Dr. Adrian Steffens, Patentanwalt bei BOEHMERT & BOEHMERT

Patent Applications for AI Technologies at Record High

/in

The innovation landscape in the field of artificial intelligence (AI) is flourishing. This is the result of a recent analysis by the German Patent and Trade Mark Office (DPMA). Speaking in Munich, Eva Schewior, President of the DPMA, reported that the number of patent applications for Germany has risen by 40 percent over the past five years, particularly in technology classes with a strong connection to AI. The core areas of AI, including special digital computer systems and neural networks, including the associated learning methods, have even seen a tripling of applications since 2019.

This development shows that AI technologies, such as generative tools, are increasingly being integrated into everyday life and are likely to play an important role in many areas of life in the future. In addition to the core areas, the DPMA found a high level of innovation in fields such as image analysis, computer technology, medical technology and transport and vehicle technology.

In terms of patent applications for the German market, US applicants lead with a share of 32.4 percent of all applications published in 2023. Germany follows with 17.1% and Japan with 12.4%. China and the Republic of Korea show the largest increase in publications compared to the previous year.

Inventions related to AI are regularly based on mathematical models implemented as software. Patent protection for these computer-implemented methods is limited in that computer programs as such are not patentable. Instead, patent protection requires that the invention contributes to solving a specific technical problem by technical means. This contribution may, for example, relate to the control of an autonomous vehicle.

BOEHMERT & BOEHMERT has already supported and accompanied many of these AI patent applications. With our experience in the field of AI technology, we are able to advise our clients in a targeted manner and respond specifically to their needs in the dynamic environment of AI innovations.

Trade Mark Misuse in Practice

/in

To the chagrin of honest entrepreneurs, trade marks are sometimes misused and used against them. The aim of the applicant may be to obtain a blocking position against competitors. Alternatively, the application may be speculative, based on the hope that a company will want to use the mark for its goods or services in the future and will therefore buy or license it from the applicant.

Case Law on Bad Faith Trade Mark Applications

Businesses are not unprotected against such trade mark applications. Case law divides these cases into those with and without intent to injure, under the general heading of bad faith. If, for example, a trade mark application is filed to prevent a competitor from continuing to use the trade mark, bad faith is usually present because of the intention to block and obstruct. Since the Classe E decision, the German Federal Supreme Court (Bundesgerichtshof – BGH) has also assumed that there is an “abusive exploitation of a merely formal legal position” if someone

  • registers a large number of trade marks
  • has no serious intention of using the marks, and
  • the trade marks are essentially hoarded for the purpose of obtaining injunctions and claims for damages against third parties using identical/similar designations (BGH, judgement of 23 November 2000, I ZR 93/98, § 35 – Classe E).

Proof of the subjective elements, i.e. proof of the applicant’s lack of intention to use, is regularly problematic in the practical application of the law.

Abusive Exploitation of a Merely Formal Legal Position

The requirements laid down by the BGH have recently been applied by the regional courts in Stuttgart and Hamburg in several cases. A manufacturer of sports watches, represented by BOEHMERT & BOEHMERT, faced Capella EOOD, a company based in Bulgaria and represented by Mr Erich Auer. Mr Auer is well known in the trade mark scene for having registered thousands of trade marks over the years through various shell companies such as Ivo-Kermatin Ltd, Suebi Ltd and Segimerus Ltd. In the present case, he took action against the watch manufacturer and its European dealers on the basis of one of these many trademarks. The case concerned a sports watch offered under the same name as the trade mark. In response to these warnings, we issued a letter of cease and desist to Capella EOOD on behalf of the watch manufacturer for unauthorised warnings of intellectual property rights. This is because a claim for injunctive relief under trademark law is precluded by the defence of abuse of rights in the case of an application made in bad faith, i.e. it cannot be enforced in the long term.

The Regional Court of Stuttgart had to decide and issued a preliminary injunction against Capella, which we had applied for and which it confirmed on opposition (judgment of 18 October 2023, 32 O 73/23 KfH, not yet final). The difficulty in the proceedings was to establish that the trade mark applicant had no subjective intention to use the trade mark and was acting in bad faith based on the objective circumstances of the case. The following facts indicated that the applicant had never intended to use the trade mark itself in its own business or for third parties on the basis of a consultancy concept: no external marketing efforts were made, no comprehensible business model or trade mark concept could be presented, and the trade mark was transferred back and forth between Erich Auer’s various companies. In addition, the applicant cancelled the majority of its trade marks after the expiry of the official deadline for the payment of fees. All in all, there was every indication that he had hoarded the trade marks essentially for the purpose of obtaining injunctions and damages against third parties using identical or similar designations. This constituted an abuse of the formal legal position of the trade mark proprietor. The Stuttgart Higher Regional Court (Oberlandesgericht) dismissed Capella’s appeal against this decision on the grounds that it was obviously unlikely to succeed under Section 522(2) of the German Code of Civil Procedure (ZPO) (decision of 27 February 2024, 2 U 187/23).

This is not the first decision in which Mr Auer’s business model has been found to be dishonest. Only recently, the General Court of the European Union also found bad faith in one of his trade mark applications – in this case by Copernicus EOOD (General Court, judgment of 17 January 2024, T-650/22 – ATHLET).

Fabio Adinolfi, Rechtsanwalt bei BOEHMERT & BOEHMERT

Radiator grille element infringes Audi brand

/in

In its judgment of January, 25 (C-334/22), the CJEU clarified that a car manufacturer can prohibit the use of a sign for spare parts if it contains an element that is similar or identical to a trademark.

Audi’s well-known four-rings trademark is registered in the EU for vehicles and spare parts, among other things. A Polish dealer was selling copied radiator grilles intended for older Audi vehicles. The radiator grilles contained an element whose shape is similar or identical to the Audi trademark and is also intended for mounting the four-ring trademark.

In 2017, Audi took action against this dealer in Poland. The aim was to obtain a ban on marketing copied radiator grilles of the aforementioned type. The Polish court referred the case to the CJEU with the request to clarify whether the marketing of replacement car parts at issue (specifically: radiator grilles) constituted “use of a sign in the course of trade” that could impair the functions of the Audi brand. Furthermore, the national court wanted to clarify whether the owner of this trademark can prohibit a third party from such use.

In its judgment, the Court affirms this. It states that in the present case, the radiator grilles did not originate from the trade mark proprietor and had been placed on the market without its consent. The part intended for affixing the Audi emblem was integrated into the radiator grilles for their marketing by the third party. It is therefore visible to the public wishing to purchase such a spare part. This could constitute a factual link between the spare part in question and the owner of the AUDI mark. Therefore, such use could impair the functions of the trademark (including the origin or quality of the goods).

However, the specific legal dispute still has to be decided by the court in Warsaw, which is bound by the legal opinion of the CJEU. The CJEU left it to the Polish court to examine whether the disputed part on the radiator grille is identical or similar to the Audi brand.

Should Audi actually prevail in the proceedings, the practical consequence of the ruling is likely to be that radiator grille manufacturers will in future maintain a significant distance from (automotive) brands when designing corresponding products in order to avoid brand collisions.

Copyright and freedom of use – the Warhol case

/in

In May 2023, the US Supreme Court surprisingly restricted artistic creativity in favor of broad copyright protection.

This article first explains how the Supreme Court limited the scope of permissible re-use. It then outlines current approaches in German case law regarding the adaptation and transformation of copyrighted works.

The doctrine of fair use in US law

The decision of the US Supreme Court was based on a portrait of the musician Prince that Andy Warhol produced as a silkscreen from a photograph taken by the plaintiff, Lynn Goldsmith. By licensing “Orange Prince” to the media company Condé Nast, the Andy Warhol Foundation had infringed the photographer’s copyrights.

The legal issue was the doctrine of fair use. This is set out in Section 107 of the US Copyright Act. The fair use doctrine is a four-factor test of whether a copyrighted work has been fairly used: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use on the potential market for or value of the copyrighted work.

The Supreme Court looked at the first factor. This factor considers whether the new work is being used for commercial or nonprofit educational purposes, and whether the transformation has added something new, such as an additional purpose or a change in character. Based on these criteria, the court rejected fair use and thus upheld Goldsmith’s claim. The key factor was that Warhol’s work had been used commercially. Furthermore, the modified portrait did not represent something fundamentally different or new. Not every slightly modified copy could enjoy copyright protection, otherwise it would be circumvented and thus undermined.

The court of first instance had accepted fair use on the grounds that Warhol had changed the character of the photograph. This is because Prince appears vulnerable in the photograph, but iconic in the image. The work was therefore immediately identifiable as a “Warhol” work. Supreme Court Justice Kagan’s minority opinion also follows the classic utilitarian approach. She fears that the majority decision will stifle creative progress and undermine creative freedom.

Free use and copyright limitations in German law

In Germany, two approaches to such borderline cases – between exclusivity and freedom of access – are currently conceivable:

First, the approach of the Federal Court of Justice: For adaptations or other modifications of a work, Section 23(1) Act on Copyright and Related Rights (UrhG) provides that the author’s consent is not required only if the newly created work maintains a sufficient distance to the work used. According to the Porsche 911 decision of the Federal Court of Justice, this so-called free use requires that “in view of the uniqueness of the new work, the borrowed personal characteristics of the protected older work fade away”. Fading in this sense occurs when the new work is so distant that the personal characteristics of the old work recede. The use of the older work may only appear as an inspiration for a new, independent work (BGH, judgement of 7 April 2022 – I ZR 222/20, § 43). In some instances, this case law even permits the clear adoption of the older work, provided that this is necessary for the artistic creation.

The Higher Regional Court of Hamburg recently took a different approach: the reproduction of the song “Metall auf Metall” and its transformation into an independent new work by means of sampling falls under the term pastiche within the meaning of Section 51a UrhG and is therefore a legally permissible use (judgement of 28 April 2022 – 5 U 48/05). The Federal Court of Justice stayed the subsequent appeal proceedings (case I ZR 74/22) and referred the question to the European Court of Justice.

Whichever way you look at it, the BGH and OLG Hamburg seem to have internalized the mantra “Cultural creation must build on the earlier work of other authors” more than the US Supreme Court. Over here in Germany, the Warhol case might have ended differently.

 

EPC: Amendments to rules for postal and electronic notification by the EPO

/in ,

Amendments to Rules 126(2), 127(2) and 131(2) EPC concern the postal and electronical notification by the European Patent Office (EPO), and the calculation of time periods triggered by a notification

 On 13 October 2022, the Administrative Council adopted changes to Rules 46, 49, 50, 57, 65, 82, 126, 127 and 131 of the Implementing Regulations to the European Patent Convention (CA/D 10/22). The amendments concern, inter alia, Rules 126(2), 127(2) and 131(2) EPC which relate to the notification of documents served by the EPO by postal services and by electronic means, and to the calculation of periods triggered by the notification. New Rules 126(2), 127(2) and 131(2) EPC enter into force on 1 November 2023 and apply to documents served by postal services or electronic means on or after that date.

These amendments remove the 10-day notification fiction according to the current Rules 126(2) EPC and 127(2) EPC, according to which a document is deemed to be served successfully on the tenth day after the date stated on the document, which is taken into account in calculating periods triggered by the notification of communications from the EPO. Instead, new Rules 126(2) and 127(2) EPC provide for a new notification fiction, according to which postal and electronic notification are deemed to occur on the date of the document. The EPO expects that the new notification fiction will result in a simplification for users since it brings the EPC and PCT notification regimes closer together.

Amended Rules 126(2) and 127(2) EPC also govern the burden of proof in exceptional cases in which notification of the documents is in dispute. As before, the EPO retains the obligation to prove the fact and the date of delivery in such instances. If the EPO is unable to prove that a document was delivered to the addressee within seven days of the date it bears, a so-called “safeguard” will be applied, resulting in that a period triggered by the deemed receipt of that document will be extended by the number of days by which these seven days are exceeded.  The general principles governing time-limit extensions set out in Rule 134 EPC will apply to the period recalculated applying this safeguard.

Rule 131(2) EPC has been adapted to the effect that the rule now explicitly refers to the fiction of notification of the documents as the relevant event for the purposes of time limit calculation.

Amended Rules 126(2), 127(2) and 131(2) EPC are intended to take into account the principle of instantaneous notification in the digital world. The EPO mailbox is deemed a reliable service available to all professional representatives and applicants in the EPC contracting states and covering 99% (by volume) of all documents issued by the EPO. For applicants and representatives, new Rules 126(2), 127(2) and 131(2) EPC impose a change in the practice of recording time limits and thus also the training of staff, in particular with regard to the handling of exceptional cases in which notification of the documents is in dispute, even if the latter are unlikely to occur in daily practice.

Important URLs:

https://www.epo.org/law-practice/legal-texts/official-journal/2023/03/a29.html

https://www.epo.org/law-practice/legal-texts/official-journal/2022/11/a101.html

Termination of the Swiss-German Agreement of 1892 – what trademark owners have to consider

/in

Effective May 31, 2022, Germany has terminated the “Agreement between Switzerland and Germany Concerning the Reciprocal Protection of Patents, Designs and Trademarks” of 1892. For more than 100 years, this bilateral Agreement had provided for facilitations for owners of industrial property rights in the territory of the respective other contracting party. The exact reasons for the termination are not known, but the Agreement had already been criticized for some time as being outdated.

Termination of the Agreement particularly significant for trademark owners

The most important practical relevance of the German-Swiss Agreement was in the field of trademark law and here in considerable simplifications in the proof of genuine use of trademarks in revocation proceedings. Under both German and Swiss trademark law, the requirement of proof of genuine use of a trademark for the registered goods and services aplies five years after registration or after expiration of the opposition period. As a matter of principle, only those acts of use are considered to be relevant which took place in the respective territory – i.e. in Germany in the case of German trademarks and in Switzerland in the case of Swiss trademarks. This principle was modified by the German-Swiss Agreement to the extent that acts of use in the territory of the respective other party were also recognized as a suitable basis for genuine use. Thus, a Swiss trademark could be successfully defended against an application for revocation although it had not been used in Switzerland at all, but only had been used in Germany for the relevant goods and services, and vice versa. This modification of the principle of territoriality ceases to apply with the termination of the German-Swiss Agreement.

Relevance in terms of timing

The termination of the German-Swiss Agreement takes place ex-nunc, i.e. there is no retroactive effect of termination of the Agreement. Although much is still unclear in detail, there are indications that it will still be possible to rely on acts of use in the territory of the other party during the relevant period of the past five years, but only with regard to such acts of use until May 31, 2022. The full relevance of the termination of the Agreement will therefore only unfold after May 31, 2027, when all acts of use in the territory of the other party are outside the five-year period.

Considerations for the trademark strategy

Owners of German or Swiss trademarks who can only show use in the respective other part must prepare themselves for a deterioration of the use situation. It is particularly advisable to check the trademark portfolio for possible new applications for the respective trademarks (as far as permissible from the point of view of repeat applications) in order to maintain trademark protection.

ECJ declares German court practice regarding the (non-)granting of preliminary injunctions arising from patents to be contrary to European law

/in

As already reported in a June 2021 article in our B&B Bulletin, the Munich Regional Court has asked the European Court of Justice (ECJ) to rule on whether the German court practice regarding preliminary injunctions in cases of patent infringement is compatible with European law.

The issue here is that German higher regional courts (most recently including the Munich Higher Regional Court) regularly refuse to issue a preliminary injunction on the grounds of patent infringement if the validity of the patent in question has not already been confirmed in opposition or nullity proceedings. In this case, the successful examination procedure before the German Patent and Trademark Office or the European Patent Office is not considered sufficient to assume that the legal validity of the patent is certain. As a consequence, patent owners were regularly unable to obtain a preliminary injunction against an infringer unless third parties had previously (unsuccessfully) attacked the patent in question Therefore, this possibility of legal action ultimately depended on factors over which the patent owner had no control.

In view of the fact that the effect of a patent takes effect upon grant, the Munich Regional Court considered this practice to violate the right of the patent proprietor to effective interim measures, which arises from Union law (namely Directive 2004/48). At the same time, in the case on which the decision was based, the Munich Regional Court saw itself prevented by the binding effect of case law of the Munich Higher Regional Court from issuing a preliminary injunction, although it assumed both patent infringement and validity of the patent.

This situation prompted the Munich Regional Court to submit the practice of the Munich Higher Regional Court (and other higher regional courts) to review by the ECJ. In its judgment of April 28, 2022 (Case C-44/21), the ECJ has now clarified that a court practice is incompatible with European law whereby the grant of interim measures for infringement of patents is in principle refused if validity of the patent in question has not been confirmed at least in first instance opposition or nullity proceedings.

Furthermore, the ECJ clarified that national courts are obliged to modify any established case law contrary to this assessment, if necessary. In particular, the Munich Regional Court must not apply national case law that is incompatible with the ruling.

In principle, the ECJ thus significantly strengthens the rights of patent owners in preliminary injunction proceedings before the German courts. However, it remains to be seen how this will be reflected in judicial practice.

Intellectual property updates in light of the ongoing war in Ukraine

/in

For more than two months now, a fierce war has evolved between Russia and Ukraine. We observe the developments in Ukraine with great concern, and sincerely hope that the Russian aggression can be stopped as soon as possible.

It may seem inappropriate to consider the effects of war on intellectual property developments, in light of ongoing reports about crimes committed in the Ukraine, and in light of devastating news and pictures that reach us. Still, certain effects on IP exist, and we believe that providing a brief summary of these on this site is appropriate.

The International Trademark Association (INTA) has summarized some of the effects the war had on intellectual property practice (https://www.inta.org/resources/the-status-of-intellectual-property-in-russia-and-ukraine/; updated April 8, 2022). Some excerpts from the information conveyed by INTA:

Ukraine

  • “The Ukrainian IP Office (Ukrpatent) continues to work. The Patent Board of Appeals has suspended operations.”
  • “It is not currently possible to send or receive original hard copy (paper) documents to / from Ukrpatent. The online filing system remains in operational and official fees can still be paid to Ukrpatent”
  • “The Ukrainian Parliament passed a law ‘On Protection of Interests of Intellectual Property in Martial Law’ (Law No 7228) on April 1, 2022. According to the new law, the duration of terms related to the protection of IP rights, as well as deadlines for procedures for acquiring these rights, are suspended. The law allows authorized persons to submit documents within 90 days of the abolition of martial law, without paying a fee for extension, or restoration of the relevant deadlines. Martial law was declared in Ukraine on February 4, 2022, following the issue of Decree 64/2022, for a period of 30 days. On March 26, 2022, the Ukrainian Parliament voted to extend martial law for a further 30 days. It is expected to be extended again before the end of April 2022”

Russia

  • “The Russian IP Office (Rospatent) and the Eurasian Patent Office are operating as usual and have not announced any unusual extensions or reinstatements”
  • “Russia has issued new legislation regarding changes to its patent laws but has yet to officially revise its law regarding the treatment of trademarks. The recent ruling in the Peppa Pig case, in which a Russian court refused to enforce Peppa Pig’s rights in Russia due to the unfriendly actions of the UK against Russia, there is a de facto shift in treatment of trademarks via the courts and a likely mirror Rospatent’s policy based on recent filings for similar marks to famous marks from ‘unfriendly countries’“

European Union

  • “The European Union Intellectual Property Office (EUIPO) has halted all cooperation actions with Rospatent, and the Eurasian Patent Office (EAPO)”
  • “The EUIPO pledged support to Ukrainian users and issued a one-month extension of time limits (which began on February 24, 2022) in proceedings before the office for all parties that have a residence or a registered office in Ukraine”

United States

  • “On March 4, 2022, the USPTO announced that it will no longer engage with officials from either Rospatent or the Eurasian Patent Office”
  • “Effective March 11, 2022, the USPTO will no longer grant requests to participate in the Global Patent Prosecution Highway (GPPH) when such requests are based on work performed by Rospatent as an Office of Earlier Examination under the GPPH“
  • “The USPTO also warns that applicants filing international applications under the Patent Cooperation Treaty should be aware that selecting Rospatent as an International Searching Authority or International Preliminary Examining Authority, may not result in the successful processing of international applications under PCT, with relation to possible problems with the transmittal of fees through financial institutions“

The European Patent Office will increase its fees on a rotating basis as of April 1, 2022

/in

The EPO is striving to make online filing of application documents the standard format. To make this more attractive, the EPO has made it possible to file in DOCX, the character-coded format.

In the future, the EPO will distinguish 3 cases for filing fees:

1. All application documents are filed online in character coded format. Then the official filing fee is only EUR 100.00.
2. The application is filed online, but at least one document is not in character-coded format. Then the filing fee is EUR 130.00.
3. Filing in paper form, with a filing fee of EUR 270.00.

It is therefore strongly recommended to ensure in the future that all application documents are filed in character-coded format in order to save official filing fees.

The chart on this page illustrates the development of filing fees in recent years. Reflected are the specific filing fees for online (red line) and paper (dashed red) filings since 2006, as well as the new filing fee incurred for online filings with only one non-character-coded document, since 2020 (dashed and dotted red). As expected, all fees have increased over the period, with one exception: since the introduction of online filing with one non-character-coded document, the amount for online filing has decreased significantly in 2020.

Accordingly, official fees can be saved if all application documents are filed in a character coded format. It is to be noted, though, that character coded files, contrary to raster formats (PDF) could easily be modified without identifying such changes afterwards. Furthermore, a consistent representation of special characters and formulas is ensured with raster formats only. It may be advisable to file documents additionally in a raster format; the slightly higher fee of EUR 130 applies.

The graph also shows the percentage change in the online submission fee from the last change (dashed and dotted blue). The significant 20 percent decrease in 2020 is clearly shown. Also shown is the inflation rate in Germany (dashed blue). As can be clearly seen, changes in fees have been at significantly higher levels than the inflation rate, ranging from 2 to 10 percent from 2008 to 2017 compared to inflation values between 0 and 2 percent. This picture has changed significantly, at least temporarily, since the introduction of online submission with one non-character-coded document in 2020: the sharp drop of 20 percent corrects the old trend. However, with the latest change, the EPO returns to a rate above 5 percent, although here the inflation rate to be contrasted is not yet known. Hopefully, future fee changes will stop the trend and remain below the rate of inflation.

 

Graphic: Development of filing fees

UPC: Changes to the legal framework for action against cross-border supply chains

/in ,

Strategic thoughts on contributory patent infringement ahead of the entry into force of the Agreement on a Unified Patent Court

The legal framework for actions against cross-border supply chains in Europe that precede the use of a patented object will change significantly with the forthcoming entry into force of the Agreement on a Unified Patent Court (UPC).

The current legal framework

Under the current legal framework, European patents unfold their protective effect at national level. Owners of a granted European or national patent can ban third parties from using the patented object within the territory of a country in which the patent is in force. In practice, this means that in the event of cross-border patent infringement, infringers can only be sued in individual countries and usually are only made accountable for actions taking place in the country in which the infringement lawsuit is filed. There is currently no possibility of centrally enforcing a patent for the whole of Europe.

This territoriality principle of European patents is about to change with the entry into force of the Unified Patent Court (UPC), expected in mid-2022. The UPC creates a new legal framework in which European patents granted by the European Patent Office can be validated as so-called “unitary patents” which have unitary effect throughout the UPC territory.

The legal instrument of contributory patent infringement allows a patent proprietor to prohibit the use of means which constitute no patent infringement by themselves, but which are suitable and intended for the use of the patented invention. For example, if a patent protects a device G that must have elements A, B and C, the patent proprietor can sue a competitor M who manufactures, offers, introduces into the market or either imports or possesses for these purposes a device having all three elements A, B and C, which are essential for the invention G, for direct patent infringement. Furthermore, a supplier L of the competitor M who supplies the element C to the competitor M and thereby makes the patent infringement possible, is also liable for contributory infringement and can be sued by the patent owner.

Under the current legal framework of most European jurisdictions, a claim against the supplier L in this example case is subject to a double territorial requirement: A contributory patent infringement by supplier L must be assumed if both the supply or offer of element C to competitor M and the subsequent (direct) patent infringement by competitor M, e.g. manufacture or marketing of device G with elements A, B and C, take place in the “domestic territory” of the patent-protected jurisdiction (cf. Sec. 10(1) Patent Act, Art. 60(2) of the UK Patent Act or Art. L613-4 of the French Patent Act). As a rule, contributory patent infringement must be discarded due to lack of this double territorial requirement if the transfer of element C to competitor M or the marketing or manufacture of device G by the competitor M takes place abroad.

For owners of a patent with effect in Germany, i.e. of a European patent in force in Germany or of a German national patent, the case law of the German Federal Court of Justice dictates a patent proprietor-friendly approach to the double territorial requirement: Accordingly, a contributory patent infringement can also be assumed when a supplier L supplies elements C to a competitor M if this competitor M manufactures the patent-protected device G – using the elements C supplied by L – with the elements A, B and C, be it abroad or in Germany, to subsequently offer or market the device G in Germany (BGH 30. 01.2007 X ZR 53/04 – Funkuhr II). As long as the competitor M ultimately implements a direct patent infringement in Germany, cases in which the supplier L is located abroad and offers or supplies from there to Germany, and even cases in which the supplier only acts abroad but knowing that the destination of the supplied means is Germany, are also covered (BGH 03.02.2015 X ZR 69/13 – Audiosignalcodierung).

With the above-mentioned decisions, the German Federal Court of Justice weakened the double territorial requirement for contributory patent infringement in Germany for the benefit of patent holders. In practice, this means that owners of patents with effect in Germany can take action against domestic or foreign suppliers of a domestic or foreign competitor who sells or offers the patented product in Germany, even if the patented product is assembled or manufactured abroad.

However, cases in which the competitor M ships the patented product to a third European country are in any case not covered. In such cases, the patent holder cannot currently take any action against the supplier L before the German courts. For example, a German supplier L who provides element C, for example, to a Romanian competitor who manufactures the German-patented device G (with elements A, B and C) in Romania, for example, and sells it in Italy, cannot currently be held accountable before the German courts.

The new legal framework

The relevant territorial criteria for contributory patent infringement will change significantly with the entry into force of the UPC.

For contributory patent infringement under the UPC, the term “domestic territory” of the respective national patent law will be replaced by the term “territory of the contracting member states” (cf. Art. 26(1) UPC Agreement). Accordingly, contributory patent infringement will not require a double domestic relation to a single state. Instead, the new legal framework for contributory patent infringement in Europe will only require that both the supply or offer and the subsequent direct patent infringement take place within the borders of the UPC territory. Under the UPC, delivery/offer and patent-infringing use of the delivered/offered means may thus take place in different UPC states.

For our example case (German supplier delivers element C to Romanian competitor who purchases C, uses it to manufacture G and sells the patented device G in Italy) both the delivery and the sale of the patented product G take place within the “territory of the contracting member states”, as Germany, Italy and Romania are all member states of the UPC. In this respect, the owner of a unitary patent in this example case could not only enforce their patent against the competitor M for direct infringement, but also against the supplier L for contributory infringement.

Thus, from the entry into force of the UPC, it will become possible for patent owners to take action against cross-border supply chains within Europe, which do not constitute an act of infringement under the current legal framework.

The 24 member states of the Unified Patent Court Agreement are: Austria, Belgium, Bulgaria, Cyprus, Technical Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Romania, Slovakia, Slovenia and Sweden. These states will form a territorial unit according to the UPC.

The EU states that are not part of the Convention are: Croatia, Poland and Spain. Other UPC states that are not EU states and therefore not part of the Convention are: Iceland, Norway, the United Kingdom, Switzerland, Turkey, Serbia, Albania, Montenegro, and Northern Macedonia.

The new strategic role of German national patents

The new UPC courts, under the lead of the central Board of Appeal in Luxembourg, will have to develop their own case law on all relevant issues of substantive patent law over time. It initially remains uncertain whether and, if so, to what extent the principles developed in German case law on contributory patent infringement will be adopted by the UPC courts. In view of the strong role that German judges and courts are expected to play in the new system, this is a realistic possibility, but it cannot be assumed with certainty at this early stage.

The currently applicable national legal standard of contributory patent infringement, which in Germany relies on Sec. 10(1) PatG, as well as the German case law applicable to it, will continue to be valid for German national patents in any case. This applies in particular to the above-mentioned – rather patent owner-friendly – extended concept of “domestic territory” for contributory patent infringement, which is applied by the German courts, mainly in the light of the decisions Funkuhr II and Audiosignalcodierung of the German Federal Court of Justice.

In practice, this means that European unitary patents and German national patents will cover different cases of contributory patent infringement from the entry into force of the UPC.

It should also be emphasised that the prohibition of double protection (Art. II § 8 IntPatÜG) will be abolished for unitary patents with the effect that patentees will be entitled to protect the same invention simultaneously by a European unitary patent and by a German national patent, even with identical patent claims. This possibility paves the way for new strategic considerations for patent proprietors who want to optimise their legal position.

Holders of a European unitary patent will be able to take action against suppliers based in a first UPC state who provide essential elements of the protected invention to a manufacturer or seller of a patented product based in a second UPC state. The first and second UPC states may be the same state or different states.

However, it is currently uncertain whether a European unitary patent will allow taking action against supply chains that take place at least partly outside the UPC territory ahead of a direct patent infringement in the UPC territory, for example, if a supplier delivers to a manufacturer or seller located outside the UPC territory, for example, in the United Kingdom, Spain or China, even if the latter later goes on to use the patented product within the UPC territory directly infringing the patent.

For owners of German national patents – or of German utility models – it will continue to be possible to take action against suppliers of a competitor who uses a patented product in Germany in the cases covered by the extended concept of domestic territory defined by the German case law. For example, it will still be possible for owners of a German national patent to take action against a supplier based in Germany who, according to our example, supplies element C to a competitor based in Spain, the United Kingdom or China who manufactures the patented device there to then re-import it into Germany. The same applies to a supplier located in Spain, the United Kingdom or China, for example, who supplies element C to a competitor located in Germany or elsewhere, who then sends the patented device G to Germany.

Conclusion

European unitary patents and German national patents may cover different cases of contributory patent infringement from the entry into force of the UPC, at least while the UPC courts develop their own case law.

All actors operating on the European market, in particular patent proprietors and potential patent infringers, are well advised to develop their own strategy taking into account the new legal framework in view of the new risks and opportunities.

Patent owners with important economic interests in Germany who want to remain capable of acting against the suppliers of their competitors should ideally complement the protection conferred by European unitary patents with parallel German national patents. For existing European patent applications, the option of branching off a German utility model may be worth considering.

Further details on the European Unitary Patent and the Unified Patent Court can be found at  https://www.boehmert.de/en/news-knowledge/upc-update/detail/getting-your-patent-portfolio-ready-for-the-upc/ /.

Menu

Informations

Legal Areas

© Copyright 2024– BOEHMERT & BOEHMERT