GERMANY: An Introduction to Intellectual Property: Patent Prosecution

Germany as a patent litigation venue 

For many of our international clients, Germany is a highly regarded patent litigation venue, and there are numerous reasons for this preference: The German patent courts have the reputation of being experienced, efficient, and impartial. Costs of litigation are reasonable, especially in comparison to UK or US standards. Most importantly however, a finding of infringement by a German court provides significant leverage for licence negotiations; if a German court finds infringement, an injunction is granted as a matter of right under law, also referred to as the “automatic injunction”.

This is unlikely to change in the near future.

Germany remains Europe’s largest economy and has gained rather than lost significance due to Brexit. And the injunctive powers of German courts will remain strong even taking into account a new draft law, which has been published recently by the German government. Although the new draft law envisages the injunction to be bound by a proportionality test, this test is supposed to prevent injunctions only in exceptional cases in which the leverage of the injunction would result in a dysfunctional effect on the negotiation relationship between the patent proprietor and the potential licensee. This will hardly ever be the case, especially in SEP cases, where the patent proprietor is obliged to provide a fair, reasonable, and non-discriminatory (“FRAND”) offer anyway. It is hard to imagine how licence negotiations of a patent proprietor could be considered FRAND on the one hand but the injunction based on FRAND negotiations non-proportional on the other hand. Finally, the large number of cases heard by German patent courts ensures that they have the expertise to decide even on today’s highly complex technology. This gives German courts the competitive edge over other, less frequented courts.

Patent infringement venues within Germany 

Within Germany, most patent infringement cases have traditionally been litigated in Düsseldorf, whereas Mannheim and Munich compete for the second place. For the year 2019, however, a significant drop of 15% in the number of newly filed patent infringement cases in Düsseldorf and an increase of 27% in the number of newly filed cases in Munich have been reported.

In our view, this development does not come as a surprise.

The number of cases at each venue in Germany almost entirely depends on how the different venues are perceived by patent proprietors. According to German civil procedure code, a plaintiff may file the complaint at any venue in Germany where tortious acts have been carried out. Since tortious acts in most patent litigation cases occur everywhere in Germany, patent proprietors may choose their litigation venue at will. Several factors have contributed to the trend that an increasing number of patent proprietors choose Munich over Düsseldorf as a patent litigation venue:

First, there is a strong presence of national and international patent law firms in Munich. And insofar as, for instance, British firms are looking for a continental foothold for the time after the Brexit transitional period, which, as things currently stand, will end on 31st of December 2020, Munich is their natural choice considering both the European and the German Patent Office as well as the German Federal Patent Court are located in Munich.

Second, the duration of the infringement proceedings plays an important role. Interested parties have referred to Munich as the “rocket docket” and rightfully so; the average time to first instance judgement has been about 12-14 months or even less. With an increasing case load, this average time is bound to increase. Yet Munich patent chambers will still be much faster than their Düsseldorf counterparts, which often take around two years to decide on a case.

Third, for SEP holders, FRAND is an ever-recurring issue. The higher regional court of Düsseldorf, in its landmark judgement dated 22 March 2019 (Unwired Planet ./. Huawei; case ID: I-2 U 31/16; df-mp partners David Molnia and Dr. Dominik Ho had represented Unwired Planet as patent attorneys), adopted a strict reading of the “ND” (i.e. non-discriminatory) part of FRAND to the effect that an SEP holder must disclose all licensing contracts concluded not only by itself but also by its predecessor in title. Unwired Planet had lodged an appeal against the judgement, but the parties settled before the German Federal Court of Justice could finally decide on the issue. In practice, this strict requirement creates considerable problems, which is why many SEP holders have opted for the Munich and Mannheim patent chambers. Especially the Munich patent chambers have embraced the chance to take a leading role in Germany for SEP cases. In February 2020, Munich issued its own interpretation of the CJEU Huawei ./. ZTE judgement on FRAND.

The upshot is that Düsseldorf will certainly stay Germany’s go-to patent litigation venue, but in view of the Düsseldorf’s strict approach to FRAND, many SEP holders will continue to choose Munich or Mannheim over Düsseldorf.

Background on patent chambers in Germany: 

In Germany, patent infringement cases are heard by specialised patent chambers that are formed on the basis of statutory orders issued by the federal states. The following is an overview of the most frequented patent chambers, which are located in Düsseldorf, Munich, and Mannheim, as of June 2020:

Düsseldorf has three patent chambers: civil chamber 4a consists of Dr. Crummenerl as presiding judge, deputy presiding judge Haase as well as the judges Dr. Schumacher and Reich; civil chamber 4b consists of presiding judge Dr. Voß, deputy presiding judge Terlinden as well as the judges Dr. Gruneberg and Dr. Schröder; and civil chamber 4c consists of presiding judge Klepsch, deputy presiding judge Dr. Schmitz, and judge Wimmers.

Munich has two patent chambers: civil chamber 7 consists of presiding judge Dr. Zigann, deputy presiding judge Dr. Werner as well as judge Klein; and civil chamber 21 consists of presiding judge Pichlmaier, deputy presiding judge Dr. Schacht, as well as judges Schmitz and Dr. Fricke.

Mannheim has two patent chambers: civil chamber 2 consists of presiding judge Dr. Kircher, deputy presiding judge Lehmeyer, and judge Sender; and civil chamber 7 consists of presiding judge Dr. Tochtermann, deputy presiding judge Schmidt, and judge Dr. Alles.

Authors: 

Dr. Dominik Ho and David Molnia