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IP protection via national routes – Germany as an example

The proper IP strategy for a company can differ depending on several company-specific factors, such as the business field of the company, its market performance, competitive position, and – of course – the budget available.

Strategies may range from active patent protection, with seeking protection for every single invention, to more passive strategies where only highly relevant developments are protected and others are freely published to establish prior art for competitors. Other strategies include those that are designed to keep most of the company’s inventions secret which can be useful with highly developed inventions that are difficult to identify or reverse engineer.

Within the system of IP protection, inventors have several different options with which to pursue patent protection, for example filing an international application (PCT) or a European application. However, pursuing the national routes in individual European countries is sometimes quite advisable, particularly since several countries provide for the possibility to file utility model applications as an alternative to or in combination with regular patent applications, which utility model applications are examined under different novelty and obviousness standards.

The following provides a short overview of the national protection rights available in several European countries, with a focus on German regulations and requirements. Further, the possibilities for enforcing these rights before national Courts are briefly discussed, again with emphasis on German proceedings.

National patents in Europe
The national patents available in most European countries comply with the Paris Convention for the Protection of Intellectual Property, which means that many features of the examination proceedings are similar to each other and to the European patent system.

National patents are usually examined protection rights with a 20 year term. Priority can be claimed within 12 months from the first filing, and applications are published after 18 months from the first filing. After the decision to grant a patent, an opposition period follows , e.g., three months in Germany. During that period, any third party can file an opposition against the patent before the German Patent and Trademark Office (GPTO). After this opposition period, or after an opposition proceeding is settled, nullity actions can be filed with the German Federal Patent Court (GFPC; “Bundespatentgericht”).

National German patent examination proceedings have a number of useful features. When a patent application is filed, examination has to be requested. Under German regulations, this request can be postponed up to 7 years from the filing date, giving the applicant time to wait, for instance, for the outcome in proceedings of counterpart applications. In addition, during the substantive examination, the term for filing responses to Office Actions of the GPTO can be extended almost arbitrarily and at no charge. Accordingly, a German patent application can be easily kept ‘on hold’ with the possibility of ‘resurrection’ at any time.

In addition, utility models (see below) can be branched off from a pending German patent application, which can coexist, even with an identical scope of protection. In cases where swift action against a possible infringer is desired, branching off utility models provides the applicant with a serious enforcible IP right within a short time that can serve as basis for an infringement action.

Since the examination proceedings before the European Patent Office (EPO) and the GPTO are very similar, and the technical qualification and examination experience of the examiners is of a high standard, the German national route is very attractive to applicants.

The examiners of the GPTO have to complete a 3 year highly sophisticated training program, including legal studies and computer skills. All examiners have an academic degree in natural sciences and at least 5 years of experience working in the relevant industry as basic qualifications. Moreover, many of the examiners have years of experience, which provides for a professional and predictable examination.

Examination procedures before the GPTO are also quite fast. Generally, applicants receive the first office action within 6 – 8 months after filing a request for examination. As a statistical average, 45% of the applications will be granted within 24 – 30 months. Oral communication with the Examiner, in the form of informal interviews or oral proceedings, is encouraged and very often assists in accelerating the proceedings.

Utility model
In many European countries a utility model can be filed as an alternative or in addition to a regular patent application. This is an unexamined registered protection right, having a protection period of 6 to 10 years, depending on the respective national regulations. Also, depending on the country in question, a patent and utility model can either coexist or the applicant has to choose to pursue one or the other of these IP rights. In Germany, the utility model offers 10 years of protection and is generally registered within 6 to 10 weeks after filing. The priority of a patent or utility model can be claimed. A prior art search can optionally be requested, but is not mandatory, and the results are not taken into account for the registration of the utility model.

In certain countries, utility model regulations provide for a grace period, which means that written or oral disclosures or a prior public use by the applicant or their predecessor in title before the priority or filing date are not taken into account for the assessment of novelty or inventive step (in potential cancellation proceedings, for example). In Germany this grace period is six months, as it is in most other European countries. Thus, branching off a utility model from a patent application (i.e., a national, or EP/PCT application designating Germany) may result in the protection of an invention even if a disclosure of the invention has been made prior to filing.

In addition, prior use and oral disclosure are only relevant prior art under German utility model regulations if they have taken place in Germany.

In some countries, the subject matter of a utility model is limited. In Germany, for instance, methods are excluded from utility model protection.

In view of the foregoing, the utility model is an interesting IP right and can offer an effective fall-back position, e.g., where absolute novelty cannot be met.

Litigation in European countries
“A patent is fundamentally a right of prohibition. Thus its value must necessarily depend on the degree to which that prohibition is enforceable” (Richard Spenser).

Many European jurisdictions truly follow this statement. Although litigation is possible in all European countries, the level of experience of the courts, proceedings and costs vary. Highly experienced and, therefore, frequently appealed courts are located in the United Kingdom, the Netherlands and Germany.

In general, decisions on infringement and validity are taken by the same court. However, in this respect, Germany’s principle of separation forms an often disputed but often quite successful exception. In Germany, the District Court decides on infringement and the GFPC decides on validity of a patent. A further characteristic of the German system is that the GFPC not only has legally trained judges, but also technically trained judges who are are highly experienced former patent examiners. Two thirds of all European cases are litigated before German courts, where 60% of the plaintiffs are foreigners. In 2009, the German courts handled 1,200 infringement cases (NL 50, UK 50, other European countries <10).

The following timeline serves to briefly illustrate the infringement proceedings before the District Courts (typically in Munich or Düsseldorf): The plaintiff has to submit the infringement complaint (‘Klageschrift’) comprising a complete presentation of the case, which is then served to the defendant. The defendant replies in a statement of defence of non-infringement (‘Klageerwiderung’) within 2 to 3 months and, after 4 to 8 weeks, an early hearing (‘Früher erster Termin’) is held before the court. Subsequently, plaintiff and defendant can submit their reply and rejoinder, respectively, within similar time periods. A subsequent oral hearing (‘Haupttermin’) is held, after which the court informs the parties of its decision in about 2 months. Infringement actions before German infringement courts take, on average, about 9 to 14 months.

As in many other countries, interim relief is granted by German District Courts. A preliminary injunction (‘Einstweilige Verfügung’) can be obtained against a potential infringer as an ex parte injunction, if the validity of the patent in suit is not in question, and if a clear-cut infringement can be shown. A protection brief (‘Schutzschrift’) can be filed with the District Courts by the potential infringer in advance, if a preliminary injunction is expected explaining that there is no infringement in fact.

However, the protection brief is not necessarily taken into account by the Court and does not necessarily result in oral proceedings prior to the Court taking a decision on the preliminary injunction. Although an appeal can be filed against the preliminary injunction, it does not suspend its enforceability.

The types of remedies in Germany are the same as in other jurisdictions, namely an accounting of infringing activities, as well as recovery of damages based on lost profit, reasonable royalty (license analogy method) or surrender of the profit generated by the infringer. Furthermore, the plaintiff can request that the infringing products be destroyed, recalled or removed from the market.

The cost risk of German infringement and nullity proceedings is based on the principle ‘the winner takes it all’, wherein the losing party has to refund all costs incurred by the prevailing party. Since the Court fees, attorneys’ and patent attorneys’ fees are predetermined by statutory provisions and calculated based on the amount in dispute (‘Streitwert’), the cost risk is quite predictable. Based on an amount in dispute of € 500,000 to € 5,000,000, the cost risk ranges from about € 75,000 to € 250,000.