Wednesday, December 2, 2020

Federal Council of Germany has patent reform bill on agenda for December 18 session

Just a quick procedural update on German patent reform: the Bundesrat (Federal Council) has patent reform on the agenda for its December 18 session--item no. 15 for the day. While I was pleased to see some improvement in early September, the legislative proposal that the German government (Chancellor Merkel's cabinet) ultimately decided to put on the table is worded in such a way that the courts would rarely even reach the question of proportionality, much less resolve it in a defendant's favor. I criticized various large companies for shooting themselves in the foot in this context.

So what's the significance of that December 18 decision by the Federal Council going to be?

The Federal Council is the co-legislative body in which the governments of the German federal states cast their votes. Just like in the U.S., patent law is federal law, not state law. Therefore, the Federal Council's influence is limited. Theoretically it could veto even a patent reform bill, but could then be overruled by a supermajority of the Bundestag (Federal Parliament). A veto won't happen here, realistically. Instead, the Federal Council will just express its views, which the Federal Parliament will then take into consideration.

While some members of the Federal Parliament have been informally looking at this dossier for a while, the formal process will only begin after the Federal Council has taken its non-binding position.

Obviously, a camp that believes it can get mileage out of the Federal Council's opinion will try to leverage it. Presumably, the state of Lower Saxony, a major Volkswagen shareholder, will be in favor of serious patent injunction reform. The most populous state, North Rhine-Westphalia, is home to Deutsche Telekom, but also to chemical giant Bayer, which opposes reform, and the Dusseldorf courts, which generate a lot of "business" for the state (which runs those courts) and the local economy. In the second-most populous and economically strongest state, Bavaria, they have BMW and Audi, but I doubt that those organizations know how to prevent their state government from siding with Siemens and the patent law community at large (Bavaria is home to the European Patent Office, the German Patent and Trademark Office, the Federal Patent Court of Germany, and as a result, to numerous patent law firms).

I'd like to be proven to have been wrong on this one, but I really fear that the Federal Council will be just about OK with the current bill (which won't solve the problem, not even in the long run) at best and speak out against even that kind of toothless reform at worst (in which case the Federal Council would likely propose particular wordings that would further dilute the injunction reform statute). When the Federal Council's position has been made public, I'll report and comment on it.

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