5/2022 GRUR on Ongoing Royalties in German Patent Cases

As noted previously on this blog (see, e.g., here and here), in 2021 the German Parliament enacted an amendment to § 139 of the German Patent Act (German original here) that permits courts to stay injunctions for a period of time while the defendant designs around or sells off infringing products.  Most commentators seem to be of the view that German courts will exercise this discretion rarely, but in the event they do exercise it the question arises how courts should determine the monetary compensation due to the patent owner during that interim period of time.  The 5/2022 issue of the German journal GRUR (Gewerblicher Rechtsschutz und Urheberrecht) includes four articles from an October 2021 conference discussing this issue, which I have noted below, with my translation of their abstracts.  I have not yet read all of the articles carefully, and some of the German terms are not easy to translate into readable English, so the normal caveats apply.  The four articles are preceded by an introductory essay by Professor Martin Stierle, titled Unterlassung under Verhältnismäßigkeit—das 2. PatMoG als Neuanfang (“Injunctions and Proportionality—the Second Patent Law Modernization Act as New Beginning”), 2022 GRUR 273-74.  Here are the papers:

1. Fabian Hoffmann, Der Ausgleichsanspruch im Patentrecht:  Die leistungsgerechte Monetasierung eines Drohpotenzials (“The Compensation Claim in Patent Law:  The Appropriate Monetization of a Threat Potential”), 2022 GRUR 286-93.  Here is the abstract:

This essay comments on the reasonable level of compensation, relevant to the appropriate economic function of the (withheld) claim for injunctive relief, as well as a comparison to other jurisdictions and bodies of law.  In addition, the methodology and justification for enhanced compensation are considered.

If I understand the gist of the paper correctly, it is that the interim compensation should be at a higher rate than other (noninfringing) licensees are paying, which would seem correct as matter of economic logic given that the patent has been found infringed and the infringer arguably has avoided some of the risks that compliant licensees have not, but not so high as to enable the patent owner to unfairly benefit from the defendant's sunk costs (holdup).   

2. Gerhard Wagner, Die Aufopferung des patentrechtlichten Unterlassungsanspruchs (“The Sacrifice of Patent Law’s Claim for Injunctive Relief”), 2022 GRUR 294-99.  Here is the abstract:

With Patent Law articles 139(1) sentences 3 and 4, the German legislature has, for the first time, regulated patent holdup.  Under strict conditions, the claim for injunctive relief will be withheld, though in response the patent owner will have a claim for reasonable monetary compensation.  Article 139(1) makes the puzzle complete, to the extent it clarifies that the claim for damages under article 139(2) remains untouched.  The doctrinal unification of this combination of rules presents a challenge.  For what, exactly, is the reasonable monetary compensation to be paid, and how does this compensatory claim fit into the basis for liability?  This essay provides answers on the basis of common private-law principles.

3.  Christian Osterrieth, Kritirien der Angemessenheit des Ausgleichs nach § 139 I 4 PatG (“Criteria for Reasonable Compensation Under Section 139(1) Sentence 4 of the Patent Law”), 2022 GRUR 299-302. Here is the abstract:

The proportionality examination introduced into the Second Patent Modernization Act, under which in special circumstances the claim for injunctive relief under § 139(1) of the Patent Act can be restricted, is coupled with a claim for reasonable monetary compensation.  The doctrinal orientation of this compensation claim, and especially its distinction from a claim for damages, raises a number of question, to which the following considerations are addressed.  The present essay comes to the conclusion that the “reasonable monetary compensation” is a way of expressing a fair estimation, which should ensure the patent owner, independently of a claim for damages, of a direct monetary benefit, the amount of which depends on the special circumstances of the case.  A windfall is however to be avoided.  

4.  Ansgar Ohly, Der Ausgleichsanspruch gemäß § 139 I 4 PatG als Rechtsfortwirkungsanspruch (“The Compensation Claim Under Patent Act § 139(1) Sentence 4 as a Claim for Effective Legal Continuity"), 2022 GRUR 303-09.  Here is the abstract:

The legislature has entered new territory by enacting into law a compensation claim in connection with the elimination of a claim for injunctive relief under Patent Act § 139(1) sentence 4.  Legislative innovations call for legal analysis.  Like the three preceding essays, the following exposition addresses the legal nature and specific questions concerning the new compensation claim.  The thesis of this essay is that it is a matter of effective legal continuity, which is related to claims under Civil Code § 951(1) sentence 1 and § 812(1) sentence 1 alternative 2, and which is directed to the determining the objective value of the use in accordance with license-analogy principles.