An International Guide to
Patent Case Management for Judges

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5.5.3 Defenses Noninfringement

According to a core principle of German procedural law, any allegation made by the plaintiff that is not expressly denied by the defendant is taken as granted. Thereby, both parties need to comply with the procedural obligation for a truthful presentation of facts pursuant to Section 138(1) of the Code of Civil Procedure.83 The level of substantiation expected from the defendant’s explanations depends on the level of substantiation of the plaintiff’s allegation. The defendant’s burden of proof is higher when the facts concerned are those that only they – but not the plaintiff – have knowledge of. The FCJ has held that the defendant must disclose information on which the plaintiff bears the burden of proof in cases where the relevant information is not accessible to the plaintiff but can easily and reasonably be provided by the defendant.84 Similarly, on facts that do not concern the defendant’s own actions or perceptions, the defendant may contest by “declaring their lack of knowledge” pursuant to Section 138(4) of the Code of Civil Procedure.

Defendants can dispute the description of the attacked embodiment and – if the latter is described correctly – the infringement allegation itself by demonstrating that the attacked embodiment is, in fact, not covered by the scope of protection of the patent. In this case, noninfringement is to be demonstrated on the basis of the relevant limitations.

If the subject matter of the patent is a process for manufacturing a new product, it is deemed that the same product produced by someone else is produced using the patented process until there is proof to the contrary pursuant to Section 139(3). In their noninfringement argumentation, the defendant can demonstrate that the attacked embodiment does not contain elements of the “new product.” They can also demonstrate that their product is manufactured according to a process that differs from the patented process. Right of prior use

Public prior use can be used as novelty-destroying prior art or to demonstrate obviousness in proceedings on the validity of a patent. Private prior use pursuant to Section 12 constitutes a defense in infringement proceedings: “the patent shall have no effect in respect of a person who, at the time the application was filed, had already begun to use the invention in Germany or had made the necessary arrangements for doing so.” Legally, it is a vindicatory defense that resolves the infringement’s unlawfulness. It gives the prior user the right to use the invention “for the needs of [their] own business.”

Section 12 has two main requirements: (i) possession of the invention and (ii) use of the invention. Both requirements need to have been fulfilled on the day the application was filed (Section 12(1)) or – if priority is effectively claimed – on the priority date (Section 12(2)). The defendant is said to have “possession” of the invention when they knew what to do in order to carry out the invention completely. The defendant must either have used the invention by, for example, producing, offering or marketing the product or, at least, have made necessary arrangements for so doing. In the latter case, the defendant must additionally show their intention to use the invention.

The scope of the right to private prior use is limited. Territorially, it is limited to the use of the invention in Germany. Personally, the right is limited to the specific company that had possession of the invention and can only be transferred together with that company: it cannot be licensed or sold independently. Further, it is limited to the product used by the defendant on the priority date and does not comprise any products developed from that unless the product used by the defendant before the priority date and the variation used by the defendant after the priority date are mentioned in the patent claim as two equal alternatives of an element, or the variation was self-evident for the person skilled in the art at the priority date.85 Exhaustion, license and compulsory license

The exhaustion defense requires that the patent proprietor or a third party acting with its consent deliberately placed the patented product or the direct product of a patented method on the market in Germany or any state of the European Economic Area.86 It is sufficient that the product was placed on the market with the explicit or implied consent of the patent proprietor, not necessarily by the patent proprietor themselves.87 The person acquiring such a product is then free to use it without infringing the patent.

The exhaustion defense relates strictly to the specific product placed on the market with the patent proprietor’s consent. This means that the entirety of the patented product needs to have been placed on the market. Exceptions discussed in the literature relate to whether a patent can already be exhausted when the crucial part of the device (e.g., a chip as the crucial part of a phone) is placed on the market, because marketing the part implicitly allows the use in and for the whole device.88

For process patents, the patent is not exhausted by, for example, placing on the market a machine that is suitable for the patented process if the machine itself is not protected by the patent.89

Section 15(2) stipulates exclusive and nonexclusive licenses. If the alleged infringer demonstrates that the use of the patent is covered by a license, this license constitutes consent regarding the use of the patent, thereby excluding infringement. Section 15(3) protects the rights conferred to the licensee if the patent is transferred to a third party or if a further license is granted.

A license between the patent owner and the alleged infringer’s manufacturers or suppliers also covers their direct or indirect customers. In the likely case that the defendant is not aware of the details of a (confidential) license agreement between their manufacturer or supplier and the (former) patent owner, the defendant may request that the court order the plaintiff to provide the license agreement pursuant to Section 142 of the Code of Civil Procedure. Upon request, the court may take measures necessary to safeguard the legitimate confidentiality interests of the plaintiff.

Section 24 of the Patent Act regulates compulsory licenses. While such licenses had little practical relevance in the past, they have become more important, especially in pharmaceutical patent cases. In 2017, the first compulsory license was successfully confirmed by the FCJ for the AIDS medicament Isentress.90 Compulsory licenses can be requested in separate proceedings before the FPC. On the basis of these proceedings, a stay might be requested in patent infringement proceedings pursuant to Section 148(1) of the Code of Civil Procedure, similar to a nullity action against the patent. Experimental and other privileges

The Patent Act knows both a research (or experimental use) exemption, which applies to all fields of technology, as well as a “Bolar” exemption, limited to pharmaceutical inventions and products. Both are provided for in Section 11, which determines to which acts the effect of the patent shall not extend.

The research exemption, regulated in Section 11(2), determines that the effect of the patent shall not extend to acts “done for experimental purposes relating to the subject matter of the patented invention.” The provision’s aim is to guarantee the freedom of research and teaching as laid down in Article 5(3) of the German Constitution.

An “experiment,” according to this provision, is a “planned action to acquire knowledge.” The purpose of the experiment must be to acquire knowledge about the invention. While the knowledge must be of scientific interest, this term is interpreted broadly. The scientific interest must be prevailing; however, it is not harmful if there are additional commercial interests. For example, a purely scientific interest is given if clinical trials are conducted to find out whether an active ingredient covered by the subject matter of the patent can be used in treating other diseases. A mixed scientific and commercial interest is given if these scientific insights can and are intended to be used in a later market authorization procedure. Conversely, purely commercial interests – which are not covered by the exemption – are given when the only purpose is to gain commercial insights about the market structure or to calculate the price of a product.

The Bolar exemption, also referred to as the “Roche–Bolar rule,” regulated in Section 11(2b), was introduced in 2005, implementing EU Directives 2001/8291 and 2001/83.92 The aim of this exemption is to privilege generic and biosimilar manufacturers in preparing their market authorization. However, in contrast to the EU directives and other EU member states’ provisions, its wording is broader and not limited to generic manufacturers (it also applies to researching pharmaceutical companies) or in terms of territorial scope. It goes further than the research exemption, as it is not limited to trials related to the patented invention itself. The scope of “necessary” studies, trials and resulting practical requirements is defined by the national rules of the state in which the market authorization is applied for.