In patent law, at least a small revolution is indeed imminent – namely with regard to the enforcement of injunctive relief in the event of a patent infringement. As early as January 2020, the German Federal Ministry of Justice and Consumer Protection (BMJV) published a discussion draft for a second law on the simplification and modernization of patent law (second PatMoG) in order to obtain comments from experts and associations from the field of intellectual property on the amendments to the law envisaged therein.
Amendment of Section 139 (1) PatG
In addition to a number of procedural amendments to the law aimed at accelerating and coordinating infringement and nullity actions in the event of patent infringement, a key point of the discussion draft is a proposed amendment to Section 139 (1) PatG, which concerns a patent owner’s injunctive relief against an infringer of its patent.
According to the current version of Section 139 (1) PatG, a person who unlawfully uses a patented invention may be sued for injunctive relief by the owner of the patent if there is a risk of repetition, and the right to injunctive relief also exists if an infringing act is threatened for the first time.
In the discussion draft of the BMJV on the second PatMoG, an addition is planned in Section 139 (1) PatG, according to which the previously unconditional injunctive relief is excluded if and to the extent that the enforcement of the injunctive relief is disproportionate because it represents a hardship not justified by the exclusive right due to special circumstances, taking into account the interest of the patent proprietor vis-à-vis the infringer and the requirements of good faith.
Objective: Adjustment of the right to injunctive relief
The aim of this addition to Section 139 (1) PatG is to adapt the right to injunctive relief in the event of patent infringement to progressive digitization and the increasing technological complexity of products, and to relieve the burden on manufacturing companies that are sued by a non-manufacturing company for patent infringement.
The proportionality test for patent law injunctive relief proposed in the BMJV’s discussion draft is also intended to take account of the fact that although such a proportionality test is already possible on the basis of current law, the courts responsible for patent infringement proceedings have so far made only very limited use of it, which is why there have been at least isolated cases in which the economic disadvantages of an injunction exceed the level required for a sufficiently deterrent effect of patent law injunctive relief. These cases are increasing, on the one hand, due to the increasing complexity and digitalization of products and, on the other hand, due to practices of non-manufacturing companies that are sometimes perceived as abusive of the law.
This is what “patent trolls” have to do with it
The proportionality test proposed in the discussion draft is therefore intended in particular to take account of a development observed in recent years that is related to so-called “patent trolls”. Patent trolls are defined as persons who obtain or acquire patents without ever intending to implement the patented invention, for example, for the manufacture of the patented products. Often these individuals or companies, also referred to as “non-practicing entities” (NPE), build up extensive patent portfolios by buying up patents from a particular technical field (often on favorable terms) and then enforcing them in a package against manufacturing companies that are alleged to infringe at least one patent from the asserted portfolio. This enforcement of claims for injunctive relief under patent law, which is often perceived as inappropriate from the point of view of the manufacturing companies, can threaten the existence of the manufacturing companies, especially if complete product portfolios of the manufacturing company are affected by the asserted claim for injunctive relief. Corresponding cases have become known in particular from the fields of telecommunications and IT as well as automotive engineering, where the products have a very high technological complexity and therefore a large number of patents may be realized in the products. In addition, a merging with telecommunications and IT technologies can also be observed in other technological fields, because physical and virtual objects are increasingly interconnected through the “Internet of Things” and “Industry 4.0”, respectively.
What the proportionality test is intended to achieve
The proportionality test in Section 139 (1) PatG provided for in the BMJV’s discussion draft is intended to have the effect of limiting the injunctive relief sought by patent trolls or non-producing companies (NPE) in particular when enforcing patent law injunctive relief against producing companies, which actually infringe a patent, if the requested cease-and-desist action represents an unjustified hardship, which may be the case, for example, if the existence of the producing company is endangered due to the enforcement of the patent law cease-and-desist claim.
Contradictory discussion among market participants
However, it has not yet been decided whether the restriction of the right to injunctive relief under patent law envisaged in the BMJV’s discussion draft will actually find its way into the Patent Act. At present, a partly very contrary discussion of the market participants concerned can be observed. One objection to a restriction of the right to injunctive relief under patent law, which is intended in particular to prevent the practices of patent trolls and non-producing enterprises (NPEs) that are regarded as abusive of the law, is that for legal dogmatic reasons there should be no first- and second-class patentees who are distinguished according to whether or not they use the patented invention themselves. Unlike the Trademark Act, the Patent Act does not impose any obligation to use the invention, i.e., a patent owner is free to decide whether to use a patent he holds himself by implementing it in a product or to exploit it in some other way, such as by licensing or by taking legal action in the event of a patent infringement.
It therefore remains exciting to observe whether the patent law revolution announced in the FAZ article will take place.
Do you have any questions for patent attorney Dr. Stefan Gehrsitz, or would you like more in-depth advice?