Modernizing German Patent Law: Toward an Explicit Obligation for Proportionality Control of Injunctions?

By: Luc Desaunettes-Barbero, Reto Hilty, Daria Kim, Matthias Lamping, Peter R. Slowinski & Hanns Ullrich (Oxford Business Law Blog)

Just over ten years after the last amendment to the German Patent Act, the German Federal Ministry of Justice and Consumer Protection submitted a discussion draft at the beginning of this year that provides for a selective revision of the Act. The overall objective of this revision is to achieve an ‘effective and balanced protection of industrial property rights’. The main proposed amendments concern injunctive relief under Section 139(1) of the German Patent Act and the application of the new German Act on the Protection of Trade Secrets in patent litigation cases. In a laudable aspiration to open the dialogue, the Ministry of Justice and Consumer Protection called for comments regarding the considered amendments. In response to this call, the Max Planck Institute for Innovation and Competition has released a Position Paper. While the Institute generally welcomes the initiative, the paper offers some suggestions aimed at increasing precision in the areas of first, the concept and the implementation of the proportionality test for granting injunctive relief, and, second, the need for enhanced protection of trade secrets in patent disputes.

Concerning injunctive relief, the discussion draft proposes to amend Section 139(1), which currently reads as follows: ‘Any person who uses a patented invention contrary to sections 9 to 13 may, in the event of the risk of recurrent infringement, be sued by the aggrieved party for cessation and desistance. This right may also be asserted in the event of the risk of a first-time infringement.’ There is an ongoing debate in Germany as to what extent this wording allows for proportionality considerations. In a landmark judgment of 2016, the German Federal Court of Justice decided that courts should have latitude to deny an injunction if its issuance would be disproportionate. In response to this decision of the Court of Justice’s, the Ministry of Justice and Consumer Protection proposes to insert a third sentence to Section 139(1): ‘The claim is excluded insofar as its enforcement is disproportionate because it constitutes a hardship not justified by the exclusive right under the special circumstances and taking into account the interests of the patentee vis-à-vis the infringer and the principle of good faith’. This proposed addition is motivated by the concerns expressed in Germany by the automotive and telecommunications industries at courts’ reluctance to rely upon proportionality as a corrective mechanism against undue injunctions, in particular against the background of digitalization and the increased technological complexity of products…

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