Presentation Hamburg Tuesday, 21 June 2005 Paris Wednesday, 22 June 2005 London Thursday, 23 June 2005 Transatlantic IP Seminar Latham & Watkins operates as a limited liability partnership worldwide with an affiliate in the United Kingdom and Italy, where the practice is conducted through an affiliated multinational partnership. Copyright 2005 Latham & Watkins. All Rights Reserved.
Gerd Jaekel gerd.jaekel@lw.com +49-40-41-40-33-52 Latham & Watkins operates as a limited liability partnership worldwide with an affiliate in the United Kingdom and Italy, where the practice is conducted through an affiliated multinational partnership. Copyright 2005 Latham & Watkins. All Rights Reserved.
Overview Statutory Bases of Damages Calculation of Damages Procedural Law 121
: Statutes 139 II 1 PatG (Patent Act) 24 II 1 GebrMG (Utility Model Act) full damages 812 BGB (Civil Code) (without negligence) return of the unjustified enrichment 33 PatG (without granted patents) compensation 122
Statutory Bases ( 139 Patent Act / 24a Utility Model Act) Infringement of a granted patent of the claimant Claimant Registered owner Exclusive licensee Ordinary licensee in a representative action Defendant can be any person or entity infringing a patent Manufacturer Distributor User (if no private or privileged use) Contributory infringement by those providing means for the exploitation of a patent 123
Statutory Bases ( 139 Patent Act / 24a Utility Model Act) Negligence Market participants must conduct patent searches (Federal Supreme Court Diarähmchen I ) Scale of searches and efforts to identify third party rights depend on the size of the defendant enterprise, its possibilities to investigate the features of the goods and on its knowledge of the circumstances establishing an infringement Department stores selling a large variety of goods may not have to conduct searches but could rely on manufacturers searches (District Court of Düsseldorf Strickwarenhandel ) problem: 45 no. 2 s. 2 TRIPS? 124
Limitation ( 141 (1) Patent Act, 195, 199 Civil Code) 3-year period starting at the end of the year in which the claimant learned or ought to have learned about the infringement 10-year period of origination of the claim 30-year period of the infringement whatever is shortest 125
Calculation of Damages Claimant may finally elect loss of profit profit realized by the infringer marketable license 126
Loss of Profit Comparing assets with and without the infringement What is the amount of the loss caused by the infringement? Claimant must prove that he (or a licensee) would have had the business had the infringer not used the infringing technology. decline in business after infringer stepped in no other reasons for decline Claimant must provide at least a well-substantiated estimate ( 287 Code of Civil Procedure) 127
Profits Realized by the Infringer Profits generated by the infringement exclusive of any further benefits derived from the rise in working capital (no evolving profits) No overhead deduction Supreme Court decision only relating to design models Judges want to find distinction to correct the decision for patent cases, argument: design model has often bigger influence on total profit than patent correcting element shall possibly be found elsewhere Exclusive of: rise in profits relating to advertising, enhanced distribution channels, goodwill of the infringer Open: Reclaim of costs saved by the use of patented technology 128
Marketable License Claimant is to be put in a position not worse than the position claimant would have been in had the infringer asked for a license What would have the parties agreed had they foreseen the course of business? Interest: prime lending rate plus 3.5% starting February 1 of the year following the infringement Increase / decrease: plus loss of goodwill of the claimant, no inspection of books, possibility to attack the validity of the patent minus uncertainty of infringer s investment, risk of exposure to further damages, use of other patents / IP rights 129
Procedural Law No discovery, no disclosure No saisie, no Anton Piller order changing now No attack on a granted patent in infringement proceedings stay in case the Patent Office overlooked something National nullity proceeding only after opposition decision or end of term to oppose Routine decisions within one year Preliminary injunctions within hours / several weeks Multi-step procedure for damages: Obtain a decision on the infringement Enforce claims concerning information and rendering of account Litigate on affirmation in lieu of oath if necessary Litigate the amount of damages And finally: enforcement of damages against all infringers 130
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