgment of damages liability.  It sufficed that the software had been offered for sale; the judgment of contributory infringement by itself created an adequate probability of direct infringement, for which a declaratory judgment of damages liability could arise.  The key language can be found in paragraphs 21-23 of the BGH's judgment:

Ein auf Feststellung der Schadensersatzpflicht gerichteter Klageantrag ist, sofern eine Schutzrechtsverletzung vorliegt, schon dann begründet, wenn eine gewisse Wahrscheinlichkeit für den Eintritt eines Schadens besteht. Diese braucht nicht hoch zu sein. Ob und was für ein Schaden entstanden ist, bedarf keiner Klärung, wenn nach der Erfahrung des täglichen Lebens der Eintritt eines Schadens mit einiger Sicherheit zu erwarten ist. Hierfür genügt es in der Regel, wenn zumindest eine rechtswidrig und schuldhaft begangene Verletzungshandlung vorliegt (BGH, Urteil vom 20. Mai 2008 - X ZR 180/05, BGHZ 176, 311 = GRUR 2008, 896 Rn. 26 mwN - Tintenpatrone I).

Als Verletzungshandlung in diesem Sinn reicht entgegen der Auffassung des Berufungsgerichts eine mittelbare Patentverletzung im Sinne von § 10 PatG grundsätzlich aus. Zwar ist im Falle einer mittelbaren Patentverletzung nur derjenige Schaden zu ersetzen, der durch die unmittelbare Patentverletzung der Abnehmer des Mittels entsteht (BGH, Urteil vom 7. Juni 2005 - X ZR 247/02, GRUR 2005, 848, 854 - Antriebsscheibenaufzug). Hieraus ist aber, wie der Senat klargestellt hat, nicht zu folgern, dass die hinreichende Wahrscheinlich-keit eines Schadenseintritts nur dann zu bejahen ist, wenn mindestens eine unmittelbare Verletzungshandlung festgestellt worden ist. Grundsätzlich reicht es vielmehr aus, wenn die Voraussetzungen einer mittelbaren Patentverletzung vorliegen (BGH, Urteil vom 13. Juni 2006 - X ZR 153/03, BGHZ 168, 124 = GRUR 2006, 839 Rn. 29 - Deckenheizung).

Entgegen der Auffassung des Berufungsgerichts sind diese Grund-sätze nicht nur dann heranzuziehen, wenn eine mittelbare Patentverletzung durch Liefern von zur unmittelbaren Verletzung geeigneten und bestimmten Mitteln feststeht. Sie gelten auch dann, wenn lediglich die Verletzungsform des Anbietens festgestellt ist.

I'd translate this as follows (with the appropriate caveat that I am not a professional translator; for what is sure to be a better translation, consult the one in IIC noted above): 

An application for a declaratory judgment of damages liability is well-grounded, as long as an infringement of rights is present, if a certain probability of the occurrence of injury is also present.  But this doesn't need to be high.  Whether and to what extent this arises needs no clarification, if in the experience of daily life an injury can be expected with reasonable certainty.  In this regard, it generally suffices if at least one unlawful and culpable infringing act is present.

Contrary to the opinion of the appellate court, however, an indirect infringement in terms of section 10 of the Patent Act does not in principle suffice as an act of infringement in this sense.  To be sure, in the case of indirect infringement only the specific harm suffered is to be compensated which results from the direct infringement by the customer.  Nevertheless, this does not mean, as the Senate has made clear, that an adequate probability of injury is only to be affirmed if at least one act of direct infringement is established.  Rather, as a basic principle it suffices, if the conditions for indirect infringement are present.

Contrary to the opinion of the appellate court, these fundamental principles are to be applied not only when it is established that an indirect infringement has occurred by the delivery of means that are suitable and intended for direct infringement.  They also apply when merely the infringing content of the offer is established.