14 Jan 2021 | Patent Litigation

Update on the planned reform of the German Patent Act

The planned modernization of German patent law is progressing. Since the first draft for the reform of the German Patent Act was provided in January 2020, two further drafts have been presented. Significant changes have been made, particularly with regard to the reform of injunctive relief, which continues to cause controversy.

The first draft for the reform of the German Patent Act was provided already in January 2020 and has been the subject of an article from May 2020 which can be found here. In our first article, the streamlining of patent nullity proceedings and the inclusion of a proportionality requirement with respect to injunctive relief were already identified as key aspects of the reform proposal. Concerning these essential points, there have been some developments with regard to the latest drafts and their discussion among experts, which we summarize below. 

Reform of the Right to Injunctive Relief 

The most recent draft includes some changes regarding the proportionality requirement with respect to injunctive relief. The legal repercussions of these changes have already become the subject of debate. 

In the discussion of the various drafts, it is recognized that injunctive relief is already limited in certain cases. For example, according to the “Wärmetauscher” ("Heat Exchanger") decision of the Federal Court of Justice of May 2016 (case reference BGH X ZR 114/13), the patent infringer is to be granted a grace period in exceptional cases. However, opinions differ considerably as to what scope should be sought for such a restriction and what scope the intended wording of the law will actually lead to.           

According to the present draft provided by the government, the right to injunctive relief is excluded to the extent that enforcement by the patent owner would lead to disproportionate hardship for the infringer or third parties not justified by the exclusive right in view of the particular circumstances of the individual case. 

Thereby, it is now explicitly clarified that the circumstances will be assessed for each individual case. 

Additionally, according to the latest draft, possible hardships for third parties can also lead to a restriction of the right to injunctive relief. This may, for example, apply to customers of the patent infringer who are dependent on the infringing products and for whom no alternative supplier is available, provided that this results in unjustified hardship in the individual case. According to the explanatory memorandum of the draft, in addition to the already existing possibility of a compulsory license, this creates the option of ordering a less intensive measure, for example by limiting the injunctive relief only for a limited period of time. 

Compared to the first draft, however, there is no longer any explicit reference to considering the interest of the patent holder. Discussion is ongoing about whether such interest is already sufficiently taken into account by the fact that only hardships not justified by the exclusive right can lead to the exclusion of the right to injunctive relief, considering that such exclusive right justifies the patent proprietor imposing restrictions on other market participants under normal circumstances. 

Furthermore, it is now provided that the infringed patent proprietor may demand monetary compensation in the event of a restriction of the right to injunctive relief, to the extent that such compensation appears appropriate. This claim for compensation is independent of any damage claim. In particular, it shall be possible to demand monetary compensation even if a claim for damages is ruled out in cases in which patent infringement is not negligent. 

Reform of the Patent Nullity Proceedings 

Concerning the streamlining of the patent nullity proceedings, there are no substantial changes compared to the first proposal. In particular, the time limit for the patent proprietor to submit his defence arguments against the nullity action is still set at two months and can be extended to three months only in exceptional cases. At the same time, the Federal Patent Court shall prepare its preliminary opinion, if possible, within six months after service of the nullity action. 

Further proposed amendments 

Among the further amendments, a new provision provided for in the present draft is notable in view of the current pandemic situation. According to such provision, it shall in the future be possible to conduct hearings and interrogations before the German Patent and Trademark Office by video conference. 

Conclusion 

The procedure for the planned patent law reform is already well advanced. However, in view of the ongoing discussion with regard to the restriction of the right to injunctive relief, possibly decisive details remain to be determined. We will keep you informed of further progress.