ECJ on Interim Measures in Germany – Reactions in Case Law and Literature

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After the Munich District Court asked for clarification, the European Court of Justice (ECJ) has commented on German court practice regarding preliminary injunctions in patent infringement cases where the validity of the patent in question has not already been confirmed in opposition or nullity proceedings. While the ECJ ruling seems to favor patent owners, it remains to be seen whether the ruling will actually lead to a change in the practice of the German courts.

The decision of the ECJ

In its judgment of April 28, 2022 (Case C-44/21), the ECJ ruled that a court practice that in principle rejects interim injunctions in patent infringement cases where the validity of the patent in question has not (yet) been confirmed in first instance opposition or revocation proceedings is incompatible with European law. Furthermore, national case law that is incompatible with this judgment may not be applied by the competent courts.

The reason for the Munich Regional Court to ask the ECJ for a decision was the adoption by the Munich Higher Regional Court of a practice already applied by other courts in a high number of patent cases. According to this practice, preliminary injunctions in patent infringement proceedings are regularly rejected by the courts if the validity of the granted patent has not already been unsuccessfully challenged at least in the first instance proceedings. This has led to criticism, as patent owners have found themselves unable to obtain a preliminary injunction against an infringer if the validity of their patent had not previously been challenged – a circumstance over which the patent owner has no direct influence. Both the development and the current practice in this regard vary from court to court.

Reactions to the ECJ decision

The ECJ decision has caused quite a stir and has been widely criticized.
For example, in his opinion (GRUR 2021, 466) on the order for reference of the Munich Regional Court (21 O 16782/20), the presiding judge at the Düsseldorf Higher Regional Court, Dr. Thomas Kühnen, criticized the fact that the case law in question had not been accurately reproduced by the Munich I Regional Court in the order for reference. The exceptions developed by this case law, in which a temporary injunction can be issued despite unexamined legal status, were incorrectly presented as conclusive, and the reasons which led in the case law in question to not issue a temporary injunction in patent matters simply for the sake of the granted patent were not discussed. It was also disregarded that only one out of three patents survives an attack on the validity of the patent. The technically often very complex subjects of invention are frequently not reliably verifiable for an infringement court staffed only with legal experts as to whether they are new and inventive compared to the prior art. The principle of proportionality must also be observed in Directive 2004/48/EC (Enforcement Directive), so that the interests of the alleged infringer must also be taken into account when deciding whether to issue a preliminary injunction. The approach of the LG München I, he argues, takes the grant of the patent and its technically amateurish review by the infringement court as the basis for whether or not the patent is provisionally enforced, and therefore does not make any assessment of the circumstances of the individual case.

Pichlmaier, presiding judge at LG München I (GRUR 2021, 557), responds to this comment and rejects the criticism of the incorrect presentation of the facts. The order for reference was merely based on the case law of the Munich Higher Regional Court, which had been correctly reproduced and which, for example, unlike the Düsseldorf Higher Regional Court, ¬ assumed conclusive exceptions. Moreover, the subject of the submission was the practiced principle of the OLG case law and not an individual question. The error rate of the patent offices cited by Kühnen, which often leads to a destruction of the patents in retrospect, was not mentioned in the OLG case law and thus was not taken into account in the submission. The argument of technical complexity cited by Kühnen could only apply to individual cases, but could not be used for the principle developed in the case law in question. This argument had also not been mentioned in the case law of the Munich Higher Regional Court.

The presiding judge at the BGH Deichfuß also notes (GRUR 2022, 800) that the ECJ in its decision had proceeded from a factual situation incorrectly reproduced by the LG München I in its order for reference. According to this decision, the issuance of a preliminary injunction for patent infringement “regularly” requires that the patent for the injunction has already survived opposition or nullity proceedings in the first instance; existing exceptions are not applied. This paints a false picture of German case law practice. However, it follows from the recitals and provisions of the Enforcement Directive that a schematic approach is prohibited, which results in the requirement for legislation and national courts to duly consider all objective circumstances of the individual case. Since the case law to date is completely different from that reproduced in the order for reference of the Munich Regional Court I, the decision of the ECJ does not give any reason to deviate from the previous case law practice; this is factually convincing and should be retained.

This ruling is also viewed critically in the literature. Although the decision is considered to be consistent (Keßler/Palzer in EuZW 2022, 562), it is noted, similarly to Kühnen, that German case law is significantly more differentiated than assumed by the ECJ decision. The ECJ answered a reference question that in fact did not arise in this form, which is why it is doubtful whether the court practice will change. In any case, there was no compulsion under EU law to adapt, since the Enforcement Directive did not require enforcement of intellectual property rights at any price, because all measures made possible by it were subject to proportionality. This is due to the fact that the enforcement of intellectual property rights regularly leads to collisions of conflicting fundamental rights. Doubts as to the existence of rights must therefore be taken into account in the context of the balancing of interests required by this reservation. In addition, the threat of liability under Section 945 of the German Code of Civil Procedure would sufficiently inhibit the patent proprietor’s frivolous application for preliminary injunctions.

It is further noted (Schmitz/Zilliox in GRUR-Prax 2022, 314) that although the ECJ rightly points out that a presumption of validity applies to patents as of the publication of their grant, the case law developed by the higher regional courts in practice leads to the refusal of interim relief for granted patents because the courts generally reject the urgency due to the lack of a validity procedure. With the present ruling, it is to be expected that the number of applications for injunctions based on patents without a completed validity procedure will increase. Whether the courts will be more generous in issuing preliminary injunctions in the future as a result of the ruling seems questionable, since the national judges had understandable
reasons for setting high requirements for the legal validity of the patent for invalidity. Moreover, the securities in favor of the defendant mentioned by the ECJ would practically rarely provide sufficient protection against the economic consequences of an unjustified injunction. All in all, one of the main hurdles for applicants seems to have been removed and there is now at least the possibility of obtaining a rapid injunction in preliminary injunction proceedings, even if the legal validity is uncertain.

Outlook

Overall, it therefore remains to be seen whether the ECJ ruling will actually lead to a change in case law.

New consumer protection law for digital goods

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With the Digital Content Directive (Directive (EU) 2019/770), the EU is further expanding the European digital single market and making it easier for consumers to access digital products. The EU’s stated goal was to ensure a balance between a high level of consumer protection and promoting the competitiveness of companies. Nevertheless, the drafting of contracts that have as their object the provision of digital content will have to be adapted in some fundamental respects as a result of the new legal framework, which has been in force in Germany since January 01, 2022.

Legal regulations and scope of application

The new legal framework for the provision of digital content was created in Germany by several amendments to the German Civil Code. The following overview focuses on the new regulations in sections 327 et seq. BGB, which have a significant impact on the design of general terms and conditions in the B2C sector.

These regulations apply to all consumer contracts that have as their object the provision of digital content or digital services (digital products) by an entrepreneur in return for payment of a price. A significant change is that the new legal regulations also apply if the consumer provides personal data as a means of payment, unless this data is processed solely to fulfill the contractual obligation to perform or legal requirements. Since free digital content is often provided with the aim of using users’ collected personal data beyond what is necessary to provide the digital product itself, this expansion of the scope means that many previously unregulated use cases, such as free apps, will now be subject to stricter consumer protection law requirements.

Obligation to provide the digital product

Within the scope of application of §§ 327 et seq. BGB, the entrepreneur is obligated to provide the digital product that is the subject of the contract. If the entrepreneur breaches this contractual obligation, the consumer may terminate the contract and claim damages or compensation for futile expenses. If the digital product is defective, the consumer may also demand subsequent performance or a price reduction. Particularly for digital products that are offered “free of charge” and for which the consumer only “pays” with personal data, this represents a paradigm shift compared to the previous regulations, which gave the entrepreneur greater leeway to amend or withdraw from the contract and also provided for milder legal consequences in the event of defects.

Obligation to update the digital product

Another controversial issue was regulated in Section 327f of the German Civil Code (BGB), which now requires the entrepreneur to provide the consumer with updates that are necessary for the digital product to remain in conformity with the contract and to inform the consumer of these updates accordingly. These mandatory updates explicitly include security updates. The obligation to update the digital product applies for as long as the digital product is provided and may therefore even go beyond the general warranty obligations. The trader is even liable for product defects if it has provided an update but the consumer has not installed it because the trader has not sufficiently informed the consumer about the availability of the update and the consequences of not installing it, or because the failure to install is due to faulty installation instructions.

Changes to the digital product

Another important provision is found in the new Section 327r of the German Civil Code, which implements Article 19 of the Digital Content Directive. If the contract provides that the digital product will be made available to the consumer on a permanent basis, the trader may only make changes to the digital product that go beyond what is necessary to maintain conformity with the contract if

  • the contract provides for this possibility and contains a valid reason for it,
  • the consumer does not incur any additional costs as a result of the change, and
  • the consumer is informed about the change in a clear and comprehensible manner.

If these conditions are not met, the consumer has the right to terminate the contract. However, Recital No. 77 of the Digital Content Directive explicitly states that if the changed digital content no longer meets the subjective and objective contractual requirements, the consumer should also be able to demand subsequent performance, reduce the price, and claim damages or reimbursement of futile expenses.

According to Recital No. 75 of the Digital Content Directive, valid reasons for modifying the digital product may include cases where the modification is necessary to adapt the digital content to a new technical environment or to a larger number of users, or for other important operational reasons.

Especially in the case of free apps, it is not uncommon to change the feature catalog during the lifetime of the app, sometimes perhaps with an expansion of features, but often with the removal of features that prove to be impractical or not economically viable. However, according to the examples given in recital 75 of the Digital Content Directive, neither the practicality nor the economic viability of a function should be a valid reason for its removal from the app. If the removal of such features proves to be a defect, the user could theoretically demand that the app be restored to its previous version.

Consequences for contract design

The new regulations significantly tighten legal obligations when providing digital products, especially in cases where the product is provided free of charge and access is paid for only through the consumer’s data. The previous legal framework did not explicitly recognize personal data as a valid means of payment and therefore did not oblige the entrepreneur who received the data to provide any consideration. With the new legal framework, the entrepreneur’s performance obligations are now structured similarly to a normal purchase or rental contract. Since the legal requirements under Section 327s of the German Civil Code (BGB) can hardly be modified by contract, the new regulations will require a redrafting of most existing contracts. Even more than in the past, it will be important to define the scope of performance carefully so as not to expose oneself to subsequent performance obligations and to reserve the right to make changes at a later date. Additional information obligations will also be imposed on the entrepreneur, which he must fulfill in order to avoid warnings from competitors. If you have any questions about the new legal framework, we will be happy to advise you.

From the land of the “Beetle smile” or on the protection of the famous shape in Germany

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The Porsche 911 decision of the Federal Court of Justice (I ZR 222/20) and Ur-Käfer decision of the Higher Regional Court of Braunschweig (2 U 47/19)

The Volkswagen Beetle and the Porsche 911 are indisputably among the great classics of automotive engineering. On March 10, the Higher Regional Court of Braunschweig ruled on the claims of the heiress after a body designer of the then Porsche Konstruktionen GmbH to the appearance of the original VW Beetle, from which she derived participation claims in the sales success of the VW New Beetle, which had been produced by VW in the years 1997 to 2010. Shortly afterwards, on April 7, the Federal Court of Justice pronounced its verdict in a dispute in which the same heiress had asserted similar claims relating to the Porsche 991 series of the Porsche 911 type from a comparable set of facts. The testator had died in 1966, so that the copyright protection period in both disputes would still run until 2036, if copyright protection existed for the respective designs. The Higher Regional Court of Braunschweig dismissed the action outright, while the Federal Court of Justice referred the case pending there back to the Court of Appeal for a new hearing.

Both cases involved a whole series of important copyright issues that may well also arise in the case of other iconic designs that have been perpetuated in constantly changing form, but still as part of a line of development over decades. From the abundance of legal problems that were dealt with here, three legal questions and one factual one are to be highlighted.

Is fame of the design sufficient for copyright protection?

In the case of famous and particularly long-lived designs from the field of applied art, factors come into play that otherwise play no role in copyright disputes. The fact that a shape becomes iconically famous at some point does not mean that it was particularly original at the time of its creation.

The VW Beetle in particular is a good example of this, and the richly illustrated Braunschweig decision shows a whole wealth of amazingly similar vehicles from the time when the “Volkswagen” was created, to which the later global corporation owes its name – and which no one knows today. Of all these vehicles, only the “Beetle” survives in the consciousness of the global public. It had already become a kind of “living fossil” long before the last production decades of the original model series, when it was only produced in Central and South America, the last survivor of a way of building cars that had long since become obsolete.

Therefore, the legal assessment must be made on the basis of the set of forms known at the time of creation, even though this may have later fallen into oblivion. The Higher Regional Court of Braunschweig correctly recognized this in its decision. In the Porsche decision, there is only a brief reference in the same sense (para. 31).

“Cultic”, at any rate, must be concluded from the decision of the OLG Braunschweig, is not a copyright category, just as little as “famous” or “groundbreaking in art history”. Other courts are not so stringent in this respect, as is shown by the very generous case law on the protection of tubular steel furniture from the Bauhaus period, in which copyrightability seems to be inferred from art historical significance.

Which standard of protection is decisive?

Separate from the question of the set of forms to be used for comparison is the question of which of the legal standards that have changed again and again in the decades since famous designs such as the Beetle or the Porsche 365 or 911 were created is to be used as the standard for the examination. Which standard of protection is to be applied to an ancient design – especially in the field of applied art?

  • The standard of protection at the time it was created?
  • The standard of protection before the Seilzirkus and Geburtstagszug decisions of the BGH (GRUR 2014, 175 – Geburtstagszug)?
  • The standard of protection before the ECJ’s Cofemel and Brompton decisions (C-683/17 – Cofemel; C-833/18 Brompton)?

The BGH clearly measures against the latest standard harmonized by the ECJ. The OLG expresses itself misleadingly in this respect, but would apply today’s standards to the actual situation at the time of creation and deny protection to an object which, according to today’s standards, was not protectable on the basis of the facts at that time (in particular in view of the then known set of forms).

Questions of copyright law

Both the BGH and the OLG Braunschweig apply the current rules of copyright contract law also to an author who, like the plaintiff’s father as an employee of the defendant’s legal predecessor, is subject to Section 43 UrhG (authors in employment and service relationships). Both decisions consider the fairness compensation of Section 32a UrhG to be applicable without further ado even in such cases. However, this only concerns new cases that arose after the new regulation came into force at the end of March 2002.

Visualization aids for the court

Time and again, it becomes apparent that two worlds collide in copyright law: That of the creators and that of the lawyers who have to deal with the creators’ output. In a legal dispute over a piece of music, how does one convey the essence of the dispute if the court is not musically trained? In the field of applied art, how can one make it clear what is at stake? The designers usually have a well-developed spatial imagination, which the discerning judges, on the other hand, do not necessarily have.
That is why many a trial in this field has been won (or lost) because the two samples, “original” and “alleged imitation” were physically expedited into the courtroom – this may involve a not inconsiderable effort in the case of bulky objects.
But what can be done when the object in question does not fit into the courtroom or – as in the Braunschweig case concerning the authorship of the VW “Beetle” – the supposed original only exists as a design drawing? One of the questions at issue was whether the formative shapes of the later “Beetle” were already present in the subsequent drawings.

From the decision discussed in ZUM-RD 2022, 342, 366

 

Here, the defendant party broke new ground with a visualization aid for the court in the form of a virtual model that could be displayed three-dimensionally in all conceivable views and juxtaposed with the subsequently executed vehicle.

 

From the decision discussed in ZUM-RD 2022, 342, 367

Thus, even the layman could see that the design of the plaintiff’s side was by no means “smiling”, contrary to the plaintiff’s claim, because the hood in the alleged original was completely straight. The view from diagonally behind also shows that the executed Beetle followed a completely different design concept than the alleged original, recognizable from the protruding fenders, the running board and the rear section, which also ends in a bulge, in the executed vehicle. The OLG Braunschweig correctly subsumed on this basis.

Such visualization aids can be produced with current CAD technology with manageable effort, even if under certain circumstances not always in such high quality as shown here.

Conclusion

The great willingness (one could almost say relief) with which the recognizing court made use of this assistance shows how important it can be, especially in the field of applied art, to argue as much visually as linguistically.

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

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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

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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

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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

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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

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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/ /.

Cologne Regional Court affirms the eligibility of sandals for copyright protection

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In preliminary injunction proceedings, the Regional Court of Cologne rules in favour of a shoe manufacturer and affirms the eligibility of sandals for copyright protection.

By order of 30 December 2021, the Regional Court of Cologne provisionally decided in preliminary injunction proceedings that a total of four sandal models of a well-known shoe manufacturer enjoy copyright protection and may no longer be offered or marketed by the defendants offering similar shoe models (see order of the Regional Court of Cologne of 30 December 2021, ref. no. 14 O 419/21).

Decision of the court

The defendants offered the shoe models in dispute in their online shop and put them on the market by sending them to buyers in the Federal Republic of Germany. Through a test purchase in the judicial district of Cologne’s Regional Court, the case finally became pending before this court.

The court assumed that the four sandal models were works of applied art protected by copyright under Section 2 (1) no. 4 UrhG. In doing so, the Board relied significantly on the “Birthday Train” decision of the Federal Court of Justice of 13 November 2013 (Case No. I ZR 143/12) and assumed that the shoe models each reached a level of design that justified copyright protection. The decision literally states:

“Each of the plaintiff’s shoes, which are to be regarded as articles of daily use, displays a considerable artistic design which rises over and above the form dictated by the function.”

In doing so, the court assumed that the designs of the straps or the upper side of the shoe, the sole, the thorn buckle, the profile, the more or less undisguised lateral cut of the sole, the absence of stitching and ornamentation, the lines as well as the respective diverging minimalist shapes were sufficiently individual and artistic.

The injunction court was convinced that the plaintiff was able to credibly demonstrate, taking into account an expert opinion, that the creator had used an existing scope of design in the development that was sufficiently different from the market environment at the time of creation.

Finally, the court concluded that the challenged copies are almost identical reproductions, despite the affixing of different trademarks.

Although a protective letter was filed, the court issued the requested interim injunction without an oral hearing. The requested order for a security deposit was rejected with the argument that the defendant’s offer, according to its own statement, is not directed at customers in the Federal Republic of Germany.

Conclusion

The decision breaks with the previous practice according to which fashion creations only enjoy copyright protection in absolute exceptional cases. Although the “Birthday Train” decision of the Federal Court of Justice put an end to the different requirements for copyright protection for works of visual and applied art, it is more than questionable whether shoe models, even if they have a certain degree of fame, actually cross the threshold for copyright protection.

Since these are “only” preliminary injunction proceedings, it cannot be ruled out that the Cologne Higher Regional Court will assess the eligibility for copyright protection differently. If the case goes to the main proceedings, it will probably be the Federal Court of Justice which will ultimately have to have the final say here and explain whether the interpretation of its decision from 2013 – and taking into account the ECJ case law on fashion creations that has since been handed down – really goes as far as the Cologne Regional Court has now assumed.

Higher Regional Court of Düsseldorf: Attribution of redesign measures by customers after the “Garage Door” decision

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Introduction

Claiming a direct patent infringement (Sec. 9 Patent Act) is generally easier for the patent proprietor than claiming an indirect patent infringement (Sec. 10 Patent Act), because the latter is subject to additional requirements. Direct infringement is also legally more favorable for the patent proprietor than indirect infringement, because the latter does not neccessarily grant unconditional injunctive relief, particularly in the case of possible non-infringing use of the attacked embodiment, but rather the infringer is not subject to the injunction if certain obligations are complied with.

In case of doubt, a patent owner will therefore want to try to assert a direct infringement instead of an indirect infringement.

Direct infringement of a product claim under Sec. 9 Patent Act, however, generally requires that the attacked embodiment realizes all features of the claim. If this is not the case, indirect infringement can only be considered under the additional conditions of Sec. 10 Patent Act, as stated.

Exceptions in the case law

However, case law has already made exceptions to this in the past and has assumed direct infringement under certain conditions even if not all features of a product claim are realized and the realization of the missing features only occurs on the customer side, for example in case the realization of the missing features only requires the addition of non-essential parts or the mere combination of successively supplied parts (cf. for example Regional Court of Düsseldorf, judgment of 5.2.2004, Ref. 4b O 388/03, BeckRS 2006, 4947; Regional Court of Düsseldorf, judgment of 5.8.2008, Ref. 4a O 220/07, BeckRS 2012, 5045).

In 2011, the Higher Regional Court of Düsseldorf had finally substantiated the legal grounds of this result and referred to the former variant with the now generally known catchword “all-round ingredient”. According to this decision, the decisive factor is whether the supplier of a contested embodiment expects or instructs the addition of this ingredient (see Higher Regional Court of Düsseldorf, judgment of February 24, 2011, Ref. 2 U 122/09, BeckRS 2011, 8375).

This and several other subsequent decisions dealt with the addition of a further subject matter or ingredient on the part of the customer for the complete realization of the patent claim, for example, water to a heatable floor for livestock stables (cf. Higher Regional Court of Düsseldorf, judgment of 19.7.2018, Ref. 15 U 43/15, GRUR-RS 2018, 22632) or the provision of a commercially available PC for installing the software essential to the invention thereon (cf. Higher Regional Court of Düsseldorf, judgment of 2.4.2017, Ref. I-2 U 23/14 GRUR-RS 2017, 109820).

Other decisions transferred this case law to those software-related cases in which the challenged embodiment can be modified on the side of the buyers in such a way that it fulfills the missing features (cf. Higher Regional Court of Düsseldorf, judgement of 19.2.2015, Ref. I-15 U 39/14, GRUR-RR 2016, 97; Higher Regional Court of Munich, decision of 9.4.2019, Ref. 6 U 4653/18, GRUR-RS 2019, 41076; Higher Regional Court of Düsseldorf, judgement of 16.4.2020, Ref. I-2 U 15/19, GRUR-RR 2020, 289).

Decision “Garage Door”

In the decision with the keyword “Garagentor” / “Garage Door” (judgement of 22.7.2021, Ref. 2 U 58/20, GRUR-RR 2021, 429), the Higher Regional Court of Düsseldorf now also transfers these principles to cases in which a direct patent infringement is only constituted when the customer removes a physical component from the attacked embodiment.

The requirements formulated in the above cited case law are adopted. Accordingly, it must first be assumed that the customer carries out a modification that leads to the realization of all features of the asserted patent claim, and that this is attributable to the defendant. Such an attribution is to be considered, for example, if the defendant has – expressly or impliedly – directed this transformation as the last act of manufacture or has at least consciously exploited the fact that customers will proceed with such a transformation for his own benefit (marginal no. 98). This requires precise presentation of according facts (marginal no. 99) and the rules on delay must be observed (marginal no. 100).

To the author’s knowledge, leave for appeals are currently pending against both the “Garage Door” decision and the above cited decision GRUR-RR 2020, 289 (decision keyword “Repeater”) with the Federal Court of Justice (Ref. X ZR 48/20 and X ZR 72/21, respectively). The Federal Court of Justice will therefore have the opportunity to set the course for practice in these and comparable cases.