As reported on JUVE Patents and FOSS Patents earlier today, the Court of Justice has published its decision in Phoenix Contact GmbH & Co. KG v. Harting Deutschland GmbH & Co. KG, available here. I discussed the Munich court's referral to the CJEU last year, writing:
The set-up for the referral is that German patent litigation is bifurcated, meaning that the district courts hear infringement trials, but validity challenges are litigated separately (either as opposition proceedings before the EPO or the Deutsches Patent- und Markenamt, or in nullity actions before the Bundespatentgericht). Validity challenges take longer than infringement trials, which gives rise to the "injunction gap"--meaning that a court may enter an injunction against an accused infringer in an infringement action, only to have it determined several months later that the patent in suit was invalid. (For an interesting take on this issue, see this recent post on IPKat.) Bifurcation also affects preliminary injunction practice, in that German courts generally do not grant preliminary injunctions in patent cases unless the patent in suit has survived a validity challenge in of these other forums (though there are exceptions, as Holzapfel and Dölling note, citing the Düsseldorf Oberlandesgericht’s 2008 decision Olanzapin, for discussion of which see my book pp. 243-44 and this 2017 blog post). Anyway, the Munich I District Court has now referred the following matter to the CJEU, as announced in a press release:
Ist es mit Artikel 9 Abs. 1 der Richtlinie 2004/48/EG vereinbar, dass im Verfahren des einstweiligen Rechtsschutzes letztinstanzlich zuständige Oberlandesgerichte den Erlass einstweiliger Maßnahmen wegen der Verletzung von Patenten grundsätzlich verweigern, wenn das Streitpatent kein erstinstanzliches Einspruchs- oder Nichtigkeitsverfahren überstanden hat?
Holzapfel and Dölling translate this as "Is it in line with Article 9(1) of Directive 2004/48/EC for the Higher Regional Courts having jurisdiction at final instance in proceedings for interim relief to refuse in principle to grant interim measures for infringement of patents if the patent in dispute has not survived opposition or nullity proceedings at first instance?" Mueller translates it as ""Is it a correct application of Art. 9 para. 1 of Directive 2004/48/EC that higher regional courts, whose decisions cannot be appealed further in preliminary injunction proceedings, generally deny injunctive relief over patent infringement if the patent-in-suit has not survived an opposition or nullity proceeding in the first instance?" . . . .
. . . the press release indicates that the referring court doesn't think that German practice is in conformity with article 9(1), because a recently-granted patent is effectively denied the possibility of preliminary injunction relief; moreover, patent owners don't have the ability to control whether their patents will be subject to a validity challenge. In addition, the release notes that patents, unlike some other forms of IP, are issued only after there has been an examination for compliance with the requirements of patentability.
To cut to the chase, the CJEU concludes that there is no general rule precluding the entry of preliminary relief where the patent in suit has not yet survived a nullity challenge. The court states, inter alia:
33 In the present case, the referring court states that the patent at issue is valid and that it is the subject of an infringement, such that the application for interim relief brought by Phoenix Contact should be granted. However, that court is bound by national case-law under which the patent concerned may enjoy interim judicial protection only where the validity of that patent has been confirmed by a decision given at first instance in patent validity proceedings.
34 It must be stated that such case-law imposes a requirement which deprives Article 9(1)(a) of Directive 2004/48 of any practical effect in so far as it does not allow the national court to adopt, in accordance with that provision, an interlocutory injunction in order to terminate immediately the infringement of the patent in question even though that patent, according to the national court, is valid and is being infringed. . . .
40 A national procedure aimed at the immediate termination of any infringement of an existing intellectual property right would be ineffective and, consequently, would disregard the objective of a high level of protection of intellectual property, if the application of that procedure were subject to a requirement such as that laid down by the national case-law referred to in paragraph 33 of the present judgment. . . .
54 In the light of all the foregoing considerations, the answer to the question referred is that Article 9(1) of Directive 2004/48 must be interpreted as precluding national case-law under which applications for interim relief for patent infringement must, in principle, be dismissed where the validity of the patent in question has not been confirmed, at the very least, by a decision given at first instance in opposition or invalidity proceedings.
Of particular interest to me, given my pending project on wrongful patent assertion (which will discuss, among other things, the CJEU's Bayer Pharma decision, which I have criticized as being too favorable to patent owners), the court rejects arguments that its ruling will result in abuses, stating:
42 Furthermore, as regards the risk that the defendant in the proceedings for interim relief may suffer harm as a result of the adoption of interim measures, it must be recalled that, under Article 3(2) of Directive 2004/48, the measures, procedures and remedies necessary to ensure the enforcement of intellectual property rights covered by that directive must be applied in such a way as to avoid the creation of barriers to legitimate trade and to provide safeguards against their abuse.
43 That provision therefore requires the Member States and, ultimately, the national courts to offer guarantees that, inter alia, the measures and procedures referred to in Article 9 of Directive 2004/48 are not to be abused (judgment of 12 September 2019, Bayer Pharma, C‑688/17, EU:C:2019:722, paragraph 68).
44 In that regard, it must be noted that the EU legislature has, in particular, provided for legal instruments which make it possible to mitigate comprehensively the risk that the defendant will suffer harm as a result of provisional measures, thereby ensuring its protection.
45 First, under Article 9(5) of Directive 2004/48, Member States are to ensure that the provisional measures referred to, inter alia, in paragraph 1 of that article are revoked or otherwise cease to have effect, upon request of the defendant, if the applicant does not institute, within a reasonable period, proceedings leading to a decision on the merits of the case before the competent judicial authority, the period to be determined by the judicial authority ordering the measures where the law of a Member State so permits or, in the absence of such determination, within a period not exceeding 20 working days or 31 calendar days, whichever is the longer.
46 Secondly, Article 9(6) of Directive 2004/48 provides for the possibility of making such provisional measures subject to the lodging by the applicant of adequate security or an equivalent assurance intended to ensure compensation for any prejudice suffered by the defendant. That protective instrument may be implemented by the competent court hearing the application for interim relief at the time when it examines that application.
47 Thirdly, Article 9(7) of Directive 2004/48 provides, in the cases referred to in that provision, for the possibility of ordering the applicant, upon request of the defendant, to provide the defendant appropriate compensation for any injury caused by those provisional measures.
48 Those legal instruments constitute guarantees which the legislature deemed necessary as a counterweight to the prompt and effective provisional measures for which it made provision. Thus, they correspond to the guarantees laid down by Directive 2004/48 in favour of the defendant, as a counterweight to the adoption of a provisional measure which affected its interests (see, to that effect, judgment of 16 July 2015, Diageo Brands, C‑681/13, EU:C:2015:471, paragraphs 74 and 75).
If there is a silver lining in this decision, perhaps it is the above passages' (arguable) implicit narrowing of Bayer Pharma--plus, perhaps, Judge Pichlmaier's statement to JUVE Patent that it would "make most sense to merge the jurisdictions for infringement and validity, as envisaged by the UPC. It is also common practice in other countries.” I myself have long thought that bifurcation is a bad idea.
For previous discussion on this blog of Bayer Pharma, see here, here, here, and here.
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