DOES OBLIGATORY INJUNCTION IN GERMANY COME TO AN END?
German Patent Law Modernized
The legislative procedure for the Second Patent Law Simplification and Modernisation Act (PatModG) has now been completed and will thus enter into force after its promulgation. The Act was preceded by months of intense controversial debates.
A central change is the amendment to Section 139 of the Patent Act, which was a particular focus of public discussion. This amendment introduces an examination of the proportionality of the injunctive relief in infringement proceedings. Even though many participants in the discussion argue that this merely transfers a proportionality test, which is already anchored in the German Code of Civil Procedure, to the Patent Act and thus does not change the legal situation as also established by the Federal Supreme Court in the "Wärmetauscher" (heat exchanger) decision" issued 10th May 2016 (X ZR 114/13), the reliability and efficiency of German patent law is to be feared. For liability reasons alone, the representatives of the alleged infringers will (have to) always raise the objection of proportionality, so that the infringement process will be extended by another point of dispute and gain in complexity. The advocates of a fundamental proportionality test thus want to put a stop to so-called patent trolls (non-practicing entities).
In our opinion, the text of the law that has now been adopted sufficiently expresses the rule-exception relationship (injunctive relief versus disproportionate and unreasonable hardship). In our opinion, the hurdles for an exception to the right to injunctive relief are set high: for each individual case it must be examined whether the right to injunctive relief would lead to an "unreasonable hardship not justified by the exclusive right". The requirement of good faith and any interests of third parties must also be taken into account.
To compensate for the restriction of the right to injunctive relief, the right to damages for the patent proprietor receives a compensatory claim in the form of appropriate compensation.
We will see how this amendment then actually plays out in practice.
As another important change, welcome procedural provisions for the protection of trade secrets have been included in the Patent Act. Thus, infringement proceedings can be conducted efficiently and with sufficient transparency, even if the parties' trade secrets are to be protected.
We would also like to highlight the planned synchronisation of nullity proceedings before the Federal Patent Court and infringement proceedings before the civil courts. The so-called Injunction Gap is to be closed by procedural means. Here, too, we will see what effect this change will have in practice.
The extension of the time limit for initiating the national phase at the DPMA from PCT applications from 30 to 31 months and thus a synchronisation with the time limit provided by the EPO should also not go unmentioned.