Wednesday, November 23, 2016

Hoppe on Recent German Patent Cases

Daniel Hoppe has published an article titled Die Rechtsprechung der deutschen Instanzgerichte zum Patent- und Gebrauchsmusterrecht seit dem Jahr 2015 ("The Patent and Utility Model Case Law of the Lower German Courts Since 2015") in the October 2016 issue of GRUR RR (pp. 385-96).  Much of the article deals with remedies, including case law on injunctions (pp. 388-89), damages (p.389), FRAND (pp. 390-93), stays (p.395), and preliminary injunctions (pp. 395-96). I'll talk about the FRAND cases in a subsequent post, but for now I'll just note one non-FRAND damages case that caught my attention, the Judgment of the Düsseldorf District Court of September 29, 2015.  The defendant was held to have indirectly infringed a patent for a water disposal process (useful for emptying toilets on boats and submarines) by supplying water disposal systems in each of which was installed a vacuum pump that would practice the claimed method.   The court assessed damages based on the infringer's profits from these sales, even though the amount of direct infringement occurring within the Republic of Germany (as opposed to at sea) may have been minimal.  The frequency of use on Germany was irrelevant.  As for the amount of profits, the court used as the royalty base both the revenue derived from the vacuum pump and the revenue derived from the entire device in which that pump was installed. The court concluded that the profit on each of these was 20%, and that 50% of the profit earned from the pump was attributable to the patented invention and 30% of the profit from the entire product, for a grand total award of  €865,599.23.  Mr. Hoppe also notes, however, a December 17, 2015, judgment of the Düsseldorf Appeals Court stating that for liability to attach for indirect infringement there must be a sufficient probability of direct infringement, and he believes that this principle may stand in contradiction to the more expansive liability theory employed in the vacuum pump case.

The question of how to assess damages for indirect infringement is a tough one; Dmitri Karshtedt has a paper on the issue titled Damages for Indirect Patent Infringement, 91 Wash. U. L. Rev. 911 (2014) (available hereAlso difficult is the question of what damages a court should award when a domestic act of infringement results in further uses of the patented invention outside the jurisdiction; for previous discussion, e.g., here.  My initial reaction to this particular decision is that it seems a bit harsh to require the defendant to disgorge its entire profit from sales of the equipment at issue, absent evidence of how often the direct infringers practiced the claimed process.

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