Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 1 LSI Law Seminars International ti Litigating Patents Overseas: Country Specific Considerations Germany by Wolfgang Festl-Wietek Viering, Jentschura & Partner Munich, Düsseldorf, Singapore April 7, 2008, Washington Munich Oberhausen Dresden Düsseldorf - Singapore Taiwan Prefiling Considerations There is no "European" litigation system. "European Patent Litigation Agreement (EPLA) and a European Community based court for European patents are just plans. Litigation is on a country by country basis. This applies even to European patents because it is not the EP, but the national part of the respective EP that is litigated. Article 64(3) EPC: Any infringement of a European Patent shall be dealt with by national law. 2
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 2 Prefiling Considerations Country by country rules apply to procedural law and enforcement with very limited exemptions EU Enforcement Directive will have harmonizing effects, but implementation will need time. Forum Shopping is essential within Europe within the individual countries. 3 Prefiling Considerations What is Europe, seen from a Litigator s point of view? 27 countries of the European Union as politically independent countries with a customs union and the principle of free circulation of goods and services Germany: 82 million people and GDP 2,5 trillion USD UK: 61 million people and GDP of 1,8 trillion USD France: 61 million people and GDP of 1,8 trillion USD further European countries, e.g. Switzerland, Turkey (not members of the EU) 4
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 3 Prefiling Considerations Cross Border Injunctions The Brussels Convention (Council Regulation No 44/2001) in general allows cross border injunctions, i.e. the court of one European state issues a decision which is also valid in another European state. However, the ECJ cases of 2006 "GAT./. LuK" (C-4/03) Primus./. Roche (C-539/03) put an end to cross border injunctions (so far). 5 Prefiling Considerations Court System in Germany Bifurcation of litigation in Germany Infringement cases - Civil Courts: Regional Court Higher Regional Court Federal Supreme Court Invalidity (for patent) & Cancellation (for utility model) cases: German Patent and Trademark Office (UM 1st inst) Federal Patent Court (Patent 1st inst) Federal Supreme Court (BGH) 6
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 4 Prefiling Considerations Court System in Germany Validity of a patent cannot be questioned and examined by judge in infringement proceedings If the court is convinced that the patent will be cancelled in the parallel pending nullity suit, it may stay the infringement proceedings until the validity of the patent is decided. Preliminary Injunction based on a patent right is possible. Ex parte preliminary injunctions (without hearing the defendant) are not uncommon, in particular during trade fairs. 7 Prefiling Considerations Court System in Germany A further consequence of the bifurcation is that attorneys in Germany are either - Patent attorneys with a technical background. They pass strict exams (German as well as European Patent attorney) and are also trained at the courts, but are admitted only to the Patent Courts, not to the infringement (civil) courts. - Attorneys at law with full legal, but no technical background. They can litigate before all courts. Judges at - the Patent courts have technical background - the Infringement (civil) courts have no technical background, but are specialized in IP matters. 8
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 5 Prefiling Considerations Warning Letter Warning letters are common practise to make the adverse party aware of the patent as well as of the infringement thereof to avoid court proceedings by offering the adverse party an opportunity to sign a cease-and-desist declaration to learn from the adverse party s reply about possible objections before filing a request for a preliminary i injunction but may be not prudent in some individual cases. 9 Prefiling Considerations Preliminary Injunctions Is a Preliminary Injunction an option? Available for litigation in patents designs, trademarks utility models only if validity is substantiated violation of unfair competition rights also ex parte and further provided that the technical aspects of the case are not too complicated there are no problems with establishing evidence the owner of the right has a legitimate interest in preventing damage that cannot be compensated by an ordinary suit. 10
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 6 Prefiling Considerations Branching off a Utility Model Utility Models can be very helpful since they can be branched off from a patent application and the claim wording can even be drafted to create a literal infringement. are non-examined rights with the effect that validity issues will be discussed in the infringement proceedings (contrary to litigation of a patent). can co-exist with a patent. Separate cancellation proceedings before the PTO are possible. 11 Discovery Issues The general principle in any German patent litigation is: The plaintiff has the burden of evidence. An infringer who just denies infringement can be very successful unless the patentee can convince the court of infringement of every single feature of the patent. There is no US-like discovery (with big consequences for costs). In preliminary injunction proceedings, the burden of evidence is lowered in so far that the plaintiff has to make it credible. 12
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 7 Discovery Issues Directive 2004/48/EC of the European Parliament on the enforcement of intellectual property rights As a Directive it needs implementation in each country. A country which did not implement, has to interpret existing law accordingly. The purpose of the Directive is to regulate enforcement of intellectual property rights, not the rights themselves. Article 3: General obligation: Those measures,,procedures and remedies to enforce intellectual property rights shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable timelimits or unwarranted delays. Those measures, procedures and remedies shall also be effective, proportionate and dissuasive... 13 Discovery Issues Article 6: Evidence Member States shall ensure that, on application by a party which has presented reasonably available evidence sufficient to support its claims... the competent judicial authorities may order that such evidence be presented by the opposing party... The Düsseldorf Court established particular preliminary injunction proceedings to obtain information with regard to patent infringement in case of high probability of infringement (Kühnen, GRUR 2005, 185 BGH Faxkarte ). 14
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 8 Discovery Issues Article 7: Measures for preserving evidence the competent judicial authorities may... order prompt and effective provisional measures to preserve relevant evidence in respect of the alleged infringement. Such measures may include the... physical seizure of the infringing goods, and... the materials... used in the production and/or distribution of these goods and the documents relating thereto. Those measures shall be taken, if necessary without the other party having been heard... 15 Discovery Issues Article 9: Provisional and precautionary measures the judicial authorities may order the precautionary seizure of the movable and immovable property of the alleged infringer, including the blocking of his/her bank accounts and other assets. the competent authorities may order the communication of bank the provisional measures... may, in appropriate cases, be taken without the defendant having been heard.. Where the provisional measures are revoked... or where it is subsequently found no infringement... the judicial authorities shall have the authority to order the applicant... to provide the defendant appropriate compensation... 16
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 9 Trial Procedures Patent Litigation Courts There are only 12 courts in Germany that deal with patent litigation matters. In practice, relevant courts are: - Düsseldorf - Munich - Frankfurt - Mannheim - Hamburg These courts established Patentstreitkammern (Chambers for Patent Litigation) which act through 3 judges. No lay jury. 17 Trial Procedures Course of a regular suit The Plaintiff files the suit and pays the advance of court fees. The Court sets terms for the Defendant to announce and to substantiate his defense. The Plaintiff may reply to this defense. Both parties can file written submissions with legal arguments until the oral hearing. There are no discovery proceedings. The burden of evidence is on the plaintiffs side. The court sets a term for the oral hearing. 18
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 10 Trial Procedures The Hearing within about 6 to 9 months The court's decision will be based mainly on the written statements of the parties. Within the hearing, the court will focus on few crucial questions Closure of hearing and announcement of date for pronouncing the decision A Judgement of the first instance can be expected in app. one year from filing the suit. Appeal is possible. 19 Trial Procedures The Hearing is quite different from a hearing before a US court: Most of the arguments are exchanged in writing to prepare the hearing The presiding judge will open the hearing with a summary of the case and quite often indicates the present opinion of the court. It will be very difficult to persuade the judges to adopt another opinion. Expert opinions provided by the parties are quite often regarded as not neutral. The court may order experts, but this rarely happens in the first instance. A hearing may be finished after 1 hour!! And it may be the only hearing in the first instance. 20
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 11 Trial Procedures In consequence of a Judgement pro Patentee: The infringer has to stop infringement under the threat of an official fine and of imprisonment May face destruction of infringing products provide full information about the extent of the infringement Accept the obligation to pay damages The patentee gets Reimbursement of the court fees and his reimbursable attorney fees Damages (lost profit or royalties) 21 Scope of Protection: Description Wording of the Claims Pursuant to article 64 par. 1 EPC A European Patent shall confer to its proprietor from the date on which the mention of its grant is published., the same rights as would be conferred by a national patent granted in that state. Pursuant to sec 9 German Patent Act No third party... shall manufacture, offer, bring into the market... a product which is subject to the patent 22
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 12 Scope of Protection: Description Wording of the Claims Rule 43 (1) Sentence 2 EPC 2000 (old Rule 29 (1) Sentence 2 EPC) "Wherever appropriate, claims shall contain a statement indicating the designation of the subject-matter of the invention and those technical features which are necessary for the definition of the claimed subject-matter but which, in combination, form part of the prior art; a characterising portion, beginning with the expression "characterised in that" or "characterised by" and specifying the technical features for which, in combination with the features stated under sub-paragraph (a), protection is sought." 23 Scope of Protection: Description Wording of the Claims Rule 42 (1) EPC 2000 (old Rule 27 (1) EPC) "The description shall: (a) specify the technical field to which the invention relates; indicate the background art which, as far as is known to the applicant, can be regarded as useful to understand the invention,, and, preferably cite the documents reflecting such art (c) disclose the invention, as claimed, in such terms that the technical problem, even if not expressly stated as such, and its solution can be understood, and state any advantageous effects of the invention with reference to the background art; 24
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 13 Scope of Protection: Description Wording of the Claims General principles (doctrine of equivalents) Article 69 should not be interpreted as meaning that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Nor should it be taken to mean that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patent t proprietor has contemplated. t On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. 25 Scope of Protection: Description Wording of the Claims Article 2 Equivalents For the purpose of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is equivalent to an element specified in the claims. 26
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 14 Scope of Protection: Description Wording of the Claims The Schneidmesser Questions (Federal Supreme Court, BGH March 12, 2002 X ZR 135/01) 1. Does the presumingly infringing form solve the problem the invention is based on with means though different, nevertheless effective in the same way? 2. If yes: Would an expert due to his skills be able to find those (different) means as being effective in the same way? 3. If yes: Are the aspects the expert therefore has to consider orientated towards the essence of the invention protected by the claim in a way such that the expert regards this different solution with its changed means as a solution having the same value as the solution that corresponds literally to the claim wording? 27 Scope of Protection: Description Wording of the Claims What is the purpose p of the invention as defined in the description...? What is the state of the art with respect to this particular feature...? What is the understanding of people skilled in the art...? Does the patent description give any explanation of the feature? 28
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 15 Scope of Protection- International Differences In the Epilady /Remington cases of 1989-90 the German court held that the German part of a European patent was infringed, whereas the English Court held that the U.K. part of the very same European patent was not infringed. In January 2007, a court in the UK upheld a revocation of the UK part of a European patent for a stent (held by a US corporation) because of obviousness. The next day a court in the Netherlands upheld the validity of a key claim of the Dutch equivalent of the very same patent and found infringement. In March 2007, a UK court found a patent relating to anticounterfeiting technology invalid. Two days later, however, the German Federal Patent Court found the German equivalent of this patent to be valid. 29 Remedies Remedies Article 10 Enforcement Directive: Corrective measures... the competent judicial authorities may order destruction. Article 13 Enforcement Directive : Damages the competent judicial authorities may... order the infringer to pay the rightholder damages appropriate to the actual prejudice suffered by him/her as a result of the infringement. they shall take into account all appropriate aspects, such as the negative economic consequences, including lost profits.. or as an alternative set the damages as a lump sum on the basis of elements such as at least the amount of royalties 30
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 16 Remedies Compensation of damages Usually, the judgment will only state that the defendant is liable to compensate the damage, but will not fix an amount of damages. In order to allow such calculation, the Defendant is obliged to render information about the extent of infringement, including prices, turnover and profits achieved with the respective product. In most cases, the parties settle once this information is given. If not, a separate suit to calculate the damages has to be filed. 31 Remedies Compensation of damages There are three options to calculate the damage and the Plaintiff is free to select one of them: - Compensation of own lost profits, which is rarely used because the patentee would have to disclose its profit margin. - Transfer of the profit achieved by the infringer. This option is interesting also to urge the infringer to show his profit calculation. - Compensation according to the doctrine of license analogy. This option is quite common and an expert may define the appropriate amount of the royalty. 32
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 17 Remedies Costs: Article 14 Enforcement Directive: Legal costs... reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party. 91 ZPO The loser pays the court fees and the (reimbursable) attorney costs. 33 Remedies Criminal Procedures Are provided by 142 PatG with custody up to three years, but have been quite unknown until some years ago. At CeBIT, some patentees and/or their Licensees are very active. SISVEL organized more than 50 raids, in particular against Asian exhibitors. Customs seizures can be very effective, too! 34
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 18 Cultural Issues Culture of Litigation Litigation is regarded d as unpleasant, but is generally accepted. There are no patent trolls. Patentees see patents not only as nice certificates, but as tools against competitors. In view of the comparatively low costs, litigation also is possible for midsize companies. Not only is the company that offers the products an infringer, but also its managing directors. Attacking them in person is not unusual, but is regarded as aggressive. The bigger the parties, the more likely is a settlement. Arbitration is much talked about, but happens rarely. 35 Cultural Issues Culture of Litigation There are cultural differences. Even within Germany. But patent litigation is pro patentee fast far less expensive than in the US of good economical effect. 36
Wolfgang Festl-Wietek of Viering Jentschura & Partner Speaker 11: 19 Cultural Issues Do it! Wolfgang Festl-Wietek Viering, Jentschura & Partner Munich, Düsseldorf, Singapore Tel: + 49 89 210 697 0 Fax: + 49 89 210 697 57 wfestl@vjp.de www.vjp.de 37