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Supplier must warn of potential patent infringement in another country

Supplier must warn of potential patent infringement in another country

Supplier must warn of potential patent infringement in another country

Imagine that you sell a product that does not fall under the Netherlands’ patent protection to a customer, but your customer then exports the product to Germany where it is protected by a patent. How does this affect your liability?

What is the problem?

A patent holder may claim compensation from a suspected infringer. However, it can only claim this compensation if the infringer was aware or should have reasonably been aware that its transactions constituted an infringement. In particular, this is the situation if a supplier sells a product that falls under patent protection abroad to a customer. The sale that takes place in a country where there is no patent protection is permitted in principle. In Germany in particular, this liability is interpreted rather broadly which means that the arm of the German patent law sometimes extends to transactions abroad. A new ruling by the German Supreme Court provides more specific points of reference.

What are the risks for suppliers in other countries?

A supplier that supplies products abroad to its customer that is also located abroad is not required per se to check what will happen to the products sold by the customer. Only when the supplier has specific indications that the products that have been sold will ultimately find their way to Germany must it warn its customer that the products fall under patent protection in Germany. For this reason, it should not supply the products.

Has this already been clarified in a legal case?

In the Abdichtsystem case, a foreign company sold products that did not fall under patent protection in the respective country to another company abroad, but the products did fall under patent protection in Germany. The customer proceeded to import the products to Germany. The foreign supplier was held liable for direct sale to German clients, but not for the sale to the foreign customer. The foreign supplier raised a defence by arguing that it did not know what its buyer was going to do with those products.

The German court made it clear that the supplier does not have to accompany its customer’s entire chain. The supplier must suspend its delivery to avoid patent infringement only when there are specific indications that the buyer will bring the products to Germany. A specific indication could for instance be that the buyer asks to include the manual in German.

What is V.O.’s advice on this?

It is important to be aware of the patent rights that may be vested in your product, and where these are vested. This then enables you as a supplier to make efforts to avoid your products ending up in a country where they fall under patent protection. You can also limit any liability by for instance supplying products with sales conditions in which you stipulate a maximum liability.

 

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