AUSTRIA: An Introduction to Intellectual Property

Austria, even though a small country with a population of 8.9 million, has a long tradition in Intellectual Property Protection. The Austrian Patent Office has been deeply involved in the creation of the IR, PCT and EP systems as well in the establishment of the EUIPO. One example for the international efforts is the Vienna Classification (VCL) is an international classification system established in 1973 by the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks, and administered by the World Intellectual Property Organization (WIPO). The Austrian Patent office granted the first patent in 1899 for “arc light regulators”. Austrian IP-practitioners carry on this tradition.

After a minor downturn in 2021 the patent application numbers grew again in 2022. In contrast trademark applications boomed in the years of the COVID crisis in Austria. The problems in the German automobile industry will certainly have implications on Austrian suppliers but this can also be seen as a chance to diversify the product range. In certain areas like machine tools, plastics, electrical machinery, and transport Austrian inventors are very active.

Not only the prosecution but also litigation is relevant on the IP-market in Austria. Patent infringement proceedings in Austria for example are exclusively handled by the Commercial Court of Vienna. The specialised chambers in such patent infringement proceedings are composed of two judges of the commercial court without technical background and lay judge with technical expertise. The lay judges typically are Austrian patent attorneys. As there are not too many lay judges available to the court and as they also represent various client in their own practice, it is quite important to consider possible conflict situations. In the second instance the Higher Regional Court Vienna is responsible; also there two professional judges and one lay judge will decide on the case. In cases with important questions of law also an appeal to the Supreme Court is possible. In Austria, because of the bifurcated system, one has to differentiate between infringement and nullity proceedings as regards court competence. Nullity proceedings are handled by the Nullity Department of the Austrian Patent Office in the first instance and by the Higher Regional Court Vienna in the second instance. Nullity proceedings may be initiated by the alleged infringer before or during the infringement proceeding. The alleged patent infringer may request a stay of the proceedings. An expedited procedure in the nullity proceedings may be requested by a party. Infringement proceedings before the Commercial Court of Vienna are quite often stayed until a decision in a parallel nullity proceeding has been made.

The duration of main proceeding in a patent infringement case depends heavily on the complexity and a possible stay for the nullity proceedings. As most of the cases are suspended until a final decision in the nullity proceedings which takes between two and three years, it takes three to four years to receive a first instance decision. If the proceedings are not suspended it can take one-and-a-half years to two years until the decision in the first instance. Because in Austria preliminary injunctions may be requested in patent infringement cases to stop the infringement fast or to preserve evidence, it is important to understand that there is no urgency requirement – at least before a main proceeding has been initiated. In most of the preliminary injunction cases the Commercial Court holds inter-parte proceedings, which take between three and nine months. A typical timeline for an ex-parte preliminary injunction to preserve evidence according to the Enforcement Directive unfortunately requires four months. The form of a first instance patent litigation procedure can be described as follows: plaintiff files a request for preliminary injunction to preserve evidence (very seldom); plaintiff files online the complaint with the court and pays the court fees. The court serves the complaint on the defendant. The defendant then files the statement of defence and often initiates a nullity action with the Austrian Patent Office and requests the stay of the proceeding. Both parties file preparatory briefs. The first hearing before the court with the determination of the further programme then takes place, and an expert will be named by court. Eventually a decision to stay the proceeding until a decision in the nullity action will be made.  The expert opinion of the court expert will be served to the parties. Both parties file preparatory briefs. At least one further hearing then occurs. The parties serve their cost notes according to the Attorney's Tariff Act. The court hands down the judgment. In a recent decision of the Supreme Court private expert opinions can be subject to reimbursement of costs by the losing party if the case is complex and the expert opinion is necessary for appropriate legal defence.

Life science will continue to play the key role in the Austrian Intellectual Property Field. The reason for that is that quite a few Austrian companies, start-ups and universities are active in this field.

Since a lot of suppliers in the Automotive industry as well as OEM-producers have to change dramatically their product portfolio and to concentrate on e-mobility, many parts are not necessary anymore. Many companies work on the most relevant parts and technologies needed for electro-cars. There is also a dramatic rise of patent applications in this field in Austria, so there will be IP litigation in this narrowing field over the next few years and beyond that.

Especially in view of evidence collecting for patent infringement proceedings, the preliminary injunction for preservation of evidence is of importance but the tool set based on the preliminary injunction does not fit all the needs and special requirements for such a proceeding. Therefore installation of a specific procedure for the preservation of evidence needs to be considered.

The biggest challenge for the Austrian IP system as well as for an international IP system is the rise of China to becoming the largest patent filing country worldwide. The strategy seems to protect the important and strong home market in China also against western market-leading companies. Chinese companies have also started to file abroad. Even world market-leading Austrian companies do not have large IP portfolios to balance such a situation.

Finally, the unitary patent will become reality 2023. This will have an impact on the way patent litigation will be used in Europe and Austria. It is expected that the majority of patent litigation cases in Austria will shift Unified Patent Court proceedings. Vienna will have a local chamber.