GERMANY: An Introduction to Intellectual Property: Patent Prosecution

Start of the Unitary Patent System 2023 

With the Unitary Patent system progressively gaining momentum and coming into full effect with its work in 2023, one can anticipate an inevitable impact on parts of the services offered for the post-grant period by this new development. How much it will affect these services at its commencement will not only depend on the advantages of a Unitary Patent, but also on the acceptance of the Unified Patent Court (UPC), which will likely be the decisive factor on the trajectory of patent prosecution. Thus, the Unitary Patent system might be an element with a strong influence on the patent prosecution market in Germany in 2023.

As economic aspects always had an impact on the patent prosecution and litigation business, the consequences of the global pandemic and the war in Ukraine will likely also influence the German patent business as they already had an impact on a number of supply chains in, eg, pharmaceutical and automotive industry. Additionally specific branches like renewable energy technologies seem to develop faster than expected. The same seems to be true for the electric vehicle market. This trend indicates that new players will show up and market shares will need to be defended - the global economic conditions being a key incentive for companies to save patent costs and monetise their patent portfolios.

These developments will strongly influence the decisions of the patent portfolio managers as to whether or not a patent fits to the Unitary Patent system, and will contribute to the successful integration of the UPC in view of the specific branch and business model.

While the intricacies for implementing a Unitary Patent have been broadly discussed in the past, one major aspect of discussion in the industry as a pro are the advantages of a lower complexity of the post-grant procedure, as well as lower administrative efforts during and after validation, which may deem the Unitary Patent system attractive, particularly in light of the recent global economic crisis. However, the question remains for specific branches, whether they should opt for a unitary patent or validate in multiple jurisdictions.

Generally, for the majority of the European patents it is not the litigation aspect, but the financial and administrative advantage of the Unitary Patent which will be decisive as to whether or not the patent is opted into the system.

However, for the European patents relevant for litigation, the Unitary patent system may become pertinent for the following reasons: a likely trend of an increase in litigation activity in view of the recent market developments. Hence, some might view the UPC as a game changer in patent litigation, as the injunctive relief, in particular, might make it an attractive alternative to litigate in the US, which will likely further increase the litigation activity in the unitary patent system.

Not only the Unitary Patent system itself, but also the realistic perspectives of a litigation at the UPC will be crucial for a Unitary Patent. Regarding the performance of the UPC, the expectations are high. They include high-quality decisions issued in a timely manner, thereby offering the possibility of a simultaneous injunction in currently 17 countries and the chance to harmonise the decisions in Europe for patent litigation. It is additionally expected that the decisions will be more predictable and effective as it combines the best practice of national systems.

On the other hand, with about 700 patent litigation cases per year at the main venues in Düsseldorf, Munich, Mannheim and Hamburg, the German national courts are highly respected venues for patent infringements suits. The injunctive relief available as a standard measure in German proceedings and the highly experienced judges keep, and will likely continue to keep, these venues compelling options.

This reputation of the German courts may influence the selection of the respective venue for litigation at the UPC as all four German local divisions of the UPC are located in Duesseldorf, Munich, Mannheim and Hamburg with the respective experienced judges. Whether this will lower patent litigation activity at the German national courts, only time will tell. In contrast to the UPC, the German national procedures are backed by thousands of judgments of the 10th Senate of the German Federal Court of Justice specialised in intellectual property offering a solid basis of settled case law. This rich basis on case law especially might make the German IP courts more appealing for a longer period of time since, for the UPC, a comparable harmonised case law basis still needs to be created within the next decade. Thus, both the German national litigation and the litigation via a German local division of the UPC have their own appeal.

A further aspect, despite the adoption of the Unitary Patent, is that the litigation costs at the UPC will be significantly higher compared to patent litigation at a single German national court. However, if an injunction in the German market is not sufficient to stop a potential infringer, litigation proceedings need to be started in several countries, pushing the litigation costs at the UPC in an attractive range.

A further advantage of Germany in context with these developments is the significant number of patent attorney firms specialised in patent litigation, a stark juxtaposition compared to other European countries. German patent attorneys also represent their clients in patent invalidation proceedings at the German Federal Patent Court and German Federal Court of Justice, and assist in the parallel infringement proceedings. These firms are highly experienced in handling complex and tightly scheduled proceedings efficiently. Thus exists a highly experienced patent attorney “infrastructure” in Germany to handle complex infringement proceedings alongside specialised lawyers, be it in front of the German courts or the UPC.

With such foresight, a number of German patent attorney firms developed their core business in the direction of patent litigation. Due to their specialisation and extensive experience at the litigation courts, they are in collaboration with specialised lawyers well positioned to manage complex litigations at the UPC.

To conclude, it in fact might be that the upcoming Unitary Patent system may have a negative effect on specific services offered by German patent attorney firms; however, it is believed that this will be over-compensated by other aspects. It is particularly expected that the Unitary Patent system further strengthens the position of Germany in the patent prosecution business. Indeed, the more attractive the national courts as well as the local and regional divisions of the UPC become, the more judicious it is to have a patent in this area, ie, either a national German patent or a Unitary Patent. In essence, it is expected that particular German patent attorney firms will become even more attractive for handling the patent prosecution for non-European patent applicants for being engaged together with specialised law firms for litigation at the UPC.