16201109 EU Civil Patent Enforcement HG1 Patent Rights

16/20/11/09 – EU Civil Patent Enforcement HG-1 Patent Rights in the EU – The Civil Enforcement Perspective Heinz Goddar Boehmert & Boehmert -1 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Enforcement Procedure n Justification enquiry? n Warning letter? n Enforcement/litigation -2 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Defence n Non-Infringement u Literal Infringement u Non-literal infringement n Invalidity of Patent u Attack -3 - against patent

16/20/11/09 – EU Civil Patent Enforcement HG-1 Patent Enforcement I (Germany) 1 st Instance – start of litigation n Complaint at specialized District Court, like Düsseldorf 2 nd Instance u “Factual“ appeal (re-studying of the merits) at specialized District Appeal Court 3 rd Instance u Legal appeal (no re-studying of the merits) at German Federal Court of Justice (10 th Senate) Qualification of Judges: legally trained, no technical background u In all three instances u n n n -4 -

16/20/11/09 – EU Civil Patent Enforcement II (Germany) n n n HG-1 Arguments heard in all three infringement instances: u Only non-infringement arguments „heard“ u No invalidity arguments decided u Only “staying“ request possible because of pending opposition or invalidation procedure Parties must be represented by attorney at law u usually “accompanied“ by (a) patent attorney(s), who must be heard by the court upon request u attorney at law “leading“ presenter Decision of first instance enforceable against bond u even in case of appeal -5 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Attack against Patent (EP or DE) n n n Opposition, if opposition period still pending u 9 months opposition period in case of EP patent, 3 months in case of German (DE) patent Joining opposition procedure, started by third party, if still pending u within three months after complaint filed at District Court Invalidation action, if opposition period has ended and no opposition by third party is pending anymore -6 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Invalidation Procedure I n n Against German patents and German parts of EP patents 1 st Instance invalidation action u to be filed at German Federal Patent Court (FPC) 2 nd Instance u factual appeal at FCJ (10 th Senate) Qualification of judges: u “mixture“ of technically and legally trained judges at FPC u only legally trained judges at 10 th Senate of FCJ -7 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Invalidation Procedure II n n n Invalidation action does not need “legal interest“ – open to “everybody“ Arguments for invalidity u lack of patentability (novelty, inventiveness etc. ) u insufficient disclosure (no enabling teaching) u broadening beyond original disclosure u broadening of scope of protection of granted patent u invention “stolen“ Representation of parties at both FPC and FCJ by either patent attorney(s) or attorney(s) at law or both u “tandem“ of lawyer and patent attorney usual, if co-pending litigation u patent attorney usually “leading“ -8 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Utility Model Enforcement I n n 1 st Instance – start of litigation u complaint at specialized District Court, like Düsseldorf 2 nd Instance u “factual“ appeal (re-studying of the merits) at specialized District Appeal Court 3 rd Instance u legal appeal (no re-studying of the merits) at German Federal Court of Justice (10 th Senate) Qualification of Judges: legally trained, no technical background u in all three instances -9 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Utility Model Enforcement II n Arguments heard in all three infringement instances u u n Effect of invalidation by infringement court u n n infringement validity only inter partes Decision of first instance District Court preliminarily enforceable against bond Representation of parties by attorneys at law u u “tandem“ of lawyer and patent attorney usual Attorney at law “leading“ for infringement arguments, patent attorney for invalidity arguments - 10 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Utility Model Cancellation I n n Cancellation request at German Patent and Trademark Office (GPTO) Factual appeal at FPC Legal revision at FCJ Qualification of judges legal and technical experts at GPTO u legal and technical judges at FPC u legally trained judges only at FCJ u - 11 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Utility Model Cancellation II n Reasons for cancellation (invalidation) u lack of protectability (novelty, inventiveness etc. ) u unduly broadened beyond original disclosure u subject matter already protected by patent or utility model with earlier priority u invention “stolen“ - 12 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Preparation for Patent/Utility Model Litigation n Patent not yet granted: filing of branched-off (“derivative“) utility model at GPTO u n based on co-pending German or EPC application designating Germany Patent granted, but too broad to be defended u patent limitation/restriction procedure at EPO or at GPTO - 13 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Fast Injunction Procedure n n Available for both patent and utility model litigation Specific requirements must be fulfilled urgency u validity of patent/utility model beyond doubt u infringement situation beyond doubt u n Risk of “sudden death“ by ex parte decision of court u preventive measure: caveat letter (“protective writ“) - 14 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Duration of Litigation and Invalidation/Cancellatio n n Duration of first instance procedure rather short u in both patent and utility model litigation u less than one year in first instance u 1 – 2 years appeal procedure u 2 – 3 years at FCJ Duration of invalidation/ cancellation u about one year in first instance u about 1 – 3 years in appeal - 15 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Cost of Litigation and Invalidation/Cancellati n n n Losing party has duty to refund essentially all cost of winning party (court fees, attorneys‘ fees, expert cost etc. ) Invalidation and cancellation cost depend on subject value in dispute In case of subject value in dispute of 500. 000, 00 EUR u cost risk of first instance litigation about 50. 000, 00 EUR u cost risk of first istance invalidation about 50. 000, 00 EUR In general, even at higher subject values in dispute, litigation/invalidation cost only about 10% of comparable e. g. U. S. procedures - 16 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Methods of Calculating Damages n n n License Analogy Lost Profit of Patentee Re-claiming of Infringer‘s Profit - 17 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Meaning of „Damages“ in Germany n n Compensation/Indemnification „Restoration“ of situation as if no infringment would have taken place No „punishment“ – i. e. no „treble damages“ or the like No influence of „wilfulness“ on amount of damages - 18 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 License Analogy n n Fictive arms-length License Agreement between Patentee („Licensor“) and Infringer („Licensee“) assumed Running royalty rate as in arms-length deal taking into due consideration special circumstances, like u u u n no minimum royalty no downpayment no risk of invalidation no risk of unenforceability no risk of lack of success of product therefore: royalty rate often distinctly higher (up to two times) of „normal“ royalty rate Royalty rate in Germany easily determined because of ample case law u particularly because of similar methods in calculating employee inventors‘ remuneration - 19 -

16/20/11/09 – EU Civil Patent Enforcement Patentee‘s Lost Profit n n HG-1 Proof of Profit, if Patentee would have made infringer‘s „business“ Proof that Patentee would have made infringer‘s „business“ - 20 -

16/20/11/09 – EU Civil Patent Enforcement HG-1 Re-claiming of Infringer‘s Profit n General cost of infringer not deductible from turnover u unless n „specified“? Difficult to verify because of lack of discovery in Germany - 21 -