Patent infringement proceedings

In the case of a protected product, not only the use of the product as a whole is subject to patent protection, but also any action in Germany involving offering or supplying means relating to an essential element of the invention if the third party knows – or if it is obvious from the circumstances – that those means are suitable and intended to be employed to use the invention in Germany (indirect or contributory patent infringement). In addition, even the use of a product that deviates from the specific features of the claim may still constitute patent infringement considering use of equivalent means. 

Patent applications do not confer any rights of exclusion. However, even a published patent application may trigger claims to compensation as of the date of its publication – provided a patent is later granted – if third parties make use of the subject matter of the patent application after that time.

2.1 Rights in the event of patent infringement
If a patent has been infringed, the patent proprietor or the holder of an exclusive license basically has the following claims against the infringer:

• that they cease and desist from using the protected subject matter of the patent 
• that they pay compensation for any loss that has been incurred and will still be incurred as a result of the use made of the protected subject matter of the patent (damages)
• that they provide information on, inter alia, the origin and the distribution channels of protected products, the names and addresses of the manufacturers, suppliers or other previous owners, the commercial customers and the quantity of the products manufactured or supplied
• that they render account regarding the revenue and expenditure in connection with the infringing activities, including a detailed statement of the profit earned
• that the protected products which are in the possession or ownership of the infringer be destroyed
• that protected products be recalled or removed from the distribution channels once and for all
• that the court decision be published.

In order to calculate the claim to compensation, the patent proprietor or the holder of an exclusive license is free to choose between three different methods of calculating compensation:

• loss of their own profits
• surrender of the infringer’s profit or
• appropriate royalties.

Although royalties offer the simplest way of calculating compensation, it is becoming more and more common to opt for a calculation based on the infringer’s profit, since the infringer is no longer able to deduct from the profit calculation any overheads that cannot be attributed directly to the infringing product, with the consequence that the patent infringer can no longer indulge in calculations that enable them to reduce their profit from the infringing activities at will. With this method of calculation, it remains difficult to prove the causal link between the patent infringement and (a portion of) the profit earned, i.e. to provide the proof which the claimant has to furnish that the use made of the patent was the decisive reason for earning the profit or a part of it, respectively. It is regularly the case that a considerable part of the profit earned will be attributable to other reasons, such as good business relations between the infringer and their customers, special efforts devoted to advertising, and sales or particular services offered. A similar problem also arises in the context of the calculation method based on loss of profits.

In the course of asserting the specific level of compensation payable in the trial to establish the amount, which is a separate proceeding following on from the proceedings leading to the declaratory judgment, the claimant has a long time to choose the calculation method and can swap between the calculation methods, by asserting these in a staggered (auxiliary) manner.

2.2 Risk of perpetration for the first time
If no patent infringement has been committed yet, there might still be a claim to a cease and desist order against a third party if there are any specific facts from which it can be inferred that an infringement of the patent by the third party is imminent (referred to as the risk of perpetration for the first time), such as preparatory actions or an announcement by the third party that it is entitled to make use of the patent. 

3.1 Obligation to present arguments and burden of proof

If a court action against a patent infringer is to be successful, it is necessary for the proprietor of the intellectual property right to investigate and process the facts of the infringement carefully. The principle that applies in an infringement trial is that the evidence needs to be adduced, i.e. the court decides solely on the facts  presented by the parties and does not conduct any investigations of its own. This means that all the facts establishing the patent infringement must be presented to the court by the claimant in good time, ideally when the suit is filed. The submissions by the party must be so detailed that the court can decide on the question of infringement without the need for any further investigations if the claimant’s presentation of the facts remains undisputed or is deemed to be true (conclusiveness). 

In particular, it is necessary to identify precisely the product or process attacked, to specify the time and place of the infringing activity, and to state the name and address of the infringer. The infringing activity must have some connection with the Federal Republic of Germany. As a rule, it needs to have been committed there. 

At the beginning of the proceedings, it is sufficient for the claimant to submit the facts establishing the patent infringement. Only if and in so far as these facts are disputed in detail by the defendant does the claimant have to prove the facts. In procedural terms, the evidence needed may exclusively take the form of documents, experts, witnesses, inspection, and the testimony of the parties. It is therefore advisable to already document the evidence of the infringing activity in detail at the beginning of the trial. In the case of witnesses, it is a good idea to have a memorandum drawn up of what the witness remembers, in order to be covered in the event that the witness is no longer available at a later date. In the case of information from the Internet, it is particularly advisable to store it or print it out immediately, because websites can easily be deleted or altered, so that there is a risk that they are no longer available to support a chain of evidence at a later date. 

If there is not enough information about the infringement and if it cannot be procured without undue burden, the possibility exists of obtaining evidence in separate proceedings or even in the context of the infringement suit itself.

3.2 Obtaining evidence
If there are indications or circumstantial evidence to render it sufficiently probable that the intellectual property right has been infringed, the infringer can be required to submit documents and to allow the article to be inspected. This entitlement to inspection can be enforced by obtaining a court order. This is also possible by means of a preliminary injunction, which is usually granted by the courts within a few days if good cause can be shown, possibly without hearing or informing the infringer. More information on the subject of the entitlement to inspection can be found
in our IP Brochure “Securing evidence by means of inspection in patent cases”.

If there has been a patent infringement, the following possibilities are available to the patent proprietor or the holder of an exclusive license in order to enforce their rights:

4.1 Caution
A caution is an extra-judicial letter, usually sent by an attorney-at-law or patent attorney, in which the other party is asked to cease and desist from committing the patent infringements in future and to make a legally binding declaration to that effect (“Declaration to cease and desist”). The declaration to cease and desist from infringing activities in the future must be serious. As a rule, this can only be presumed if the other party undertakes in that declaration to pay appropriate liquidated damages to the patent proprietor or the holder of an exclusive license in the event that they make continued use of the patent.

If the party cautioned does not react to the caution or refuses to make a declaration to cease and desist, the proprietor of the right may, but is not obliged to, assert their rights by means of a court action. Conversely, the party cautioned may file a suit against the proprietor of the intellectual property right for a court ruling of non-infringement (known as an action for a negative declaratory judgment) in order to have its legal position confirmed. 

In order to avoid the risk of a negative declaratory judgment, the proprietor of the right may, instead of the caution, send a query questioning entitlement (usually via their attorney), which differs from the caution in that it does not contain any demand for an undertaking to cease and desist. In effect, it merely enquires why the other party considers itself entitled to engage in the activities referred to. 

Caution or entitlement letters are not always advisable as they alert the infringer and may trigger the preparation or filing of counter-attacks like a revocation action or a so called “Italian torpedo”.

4.2 Preliminary injunction
In

In urgent cases, the possibility exists of prohibiting the infringer from using the patent by means of a preliminary injunction (PI). German courts sometimes decide on a motion for the granting of a preliminary injunction within a matter of days, without hearing the respondent in exceptional cases. A PI is only a provisional decision, however, and can take the place of proceedings in the main suit only in exceptional cases.

More information on the subject of preliminary injunctions can be found in our IP Brochure “Preliminary injunction in patent and utility model cases”.

4.3 Proceedings in the main suit
The patent proprietor or the holder of an exclusive license may also file a suit in the main suit immediately – i.e. without issuing a caution or applying for a preliminary injunction. 

The validity of the patent-in-suit is not assessed in the infringement proceedings. Competence to judge this lies solely with the German Patent and Trade Mark Office or the European Patent Office in opposition proceedings and with the Federal Patent Court (in the first instance) and the Federal Supreme Court (in the second instance) in nullity proceedings. The opposition and nullity proceedings are independent of the infringement proceedings It is therefore possible and happens frequently that a judgment will be handed down in the infringement case long before the opposition or nullity proceedings are completed.

The opposition or nullity proceedings may, however, influence the infringement proceedings. If the court hearing the infringement case believes that the patent has been infringed and at the same time assumes that there is an overwhelming degree of probability that the patent-in-suit lacks validity, it can stay the infringement proceedings until a decision has been handed down in the first instance opposition or nullity proceedings, or even until the decision in the opposition or nullity proceedings has become final.

In utility model infringement proceedings, objection of the eligibility for protection of the utility model can be asserted, since the utility model is unexamined. The infringement court then has to examine eligibility for protection, even if an application cancellation has been submitted. However, the decision by the infringement court regarding validity only has inter-partes effect, i.e. between the parties to the infringement proceedings.

More information about the examination of the validity of patents is available in our IP Brochures “Patent invalidity proceedings”, “Utility model protection in Germany”, and “European patent opposition proceedings”.

5.1 Legal venue
Competence to hear patent infringement cases, both in the main suit and in preliminary injunction proceedings, lies with 12 Regional Courts in Germany, at which special chambers for patent litigation exist. 

The suit must be filed either at the defendant’s main place of business or residence or at the place where the infringing activity has occurred. The latter is anywhere the recipient of an offer has his/her main place of business or his/her residence. In the case of offers on the Internet, the claimant is as a rule, free to choose between any of the 12 patent litigation courts. 

5.2 Standing to sue
The rights under the patent can be asserted by the patent proprietor or the holder of an exclusive license in his own name. The holder of a non-exclusive license can only assert rights under the patent against third parties if they have been authorised to do so by the patent proprietor or by the holder of the exclusive license and if they have a legal interest of their own in asserting those rights in court. 

5.3 Service of the statement of claim
The statement of claim is served on the defendant by the court. If the defendant has his/her main place of business or residence in another country and if, at that point, no German counsel has been appointed to represent them in litigation, the statement of claim has to be served in that other country. Any translations that might be necessary must initially be produced at the claimant’s expense. Various international agreements exist on conducting service in other countries. Depending on the country of service, service can take between 2 and 12 months. This period delays a patent infringement trial by that time, compared to the standard time taken.

When the statement of claim is served on the defendant, they are invited to declare their position on the suit. Since any declarations can only be made by an attorney-at-law admitted to a German bar, the defendant must retain an attorney-at-law for this purpose. One consequence of retaining an attorney is that any further documents can be served directly on the attorney retained, without the need for translations to be made by the court or claimant.

5.4 Instances/duration of proceedings
Suits in the main proceedings in patent infringement cases are heard in the first instance by specialised patent litigation chambers at the 12 Regional Courts. 
Each of these chambers sits with three judges who have a legal training and have, as a rule, been involved in patent infringement cases for several years. Only in exceptional cases will the judges also have studied a technical subject. If the court is not capable of assessing any relevant technical issues itself, a technical expert is appointed. The inclination to commission an expert opinion varies from one Regional Court to another, but in general, the commissioning of experts by the court is an exception to the rule. In some cases, the submission of a privately commissioned opinion by the claimant can be helpful in furthering the court’s technical understanding and may thus go some way towards obviating the need for an expert to be appointed by the court.

In the course of the proceedings before the court of first instance, all the relevant facts and defences must be presented as a matter of principle, since the presentation of new facts at the appeal stage is only permissible subject to strict conditions. Only facts that were not previously known and could not have been known during the first instance can be submitted for the first time at the appeal stage without problems. 

The court file is not open to public inspection. Only the oral hearing is public. If any of the parties’ business secrets need to be discussed in the course of the oral hearing, the party concerned may request that the public be excluded.
The duration of proceedings in the first instance before the Regional Courts differs and varies over time. Normally, a case takes between 8 and 15 months. Commissioning an 
expert opinion usually delays the proceedings by 9 to 12 months.

The proceedings in the first instance usually take place in the following seven steps:

• filing the statement of claim
• the court's service of the statement of claim on the defendant
• the defendant's response to the statement of claim
• the claimant’s reply to the defendant’s statement of defence
• the defendant’s rejoinder to the claimant’s reply
• oral hearing (duration of the oral hearing: about 1-4 hours) and
• the court's decision. 

If he commissioning of a written expert opinion is ordered, both parties are also given an opportunity to comment in writing on the expert’s opinion. During an oral hearing, the expert may be questioned on their expert opinion by both the court and the parties.

After the judgment has been handed down by the Regional Court in the first instance, the losing party has the possibility of lodging an appeal with the appeal court within one month, and reasoning the appeal within two months. Each of the specialized panels at the appeal courts likewise sit with three judges who have a legal training and will not normally have studied a technical subject.

The appeal proceedings are not an instance for hearing new facts. The appeal court merely decides on the facts already submitted in the proceedings before the Regional Court and on any new facts which are permissible at the appeal stage. The appeal proceedings before the Appeal Courts usually take between 15 and 24 months.

Should it be necessary to commission an expert opinion, the proceedings are drawn out by up to 12 months. The course of the proceedings corresponds substantially to that of the first instance.

The appeal judgment can only be submitted to the Federal Supreme Court for an appeal on points of law subject to very strict conditions. The proceedings before the Federal Court of Justice usually take 2 to 3 years.

The claimant is obliged to pay the court costs of the first instance when they file the suit. Until the court costs have been paid, the court will not serve the statement of claim on the defendant. If the defendant has their main place of business or residence in another country where German is not an official language and if no German counsel has been retained, the statement of claim has to be translated and served at the defendant’s main place of business or residence in that other country. 

The cost of translating the statement of claim likewise has to be paid by the claimant when the suit is filed.

Since the defendant has a claim for the compensation of their legal expenses if they win, claimants may (depending on their country of residence), at the defendant’s request, also be required to deposit cash or a bank guarantee as a security for said legal expenses.

The losing party must reimburse the victorious party’s statutory attorneys’ and patent attorneys’ fees, and any necessary expenditure, such as travelling expenses and translation costs, and any court costs already incurred by it. The amount of the statutory court and attorneys’ fees is calculated according to a computational formula laid down by statute, which is based on the value in dispute in the case, i.e. the economic value of the litigation for the claimant. The value in dispute is set by the court in its own discretion. The total cost risk thus consists of the court costs, the opposing party’s statutory attorneys’ fees and necessary expenditure, and one’s own attorneys’ fees and expenses. 

The value in dispute in typical patent infringement cases is between EUR 500,000 and EUR 5,000,000. The cost risk of proceedings in the first instance is thus approximately EUR 60,000 to EUR 300,000. In rare cases, the value in dispute may be as high as EUR 30,000,000 (the maximum amount up to which fees increase), so that the total cost risk increases accordingly.

The costs of the appeal proceedings are about 20% higher than the costs in the first instance. The costs of an appeal on points of law before the Federal Court of Justice are about 65% higher than those of the proceedings in the first instance. 

The costs for which the opposing party must be reimbursed are fixed by the court in cost fixing proceedings. The cost fixing proceedings are conducted following the instance concerned; it is a purely written procedure and concludes with the decision fixing costs, which can be enforced against the opposing party.

Court decisions which have become final can be enforced by the victorious party, i.e. the opposing party can be called upon to comply with the operative part of the decision with immediate effect and to perform any actions laid down in the decision (e.g. to provide information or to destroy goods). If the court’s decision is not yet final, which is the case whenever a legal remedy (appeal, appeal on points of law) has been or still can be lodged against the decision, decisions can, as a rule, be enforced provisionally in return for the furnishing of a security. The amount of the security to be furnished is fixed by the court and is almost always based on the amount of the value in dispute, unless detailed information on the damage by the enforcement is available. Security can be furnished by depositing it or by handing over to the opposing party a bank guarantee which the victorious party has to obtain.

If a decision is enforced provisionally before it has become final and is then set aside by the appeal court or the court hearing the appeal on points of law, the claimant must compensate the defendant for the losses incurred by the enforcement. For this reason, before a decision is provisionally enforced, it is advisable to assess the risk of having the decision set aside later and the possible loss caused by the enforcement and to weigh that up against the benefits of provisional enforcement.

The victorious party is not obliged to enforce a decision provisionally. Nor must the decision be enforced in its entirety. It is also possible merely to enforce individual elements of the judgment (e.g. only the entitlement to information).

In individual cases, the court can, at the request of the losing party, forbid the provisional enforcement of the decision. That is conceivable, for example, if the provisional decision could cause irreparable losses, which could not be made good again in the event that the decision were set aside. Protection against enforcement in this way must be asserted in the course of the proceedings and, if it is justified, is ordered in the decision.

German law provides rapid and effective means for enforcing rights under patents. Compared to other countries, it is possible to obtain an enforceable decision from a German court very quickly. Thanks to the high level of competence and experience of the German courts, which deal with more than 500 patent litigation cases a year even after the Unified Patent Court started operation in June 2023, they also enjoy a very good reputation world-wide and frequently provide courts in other countries with a basis for their own rulings.

If a party is to be successful, it is crucial to be able to rely on thorough strategic preparation and planning by attorneys-at-law and patent attorneys with experience in patent infringement cases. 

BARDEHLE PAGENBERG has united the two professions in one law firm for decades  and can thus offer advice and consultation by teams of attorneys-at-law and patent attorneys who are highly qualified in law and technology and have many years of experience.  

The attorneys in our law firm have extensive experience in patent infringement cases and can assist you in defending your interests by representing you in and out of court and also in negotiating a settlement with the opposing party.

A well-organised office administration and the special care shown by our staff, which has become routine over the years, guarantees that company secrets and other sensitive information are dealt with reliably.

In addition, with our offices in Paris and Barcelona, we also offer the possibility of conducting cross-border measures “in a one-stop shop”. For litigation in other countries, we work together with a network of foreign colleagues in which the ­­co-operation has been established over many years.