5.6.2 Preaction and pretrial
5.6.2.1 Cease and desist warnings and requests for right to use
5.6.2.1.1 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).
5.6.2.1.2 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.
5.6.2.1.3 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.