5.6.6 Gathering of information
5.6.6.1 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 5.6.4.6 of this chapter.
5.6.6.2 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.
5.6.6.3 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 5.6.4.6 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 5.6.7.1 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.
5.6.6.4 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 5.6.4.6 of this chapter).