Monday, August 21, 2023

Reisner and Ballestrem on the Effect of Covenants not to Sue in Germany

Earlier this year, Germany’s Federal Supreme Court (BGH) issued a decision holding that a covenant not to sue (or a covenant to sue last) given by a patentee to a component manufacturer can give rise to the exhaustion of the patentee’s right to recover against the maker of the end product.  A recent article by Stephan Reisner and Johannes Graf Ballestrem, Erschöpfungseintritt bei Vereinbarung eines ˶covenant not to sue‟ und einem Inverkehrbringen von Teilkomponenten:  Zugleich Besprechung von BGH ˶CQI-Bericht II‟ (“Exhaustion through Agreement to a ‘Covenant not to Sue’ and the Placing on the Market of Components:  Together with a Discussion of the BGH Decision “CQI-Bericht II”), Mitteilungen der deutschen Patentanwälten, July/Aug 2023, pp. 301-07, discusses the decision in some depth.  Here is the abstract, in my translation from the German:

In its recent decision CQI-Bericht II of January 1, 2023 (X ZR 123/20), the BGH addresses together two exceedingly practice-relevant themes in connection with patent exhaustion.  First, it clarifies whether and under what conditions a covenant not to sue–specifically, a covenant to be sued last—can have exhaustive effect.  Second, for the first time the BGH expressly comments on whether the consensual placing on the market of a component (here, chipsets) can result in the exhaustion of rights with respect to a larger product that incorporates the component (here, a smartphone) (the so-called “broader exhaustion doctrine”).  The decision is welcome, though it also provides some room for criticism.  

I should note as well that Florian Mueller published an insightful post on the possible implications of the decision back in February (see here), which I commend to readers’ attention, and Patricia Rombach will be discussing it in a chapter to be included in the forthcoming edited volume FRAND:  German Case Law and Global Perspectives (Peter Picht, Thomas Cotter & Erik Habich eds., Edward Elgar Publishing, forthcoming 2024). 

No comments:

Post a Comment