Injunctions in European Patent Law

Prof. Dr. Lea Tochtermann of Mannheim University

May 2019Summary prepared for 4iP Council

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InjunctionsinEuropeanPatentLawProf.Dr.LeaTochtermann,UniversityofMannheim

I. Need for a proportionality assessment? At present, it is widely discussed that the grant of a patent injunctionmight be seen asdisproportionatewherethepatentconcernedprotectsatechnology,whichperhapsisonlyaminorcomponentofamuchmorecomplexsystem.Thepotentialeffectoftheinjunctiontostoptheuseofthesystemasawholemightbeseenasexcessive.

The paperwill give an overviewof the legal foundations and the practical implications ofpatent injunctions both with regard to selected European jurisdictions and the EuropeanPatent law. It will especially be discussed whether there is a statutory basis for aproportionalityassessmentinconsideringthegrantofaninjunction.

II. Legal foundations

1. InternationalInstruments

Theaimtoestablishacertainconvergenceintheenforcementofintellectualpropertyrightsisinternationallyrecognized,namelybytheTRIPSAgreementof1995and–attheEuropeanLevel–bytheEnforcementDirectiveof2004.

a)TheTRIPS-Agreementof1995

Art.44TRIPSoninjunctionsdoesnotstateanyrequirementofproportionalityofanysortinthegrantingofsuchinjunctions1:“Thejudicialauthoritiesshallhavetheauthoritytoorderaparty to desist from an infringement [...]“. If the drafters of the TRIPS Agreement hadintended to stipulate such precondition they would have explicitly done so. This can bededucedfromacomparisontoArt.46TRIPSonOtherRemedies,whichexplicitlymentionsa“needforproportionality”inconsideringsuchrequests.2

Another issueis,whetherTRIPSwouldallowsucharestriction. It isfrequentlyarguedthatArt.30TRIPS3maybeconstruedinawaytoallowforindividualexceptionstotheexclusivityrightofthepatentee,whicharetobegrantedbyjudgesdecidingontheenforcementofthepatent.However,severalreasonsratherspeakagainstabroadreadingofthisprovision.

First, its wording clearly addresses the extent of the patent as a substantive (exclusivity)right. Itdescribes“exceptionstotherightsconferred”thuspotentially limitingtheirscope.Addressing “members” also leads the assumption that the exceptions should only be1Ohly,GRURInt.2008,787,797.2„Inconsideringsuchrequests,theneedforproportionalitybetweentheseriousnessoftheinfringementandtheremediesorderedaswellastheinterestsofthirdpartiesshallbetakenintoaccount.“3ExceptionstoRightsConferred:Membersmayprovidelimitedexceptionstotheexclusiverightsconferredbyapatent,providedthatsuchexceptionsdonotunreasonablyconflictwithanormalexploitationofthepatentanddonotunreasonablyprejudicethelegitimateinterestsofthepatentowner,takingaccountofthelegitimateinterestsofthirdparties.

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grantedbyTRIPSmemberstatesaslegislatorsoftheirownlawasopposedtocourtjudgesapplyingthelaw.Hence,theTRIPS-Agreementdoesnotstipulateanymandatoryproportionalityrequirementinthegrantingofaninjunction.

b)TheEnforcementDirectiveof2004

Justas theTRIPS, theEnforcementDirectivedoesnotexpresslystipulateaproportionalityrequirement for the granting of an injunction. The conditions for the granting of aninjunctionexplicitlyareleftforthenationallegalorderstodetermine.

ConsideringthematerialprovisionsoftheDirectiveit isnoteworthythatproportionality infact is mentioned in several instances, albeit not explicitly in Art.11 with respect toinjunctions. Art.3 para 2 contains a general statement according to which the remediesprescribedby theDirective shall ‘also’beproportionate.Of course, fromthewording it isclearthatthisrequirementshallapplytoallremediesmentionedinthefollowing,includinginjunctions. Yet, despite of the general statement, a number of the following provisionsexplicitly setoutproportionality requirements:This is thecase forArt.10para34orArt.8para15.

OnthisbasisitmaybeassumedthatthegeneralstatementregardingproportionalitymadeinArt.3para.2isofratherdeclaratorycharacter.Thisalsoissupportedbytheobservationthatinthesamesentence,Art.3para.2callsforremediestobe‘effective’and‘dissuasive’.Hence, allowing for an application of the proportionality requirement such as to excludeinjunctions, must always be balanced against the effectiveness and dissuasiveness of theremedy.6Ifatall,thisshouldonlybepermittedbyapplyingveryhighstandards.

Finally, Art.12 addresses the proportionality of measures against the infringer in aparticularlyexplicitmanner.Itopenstojudicialauthoritiesthepossibility(“may”insteadof“shall”) of ordering pecuniary compensation instead of an injunction in cases where theinfringement was committed unintentionally and without negligence. The furtherrequirementisthattheexecutionofthemeasuresinquestionwouldcausedisproportionateharmtothepersonheldliable.Theprovisionalsoappliestoinjunctions.7Hence,itdoesnotconstituteageneralproportionalityrequirementbutanexemptionclausetargetingfaultlessinfringement.8

Allinall,thisshowsthatthedraftersverycarefullyconsideredtheaspectofproportionalityofinjunctiverelief,buttheychosenottoinsertageneralexception.

4Prescribinganeedforproportionalityinconsideringarequestforcorrective(provisional)measures.5RequestoftheClaimantforinformationshallbejustifiedandproportionate.6BGHGRUR2016,1031–Wärmetauscher,para.50;Ohly,GRURInt.2008,787,797.7Recital25explicitlylinksthealternativemeasureofpecuniarycompensationtoinjunctions.ThistogetherwiththeplacementofArt.12behindArt.10onCorrectivemeasuresandbehindArt.11oninjunctionsletsitbeassumedthattheprovisionappliestoboth.8Ahrens/McGuire,ModellG,§56Buch1,para.3.

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c)TheEuropeanPatentConvention

WhataboutEuropeanPatentLaw?Naturally,theEPCdoesnotsetoutanyrequirementsforclaiming an injunction. According to Art.63 para 3 EPC “Any infringement of a Europeanpatentshallbedealtwithbynationallaw.”

2.Anoverview:Europeansubstantivepatentlaws

Whatdo the substantivepatent lawsof selectedEuropean jurisdictionsand theUPCAsayaboutaproportionalityrequirement?

a)PatentinjunctionsinGermanlaw

Section139GermanPatentActgrantsarighttoclaimaninjunctionagainstanyoneusingapatentedinventioncontrarytoSection9or10PatentAct.Section9describesthescopeofapplication of patent protection in terms of granting the patent holder a right to use thepatented invention aswell as a right to exclude all others from such usewithout his/herconsent.

It should be mentioned that a claim for an injunction is rooted in substantive and notprocedural law inGermany.Hence, if thepreconditionsofArt.139PatentActaremet,aninjunction must be granted. There is no procedural leeway for judges to abstain fromgranting an injunction on the basis of proportionality considerations. However, it is anongoingdiscussioninGermanywhetherproportionalityshouldbepartofthepicture.

But what does German substantive patent law say about proportionality? First, Germanydoesnot have a general proportionality requirementmirroringArt.3 para.2 EnforcementDirective (see supra). Second, Germany has not implemented Art.12 of the EnforcementDirective.UnderGermanpatent law,onlytheclaimsfordestructionandrecallofproductsaresubjectedtoanexplicitproportionalityrequirementinArt.140apara.3PatentAct.

However, thisdoesnotmean thatGermanPatent Lawdoesnot call forproportionality inawardingsubstantiveclaims.Ingeneralcivillawitisimplementedbyvirtueofthegoodfaithprinciple.Hence,apotentialinfringermayraisethedefenseofdisproportionalityagainstaninjunctionbyinvokinggoodfaithunderSec.§242BGB.9Forexample,theFederalSupremeCourt in its“Wärmetauscher”-decisionof2016held thatan immediateenforcementofaninjunction – even considering the legitimate interests of the patent holder vis-à-vis theinfringer – may constitute a disproportionate severity that could not be justified by theexclusivityofthepatentrightandthereforewasconsideredtobecontrarytogoodfaith.Thecourt defined this standard in order to consider the granting of a grace period for theinfringertoaccomplishtransitionandeliminationmeasures.10

The BGH has defined high thresholds, accounting for the very nature/character of patentinfringement.Sincetheinfringementwasadirectconsequencebyi.e.themanufactureofaprotectedproduct it is a necessary consequenceof an injunction that the infringerwouldhavetoceaseproduction.Theconsequentialhardshipistobeaccepted.Alimitationofthe

9Benkard-Grabinski/Zülch,PatG,§139para.26.10BGHGRUR2016,1031–Wärmetauscher,para.41.

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effects of a patent was only justified if and because an absolute prohibition wasintolerable/anunacceptablehardship(“unzumutbar”).11

b)PatentinjunctionsinUKlaw

The UK has implemented neither Art.3 nor Art.12 Enforcement Directive. English courtsratherseethemselvesasbeingauthorizedonthebasisoftheirequity lawtraditionnottograntacease-and-desistorderintheeventofdisproportionality.However,thisisconsideredonlyforrareandexceptionalcases.AsJudgePumphreyputitinNavitaire:“thattheeffectofthe grant of the injunctionwould be grossly disproportionate to the right protected, theword ‚grossly’ avoids any suggestion that all that has to be done is to strike a balanceofconvenience.“1213

ThismightleadtheassumptionthatGermanandUKlawarenottoofarapartwhenitcomestotheresults.

c)PatentinjunctionsinFrenchlaw

Art.12 Enforcement Directive was not implemented in French Law. The principle ofproportionalityenshrinedinArt.3.2EnforcementDirectiveonlycomessporadicallyintoplaywhencourtsassessthegrantofapermanentinjunction.

French judges have denied injunctive relief mainly in circumstances providing for acompetitionlawdefenceorforanabuseofrightsdefence.

d)PatentinjunctionsaccordingtoUPCA

EventhoughtheprospectsoftheUPCarestillsomewhatunpredictable,itstillisworthwhileto take a look at the UPCA and the Rules of Procedure – after all they are a body ofharmonizedEuropeanLaw.ExpertsinpatentlitigationfromalloverEuropehavediscussedfordecadesinordertoestablishacommongroundforthepatentlitigationbeforetheUPCandtriedtocreateakindof“bestofallworlds”.SurprisinglyArt.63UPCAoninjunctions14doesnotfeatureaproportionalityrequirementaswell.Art.63UPCAisaliteralimplementationofArt.11EnforcementDirective.

i) Noproceduraldiscretion

The provision clearly reflects the Continental European understanding that a proceduralorder of an injunction is the result of a substantive cease-and-desist-claim against theinfringer. In particular, there is no procedural discretion of the judges not to grant aninjunctionifitconsidersittobedisproportionate.Therefore,anycounter-argumentsagainst

11BGHGRUR2016,1031–Wärmetauscher,para.45.12NavitaireInc.v.easyJetAirlineCoLtd(No.2)[2006]RPC4,[104].13SeeBGHGRUR2016,1031–Wärmetauscher,para.50;seeforapresentationoftheUKlegalsituationTilmann,UnifiedPatentProtection,Art.63UPCA,paras27.14Article63-Permanentinjunctions:1.Whereadecisionistakenfindinganinfringementofapatent,theCourtmaygrantaninjunctionagainsttheinfringeraimedatprohibitingthecontinuationoftheinfringement.TheCourtmayalsograntsuchinjunctionagainstanintermediarywhoseservicesarebeingusedbyathirdpartytoinfringeapatent.

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acease-and-desistordermustbeassertedundersubstantivelaw.15ButwouldArt.63UPCAallowforsuchcounter-arguments?

Therehas been somediscussionwhether thewording “may grant” still confers discretionupon the judges not to grant the injunction despite a clear infringement. However, thepredominant opinion rejects this point of view. 16 Hence, if the court finds after allconsiderationofcounterargumentsthatthereisaninfringement,aninjunction–ifclaimed– is imperative.Arguingontheawardof thesubstantiveclaim, thedefendanthasenoughopportunitytoraiseitscounter-argumentsagainsttheinfringement.17

ii) Nogeneralsubstantivelawdefenseofdisproportionality

This leads us to the question whether the defendant can claim disproportionality as anargumentbasedonsubstantivelaw?

The legalbasis foracease-and-desistclaimwithrespecttoEPUE isArt.5(1)EPUE-Reg.1819combined with Art.25 UPCA20. Again, there is no explicit proportionality requirement.Art.3(2)EnforcementDirectivealsocannotbeusedtolimittheeffectsoftheprovisionforthe reasons presented above.21On the other hand, several other provisions of the UPCAexplicitlyaddressdiscretion.22Hence,thedraftersoftheUPCAtookadeliberatechoicenottoincludeaproportionalityrequirementintheruleoninjunctionsinArt.63UPCA.

The UPCA and the EPUE referring to the Enforcement Directive are comprehensive andbinding on the issue of proportionality under patent law. So there can be no recourse tonationalpatentlawunderArt.24(1)lit.eand(2)UPCA.III. Opinion

Ageneralproportionalityassessmentasrequirementforthegrantingofaninjunctionmaybe hazardous. Without specific standards defined by law it could severely disturb thebalanceofthepatentsystemasawhole.

15Tilmann,UnifiedPatentProtection,Art.63UPCA,paras27etseq.16Reetz,Pecnard,Ruscalzo,vanderVeldenandMarfé,GRURInt.2015,19;Tilmann,UnifiedPatentProtection,Art.63UPCA,para29.17Tilmann,UnifiedPatentProtection,Art.63UPCA,paras29etseq.18Article5-Uniformprotection:1.TheEuropeanpatentwithunitaryeffectshallconferonitsproprietortherighttopreventanythirdpartyfromcommittingactsagainstwhichthatpatentprovidesprotectionthroughouttheterritoriesoftheparticipatingMemberStatesinwhichithasunitaryeffect,subjecttoapplicablelimitations.19Tilmann,UnifiedPatentProtection,Art.63UPCA,para17.20Article25-Righttopreventthedirectuseoftheinvention:Apatentshallconferonitsproprietortherighttopreventanythirdpartynothavingtheproprietor'sconsentfromthefollowing:

(a)making,offering,placingonthemarketorusingaproductwhichisthesubject-matterofthepatent,orimportingorstoringtheproductforthosepurposes;

21Tilmann,UnifiedPatentProtection,Art.63UPCA,para18.22Someexamplesare

− Art.60onpreservingevidence− Art.62onprovisionalmeasuresexpresslycallsforabalancingofinterests,whichtheCourtisrequired

toeffectinadiscretiondecision(Art.62(2)UPCA.Art.68ondamagesavailsitselfoftheoptionofArt.12EnforcementDirective.

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Patentlawisdrivenbytheunderlyingideathatthetechnologybehindthepatentsshallbemade available to the general public in order to further the technical knowledge of thesocietyasawhole.This issupposedtoreducethenecessaryinvestmentintheresearchofnew technologies and to target these investments better. Disclosing existing knowledgeallows others to build upon this knowledge and to develop it further. The risk of parallelinventions–generatingdouble costs– is reducedand the societyasawhole can steadilycontinuetoinnovate.Thusdisclosureisanefficientmeansofinnovation.

While this evidently is desirable from the point of view of the society as a whole, theprospectofbeingusedandcopiedisnotsimilarlyappealingtoinnovators.Accordinglytheremustbeanincentivetodisclosetheirinnovations.Thisiswerethepatentsystemcomesin.Patentholdersaregrantedatemporarymonopolyontheuseoftheinvention.Byvirtueoftheirexclusive right theyalonemaydecidewho isallowed touse thepatented invention.Patentlawsclearlydefinethescopeandtherestrictionsofthepatentrightasatemporarymonopolytoassureitdoesnotgooverboard.Butwithintheselimitstheinjunctioniscentraltotheeffectiveenforcementofthisright,bearingmuchmoredeterrentpotentialthani.e.thedamageremedybecauseithasthepowertoexcludecompetitorsfromthemarket.

Introducingageneralproportionalityrequirementforanyinjunction,however,wouldequalanunwrittenrestrictionofthepatentrightassuch.Inessenceitwouldmirroracompulsorylicense.Toputthegrantofaninjunctionincaseofaninfringementintoquestionbyapplyingavagueproportionalityrequirementwouldinadditionmassivelyendangerlegalcertainty.Itwould put the deliberate choice of the legislator to balance the interests concerned intoquestion.