Wednesday, January 9, 2019

Scharen on Injunctions in German Patent Litigation

Uwe Scharen, a retired presiding judge of the German Federal Supreme Court, has published an article titled Zur Praxis der gerichtlichen Geltendmachung des Verlangens nach Unterlassung von Patentverletzungen ("On the judicial enforcement of claims for enjoining patent infringement"), in the September 2018 issue of Mitteilungen der deutschen Patentanwälten (pages 369-79).  The essay was commissioned by the 4iPCouncilHere is the abstract (my translation):
The essay comprises a practice-oriented overview of first instance patent infringement actions, insofar as they are directed to injunctive relief, including proceedings for preliminary injunctions.  On the basis of case law through the end of 2017, the essay discusses the typical course of both proceedings as well as the requirements and possibilities for both parties, in particular those for averting an injunction.
Anyone hoping that the essay might suggest some movement on the part of the German judiciary towards a more flexible standard for  awarding injunctions will be disappointed.  Upon review of the statutory provisions and the case law, Judge Scharen argues that German judges cannot use article 3(2) of the Enforcement Directive (which states that measures, procedures, and remedies for the enforcement of IP rights shall be "effective, proportionate, and dissuasive," my emphasis) as authority for restricting injunctive relief in patent cases.  Instead, the courts are limited to a small number of established exceptions for which the requirements are strict.  These include compulsory licensing in the public interest (possible, but so far rare); the possibility that an injunction might be denied if the patent owner has acted in bad faith, e.g., by delaying the commencement of proceedings against an infringer who has reasonably relied on the owner's inaction (also rare); the competition-law defense as recognized by the CJEU in Huawei v. ZTE and interpreted by the lower courts in Germany; and (maybe) some sort of abuse of right defense, the contours of which in patent cases is at present unclear.  Judge Scharen also notes that, while the Federal Supreme Court's 2016 decision in Wärmetauscher envisions the possibility of courts granting an Aufbrauchfrist (essentially, a stay pending design-around) under appropriate circumstances, those circumstances are exceptional.  (For previous discussion on this blog of the Aufbrauchfrist, see here, here, and here.  I hope to have a little more to say about this topic in a forthcoming post.)  Judge Scharen closes this portion of the essay by stating that:
The literature has considered whether, and if so under what circumstances (for example, a plaintiff that hasn't incurred any R&D expenses of its own), the good-faith principle prevents a nonpracticing entity from demanding an injunction, or whether an injunction should be denied if the protected subject matter is merely a minor component of a complex device the demand for which is driven by other subject matter.  To date, it is clear that injunctive relief has not been denied on these grounds (p.374, my translation).
There is also a discussion of stays pending revocation proceedings and stays pending appeal, as well as (as the abstract suggests) a discussion of preliminary injunctions.

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