Thursday, October 21, 2021

Patent injunctions remain the norm in Germany, judges from Federal Court of Justice and Karlsruhe Higher Regional Court clarify

Today and tomorrow, the Munich-based Center for Intellectual Property Law, Information and Technology (CIPLITEC) is holding an online conference on the impact of this year's German patent "reform" bill.

The short version is that what's been said so far is pretty consistent with the rather skeptical views I have expressed on the botched injunction statute. I'll keep it very brief because the rest is just detail:

  • Professor Axel Metzger from Berlin's Humboldt University diplomatically voiced criticism of the status quo and especially the practical reality of "forum selling." Without a doubt, German courts are so popular with plaintiffs because they give patentees great leverage. Just this week I showed that Germany is the center of gravity of what is presently the biggest 5G patent dispute: Nokia v. OPPO (and vice versa, as OPPO is countersuing--mostly in Germany as well, plus in China, as I reported earlier today).

    However, his opinion on how to strike the right balance in patent enforcement Professor Metzger did not prevent him from a brutally realistic portrayal of the post-reform situation:

    • "no paradigm shift"

    • "injunction remains the norm"

    • "no constraint on effective enforcement: while lawyers will plead [on proportionality] and costs will increase, courts will develop boilerplate (copy-and-paste) passages"

  • Judge Andreas Voss ("Voß" in German), the Presiding Judge of the Patent (and Antitrust) Senate of the Karlsruhe Higher Regional Court (which hears all patent infringement appeals from Mannheim), gave a presentation that I already interpreted as dashing hopes for major change. Shortly thereafter, University of Luxembourg law professor Martin Stierle asked him the key question of whether he believed that much was going to change. For example, to him the most logical interpretation of the term "under the special circumstances of a singular case" is that an injunction can be denied only under the most egregious of circumstances (which has been my perspective all along). Judge Voss really does not expect a departure from Germany's near-automatic injunction regime. He is, however, concerned that defendants may seek to delay the resolution of infringement cases by attempting to "force" courts to take proportionality-related evidence.

    Just like I said on other occasions, Judge Voss noted that the statutory language does not suggest a wholesale denial of injunctions but normally the discussion is going to center on use-up/workaround periods. Judge Voss rightly noted that even though the statute says the claim for injunctive relief is "excluded," the very next word ("soweit") means "to the extent that...".

  • Judge Fabian Hoffmann is widely regarded as the relatively defendant-friendliest judge of the patent-specialized 10th Civil Senate of the Federal Court of Justice (where the patent litigation buck effectively stops in Germany). But even Judge Hoffmann had no good news for the injunction reform movement. First he explained that the hurdle for third-party interests to counsel against the grant of an injunction is not going to be lower than the one that is applicable to a petition for a compulsory license. Judge Hoffmann argues that a compulsory license results in legal use of a patent, but if someone has been convicted of infringement and seeks to be permitted to continue an illegal use, there is no reason why the standard should be easier to meet.

    Then he pointed out that this year's amendment to the German Patent Act was explicitly meant to just codify the case law, and if the legislature says that it wants to preserve the status quo, no one should expect the courts to decide to any different effect. He went on to say that the law would have had to be phrased differently, and certainly wouldn't have been enacted during the last legislative term--if lawmakers had wanted to establish an eBay v. MercExchange type of injunction standard in Germany. That is 100% spot-on whether one likes to hear that simple truth or not. I absolutely concur with Judge Hoffmann that those who wanted to move the patent injunction needle would have had to convince the legislature of the need for a paradigm shift. They failed to do so; they didn't even seriously try. They thought a narrow, limited exception was going to be sufficient. What they got is only a perpetuation of the status quo ante, enshrining the Wärmetauscher (Heat Exchanger) case law by the Federal Court of Justice. Now they'll have to live with the result, which is going to be, plain and simple, more of the same. Plus ça change...

Those judges only spoke for themselves, not for their courts. But what they said spoke for itself.

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