29. September 2022
Since August 18, 2021, § 139 I 3 of the German Patent Act (PatG) is in force. It states that the right to injunctive relief is excluded if the grant of an injunction would lead to disproportionate hardship for the infringer or third parties. In determining disproportionality, the court must consider the particular circumstances of the individual case and the requirements of good faith. German law makers passed § 139 I 3 PatG about five years after the German Federal Court of Justice (BGH) ruled similarly in the so called “heat exchanger” ruling (BGH, 10.05.2016, Az. X ZR 114/13, GRUR 2016, 1031), with reference to that decision. In this case, the BGH held that it can be unreasonable to grant an injunction if the economic consequences would affect and disadvantage the infringer in the individual case due to special circumstances beyond reasonability. However, the BGH found, that the immediate injunction concerning the “airscarf” heating elements in question was reasonable.
Unsurprisingly, almost a year after the law makers adopted § 139 I 3 PatG, German courts have and had to decide the disproportionality defense raised by defendants in several cases. Needless to say, so far, the published judgements are only in the first instance.
In two recent cases, both the Düsseldorf (judgement of 30.06.2022, 4b O 7/22) and Munich (judgement of 25.05.2022, 7 O 14091/19) courts followed similar lines, which seem to be largely influenced by the above mentioned “heat exchanger” ruling and lead to a rejection of the disproportionality defense. The Düsseldorf court specifically refers to said decision underlining that § 139 I 3 PatG was “a clarification by the legislator intended to express that the right to injunctive relief may be limited in view of proportionality, as was already recognized in the case law of the Federal Court of Justice prior to the adoption of the provision”.
Both judgements held that restrictions to the injunction can only be granted in particularly exceptional cases. The disproportionality defense can therefore only be successful if the negative consequences of the injunction are exceptionally high due to special circumstances of the individual case. This sounds quite familiar.
In the Düsseldorf case the defendants raised the argument that the plaintiff cannot provide a substitute for the challenged embodiment, thereby causing collateral damage to a third party. The court held that “this is precisely the necessary consequence of an unlawful patent infringement”. Additionally, the patent expired about three months after the oral hearing. Hence, the court held that the damage caused by the fact that the defendants are prohibited from supplying the challenged embodiment to the third party cannot be disproportionately high. Another argument raised by the defendants was their willingness to take a license. In this regard, the court found that the license negotiations commenced “not until November 2021 and thus already well after the filing of the complaint [against the parent company] in 2018” and that “the plaintiff in the present case is not to be referred to conducting license agreement negotiations only for the right at issue”. The court therefore did not further address the defendants’ argument.
Munich ruled similarly. The court listed a number of arguments that could be considered including “whether the patentee is a non-practicing entity and has a primary interest in monetizing the patent, whether alternative off-patent solutions are lacking, whether the value of the invention is completely disproportionate to potential harm from immediate injunctive relief, whether complex products are involved that are covered by many patents when only some of them are infringed, and whether the subject matter of the infringement involves only a small but functionally essential component of a complex device that cannot be replaced in a reasonable time”. However, the court was still not convinced by the defendant’s argument, namely that some of the patents in the portfolio, for which a license was offered, were about to expire and the patents in the portfolio only cover a very small part of a complex product. The court took into account that in the case at hand, the defendant had found a work around and not sold any infringing products in the past two months and hence could not demonstrate an unjustifiable hardship as the consequence of an injunction. The court hence found that the consequences of the injunction did not result in an unjustifiable hardship, because the consequences of a claim for injunctive relief did “not go beyond the normal consequences of the exclusive right”.
According to reports, the Düsseldorf court has added to that in a different case (4c O 18/21) on the infringement of a patent on cancer medication through the distribution of the defendant’s medication for treating hepatitis C. The disproportionality defense did not prevail because the defendant’s compulsory license action was filed too late in the game (with only a few months before the oral hearing) and without filing a compulsory license action, the defendant cannot rely on the disproportionality defense based on patients’ interests. This was even though specific patients can only be treated with the defendant’s medication and no other medicine.
The new law therefore does not seem to change the legal landscape. The courts still follow the line of reasoning set out by the BGH’s “heat exchanger” ruling, referencing the remarks of the German law maker on the new § 139 I 3 PatG. What counts is the weighing of interests in the individual case. The disproportionality defense is restricted to genuinely exceptional cases in which the injunction would be unusually severe and appears unreasonable. However, since we did not see a case in which § 139 I 3 PatG was applied by the courts yet, one can only guess which exceptional circumstances will be considered sufficient. Therefore, all that has changed is, that the disproportionality defense will be raised before the courts more regularly and we are awaiting to see a case in which it will prevail.