5.6 Judicial patent proceedings and case management
5.6.1 Key features in patent proceedings and differences to a trial-based system
Patent infringement actions are genuine civil actions whose procedure is governed by the German Code of Civil Procedure (“Zivilprozessordnung”).93 Further basic provisions are contained in the Courts Constitution Act (“Gerichtsverfassungsgesetz”).94 The German Patent Act, however, also provides for a number of specific procedural elements that supplement the general provisions on civil procedure for patent infringement cases (e.g., Section 140c on pretrial inspection orders). One characteristic fundamentally distinguishes German civil actions (of continental European style) from Anglo-American civil actions, and appreciating this distinction is a way to summarize the key features of a German patent infringement action that will be addressed in this section: German civil actions do not take a trial-based form.
In a typical Anglo-American trial, the facts are presented by the parties to the fact finder through evidence, particularly party-retained expert witnesses, during the main trial hearing rather than through written pleadings.95 This trial typically takes some days – sometimes weeks or months – depending on the amount and complexity of the evidence. Pretrial discovery and pretrial motions (motions to dismiss or summary judgment motions) are important in such a trial-based process.
By contrast, none of these features are present in German civil litigation, with the absolutely rare exception of court-appointed experts and the rare necessity to submit party expert opinions. There are no juries, so the bench (consisting of specialized judges) is the only fact finder and final decision-maker. The proceedings are front-loaded, and most of the input comes through written briefs filed by the parties. There is typically only one final and very dense and concise substantive hearing toward the end of the process. This hearing is only rarely about evidence; in most cases, it is on claim construction and infringement as well as validity. However, validity is only at stake with regard to the decision whether the court, if it finds an infringement of the patent, should stay the proceedings with regard to parallel validity proceedings before the EPO or the FPC pursuant to Section 148 of the Code of Civil Procedure. While these arguments are typically highly fact-specific and therefore technical, the basic technical facts are mostly not in dispute between the parties but rather the correct interpretation of those facts for the purpose of infringement (based on proper claim construction) and validity (based on the proper claim construction and the proper determination of the disclosure of the prior art references). In this process, there are, for the most part, no pretrial motions that could result in early dismissal of the action before the final hearing. Thus, any lack of “conclusiveness” (“Schlüssigkeit”) will only be identified and disposed of by way of dismissing the case at the end of the regular process (i.e., following the briefing and the final hearing).
As there is no specific fact finder (jury), there are no early hearings on certain issues of law, like the “Markman hearing” on claim construction.96 As the substantive input is fed into proceedings by the parties not through the evidence but through the mostly written party submissions, experts do not play an essential role, and there is no cross-examination of party-appointed experts like in a trial-based system. The bench can, however, resort to independent (technical) experts if relevant facts are in dispute between the parties, but this is the exception.
There is also no general discovery system. Rather, there are limited and specific instruments for the plaintiff to discover facts that are not publicly available (e.g., “inspection orders”). As there is no general discovery, there is also no comprehensive system of privileges and protective orders as is well established in the Anglo-American realm. Both the lack of a discovery and of a general confidentiality system have, over the last two decades, been addressed in the German system by a number of statutory changes and case law. Different from a trial-court system, the court of first instance is not the only “court of record.” Rather – and mostly because the process is less time- and resource-consuming – the appellate level is typically also called upon to engage in further fact-finding within certain limits. Thus, there is no clear-cut distinction between trial and appellate levels along the lines of “fact-finding” and “issues of law.”
5.6.2 Preaction and pretrial
126.96.36.199 Cease and desist warnings and requests for right to use
188.8.131.52.1 Relevance of out-of-court communications
One of the most critical points in any patent litigation is how to initially raise the infringement issue with the potential infringer. This is critical because, depending on the way the infringement issue is addressed, the potential infringer can take action against the right holder (e.g., a declaratory judgment action for noninfringement). Furthermore, the form of addressing the infringement issue could open procedural ways for the defendant to dispose of a subsequently filed offensive infringement litigation such that the patentee (plaintiff) would need to bear the costs.
In many jurisdictions, a key point of the analysis is the threshold for filing a declaratory judgment action. In other words, when does flagging a potential infringement issue give the counterpart sufficient reason to file an action seeking declaratory relief for noninfringement? In U.S. practice, this is known as the “case-or-controversy” requirement for filing a declaratory judgment action. A similar requirement exists under German law (cf. Section 256(1) of the Code of Civil Procedure, “Feststellungsinteresse”). The impact on the strategy is less significant, however, because filing the declaratory judgment action does not give that case priority over any subsequently filed offensive infringement action.
Depending on how possible infringers are approached out of court, remedies under unfair competition law could apply (e.g., when warning letters are sent to customers).
184.108.40.206.2 Request for a right to use as opposed to a cease and desist letter
The “safe harbor” in terms of avoiding a declaratory judgment action or any other possible remedy that the potential infringer might be considering is raising the infringement issue in the form of a “request for a right to use.” The distinction of such a request compared to a cease-and-desist letter is that this specific form does not conclude that there is infringement or requests that the addressee should cease and desist. Rather, the right holder asks for the reasons that the addressee considers themselves “entitled” to make use of the patented teaching. This category is designed to enable the right holder to enter into a discussion with the addressee without subjecting themselves to possible counterclaims. It is generally not recommended to simply allege infringement of a certain patent but rather to give the request a factual and legal basis in terms of the patent claims and the accused devices or methods.
The alternative is a cease and desist letter, which formally requests that the addressee cease and desist the infringing activity and also requests that the addressee declares a formal undertaking to cease and desist, with any infringement of that obligation triggering a financial penalty (a “cease and desist declaration”).97 If the defendant actually submits such a declaration whose scope and financial penalty are sufficient, the plaintiff cannot assert any claims for injunctive relief in court anymore. The cease and desist declaration is legally considered a functional equivalent to a court judgment, so the patentee (plaintiff) would lack the legal interest in pursuing a claim for injunctive relief notwithstanding the cease and desist declaration.
220.127.116.11.3 Procedural mechanics in connection with a cease and desist letter
It is important to note that there is an enormous amount of case law regarding the requirements that such cease and desist declarations need to meet to be effective. For example, they cannot be conditioned on “actual infringement” because that very issue is meant to be disposed of by the declaration. They also can not only narrowly cover the very devices (in terms of model numbers) identified by the patentee, but they would need to cover any and all devices that are substantially similar to the actually identified devices in terms of the technical characteristics relevant for the infringement mapping.98 The latter point can cause significant issues in terms of the right way to phrase the key part of the declaration (defining the accused device or method). It is typically done by way of using the pertinent patent claim language. This does not mean, however, that the scope of the declaration would be as broad as the scope of protection of the patent-in-suit. Rather, it is done in an attempt to sufficiently abstract from the specific device. Different from a court judgment, there is usually no reasoning, so the main source for guiding the operation of correctly interpreting the scope of the declaration would not be available. Therefore, it is recommended to specify some of the claim language by introducing critical factual aspects that realize the pertinent features in the accused devices. This can open the door to discussions between the parties, but it is typically better to deal with this up front, particularly if a certain modification or work-around is conceivable at a later point in time.
If the patentee does not send a formal letter requesting that the defendant submit a cease and desist declaration, there is a risk that the subsequently filed infringement case for injunctive relief would be “acknowledged” by the defendant right away. Based on this, the court would enter into a judgment by consent (“Anerkenntnisurteil”; Section 307), but the plaintiff would need to bear the costs.
One important consideration is that any warning given to the potential infringer prior to filing an infringement case would enable the potential infringer to react by resorting to abusive procedural measures, particularly by way of filing declaratory judgment actions (noninfringement) in other EU jurisdictions, including for the German part of a European patent, even if no jurisdictions exist, with the sole purpose of slowing down the process of a subsequent infringement action in Germany. This practice – which came to be known as an “Italian torpedo” some 20 years ago due to the generally quite slow proceedings before Italian courts – is not common anymore, but it still presents a risk that should be considered depending on an analysis of the parties and the developing dispute at issue.
5.6.3 Venue, jurisdiction and case assignment rules
18.104.22.168 Venue and jurisdictions
The German system conceptually distinguishes “venue” (“örtliche Zuständigkeit”) and “international jurisdiction” (“internationale Zuständigkeit”). The rules on venue, as provided for in the Code of Civil Procedure (Section 12 et seq.), are considered to also implicitly establish international jurisdiction for the German courts unless an international agreement takes priority. These rules distinguish between courts of “general jurisdiction” (“allgemeiner Gerichtsstand”)99 and courts of “specific jurisdiction” (“besonderer Gerichtsstand”).
A court that has general jurisdiction over a person is competent for any and all claims against that person unless there is a specific “exclusive jurisdiction” pertaining to certain claims. Generally, the courts at the individual’s residence (Section 13) and the courts at a company’s principal place of business (Section 17) are courts of general jurisdiction. The most important “exclusive jurisdiction” is that of the German FPC, which has exclusive jurisdiction over all nullity actions (Section 81). The most relevant rule on specific jurisdiction is that of Section 32, providing that tort-law-based actions can be filed in the court where the tortious action was committed (forum loci delicti commissi). This provision is the typical basis for venue and international jurisdiction in patent infringement actions. As most of the infringing activities are practiced nationwide (e.g., sales), the plaintiff can pick the venue based on criteria like quality and speed of adjudication – or any other criteria for that matter – instead of being bound to sue at the court of general jurisdiction. This “forum shopping” has been subject to controversy, yet the provision has not been applied restrictively by German courts. It has, for example, been considered sufficient for nationwide jurisdiction if the defendant supplies a product to one customer and that customer distributes the product nationwide (like in the automotive industry).100
Infringement of a German patent (or the German part of a European patent) automatically implies international jurisdiction of the German courts (“double-relevant facts”). If the facts presented by the plaintiff do not support the infringement of a German patent, then there is no international jurisdiction as well. Based on general doctrines of tort law (Section 823 et seq. of the Civil Code),101 the case law of the FCJ has been relatively far reaching in terms of infringement of a German patent by way of acts committed abroad. Thus, seen as infringer is not only the entity who carries out the act of use themselves, but also the person who objectively enables or promotes the realization of the act of use by another person, even though they were able to obtain knowledge with reasonable effort that the act supported by him infringes the patent.102 Hence, even if the defendant’s activities are exclusively conducted abroad (e.g., supplying certain parts to a customer who imports the products as part of a bigger and complex product) those actions can result in infringement of a German patent and thereby jurisdiction of German courts, if an examination of the property rights was indicated.103
If one of the parties has its residence or principal place of business in another member state of the EU, the Brussels Ia Regulation104 applies. This regulation generally follows the same concept of general jurisdiction for the courts of the member state in which the defendant resides (Article 4(1) of the Brussels Ia Regulation) and of specific jurisdiction for the courts of the member state wherein the infringing activity occurs (Article 7(2) of the Brussels Ia Regulation). If a non-EU country in Europe is involved (particularly Switzerland), the Lugano Convention105 must be considered. Its structure is similar to the Brussels Ia Regulation. Based on the general jurisdictional rule – according to which a party can be sued with regard to any claims in the courts of the country in which the party has its residence or principal place of business – it is generally possible to also assert patents other than the national patents of the forum. This would also apply to other national (non-German) parts of a European patent if the defendant resides in Germany. Under Article 8(1) of the Brussels Ia Regulation, jurisdiction could also be established for non-German resident defendants.
These vehicles enabling “cross border” patent litigation have not yet played a significant role, since the European Court of Justice, in Gesellschaft für Antriebstechnik v. Lamellen und Kupplungsbau Beteiligungs,106 held that exclusive jurisdiction is automatically established as soon as the defendant requests the nullification of the patent-in-suit by way of a counterclaim or even only requests the dismissal of the infringement action based on the invalidity of the patent-in-suit. The sole exception to this rule has been cases for preliminary relief, but, so far, no German court has entertained any genuine cross border actions in the form of an interim relief.
22.214.171.124 Case assignment
Patent infringement matters are regular civil law matters assigned to the civil court system, which includes state and federal courts. The entry level is at the regional courts (“Landgerichte”; Section 143(1)), 12 of which have jurisdiction over patent disputes.107 Typically, there is one regional court with jurisdiction for all the appellate circuits of one state or even multiple states.108 The Regional Court of Düsseldorf (“Landgericht Düsseldorf”) has exclusive jurisdiction for all patent infringement matters in the state of North Rhine-Westphalia (about 18 million inhabitants), and the Regional Court of Mannheim (“Landgericht Mannheim”) has exclusive jurisdiction for all patent infringement matters in the state of Baden-Württemberg (about 11 million inhabitants). While generally, according to Section 32, all 12 regional courts have nationwide jurisdiction, the regional courts of Düsseldorf, Mannheim and Munich (“Landgericht München I”) are the busiest.
These courts each have two or three panels. Each panel (“Kammer”; more literally translated as “chamber”) has three members on the bench for each case, while, in most cases, more than three judges are permanent members of the bench. Individual cases are assigned to the competent chambers on an abstract case allocation scheme, which is set up for each calendar year in advance by the presidium of the respective court.
The German judiciary is based on a judicial career system, so judges embark on a judicial career early on – in most cases after having graduated from university (legal studies) and upon completion of a two-year judicial trainee program, finishing with the second state examination, which is the entry requirement for both bar admission and for a judicial career.109 Traditionally, the judiciary aims to recruit graduates in the top 10 to 20 percent of their class years. In many cases, the judges assigned to the patent panels hold even better credentials than the average judge. The presiding judge of a panel typically has more than 10 years of experience and will have served some time at an appellate court or as a clerk at the FCJ.
Any civil patent action is filed by one or several plaintiffs. It can be a regular infringement action in which the plaintiff claims to be entitled to claims for relief against the defendant’s allegedly infringing activities, or it can be a declaratory action in which the alleged infringer acts as plaintiff seeking declaratory relief denying any liability. The plaintiff in a regular infringement action requires standing to sue (“Aktivlegitimation”). The patent proprietor has standing to sue for injunctive relief and any further reliefs, in particular claims for damages. The exclusive licensee also has standing for those types of relief.110 Indeed, the patent owner and the exclusive licensee can generally both sue for the same relief, but, of course, that does not lead to a duplication of claims for damages.111 However, the requirements for an exclusive licensee to establish such a standing are strict.
Agreements governed by foreign law are generally possible, but they must be checked carefully as to whether they meet the thresholds for a genuine exclusive license for the purposes of standing to sue. Any party other than the patent owner or the exclusive licensee must establish standing to sue based on a transfer, either from the proprietor or the exclusive licensee. Such “title holders” can, without any limitation, assign claims for past damages to any third party, who can then assert those in a patent infringement action. Claims for injunction relief, however, cannot be assigned without transferring the property title to the patent.112 If there are specific legal interests present (e.g., if a nonexclusive licensee wants to assert claims), the proprietor can “authorize” the plaintiff (nonexclusive licensee) to also assert claims for injunctive relief.113 Again, neither the proprietor nor the exclusive licensee would need to be party to such litigation. In this regard, there are no “necessary parties” that need to be included as “coplaintiffs.”
An action for declaratory relief requires a specific “interest,” which is similar to what is known as the “case-or-controversy” requirement in the U.S. federal system (Section 256 of the Code of Civil Procedure).
For the plaintiff to prevail on claims for infringement, the defendant must be liable. Liability is generally established by any of the activities specifically set forth in the statute (Section 9) pertaining to devices or methods protected by the patent-in-suit – that is, falling within the scope of protection of the patent-in-suit as defined by its claims (Article 69 of the EPC; Section 14 of the Patent Act). Such activities can be summarized as manufacturing and distributing the accused device or performing the protected process (i.e., method). However, it is not necessary that any of these activities are performed by the defendant in person. Rather, there is a well-settled, highly sophisticated jurisprudence based on general tort law also establishing liability in scenarios in which the defendant only causes those subsequent activities by third parties to occur.
One practically and highly relevant example is the supply of accused devices abroad. The defendant might ship chips abroad to a separate party, who uses the chip to assemble an electronic device. Yet, another, commercially separate entity might import the device into Germany to distribute it. Even though only the last entity in the chain performs any of the statutorily specified activities (importing), the first entity in the chain can also be separately liable for infringement, even in the absence of any concerned activities. Rather, it suffices that the source knew that the products were, in part, also ultimately destined for the German market.114 Any of the parties in the chain can be separately sued for patent infringement in Germany. Thus, suing the entity that is the source of the chip does not implicate or necessitate also suing the importing entity (importer of the assembled electronic device). In German procedure, there is no teaching similar to the “party of interest” doctrine in U.S. federal practice.
126.96.36.199 Party representation
Parties need to be represented by an attorney-at-law admitted to practice in Germany (Section 78(1) of the Code of Civil Procedure). Patent attorneys who are not members of the general attorneys’ bar, but only of the patent bar, can only act to support the attorneys-at-law but cannot represent a party independently. This is different for nullity actions, both before the FPC and on appeal before the FCJ, in which both (independent) representation by a patent attorney or an attorney-at-law are permitted (Sections 97(2) and 113).
5.6.4 Statements of case and front-loading proceedings
188.8.131.52 Initial phase of the patent infringement action
The process starts, and the civil action becomes formally pending (“Rechtshängigkeit”), by serving the complaint (Sections 253(1) and 261(1) of the Code of Civil Procedure). Service of process is to be effected either under national rules115 (service on entities or individuals residing or present in Germany), European rules116 or the Hague Service Convention.117 It involves serving the complaint together with the court order setting a term for the defendant to file a response to the complaint (answer) and summoning the parties to the oral hearing (Sections 274(2) and 275(1)). Alternatively, the court can order preliminary proceedings in writing (“schriftliches Vorverfahren”), which is usually done if service is to be effected abroad (Section 271(2)).
If preliminary proceedings in writing are ordered, the defendant must file a notice of defense (“Verteidigungsanzeige”) to avoid a default judgment (Section 276(1) of the Code of Civil Procedure). The term for filing such a notice varies between two and four weeks. Upon filing the notice of defense, the court sets a hearing date. This hearing date is, using a terminus technicus of the Code of Civil Procedure, referred to as “advanced first hearing” (“früher erster Termin”). This term is misleading, however, as the hearing is typically the only oral hearing of the case (Section 275(2)). It is set toward the end of the expected process.
The first-instance proceedings before the regional court, by and large, take one year from the filing of the complaint to judgment, even though the details vary depending on the venue and the current workload in each venue, which change over time. Before the hearing, there is typically at least another round of briefing (reply and rejoinder). In many cases, the parties tend to file further briefs, which is possible even though, in many venues, this is not the bench’s most favored approach.
Certain venues have varied this general process. In Düsseldorf, for example, there can be a further (genuine) early hearing date following the service of process. The purpose of that early hearing is to record the prayers for relief (taking into account comments from the bench regarding the right way to phrase the prayers for relief). Furthermore, the date for the main hearing is set, as are the terms for all the briefs to be filed up to the final hearing date. The procedure of the Regional Court of Munich implements yet another variant, according to which there are two substantive hearing dates. The first hearing occurs right after the filing of the response brief and typically covers claim construction and infringement. The second hearing date is the final point in the process (at least two weeks after the rejoinder) and primarily deals with validity issues (e.g., with the stay motion with regard to ongoing nullity proceedings). The Regional Court of Mannheim generally discusses all relevant questions of the case within a single hearing.
184.108.40.206 Pendency of the action
Whenever pendency of an action is required by other statutes or international treaties, it is of paramount importance to appreciate that a German civil action (including a patent infringement action) is only considered pending upon service of process (Section 261(1) of the Code of Civil Procedure). Previously, this was a relevant point under the previously applicable Brussels I Regulation but this has now been resolved by Article 30 of the Brussels Ia Regulation, which uniformly refers to the filing of action as the decisive point in time. It is, however, still a crucial issue for entitlement actions (Article 61(1) of the EPC) filed with the German courts, particularly with the Munich court (situs of the EPO). For the European patent prosecution to be stayed, those actions need to become “instituted” before the grant of the European patent at issue (Rule 14(1) of the EPC), which is taken as technically “pending” with the meaning of the German Code of Civil Procedure. Thus, pendency must be achieved as early as possible, which is why, particularly when service abroad is at issue (e.g., through the Hague Convention process), filing the entitlement action in a different German judicial branch (e.g., administrative rather than civil) could be recommended to achieve pendency with the filing, rather than with the service.118
220.127.116.11 Basic requirements regarding the admissibility of the action in connection with the prayers for relief
Under the German Code of Civil Procedure, there are certain basic requirements that an infringement complaint must meet in order to be admissible: The complaint must name the parties (plaintiff and defendant) and the court (Section 253(2)(1)). The complaint must set forth the prayers for relief, also referred to as “requests” (“Klageanträge”). The infringement complaint must also set forth all of the specific facts that are required to arrive at the conclusions presented by the plaintiff to be the basis for the requested relief (Sections 253(2) and 138(1)). This includes not only the facts pertaining to standing to sue but also the infringing activities and the defendant’s liability. While issues of law, strictly speaking, do not need to be addressed by the parties (iura novit curia), claim construction, which is considered an issue of law, needs to be addressed to a certain minimum extent in order for the facts establishing infringement to be meaningful. Without a specific infringement mapping (i.e., putting the technical facts in the context of meaningfully explained terms of the claims), the infringement contentions are not sufficiently “specific.” Furthermore, setting aside the formal requirements under Section 253, the success of the proceedings is hinged upon a clear analysis of claim construction and infringement and how well the potentially critical issues are already set forth in the complaint, putting the plaintiff’s case on the right track.
Even though Section 253(2)(2) of the Code of Civil Procedure expressly states that the requests need to be “specific,” the courts are generally still satisfied with the use of the patent claim language for phrasing the requests. However, the case law of the FCJ encourages plaintiffs to specifically adopt certain key features to better caption the specific infringement mapping in the accused device or accused method.119 As a rule, this is no requirement for admissibility, though plaintiffs typically are better off waiting for a formal note from the bench before engaging in this exercise. It is important to realize that, in this regard, using the broader claim language or a more specific language taking up the infringement mapping does not per se affect the scope of the requested relief, as will be explained in the following section.
18.104.22.168 The scope of the action and the relief (the accused device and “Streitgegenstand”)
The relief based on the language of the patent claims is procedurally not tantamount to the scope of protection of the patent-in-suit (as defined in Article 69 of the EPC). On the contrary, the scope is – as a rule – limited to the accused device. “Accused device,” in this sense, is more of a conceptual or abstract term than a tangible term that would be limited to the very products as identified in the complaint by way of, for example, a product number. Under the case law of the FCJ, the accused device is defined by the specific technical characteristics that are referred to and relied upon for the infringement contention (complaint) or holding (judgment) under the asserted patent claim.120 Thus, the accused device does not encompass any and all devices falling within the scope of protection of the patent-in-suit, but its definition extends beyond the very products at issue.
Other products not mentioned in the complaint – and perhaps even unknown to the plaintiff – also (eo ipso) fall in that category if those are identical with respect to the technical characteristics on which the infringement mapping is based.121 Hence, it follows that, if a further product line becomes available during the course of the litigation, the plaintiff does not necessarily need to introduce it into the litigation. A different product line would also be part of the litigation – and form part of the accused device – if the relevant technical characteristics are identical. In this respect, the accused device in patent litigation is tantamount to the “procedural claim” (Section 322 of the Code of Civil Procedure), also referred to as “Streitgegenstand” (subject matter) of the litigation. This is a core feature in German jurisprudence.
The subject matter is defined by both the requests and the facts presented by the plaintiff to justify the underlying legal conclusions. It forms the groundwork for a number of further procedural elements, including the scope of the requested (injunctive) relief that is decisive for subsequent contempt proceedings. It is also relevant for assessing the admissibility of a claim modification during pendency of the action.
22.214.171.124 Modifications of the pending claim
The German process is generally very flexible, and changes can be accommodated even at a late stage of the proceedings. If new facts are introduced that change the “procedural claim” within the meaning of Section 322 of the Code of Civil Procedure, this is considered a “Klageänderung” (claim modification; Sections 263, 264). In a patent infringement case, this is typically the case if a different or modified “accused device” is introduced. It could, for example, be that the very same product as identified in the complaint implements several accused devices because different sets of technical aspects in that product can be invoked for independent infringement mappings of the same patent claims. The same would be true if a different product line was identified during the course of the litigation, and the infringement mapping resorts to technical characteristics whose essence deviates from the products previously identified in the complaint. Such a “claim extension” is very generously admitted into the proceedings. However, if introduced very late into the proceedings, the court could order a new schedule (i.e., push back the final hearing date and extend the terms in order to give the defendant a chance to address those changes).
126.96.36.199 Pleading standards
The facts presented in the complaint for showing infringement need to be sufficiently substantiated: the facts need to be specific, and the plaintiff must be concrete in showing how these facts are considered to realize the features of the asserted independent claims of the patent-in-suit. While no evidence for any of the asserted facts needs to be presented at this stage, there must be a sufficient basis for factual contentions. They cannot present pure speculation. If they do, the defendant does not need to contest the allegation at all – it would be procedurally discounted as insufficiently stated.
If the facts, however, are sufficiently specified, the defendant must react in substance by either admitting or denying (Section 138(2) of the Code of Civil Procedure). This implies that the defendant must specifically deny the individual factual items of the plaintiff’s factual infringement contentions. The defendant cannot just generally deny the factual allegations. It is also not sufficient to argue that the plaintiff’s conclusions as to why the accused device or accused method must work in a certain way (which frequently happens, e.g., in the field of electronics) are flawed, unless the factual allegation pertaining to the relevant characteristic of the device or method itself is expressly disputed. Facts that are not expressly disputed are generally to be deemed as having been acknowledged (Section 138(3)). While it is generally sufficient to just deny a certain factual allegation and not necessary disclose what the pertinent mechanism actually looks like, there are significant exceptions to this procedural rule that are referred to under the keyword of “secondary burden to substantiate” (“sekundäre Darlegungslast”).
While this is a general category of civil litigation, it has become particularly important in patent infringement cases in order to compensate for the lack of a general discovery. Based on the general principle of good faith, this also applies to the rules of civil procedure. The defendant in a patent infringement action is under an obligation to specify how certain aspects that are only known to them and that could only be discovered by the plaintiff with disproportionate effort actually function.122
Furthermore, the defendant’s denial ought to be as specific as the plaintiff’s contention. Thus, if the plaintiff presents a detailed and consistent explanation as to why and how the specifics of the accused device work, the defendant cannot just generally deny that. Rather, the defendant must engage in specific and detailed explanations at the same level. While there are generally limits in terms of equitable considerations (“Zumutbarkeit”) that can also accommodate relying on trade secrets, it is not sufficient to just refer to this without further detail. Furthermore, the defendant can be expected to make use of the legal means to protect confidential information (see Section 5.6.8 of this chapter, which is particularly relevant in connection with the most recent changes to the Patent Act (cf. Section 145a). If anything in this regime does not satisfy specific confidentiality interests, the defendant would need to substantiate this and would need to ask for a separate agreement with the plaintiff.
The same rationale just set forth for Section 138(3) applies to limiting the cases in which the defendant can deny an allegation by referring to their lack of knowledge. While this is generally possible if the facts concerned were neither actions of the party itself nor within its ken (cf. Section 138(4) Code of Civil Procedure), this rule is limited by establishing obligations to procure sufficient information. This is, for example, the case if the defendant has retained a third party to manufacture the product or perform the accused process:123 it cannot work to the advantage of the defendant that they use third parties to leverage its business. Furthermore, a dealer cannot claim to not have any detailed knowledge of the accused device because it is manufactured elsewhere and that the plaintiff should therefore turn to the manufacturer.124 Rather, the dealer must look into the facts – that is, examine the device or turn to the manufacturer for the specifics. The dealer can rely, however, on information from a trustworthy source (e.g., the manufacturer) and, unless the plaintiff shows that the information is flawed, does not need to engage in independent efforts to further explore the facts by examining the accused device.
188.8.131.52 Further briefs
Up to the hearing, the parties typically file at least two rounds of briefs (complaint, response, reply and rejoinder). Usually, there are further briefs exchanged right up to the hearing date, even though the judges do not tend to like this approach. The only practical and effective way to avoid it, however, is for the court to push back the hearing date if the plaintiff files late briefs too soon before the hearing.
5.6.5 Provisional measures
184.108.40.206 Proceedings for preliminary relief are independent of the proceedings for permanent relief
The German Code of Civil Procedure provides for summary proceedings –that is, for civil actions for preliminary relief, particularly in the form of preliminary injunctive relief (Sections 916 to 945b). This is not designed as a form of “interim relief” within the action for permanent relief but rather takes the form of a separate and independent action. Thus, all requirements (jurisdiction and venue) ought to be checked independently. Actions for interim relief and for permanent relief can therefore be entertained in different venues, and, indeed, plaintiffs often seek preliminary injunctive relief in venues whose practice is generally considered more favorable to preliminary relief. The sole exception applies to cases in which an action for permanent relief has already been filed, in which case that court would also have exclusive jurisdiction for the corresponding summary proceedings, even if the action is already pending on appeal (Section 937(1)).
The principle of separate actions also entails that a ruling on permanent relief does not automatically affect a prior ruling on preliminary relief.125 Any preliminary injunction will therefore need to be set aside by a court within the framework of the proceedings for preliminary relief. It does not cease to exist just because the court in the action for permanent relief dismisses the action.126
220.127.116.11 Ex parte proceedings: protective writ
Preliminary injunctive relief can be granted ex parte, and, indeed, ex parte injunctions are still common in trademark or unfair competition matters; but it is the real exception in patent cases because the complexity of the matters makes it mostly indispensable to give the defendant its day in court before making a decision.127 To avoid ex parte decisions, the potential defendant can file a “protective letter” with the possible infringement courts (Section 945a of the Code of Civil Procedure). This is an anticipated defense brief whose purpose is to establish at least sufficient doubt with regard to the merits of the case for a preliminary injunction such that the court does not grant it without a hearing. However, filing such a protective letter is not univocally advantageous for the plaintiff. Rather, there are two main risks to be considered:
- The plaintiff and the court can argue that, by virtue of the protective letter, the defendant had a chance to be heard, so an ex parte injunction could be issued, and the general concerns of not hearing the defendant would be mitigated. Thus, filing the protective letter could have the reverse effect and enable an ex parte injunction rather than avoiding it.
- If the injunction is nevertheless issued, it can be served directly on the defendant’s counsel, which is a very significant shortening of regular service, particularly of service abroad under the Hague Service Convention.128
If the injunction is granted ex parte, the plaintiff must serve it within a one-month term; otherwise, it becomes void (Section 929(2) of the Code of Civil Procedure). The service is typically done through a bailiff that the plaintiff’s counsel must retain. It must be effected on the defendant’s counsel if such counsel for the proceedings exists (e.g., when a protective writ was already filed). Only if the preliminary injunction is actually served (in time) does it become binding on the defendant. The defendant can oppose the ex parte injunction, and the court will schedule a hearing day following such opposition (Section 924).
If the court is of the preliminary view, having analyzed the plaintiff’s application, that the grant of an ex parte injunction is not possible, the court will typically issue a notice to that extent to the plaintiff (sometimes also by way of a phone call). It is then up to the plaintiff to either withdraw the action or to maintain it. If maintained, the court can either dismiss the application right away (ex parte) or schedule a hearing date and effect service of process (application and summons) on the defendant. The ex parte dismissal can be appealed by the plaintiff, and this proceeding would continue ex parte at the appellate level. The appellate court can grant the requested relief ex parte or can affirm the dismissal, summon the defendant or remand the case for further inter partes proceedings.
18.104.22.168 Distinct procedural characteristics of proceedings for preliminary relief compared to permanent relief
The process of inter partes summary proceedings for preliminary relief is generally similar to that described above for the main proceedings for permanent relief. The process is significantly more accelerated, however, so a hearing date should take place a couple of weeks or a few months after the service of the application. Furthermore, there are a number of procedural differences that are due to the inherently accelerated nature of the proceedings:
- Expert evidence is not available in interim proceedings (Sections 920(2) and 294(2) of the Code of Civil Procedure).
- There is no separate hearing date scheduled for the taking of evidence, so witnesses will not be summoned; rather, the parties need to ensure that they are readily available for the hearing date (“präsenter Zeuge”; cf. Section 294(2)).
- There is no preclusion of facts or evidence. Thus, even if the court sets a term, the parties can push back submitting any facts or evidence to the final hearing.
- There is also no stay of the proceedings pending the nullity action or opposition. Rather, if there are concerns regarding the validity of the patent-in-suit, the application must be dismissed.
- The evidentiary threshold is lower, as “Glaubhaftmachung” (prima facie evidence) is sufficient, which can be better translated as “demonstrating an allegation as to fact to the satisfaction of the court” (official translation of the Ministry of Justice: cf. Sections 920(2) and 294). There is no limitation to the formal evidence set forth above, so affidavits are also possible and frequently used.
- The decision of the court is typically pronounced on the day of the hearing, so no separate hearing date for pronouncing the ruling is set as for most of the cases in the main action.
- The relief granted in the court’s ruling is eo ipso enforceable, so the court does not need to separately pronounce the preliminary enforceability (Section 928) and therefore typically does not also set a security bond to be posted for making the injunction enforceable (even though that is possible, cf. Section 921).
22.214.171.124 Requirements for preliminary injunctive relief
126.96.36.199.1 Requirements for interim relief: “Verfügungsanspruch” (substantive infringement claim) and “Verfügungsgrund” (specific legal interest for preliminary relief)
As to the requirements for interim relief under the general provisions of the Code of Civil Procedure, two categories can be distinguished: the substantive requirements regarding the asserted claim (“Verfügungsanspruch”) and the specific reason or interest justifying interim relief prior to permanent relief (“Verfügungsgrund”). Within the analysis regarding the “specific interest,” both “urgency” and “balancing the equities” of the matter (“Verfügungsanspruch”) need to be addressed, while the balancing of interests also encompasses the analysis regarding the validity of the patent-in-suit.
The standards for the “Verfügungsanspruch” – mainly for claim construction and infringement issues – are generally the same that apply in the main proceedings with the above-described difference regarding evidence. Thus, different from other jurisdictions, the merits of infringement play a decisive role in the grant of preliminary injunctive relief rather than putting the primary focus on an equity analysis weighing the interests affected by granting or not granting the requested preliminary relief.
This being the case, the practically most critical part of German patent infringement proceedings is the “Verfügungsgrund”: the specific legal interest that the plaintiff must show for pursuing its claims in the form of interim proceedings. In this regard, it must be considered that preliminary relief under the German Code of Civil Procedure, as a rule, should only preserve the status, ensuring that the enforcement of rights following an action for permanent relief will not be frustrated.129 In matters for injunctive relief, by definition and inevitably so, the permanent relief is not only preserved but “moved ahead” (“vorweggenommen”). Even so, such preliminary relief is possible and is not limited to cases of irreparable harm for the plaintiff. On the contrary, if the merits of the case are clear on the face of it, the threshold for the specific legal interest is generally not too high. Yet, the merits of a patent infringement case are only rarely sufficiently clear in this respect – neither on infringement nor on validity. This is due to both factual and legal reasons and is particularly the case for the validity side, for which the bifurcation element aggravates these problems.
Thus, while preliminary injunctive relief is the practically prevailing form of dealing with trademark and unfair competition disputes, the German courts are rather cautious when it comes to preliminary reliefs in patent matters. The rationale is that such matters are generally factually much more complex, and the impact of the injunction is generally much more severe than in, for example, trademark matters. Furthermore, the actions for permanent relief are much quicker in Germany compared to other jurisdictions, so the practical need for preliminary relief is less urgent. Yet, despite this general reservation, injunctive relief in patent matters is practically possible if the infringement analysis is not too complex. Thus, while it is possible to produce party expert opinions to corroborate the infringement analysis and its factual basis (genuine “expert evidence” is not available in summary proceedings, cf. Sections 920(2) and 294(2) of the Code of Civil Procedure), a “battle of experts” is, in many cases, taken as an indication that the matter at bar is unsuitable for preliminary proceedings. The more the plaintiff must argue to make the infringement case, particularly regarding the factual basis, the higher the likelihood the court deems the matter unsuitable for preliminary relief.
The most difficult factor in most of the patent infringement actions for preliminary relief is validity. As the German system provides for bifurcation, the infringement courts generally – and also in actions for permanent relief – do not rule conclusively on validity but only need to engage in a “prediction” as to the outcome of the (opposition or nullity) actions challenging the validity – that is, the infringement courts assess the prospects of success of the validity challenges. Such an assessment is similar in cases for preliminary relief. However, in many cases, due to the accelerated nature of actions for preliminary relief, the defendant may not have had sufficient time to put together a substantiated validity challenge (requiring searches of prior art and corresponding assessments).
Additionally, as the actions challenging the validity of the patent-in-suit take significantly longer than even the infringement actions for permanent relief, the resulting “injunction gap” considerably widens in the case of preliminary injunctions for patent infringement. Therefore, the case law of all of the relevant appellate circuits in Germany states that preliminary injunctions in patent infringement matters generally require that the patent-in-suit has already been sufficiently confirmed in opposition or nullity proceedings, at least in the first instance.130
The Regional Court of Munich has held that this practice is at odds with the EU Enforcement Directive,131 according to which preliminary relief ought to be provided. The court has therefore referred a case to the European Court of Justice,132 asking it to clarify this issue of law: that is, whether the general requirement for an inter partes decision on validity contradicts EU law and should therefore be abandoned.133 The referral has been criticized because it did not sufficiently describe the exceptions to the above-mentioned rule, according to which, for special scenarios (e.g., irreparable harm to the plaintiff in cases of an imminent market entry of a generic medical product, evident lack of merits of the validity attack, or general acceptance of a patent in the market), the grant of a preliminary injunction is possible even in the absence of a previous inter partes decision on validity. The prevailing literature considers that system adequate, with those exceptions, and not in violation of the EU Enforcement Directive.134
Urgency is a necessary requirement for any action for preliminary relief. This requirement does not imply that the right holder would need to proactively check the market for infringing activities. However, once specific indications for infringement have been brought to the right holder’s attention, they must act without undue delay to explore the facts. Once the facts and evidence have been explored without undue delay, case law expects that the motion for interim relief is filed within a month.135 Some appellate circuits are more generous in this regard and let two or three months suffice.136 Urgency also places significant limitations on the plaintiff’s procedural strategy. The plaintiff must be very careful to engage in settlement negotiations and, in this connection, agree to extend terms or push back hearing dates, even dates for pronouncing a decision. Such acts can be taken as showing a lack of genuine urgency, so the case would need to be dismissed, even if already on appeal.
5.6.6 Gathering of information
188.8.131.52 Basic pleadings mechanics
It is one of the fundamental principles governing any civil action under the Code of Civil Procedure that all facts and evidence relevant to the substantive claims at bar must be presented by the parties (“Beibringungsgrundsatz”; Section 138(1) of the Code of Civil Procedure). The court cannot ex officio or otherwise sua sponte, explore facts or evidence (with some exceptions like court-appointed experts and orders to produce certain documents that will be discussed later). The party asserting the claims generally bears the burden of substantiating and, if contested by the opposing party, of proving the facts that form the basis for the asserted claim. Thus, in a patent infringement matter, the party claiming that the opposing party is liable for patent infringement (and therefore subject to certain relief) must make the necessary factual contentions and, if contested, must take recourse to evidence.
Nevertheless, this does not mean that such a party (the claimant or plaintiff)137 must have conclusive knowledge of the facts, let alone hold evidence to that extent when filing a patent infringement action. It suffices to specify certain facts that the defendant can admit, or deny or dispute. The limits to this are pure speculation: the plaintiff cannot just allege certain facts without any basis so as to procedurally make the defendant address it. “Fishing expeditions” are not possible in the German procedural system. If there is a sufficient basis from which to infer a factual contention and the defendant nonetheless still chooses not to address certain factual contentions, then those are considered admitted (Section 138(3)). If the plaintiff’s contentions are denied, the court must take evidence. The details of these pleading standards given in Section 184.108.40.206 of this chapter.
220.127.116.11 Test buy
The easiest way to ascertain factual information is by way of buying the accused devices and subjecting them to empirical analysis. It is well settled that any form of “test buy” is a legitimate way to procure the information necessary for initiating an infringement action even if the buyer (who can also be the plaintiff’s counsel) does not disclose this context. Possible limits include illegal ways of procuring such information.
18.104.22.168 Limited pretrial discovery (inspection orders)
However, the patentee does not, in some cases, have access to the accused devices or the performance of the accused method. Furthermore, even reverse engineering might not be suitable for disclosing all relevant features (e.g., product-by-process features). Thus, even if the patentee would have a sufficient basis for making certain factual infringement allegations (see Section 22.214.171.124 of this chapter) and could file an action on that basis, the assumption could turn out to be wrong, and the action would be dismissed on the merits. While this is a general risk that a patentee (as plaintiff) must take when bringing an action, it is dissatisfying if that risk is based on insufficient factual information. Therefore, in implementing key points of the EU Enforcement Directive,138 the Patent Act provides a specific procedural (also “pretrial”) system enabling the patentee to ascertain particular facts, which enables measures ahead of filing any action for permanent relief.
The key part of this statutory regime is provided for in Section 140c of Patent Act, under which any person who, with sufficient likelihood, infringes a patent, may be sued for submission of a document or for inspection of an item (e.g., a device or process) that lies in their control if this is necessary for the purpose of establishing infringement (cf. Section 140c(1) of the Patent Act). The basic requirement for such an inspection order is a certain likelihood of infringement. Thus, the patentee must substantiate infringement in terms of distinguishing the features for which there is certainty and those for which there is a factual uncertainty while explaining the basis for inferring a certain likelihood of the use of such features in the defendant’s devices or methods. These obligations to submit a document or to acquiesce the inspection can also be imposed by way of preliminary injunctive relief (Section 140c(3) of the Patent Act). This is the part that enables a pretrial discovery of facts ahead of filing an action for permanent relief.
Under the umbrella of this statutory regime,139 case law – particularly of the Düsseldorf regional and higher regional courts140 – has developed a highly balanced but rather sophisticated process for an ex parte inspection order pertaining to devices and processes possessed and respectively used by a likely patent infringer. While the nuances of this process are subtle, it is generally based on a combination of a preliminary injunction (based on Section 140c(3) of the Patent Act) with an “independent evidentiary proceeding” (based on Section 485(1) of the Code of Civil Procedure). With the former aspect, the likely patent infringer is ordered to acquiesce the inspection (by a court-appointed expert), while the latter enables the taking of evidence in the form of an expert opinion ahead of initiating any proceedings for permanent relief (the main action for infringement). In doing so, the corresponding expert opinion can be adopted as genuine expert evidence in possible subsequent proceedings on the merits for permanent relief (regarding expert evidence see Section 126.96.36.199 of this chapter). If the accused devices or methods to be inspected are located on the premises of the likely patent infringer, and access is denied, an additional search warrant (Section 758a) can be issued.141 Under specific circumstances, the inspection may even be carried out in the premises of a third party as long as the infringer can nonetheless be deemed to be in possession of the relevant products or has sufficient influence upon the carrying out of the protected procedure. If the likely patent infringer refuses the inspection or refuses access to the premises, the inspection order or search warrant needs to be enforced with the help of a bailiff, who, in turn, can call on the help of police officers.
The key point of this process is balancing the parties’ interests – that is, the interest in securing evidence for showing infringement against the interest to preserve confidential information. This is why the typical inspection process provides for a court-appointed independent expert to conduct the inspection. Only the patentee’s lawyers (including patent attorneys), but not the patentee, are admitted to attend the inspection, while both the expert and the lawyers also act under a protective order so that they cannot discuss the findings with others, including the patentee. In order to ensure that the defendant’s rights are preserved, the expert will typically be put under an obligation to give the defendant a certain time (e.g., two hours) to contact its lawyers while the inspection is deferred. It is in this regard recommended that companies, whose premises could be subject to such orders, retain lawyers who are available on short notice to appear in such a scenario.
While the expert cannot just seize devices or documents (unless such seizure is expressly ordered and conducted through the bailiff), the expert should be authorized in the order to document the findings of the inspection by way of photos, screenshots and the like, including deconstruction, if no damage remains. If digital data or code are at issue, it is possible to allow the expert to download such data, and the defendant would need to support this by way of providing passwords if ordered to do so in the inspection order.
The court-appointed expert then drafts an expert opinion on the results of the inspection with regard to the facts and merits of infringement of the patent-in-suit. This report is released in an unredacted form to both the court and the likely patent infringer’s lawyers, as well as the patentee’s individual lawyers, who are bound by the protective obligation in the original inspection order. This order also includes, as discussed above, an obligation to also keep the confidentiality from their client (the patentee). The FCJ has confirmed that such an obligation is legally valid and sufficient to protect the defendant.142 Thus, the likely patent infringer cannot generally ask to only release a redacted version of the report to the patentee’s lawyers bound by the protective order.
In this regard, the confidentiality regime differs from the new statutory regime under Section 145a of Patent Act in combination with Sections 16–20 of the new statute on the protection of confidential business information (“Geschäftsgeheimnisschutzgesetz”)143 because that new statutory regime requires that at least one individual of each party be granted access to the confidential and protected information (cf. Section 19(1)(2) Law on the Protection of Trade Secrets). This is the reason why Section 145a of the Patent Act, which enables the protective measures set forth in the new business information protection statute, expressly excludes the proceedings under Section 140c of the Patent Act.144 In the first stage of the subsequent written proceedings following the submission of the expert opinion under Section 140c of the Patent Act, the expert opinion is therefore not released to the patentee (or to an individual employed or person retained by the patentee, other than outside counsel of record). Rather, an assessment ought to be made as to whether such release is justified in the light of possible confidential information contained in the expert opinion. In making this decision, the court must balance the parties’ interests (i.e., the interest of showing infringement against the interest to protect confidential information). If there is confidential information involved, and the expert opinion has not confirmed the likelihood of infringement, then the release is not justified. If there is a significant likelihood of infringement, then the release might be justified even if confidential information is affected. In many instances, it is sufficient to release the expert opinion in a redacted form.145 The number of applications for inspection orders is low – even the regional courts that regularly deal with patent matters only handle a handful of such cases per year.
188.8.131.52 28 USC § 1782
Due to the lack of sufficient discovery, it has become very popular for plaintiffs in German infringement actions (and sometimes also for defendants) to avail themselves of 28 USC § 1782. This provision allows a U.S. federal court to order a person residing in its district to give testimony or produce a document for use in a foreign or international proceeding. This provision is, in practice, not interpreted restrictively,146 which is why this form of discovery has been frequently used in German patent litigation involving U.S. parties or U.S. third parties in possession of evidence relevant for the German litigation. This provision has become relevant not only for technical information but also for license agreements in the context of FRAND (fair, reasonable and nondiscriminatory) defenses.
It is important to note, however, that the plaintiff is not considered to be under any procedural obligation to make use of a § 1782 discovery in order to ascertain facts or evidence because, with regard to Article 23 of the Hague Evidence Convention,147 Germany has declared its objection, so it will not comply with requests for pretrial discovery.148 Indeed, in many scenarios, the results of the U.S. discovery could even delay the action. It might therefore be strategically advantageous to trust the pleading requirements provided for in the German practice of civil procedure, particularly the defendant’s secondary burden to substantiate when it comes to the defendant’s products (see Section 184.108.40.206 of this chapter).
The taking of evidence only comes into play when there are contested issues of fact that turn out to be decisive for the court’s ruling. As in any civil action, the court cannot just explore the facts if they are not relevant under the court’s legal analysis and applicable to the requested relief based on the parties’ factual contentions. Because of the above-explained, highly balanced and effective system of procedural obligations to substantiate contentions and denials, orders for evidence are clearly the exception in a German patent infringement action.
If the taking of evidence is necessary, the court must order to do so. This will typically only be done after an oral hearing, but it is procedurally also possible ahead of the first hearing, particularly if expert reports are involved (cf. Section 358a(4)). The order for evidence generally requires a formal written order identifying the contested facts and the evidence, particularly naming the witnesses and experts as well as the party that has taken recourse to the evidence (Section 359). The latter point is relevant because the taking of evidence is generally only admissible if one of the parties has taken recourse to the evidence at issue. Expert evidence is the most important exception: the court can call for an expert opinion even if the parties have not expressly requested it. Naming the party that has taken recourse does not yet imply anything on the burden of proof. The burden of proof only becomes relevant if the court, following the taking of evaluation of the evidence, cannot convince itself in a manner sufficient for ascertaining whether the contested issue of fact is true or not (Section 286). The party bearing the burden of proof bears the risk of this non liquet – that is, the risk that the court rules against the party bearing the burden of proof. In the German concept, these rules are considered substantive rather than procedural in nature.
The German Code of Civil Procedure provides for several means of evidence: experts, witnesses, records or documents, visual evidence taken on site and the examination of a party.
Only court-appointed experts are considered experts in terms of being a formal means of evidence. Experts retained by the parties to the litigation, and their corresponding reports, do not count as “evidence.” Rather, such reports just generally count as submissions by the respective parties. However, they do carry more weight (“qualified party submission”) depending on the qualifications and reasoning of the expert opinion, as the court cannot simply take on a different view without providing express reasons and sources as to why certain scientifically founded arguments are dismissed. Thus, filing party expert opinions can be a relevant element and can make the court more inclined to resort to an independent expert. Though rare in practice, a party expert may be allowed to speak during the hearing, but, again, this is procedurally only considered as a party representative – not an “expert witness” – speaking. Thus, there is no cross-examination or anything known from the Anglo-American trial-based system.
While the court has discretion as to expert selection (cf. Section 404(1)), the court usually asks the parties which experts are suitable for a specific technical field (cf. Section 404(4)). If the parties agree on an expert, the court generally must retain this expert (cf. Section 404(5)). The most difficult challenge is to identify experts in the pertinent technical field who are not (too) close to any of the parties (who are, in patent infringement cases, often leading companies in the field that also work closely with scientists), as the parties can reject experts for reasons of bias (cf. Section 406). This is also why the parties, when evaluating which experts are suitable, should be very careful when unilaterally contacting candidates. Once an expert has been identified and has indicated they are ready to render an opinion on the pertinent subject matter, the court formally appoints the expert and sets a term for the expert to submit a written report on certain issues set forth in the order for evidence (Section 411(1)).
The written report is submitted to the court, and the court provides it to the parties so that they have the opportunity to comment in writing on the report. Based on these statements, the court can specify further points, asking the expert to supplement the report. In many cases, the expert is summoned to a hearing to give the court and the parties a chance to ask questions about the report. The court may prepare such a hearing by way of a written order to give the expert a chance to prepare. During the hearing, the bench primarily leads the examination of the expert, but the parties (through their counsel) have the right to also ask questions. Even though the examination of experts is conducted in a manner similar to that of witnesses (the pertinent rules on witnesses apply mutatis mutandis to experts; cf. Section 402), experts are not referred to as “expert witnesses.” The latter term only refers to “knowledgeable persons” who are to be examined to obtain evidence regarding past facts and circumstances, or situations given in the past, that require special technical competence to be perceived (Section 414). These genuine “expert witnesses” are procedurally treated as witnesses, not as experts, for the purposes of the rules on taking evidence.
As stated above, only contested issues of fact can be subject to an expert opinion. This could, for example, pertain to a characteristic of the accused device that is not readily ascertainable (e.g., visible). While issues of law cannot be subject to expert evidence, and claim construction is generally considered an issue of law, certain aspects relevant to claim interpretation can be referred to an expert. A typical example is cases in which specific technical terms are used in the claims and not defined in the description but for which the skilled person at the priority date could have a defined understanding. If a claim, for example, uses the term “solution,” the parties could argue whether the term is limited to a strict molecular solution or if it could also cover certain suspensions. The experienced German infringement courts are rather reluctant, though, to resort to expert opinions in such cases unless there is no clear function indication in the patent-in-suit or any other documents that form the undisputed basis for the common general knowledge at the priority date based on which the skilled person is considered to have been operating.
It is important to note, though, that the bench cannot just rely on the expert when it comes to claim construction. The FCJ has set aside a number of decisions that did not reflect a genuine and independent reasoning of the infringement regarding claim construction but rather generally referred to an expert’s reasoning.149
While experts are typically retained to provide a written expert report on certain questions as set forth in the order for evidence, experts have also been retained by the court to attend a hearing and to assist the bench during the hearing by way of commenting on certain technical topics.150
While the taking of evidence by hearing witnesses is a key part of the provisions on evidence in the Code of Civil Procedure (Section 373–401, witnesses are rarely examined in German patent infringement proceedings. The main issue for which witnesses play a role is a prior-use right according to Section 12 of the Patent Act. This is different from a public prior use that would count as prior art and thus only be relevant for a stay of infringement proceedings. The prior-use right, under Section 12, is a genuine defense that does not challenge the validity of the patent but only establishes a right for the defendant to continue a certain use of the invention that had to be started before the filing or priority date. Other fields where witnesses can be relevant are with respect to the standing to sue or the infringing activities of the defendant.
The taking of evidence by hearing a witness requires offering this evidence by naming the witness and designating the facts regarding which the witness is to be examined (Section 373). The court cannot ex officio name a witness. The witness must be summoned to the hearing (Section 377), and the summons must include the designation of the parties, the subject matter of the examination and an instruction of the witness to appear at the set hearing date for the purpose of testifying before the court. The summons must also include the warning that failure to do so may be sanctioned by means of administrative coercion provided for in the law.
While affidavits do not count as witness evidence (only as a document), Section 377(3) provides that the court may instruct that the question regarding which evidence is to be taken be answered in writing should it believe that, in light of the content of the question regarding which evidence is to be taken and taking into consideration the person of the witness, it suffices to proceed in this matter. This written answer would qualify as witness testimony. Any other written declaration (or affidavit), or the record of witness testimony from another proceeding, would not qualify as witness evidence but only as evidence in the form of a “record or document.” While it is not excluded to tender and take evidence in this form, the court would need to take evidence by also hearing the witness if the opposing party requests this.151 Thus, while there is no general principle that the most direct evidence ought to be taken, the taking of evidence in the form of hearing a witness cannot be easily avoided by referring to written statements or affidavits.
Witnesses are only entitled to refuse to testify on the specific personal and factual grounds provided for in Sections 383 and 384. Among the personal grounds are certain personal relationships with any of the parties, as well as professional duties of confidentiality. Among the factual grounds is the right to refuse answers to questions that the witness would not be able to answer without disclosing a technical or trade secret.
The production of records or documents requires the party tendering the evidence to actually produce it (Section 420). If the document is in the possession of the opposing party, the evidence can only be offered by filing a petition that the court direct the opponent to produce the record or document (Section 421). Unless there is a specific substantive obligation under civil law to produce such a document (Section 422), the opposing party only has a procedural obligation to produce such a record or document when it previously also tendered evidence to that extent, even if this was only in the written stage of the proceedings (Section 423).
Thus, generally speaking, the parties are under no procedural obligation to voluntarily produce any documents in their possession. However, the court can order one of the parties or a third party to submit records or documents in their possession if any of the parties has made reference to it (Section 142(1)). The same applies for items that are in the defendant’s or a third party’s possession (Section 144(1)) if such items ought to be examined by the court or a court-appointed expert. While this modifies the general principle of the production of evidence by the party referring to it, it is not meant to enable full-scale document discovery. Rather, the record or document must be specifically referred to, and it must be substantiated why it is assumed to be in the possession of any of the parties or a third party. It is not possible to ask for the production of an entire document collection without specifying the relevance of its individual parts.
Furthermore, this mechanism is not meant to enable the conclusive pleading by the plaintiff, as a typical discovery mechanism would. Rather, the plaintiff must sufficiently substantiate the facts on which the asserted claims are based rather than just explore the facts that could enable such pleading by way of document production. With regard to patent infringement actions in particular, the case law of the FCJ has aligned the infringement court’s duties to issue such orders with the statutory requirements for an independent inspection claim provided for in Section 140c of the Patent Act (see 220.127.116.11 of this chapter). Thus, the defendant need only submit certain documents referred to by the plaintiff and pertaining to the showing of infringement if there is a certain likelihood of infringement and the production is necessary for showing infringement.152
Protecting parties’ confidential information is a critical aspect in many patent infringement actions. While a discovery-based system conceptually provides for a sophisticated confidentiality regime in the form of protective orders or similar instruments, this is not the case in the German legal system, which does not provide for any general pretrial discovery. Thus, originally, the only statutory regime for protecting confidential information was provided for in the Courts Constitution Act, particularly in Sections 172–174. These provisions are exceptions to the general principle that all court hearings need to be public (Section 169 of the Courts Constitution Act). On this basis, the court can exclude the public from a hearing if confidential business information is discussed. The parties and their attorneys can remain in the hearing, but all people attending can be subjected to a confidentiality order (Section 174(3) of the Courts Constitution Act) whose breach triggers a criminal liability (Section 353d(2) of the Criminal Code).153
This regime has been frequently used to protect not only technical information but also business information (e.g., in FRAND cases). However, the regime within the Courts Constitution Act has its obvious shortcomings, because the court cannot order confidentiality ahead of a hearing, so the function of the front-loaded proceedings, with the focus on the written briefs, is impaired. These issues have been addressed by way of Section 145a of the Patent Act, which was very recently enacted.154 In referring to the recent statute on the protection of confidential business information (Sections 16–20 of the Trade Secrets Protection Act), Section 145a of the Patent Act gives the court sufficient flexibility and discretion to order suitable regimes for protecting confidential information already in the initial stages of the proceedings. Based on a request from any of the parties, the court can issue protective orders according to which certain information ought to be kept confidential. This encompasses any information that has been introduced into the proceedings if it could qualify as a trade secret or confidential business information. All individuals that are part of the proceedings (parties, outside counsel, experts and witnesses) and all third parties that have access to the documents of the proceedings are bound by the order. The court can also limit access to confidential information, contained in documents submitted by the parties or by third parties, to a certain number of individuals.
The same is true for the attendance of the oral hearing in which this information is to be discussed. However, at least one individual of each party and each party’s outside counsel must have access (Section 19(1)). Sanctions for violation of the orders are limited to fines of EUR 100,000 or up to six months’ detention.
5.6.9 Oral hearing
The rule is to hold only one oral hearing toward the end of the process. The regional court typically has one hearing day per week (e.g., Friday for the VII Civil Panel of the Mannheim court), for which more than one case is scheduled. Depending on the complexity of the matter, the court reserves one or several hours for the hearing. Occasionally, hearings in complex cases go on for eight hours or more. There are no time limits for the pleadings of the parties, and the parties do not need to turn in pleading notes ahead of the hearing.
The hearings need to be public (cf. Section 169(1) of the Courts Constitution Act) unless the public is excluded, for example, to protect trade secret information that might be discussed during the hearing. Excluding the public requires a nonpublic hearing on the ground for exclusion and can only last for as long as necessary (cf. Section 174(1) of the Courts Constitution Act). Because the public must be given the chance to attend a hearing, the name of the parties, the time of the hearing and the case number need to be put on a panel in front of the courtroom.155 Furthermore, the public must have access to the court building and the courtroom.156 However, the docket is not public. Thus, it is generally not possible to ascertain whether a certain case is pending by looking into the docket or calling the court’s registry. As a matter of course, the parties do not need to keep the case confidential.
The hearing must always take place physically at the court room, so this is the relevant location for ensuring that the hearing is open to the general public. However, the court can, under Section 128a Code of Civil Procedure, also permit the parties and lawyers to stay at another location and broadcast the hearing in real time to that location. This formed the basis for the frequently used video hearings that were welcomed during the COVID-19 pandemic. Additionally, witnesses and experts may be permitted to stay in another location and be connected through video for their examination.
All patent infringement matters are heard by a bench of three judges (Section 75 of the Courts Constitution Act). While it is generally possible to delegate a civil action to one member of the bench, that possibility is basically never used in patent infringement matters. One of the three judges on the bench (but typically not the presiding judge) acts as a reporting member. This reporting member prepares a detailed analysis of the case and makes a preliminary opinion as a basis for the deliberation of the three judges taking place, as a matter of practice, on the day before the hearing. The reporting judge and the presiding judge are expected to know the files at a great level of detail, while the third judge receives most of the information from the deliberation and the hearing (but does have the same vote regarding the decision). In most cases, the presiding judge speaks for the bench in the hearing, but, selectively, the reporting judge or the third judge may also ask the parties questions during the hearing.
The hearing starts with the presiding judge calling the matter by naming the parties and the case number (Section 220(1)). Different from a trial-based system, there are no comprehensive minutes that would form part of the record. Rather, the presiding judge only records specific aspects of the hearing.157 At the outset of the hearing, the presiding judge records the attendance of the parties and their representatives as well as that of the bench. In some cases, the presiding judge also records the prayers for relief (requests) at the outset of the hearing, unless those requests were already recorded in an earlier hearing date, which is possible according to the practice of the Munich court and the Düsseldorf court. In most cases, however, the prayers for relief are only recorded toward the end of the oral hearing as certain aspects might change during the course of the hearing. The recording is either performed by a record clerk (cf. Section 159(1)) of the court registry or by the presiding judge using a recording device (the latter has become most common).
After recording attendance, the presiding judge first asks the parties if there is any possibility of settling the dispute (Section 278(2)). While, in most cases, those discussions will be cut short by the parties, the parties can point out certain considerations that have so far guided them or that have turned out to be a problem in settling the case. Based on the court’s initial assessment of the merits of the case, the court could revisit the discussions later again. Thus, the bench is not just strictly observing the presentation of the matter, but it also has an active role in terms of encouraging and possibly facilitating settlement as well as engaging in a discussion of the key points of the dispute with the parties. The Code of Civil Procedure expressly provides that, to the extent required, the court is to discuss with the parties the key points of the dispute, both in terms of factual aspects of the matter and of its legal ramifications (Section 139(1)). In this regard, the court is also to ask questions and work toward ensuring that the parties’ contentions are complete with regard to all the relevant facts and evidence. The court must also ensure that the prayers for relief are correctly phrased. So, for example, if the court has concerns regarding the admissibility of the requests because they only repeat the claim language, the court would need to give a formal notice under Section 139(1) indicating that the language of the requests would need to be amended in order to be admissible.
To ensure the court has completely understood the parties’ submissions and has complied with its duties under Section 139(1), the presiding judge gives an introduction to the matter (Section 278(2)). This is, in most cases, a concise account of the bench’s understanding of the parties’ key points. While the court cannot form a conclusive opinion at this stage but must rather stay open, the presiding judge will typically also present the bench’s preliminary view on the merits in order to give the parties an adequate chance to address the court’s view. The preliminary opinion is based on the deliberation of the bench.
While it is not easy to “turn around” the bench, it does happen, particularly in complex cases, that the bench changes its mind. If new points that the counsel would want to discuss with the client before responding in the hearing are raised, it is also common for either side to ask for a break after the introduction. It is standing practice that the bench gives the word first to the party disadvantaged by the majority of the points in the introduction. As stated before, there is no time limit for oral pleadings, but the bench expects (and regularly states) that the points in its introduction be specifically addressed rather than repeating just the essence of the written briefs.
It can be important for the parties to have certain statements recorded. This is the case, for example, if a certain factual aspect pertaining to the accused device is described in more detail only during the hearing. Otherwise, it will be difficult to base a decision on remarks made during the oral hearing. The court must also record notices under Section 139 (cf. Section 139(4)) unless those have been given ahead of the hearing in writing.
At the end of the hearing, the presiding judge will typically record the requests and set a date for pronouncing the ruling on the case (Section 310(1)). This is typically about four to eight weeks after the hearing. The presiding judge then announces that the hearing is closed. This point of closing the hearing is the final point of the process. Any decision will procedurally refer back to that point. No later-filed facts or evidence can be considered for making the ruling (Section 296a). In rare cases, the court retires for further deliberation before closing the case and returns to pronounce a decision in the hearing. Such an ad hoc verdict is procedurally possible but practically very rare and, in those rare cases, is almost always against the plaintiff dismissing the action. It presents the court’s firm conviction that the case is without basis.
Nevertheless, post-hearing briefs are always a significant point. These are possible if new points have arisen in briefs of the opposing side or if notices from the court came to the party’s attention without sufficient time to allow them to be adequately addressed during the court hearing (Sections 283 and 139(5)). It cannot be generally said at what point prior to the oral hearing such new points will be considered too late for adequate comment in the hearing. Sometimes, lawyers refer to a one-week term, but this is not conclusive in this regard. A new factual point can be raised two weeks before the hearing and yet justify a leave for the opposing party to file a post-hearing brief, provided that the given points are sufficiently complex. If it is the plaintiff that files new points shortly before the hearing, the courts have a tendency to push back the hearing date so that the defendant can adequately respond before the hearing, enabling sufficient preparation of the matter ahead of the hearing.
A post-hearing brief is also possible if new points were only raised during the hearing. The problem with post-hearing briefs is that new facts can be introduced into the proceedings that, by the time of the decision, were not necessarily discussed in the proceedings, as the proceedings formally closed with the end of the oral hearing. Thus, if a new point relevant to the decision-making is raised in a post-hearing brief, the court might need to reopen proceedings (Section 156(1)), which means that another hearing date is required unless the parties agree to a decision in written proceedings according to Section 128(2). This can, of course, significantly delay the proceedings.
However, it is rather difficult to reject new facts or evidence as late-filed. Even though the Code of Civil Procedure provides for this in Section 296, under the case law of the Federal Constitutional Court, there is a requirement to show an actual delay of the action if the late-filed contention is admitted into the proceedings.158 This means showing that the action would be delayed compared to a scenario in which the file was made on time (relative delay).159 Even if a contention is contested, it might not delay the case because any order for evidence would have only been made following the (“final”) hearing anyway. Only if the hearing date could have already been used for disposing of an evidentiary point triggered by the late filing would a preclusion be realistically possible.
The parties can file post-hearing briefs even in the absence of an express leave to that extent. As the hearing is closed, new facts in post-hearing briefs cannot be considered for the decision (Section 296a). However, the court is under the duty to read all post-hearing briefs to determine whether any further submissions in those briefs would warrant reopening the matter under Section 156. Such a reopening is within the court’s discretion; it must balance the further delay against points of judicial economy.
A decision can be a decision on the merits (e.g., entering into the relief as requested by the plaintiff) or a dismissal of the case for lack of infringement or lack of standing (Section 300(1)). It can, however, also be an order for evidence or a stay of the infringement proceedings pending a nullity action or opposition proceedings (Section 148). The decision can also be to reopen the case, scheduling another hearing date (Section 156). The pronouncement takes place in a separate oral hearing, typically in the morning of the court’s respective weekly hearing day and before the first hearing on the scheduled case starts. On the date for pronouncing the decision, the fully worded ruling must be ready (Section 310(2)), which is why, though not frequent, dates for pronouncing a decision might be postponed.
The parties do not need to attend the pronouncement (Section 312(1)). Typically, no counsel attends, but somebody from the outside counsel’s office would attend the pronouncement as part of the public. The pronouncement only repeats the court’s order (i.e., the ordered relief or dismissal) and the decision on costs and enforceability. In almost all cases, no further reasons are given orally, but the written opinion is already available. Depending on the court, the parties’ counsel can obtain a copy of the decision at the clerk’s office.
After pronouncing the decision, the ordered relief is already legally existing, even though the fully worded judgment is only officially served on the parties some days later.160 Thus, if an injunction is at issue, the pronouncement is the earliest point at which it can be effective. For a first-instance decision to be actually “binding” in the sense of “enforceable,” the plaintiff must post a security bond (which is ordered as part of the relief in the ruling; cf. Section 709). Any first-instance decision needs to be accompanied by a decision on its “preliminary enforceability,” which means defining the requirement for enforcing the decision before it becomes final, particularly pending appeal.
The plaintiff can already be prepared for such a security bond, which is typically provided as a bank guarantee. It can be served on the defendant’s counsel on the very same day if the process is completed. Consequently, the defendant would need to immediately honor the injunction even if the reasons of the decision have not been served. However, filing any measures of contempt requires the service of the ruling, and it also requires an “enforceable” copy of the judgment, which the clerk provides (Section 750(1)).
There are several special forms of decisions. If either of the parties do not attend the hearing (despite being properly summoned), a default judgment can be pronounced. A default judgment against the plaintiff (Section 330) only requires a corresponding petition from the defendant. If the defendant fails to appear, it is presumed that the facts as submitted to the court by the plaintiff in oral argument have been acknowledged by the defendant (Section 331). Thus, the court can only render a default judgment against the defendant if the legal conclusions based on the plaintiff’s factual contentions support the plaintiff’s requests. A default judgment is very dangerous, as it is enforceable without the posting of a security bond.
On special occasions, either side might be under pressure to concede. For the plaintiff, this is possible in the form of a procedural “waiver” under Section 306. According to this provision, during the hearing, the plaintiff can waive the claim asserted so that they shall be dismissed with their claim should the defendant apply for such a dismissal. This is a dismissal with full prejudice. A mere voluntary withdrawal under Section 269 does not have this procedural prejudice, which is why defendants have the right to refuse consent to the plaintiff’s withdrawal if a hearing on the merits has already taken place (Section 269(3)). However, a withdrawn claim can, of course, not be reasserted if there is an underlying settlement. Based on this, the defendant could have a reasserted claim dismissed as inadmissible. Yet, sometimes, defendants in these scenarios insist on a waiver judgment under Section 306 and are not content with a withdrawal.
For the defendant, conceding can be done in the form of an “acknowledgment” under Section 307. This might happen if the plaintiff did not send a warning letter before filing the action, and the defendant wants to avoid the costs. In such a scenario, if the acknowledgment is presented without undue delay, the plaintiff would need to bear the costs of the proceedings (Section 93).