On 10 June 2021, the German Bundestag approved an amendment to the Patent Act through the Second Patent Law Modernisation Act. In the meantime, the amendment has also been confirmed by the Bundesrat.
Disproportionality of Injunctive Relief
The core of the amendment to the Patent Act concerns the injunctive relief under Sec. 139 (1) Patent Act. After long discussions about the exact wording, the amendment reads as follows:
“The claim is excluded insofar as the claim would lead to disproportionate hardship for the infringer or third parties not justified by the exclusive right due to the special circumstances of the individual case and the requirements of good faith. In this case, the infringed party shall be granted appropriate monetary compensation. The claim for damages under paragraph 2 shall remain unaffected.”
With this amendment, the legislator has, according to its own statement in the reasons for the draft legislation, cast the case law of the Federal Court of Justice in the heat exchanger case (decision of May 10th, 2016, file no. X ZR 114/13) into legal form. The utility model law has been adapted accordingly.
Implications of Amendment
A far-reaching change in the previous practice of the courts with regard to injunctive relief is not to be expected. The reasons for the draft legislation make it clear that injunctive relief is only disproportionate in rare exceptional cases. Moreover, it is to be anticipated that in practice the courts will – if at all – restrict injunctions in the form of a grace period (Aufbrauchfrist), but not a permanent denial. Yet, according to the reasons for the draft legislation, a permanent denial of injunctive relief remains possible in theory. Further, the courts will only review the proportionality of an injunction if the defendant explicitly raises this defence. It is the defendant’s burden to bring evidence for disproportionality.
If the threshold of disproportionality is exceeded, the wording of the law provides a claim for appropriate monetary compensation against the infringer. Aside from this, damages can still be claimed.
Criteria for Disproportionality
The wording of the law deliberately leaves open when disproportionality exists, so that this must be worked out in future by the courts of instance when applying the law. However, the reasons for the draft legislation list various criteria that can be used to assess disproportionality. In doing so, the totality of the circumstances of the respective case must be taken into account, without any single argument being decisive.
The relevant criteria include:
- existence or non-existence of a competitive relationship with the infringer and use of the patented invention;
- interest of the patent holder in the injunction – mere monetisation in the foreground?;
- economic consequences of an injunction for the infringer;
- complexity of the attacked product and possibilities of a design around;
- behaviour of the parties as well as subjective aspects;
- third party interests, for example in the supply of vital medicines.
It should be emphasised that the legislator has positioned itself in the reasons for the draft legislation to the effect that the mere lack of use of the patented invention by the patent proprietor is not sufficient to grant a grace period (Aufbrauchfrist). Nevertheless, the reasons could be understood to mean that in the future patentees who are neither individual inventors, universities nor small or medium-sized enterprises will be considered less worthy of protection.
With regard to the long-disputed third party interests, the compulsory licence under patent law pursuant to Sec. 24 Patent Act remains lex specialis for a permanent overcoming of the injunctive relief. Within the scope of the examination of disproportionality under Sec. 139 (1) Patent Act, third party interests will in future only be able to justify a grace period (Aufbrauchfrist). Third party interested will only be considered if there is a risk of interference with fundamental rights.
In addition to the central modification of Sec. 139 (1) Patent Act, Sec. 83 Patent Act was also amended. In order to prevent different outcomes in infringement and nullity proceedings, Sec. 83 (1) Patent Act will in future require the Patent Court to notify the parties and the infringement court of a preliminary opinion in nullity proceedings within six months after service of the nullity action.