TerraLex Cross Border Patent Guide

The main source of patent legislation in the Federal Republic of Germany is the German Patent Act (dated 16 December 1980, Patentgesetz – GPA). The GPA statutes the material patent law, in particular the prerequisites and scope for any patent protection, infringing conduct, the application and registration procedure before the German Patent and Trademark Office (Deutsches Patent- und Markenamt – GPTO) as well as respective appeals and nullity/cancellation proceedings before the GPTO. Moreover, there are international conventions, such as the European Patent Convention (EPC), which has had the greatest influence on recent reforms.

With respect to technical knowhow and inventions, there are some further legal statues like the German Employee Inventions Acts (Gesetz über Arbeitnehmererfindungen – GEIA) which regulates the legal relationship between employers and employed inventors.

Patent law in Germany can potentially protect all kind of inventions, namely objects and methods, from all fields of technology and sciences. Fields that have special characteristics for patent protection are software, chemical and biotechnological inventions, as well as medical procedures and substances.

Moreover, special characteristics arise in the case of chemical substances from the fact that the inventive possibilities of use cannot be easily determined. Consequently, the patent proprietor has reserved rights for all conceivable possible uses of the substance, as they are protected absolutely. For biotechnological inventions, the particularity lies in the assessment of patentability, as well as greater importance of ethical issues. In the field of patenting of medical procedures and substances, the statutory exception of patent protection for curative procedures to ensure appropriate treatment and diagnosis for the life and limb of the individual is in tension with the legally desired investment in industrial medical and medical technology research.

Excluded from patent protection are plant and animal varieties, essentially biological processes for the production of plants and animals, and the plants and animals produced exclusively by such processes. Also excluded are methods for the treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body.

In Germany, designs are generally subject to their own law and are subject to the German Design Act (Designgesetz – GDA). Software is generally subject to copyright protection and falls under the German Copyright Act (Urheberrechtsgesetz – GCA).

Since software is not a classical technology, the scope of the extension of patent protection to computer-protected manufacturing techniques was initially unclear, but the EPO's and the Federal Court of Justice’s case law has set prerequisites and limits to the risk of patenting too broadly. Software is generally subject to copyright protection and falls under the German Copyright Act (Urheberrechtsgesetz – GCA). However, software protection via patents may also be possible under specific prerequisites which are subject to a by case law developed examination. This might be the case, for instance, with generalized solutions to problems, if what is claimed in the patent application has a technical character. The decisive factor here is the nature of the problem which is shown to have been solved in relation to the prior art stated in the patent specification. In this context, a problem solution is described as technical in the sense that it uses computer assistance to regulate or control an application of natural forces that takes place outside the computer.

Applying general patent law principles, the patentability of AI-related inventions is not given for unspecific technical implementations, purely abstract models, or AI algorithms due to their lack of technical character. However, technicality may be present if they require the use of technical means, i.e. if the invention is aimed at a specific purpose which is to be achieved with its help. According to the German Federal Patent Court (Bundespatentgericht – GFPC), the applier has to name natural persons as inventors.

The patent right protection arises through the grant of a patent for an invention after the materially examined patent application that has to be filed with the GPTO. The requirements for obtaining a patent are regulated in the GPA.

The application must contain the name of the applicant, a request for the grant of the patent in which the invention is briefly and precisely named and a description of the invention. In addition, the application must contain at least one patent claim and drawings to which the claims or the description refer.

The patent application is kept secret by the patent office for 18 months and then published.

Upon request, the GPTO will initiate the examination procedure and prior art research.

The GPTO provides after successful proceedings (which can last up to a few years) the required patent specification (Patentschrift) which comprises the key information, in particular about the person of the inventor, the patentee, the underlying prior art and the subject matter of the invention. Generally, the grant of a patent is published in the Patent Gazette and the patent specification is published at the same time. The legal effects of the granted patent ensue upon publication in the Patent Gazette.

The GPTO proceedings can last up to a few years, regularly between two and four years. The first patent examination is possible within one year.

Germany is participant of the Global Patent Prosecution Highway (GPPH) program, and an applicant can generally ask for an acceleration request under the GPPH.

The regular application fees (online application, including 10 patent claims) should usually not exceed 500.00 EUR and there are, additionally, annual fees from the 3rd to the 20th patent year, increasing usually from 70.00 EUR for the 3rd patent year to 2,030.00 EUR for the 20th patent year.

The most important requirement is the technicality of the invention, there is however a modifiable and flexible understanding of the term, if it needs adaption because of technological process and an effective patent protection, e.g. in the case of microchips. Other necessary elements are the novelty and inventive activity, as well as the industrial applicability. An invention is considered to be new if it does not belong to the prior art, which is defined by all the knowledge that has been made available to the public before the date of application. For an inventive activity, there must be an objective enrichment of technical knowledge, while considering the technical contribution in its overall context. Mere knowledge of the person skilled in the art is insufficient. The invention must also be disclosed in the application so clearly and thoroughly that a person skilled in the art can reproduce it. Lastly, an invention is industrial applicable if it can be made or used in any kind of industry, including agriculture.

Furthermore, priority is one of the most important principles of patent law. The right of priority is the right to claim a period of 12 months, calculated from the filing date of the first patent application, for a subsequent patent application. The priority of an earlier invention can be claimed if the prior application and the subsequent application concern the same invention. Priority thus offers the inventor the possibility of deciding within a 12-month period whether he wishes to make the application pending in other countries by filing an application in only one country.

The proprietor of the patent alone is entitled to use the patented invention within the scope of the law in force. The proprietor obtains the exclusive right to prohibit third parties from manufacturing, offering, placing on the market, using, possessing, or importing any products that include the patented technology.

In Germany, the so-called inventor principle applies, which states that the inventor has the material ownership and the assignment to the invention because of the general inventor right. This is granted by inventing something without the need of registration. In addition, there is the first-to-file principle, which falsifies the inventor as the one who first files an independently made invention. Further, the inventor has the right to inventor designation and the right to a patent. If inventions are created in the course of employment, pursuant to the GEIA, the employer receives a claim as a successor in title and, in return, the inventor an appropriate compensation.

Due to justice and social commitment of intellectual property, the exclusive character of patent law has been limited. Here, most important is the time limit, namely the duration of protection, which takes account of the general interest in free access to technical teachings. This is generally 20 years and begins one day after the application for the invention, whereas the effects of the patent only come into effect with the publication of the patent grant after completion of the examination procedure. Thus, the effective term of protection is normally not a full 20-years period.

Also in Germany, Regulation (EC) No. 469/2009 provides for a Special Protection Certificate (SPC) for pharmaceutical products, which represents an exclusive right similar to a patent. This grants extended patent protection of a maximum of five years beyond the patent term of 20 years. This is intended to effectively increase the amortization period to a maximum of 15 years and make cost-intensive drug research more attractive. The SPC must be filed separately for each Member State within the first six months of the granting of the first marketing authorization, which can only be filed by the holder of the basic patent.

The first owner of patents is the inventor, as in Germany there is the inventor principle. This states that the inventor has the material ownership and the assignment to the invention because of the general inventor right, which is granted by inventing something without the need of registration.

By case law, a co-inventor is defined as anyone who has made an independent creative, but not necessarily inventive, contribution to the solution of a concrete problem through intellectual collaboration. If several persons develop an invention, the right to a patent belongs to them jointly. By that, they also gain a right to inventor designation as well as the ability to register the invention on behalf of all and defend it against third parties. Co-owners, on the other hand, hold a right of joint use, with the restriction that the practice cannot interfere with other holders’ joint use. Further, all holders can only dispose of the patent unanimously unless it is the disposal of an individual share of the patent. For the standing to sue (locus standi) the decisive factor is which patent proprietor is entered in the register, although it can also be transferred by contract.

In general, the patentee may transfer their patent rights and patent ownership as a whole by a full transfer through a purchase of rights agreement (schuldrechtlicher Erwerbsvertrag) as well as an agreement of the transfer in rem (dinglicher Übertragsungvertrag). The patent being transferred/assigned should be precisely specified. With this, the general rules of contract law must be considered. The patent register should be amended accordingly. For licenses, the patent proprietor can grant a simple, exclusive, or sole license – the licensed patent should be precisely specified (orientation on the property right, particularly link to the patent claims; limitation to specific types of use). The licenses can be subject to spatial, temporal, or content nature limitations. It is also necessary to specify the contractual territory and the royalties. In addition, termination and a termination option must be contractually agreed upon. It is further advisable (especially for granting simple licenses) to regulate contractually the legal requirements for the duty to procure rights, to enable the use of the technology and the consequences of breaching these duties.

If the challenged embodiment falls within the scope of protection of the patent and fulfills all features of the patent (main) claim, it counts as a direct infringement of patent rights. The individual features of the patent claim in accordance with Sec. 14 GPA however define the scope of protection. Then, manufacturing, offering, placing on the market, using, and importing products comprising the patented teachings as well as possessing the protected patent qualify as direct infringing conduct.

The most practical and significant constellation of indirect infringement is that of offering an essential element of the invention. These essential elements can be objects that are part of a patentable invention. In addition, there must be an offer or delivery of an essential element, where the addressee must be a person who is not authorized to use the invention. There is however deemed authorization if delivering replacement, wear, or spare parts, as long the addressee’s actions can be qualified as repair and not as new manufacture. The supplier also has to know, or it has to be obvious due to the circumstances that the supplied items are able and intended by the recipient to be used for the usage of the patented invention. In court proceedings, however, this is difficult to prove, so there has been an objectification of the concept of suitability of using it for the usage of the invention. Lastly, both the offer and the delivery as well as the intended usage of the essential element have to take place domestically.

If the subject matter of the invention is not used in an identical form, there may nevertheless be an interference with the scope of protection of the patent in the sense of an equivalent infringement. A use of the protected invention also occurs in the case of non-literal use, if the person skilled in the art, on the basis of considerations connected with the meaning of the claims, i.e. with the invention described therein, could find the modified means used in the challenged embodiment to have the same effect with the aid of his technical knowledge for solving the problem underlying the invention. With other words, equivalence extends the scope of patent protection to a conduct, which make use of the meaning and purpose of the invention by equivalent means of solution. By case law, there has been established a three step-doctrine for the determination of equivalent infringement, whereas each step respectively prerequisite is subject to further assessment and interpretation: The varied means of solution have to have (1) the same or substantially the same effect as the means according to the patent; (2) to be can obvious for the person skilled in the art with the aid of his technical knowledge; and (3) to be of equal value with the patent claim. While using these principles a balance must be struck between determining the scope of protection for adequate protection of the patentee and sufficient legal certainty for third parties, which is ensured by a clear orientation of the scope of equivalence to the patent claim and the patent description.

The legal exceptions to patent protection serve to take account of higher interests, as well as to correct motivations that do not correspond to the creation of incentives for research and development. Patents should have their effect in economic affairs and not interfere with the private sphere. Thus, private and non-commercial conduct is permitted with regards to patent rights. The GPA also privileges experiments and shall avoid experiments from being prevented by the exclusivity patent effect. This privilege is however limited to experiments which relate to and are aimed at further research of the subject matter of the patented invention. However, the results do not need to serve merely scientific purposes. Furthermore, there is privilege for the use of biological materials, as well as an exception for the breeding, discovery, and development of a new plant variety. For pharmaceutical products, within the scope of the privilege of marketing authorization, the so-called Roche-Bolar-Rule applies, which leads to studies and experiments being excepted from the exclusive right, if they conduce an authorization thereof. This primarily aims at generic drug manufacturers in order to prepare for the authorization of their products before the protection of a drug expires.

If the invention has already been in use at the time of the application without this use having become public, this is subject to the right of prior use and is also excluded from patent protection.

The patent right holder has with respect to infringing products respectively patent infringements against the infringer a claim for destruction, for recall or removal and withdrawal from the distribution channels, a right to information (disclosure of accounts, third party information, production of a document and inspection of an item), a claim for damages (by patent law and unjust enrichment law) and the possibility for injunctive relief. For court proceedings they can either file their claims by an injunctive process (but only for injunctive relief and security measures and doubts about the legal validity of the injunction patent have to be particularly considered) or patent infringement proceedings. The subject-matter jurisdiction then lies with the Regional Court in the first instance and for the second instance with the Higher Regional Court, which is a trial court. For appeals (Revision), the tenth civil senate of the Federal Supreme Court has the respective competence.

Generally, registered, but not patentable patents can be challenges. Within nine months after publication of the patent grant in the Patent Gazette, an opposition may be filed by any person. In the opposition proceedings, opponents can present reasons against the legality of the patent grant and the patent division of the GPTO re-examines the fulfillment of the necessary requirements for grant. Thereafter, the patent may be maintained, maintained with limitations, or revoked. However, an appeal against this decision is possible before the GFPC. After expiry of the opposition period, however, the patent is valid. However, after the patent has become legally effective in the absence of an opposition, an action for nullity may be brought before the GFPC. For this purpose, the plaintiff must present grounds for invalidity, e.g., lack of patentability. The judgment issued following this action may either uphold the patent or declare it invalid in whole or in part. The Federal Court of Justice is the competent court as the subsequent instance.

In Germany, patent infringement and patent invalidity proceedings are decided in separate proceedings, but the invalidity proceedings mostly qualify as reason for a temporal suspension of the infringement proceeding until the final decision of the invalidity proceeding has been issued.

In patent cases, the issuance of a preliminary injunction (PI) is principally possible, but quite seldom. However, in patent infringement cases, a technical issue has to be assessed, which the court will rarely be able to do in so-called summary proceedings (here, only a preliminary and cursory examination takes place) due to its complexity.

The case law (so far) also assumes this. In principle, it only considers the issuance of a preliminary injunction if both the existence of the patent and the patent infringement are clear. I.e., an erroneous decision to be revised in any subsequent main proceedings must not be seriously to be expected. This is a prognosis decision to be made by the court.

According to case law, as a rule, the legal validity of the injunction patent can only be assumed to be sufficiently secure if the injunction patent has already survived opposition or nullity proceedings in the first instance. Doubts about the legal validity of the injunction patent may already exist if the patent has been challenged by an opposition or nullity action. According to case law, a decision on the validity of the patent may be dispensed with in a few special cases, e.g. in generics cases, if the defendant has already participated in the grant proceedings with his own objections, if the objections to the validity of the injunction patent prove to be groundless even on summary examination, or if the patent is about to expire.

The ECJ emphasized that there is a presumption of validity for European Patents (EP) applied for from the date of publication of their issuance and that they therefore enjoy the full scope of protection of the Enforcement Directive from that date. The practical impact of the ECJ's decision is not yet fully apparent. It can be assumed that the instance courts will not deviate significantly from their previous case law, but rather implement the principles of the ECJ into it.

Depending on the court, the usual duration of preliminary proceedings is much shorter than the main proceeding. The preliminary injunction proceedings are given preferential treatment by the courts.

Patent right infringements may generally qualify as criminal offense: Acting without the requisite consent of the proprietor of a patent by manufacturing, offering, putting into circulation, using a product which is the subject matter of the patent, importing or holding the product for one of these purposes; or using or offering for use within the territorial scope of the GPA a process which is the subject matter of the patent. An attempt may also be punishable.

The GPA stipulates as penalty imprisonment of no more than three years or a fine. Where the offender acts on a commercial scale, the penalty is a term of imprisonment of no more than five years or a fine.

Damages for patent infringements might be calculated based on one of the three following methods:

• based on the royalty analogy;
• based on lost profits; or
• based on profits earned by the infringer.

Frequently, the claimants chose the royalty analogy as calculation method. The calculation is based on the reasonable royalty that the infringer would have had to pay if it had been permitted to use the invention (e.g., under a license). Actually, entered similar licenses with other parties might be used in calculating the royalty.

Damages are rarely calculated based on lost profits (difficulties to prove the causal damage and disclosure of profits necessary).

The profit to be reimbursed equals the profit generated by the patent infringement, therefore being based on the sales generated by the patent infringement minus (specific) costs.

Generally, as infringer liable is first and foremost the person who directly causes the patent infringement. Companies are also liable for their legal representatives.

The limitation period for bringing a patent right infringement is generally three years.

The general rule in Germany is that the unsuccessful party has to pay all costs arising with regard to the litigation (court fees, (opposing) lawyer fees, patent attorney fees, necessary expenses).

The court fees and the lawyer fees are based on the value of the dispute.

First instance proceedings might take between 12 and 18 months, in cases of the temporal suspension because of the invalidity proceeding even longer; appeal proceedings might take between 18 and 24 months.

Yes, based on Regulation (EC) No. 1383/2003, German and EU customs may detain patent and utility model infringing products when entering the country or the EU. Under German law, if unlawful parallel imports can be detained and information on the sender and the recipient will be provided to allow civil or criminal action. Customs actions require that the IP holder files a general customs seizure application with the German or EU authorities which is easily done.

With implementing the Unitary Patent System in Europe and the operation start of the Unified Patent Court (UPC) on 1 June 2023, there is now a possibility to provide uniform patent protection in currently 17 participating EU Member States and contracting states of the EPC. Therefore, UPC decisions will be effective in all participating EU Member States and are expected to save time and costs. The existing system, which consisted of European patents (so-called bundle patents) will be supplemented by unitary patents, by the possibility of converting the bundle patents into such patents (“opt-ins”). However, an "opt-out" is also possible, whereby the jurisdiction of the UPC is revoked.

The proposal for a Regulation on standard essential patents and amending Regulation (EU) 2017/1001 was published on 27 April 2023 and contains ambitious changes concerning the regulation of standard essential patents (SEP) within the EU. It shall provide for enhanced transparency with regard to information necessary for SEP licensing; registration of SEPs; procedure for evaluating the essentiality of registered SEPs; and procedure for determination FRAND terms and conditions for a SEP license. Furthermore, it shall create a competence center within EUIPO to administer databases, a register and the procedures for essentiality checks of SEPs and the FRAND determination. The competence center will also provide training, support, and general advice on SEPs to SMEs and raise awareness of SEP licensing. It also includes provisions detailing the process of notifying standards and aggregate royalty, registration of SEPs and expert opinion on aggregate royalty. Also included are provisions concerning the information and data that the competence center would include in the register and databases. The registration will be subject to a fee. Moreover, the proposal pertains to essentiality checks of SEPs, as well as establishes provisions for the determination of FRAND terms and conditions. Lastly, it contains provisions setting out the treatment of micro-enterprises and small and medium-sized enterprises considering their specific needs.