Research News  |  05/05/2020

Modernizing Patent Law: New Rules for the Digital Age

An amendment to the German Patent Act is intended to make disproportionate injunctive relief for patentees more difficult. The Institute has issued a position paper on the current discussion draft.

Digitization poses new challenges for patent protection. In particular, the large number of patent-protected individual components used in some products makes it difficult to identify all the relevant property rights and to acquire the necessary licenses.

Just over ten years after the last amendment to the Patent Act, the 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 Patent Act. At the heart of the amendment are changes to the patent injunctive relief in Section 139(1). This grants the patentee the right to have the use of its patent without consent prohibited. The discussion draft proposes to insert a third sentence to the Section, clarifying that the enforcement of the injunction can be excluded in individual cases if it would be disproportionate.

Suggestions for the further legislative process

In practice, such constellations are likely to arise in the case of so-called "complex products". These often comprise a large number of individually patented components that, in themselves, contribute only marginally to the value of the final product. As a result, each patentee enjoys a position of power that is out of proportion with the contribution of its invention to the final product, since the patentee can, under certain circumstances, stop the production of a product with an injunction. In the case of standard-essential patents (SEPs) or “non-practicing entities”, which do not have or do not want to establish any production capacity themselves, the granting of injunctive relief may also be disproportionate in individual cases.

The Institute, which issued a position paper on the discussion draft in March, in principle welcomes the proposed limitation of the claim to injunctive relief. “An injunction should not be granted if, and to the extent that, its enforcement is disproportionate”, states the position paper.

However, the Institute does also provide certain suggestions with regard to the further legislative process. The working group that wrote the position paper is concerned that both the proposed legislative text and the explanatory memorandum give priority to the interests of the patentee over those of other parties. “Such prioritisation is neither desirable as a matter of policy, nor justifiable by the exclusive nature of the patent right”, argues the position paper.

Consideration of public interests

The authors also take a critical view of the fact that the discussion draft links the finding of disproportionality to a violation of the principle of good faith. As a consequence, when considering an injunction action the infringement courts would have to confine themselves to the bilateral relationship between the parties to the dispute and would not have the opportunity to include undesirable effects of patent law, which might arise in individual cases, in their examination.

The position paper also criticizes the fact that the discussion draft rejects the consideration of public interests in the context of the proportionality assessment. While the amendment refers to the fact that general interests are sufficiently protected by the option of a compulsory license under Section 24 of the Patent Act, the Institute takes the legal view that injunctions issued without regard to possible public interests could be disproportionate in individual cases.

Read the full text of the Institute's position paper here