Year in Review: notable 2020 patent cases in Germany

Compulsory licence defence under antitrust law – FRAND-Einwand I (Federal Court of Justice)

This was a landmark Federal Court of Justice decision considering the CJEU’s ruling in Huawei v ZTE (Case C-170/13). Among other issues, it considered and applied the provisions of Article 102 paragraph 2 (a) and (b) of the Treaty on the Functioning of the European Union.

First, the assertion of the claims for an injunction, recall and destruction of the infringer’s products by the owner of an SEP may constitute an abuse, if it has not enabled the willing infringer to sign a licence agreement on reasonable terms.

Second, the claimant must help draft the terms of such an agreement if an information asymmetry among the would-be parties demands it. Third, it must provide sufficient transparency for the infringer to understand the amount of the proposed licence fee. Fourth, combining SEPs and non-SEPs in a licence is not, in principle, a breach of antitrust law provided that no payment is demanded for the use of the non-SEPs.

Finally, the infringer may defend himself in an infringement suit by invoking its right to a FRAND licence from the patent holder.

Balance of interests when negotiating a FRAND licence – FRAND-Einwand II (Federal Court of Justice)

As a follow-up to its FRAND-Einwand I decision, the German Federal Court of Justice elaborated on its interpretation of European antitrust legislation regarding SEPs.

The owner of an SEP who brings a patent infringement action does not abuse its market power if the infringer, aware of the infringement and the owner’s willingness to license, has not unequivocally indicated that it will seek a licence on FRAND terms.

Both parties are required to contribute in good faith so that an appropriate balance of the conflicting interests can be negotiated in the form of a licence agreement on FRAND terms.

Outside the scope of application of the protection of succession under Section 15 III of the German Patent Act, objections which were available to a user of the invention against the former patentee cannot be raised against its successor in title. This applies particularly to the objection of patent ambush.

Application of principle requiring all claims to be brought together in a second patent infringement action – Fensterflügel (Federal Court of Justice)

The Federal Court of Justice clarified the exceptional nature of Section 145 of the German Patent Act and its narrow scope of application. In addition, the court provided legal certainty by clarifying that a claimant does not have to assert all claims arising from an IP right against similar embodiments in a single lawsuit.
Section 145 of the German Patent Act precludes any further infringement suit from being brought if it is based on the same or an equivalent patent and not raised in the previous infringement suit. The court ruled that the provision is not applicable in cases where a different embodiment is alleged to infringe the same patent in subsequent infringement proceedings and nor should the underlying principle of Section 145 be applied by analogy.

Whether the infringement action was inadmissible due to infringement proceedings previously based on the same patent against the same defendants was to be assessed according to the general provisions of the German Code of Civil Procedure relating to lis pendens or res judicata (a matter judged).

Since the second embodiment was not the subject of the earlier legal dispute, there was no legal force to the claim to lis pendens under the German Code of Civil Procedure.

Requirements for equal effect in the case of an embodiment with a deviating design form – Kranarm (Federal Court of Justice)

The Federal Court of Justice affirmed its case law regarding the interpretation of the equivalent infringement criterion of the “same effect” (Gleichwirkung). The patent in suit related to a crane arm with an attachment device for implements.

The court held that an embodiment which had a deviating design instead of a feature provided for in the patent claim could not automatically be regarded as having the same effect because the protection of a hose line sought by the patent was achieved in another section instead of the section of the line provided for in the patent claim.

The court has now confirmed that it may be sufficient to assume that the “same effect” as required by the patent claim is achieved by modified means only to a limited extent. However, a substitute means can only be regarded as having the same effect if it also achieves precisely that effect which an individual feature, not realised literally, is intended to achieve.

Patent infringement in case of free programmability of software – Repeater (Düsseldorf Higher Regional Court)

The Higher Regional Court Düsseldorf confirmed its established case law in this dispute. The party whose product does not originally have all the claim features, but who instructs third parties to add the missing features or deliberately exploits their willingness to do so, commits a direct infringement.

It held that, in principle, the prerequisite for a direct patent infringement would be met if the features of the patent claim were realised and the attacked embodiment was objectively capable of achieving the properties and effects according to the patent due to its given construction.

The court further held that if the software supplied with the challenged embodiment was preconfigured in the state of delivery in such a way that not all features of the patent claim were realised, direct infringement would only be considered if it could be assumed that purchasers programmed the challenged embodiment by means of the supplied software in such a way that it led to the realisation of all features of the patent claim. This act could be attributed to the defendant and such attribution could be justified if the defendant had instructed this programming, for example in a manual, or had at least consciously exploited it.

Mention of the means in the patent claim not sufficient for indirect patent infringement – Entnehmbarer Datenspeicher (Karlsruhe Higher Regional Court)

The Higher Regional Court Karlsruhe clarified the term “essential means” in section 10 of the German Patent Act. The provision stipulates the conditions for an indirect patent infringement. One of them is offering or delivering, without authorisation by the patentee, means which refer to an essential element of the invention.

The patent for a SIM card invention for dialling into a mobile network was not indirectly infringed by the defendant, whose mobile phones merely activated it, even though the phones had been mentioned in the patent claims.

The court held that a means included in the patent claim was not an essential element of the invention if it made no contribution to it and was therefore of no essential importance. In this context, a contribution which was practically without significance could be disregarded. A means interacts with one or more features of the claim and therefore relates to an essential element of the invention only if the protected inventive concept is actually realised by the use of the means.

Invalidity of combination SPCs - Ezetimibe/Simvastatin (Federal Patent Court)

Several generics companies filed nullity actions against the supplementary protection certificate for the combination of ezetimibe with simvastatin (“combination SPC”).

The holder also owned an SPC directed to ezetimibe (“mono-SPC”). The mono-SPC was based on the same basic patent but was filed earlier based on an earlier market authorisation. Both SPCs were granted on the same day.

On 9 October 2020, the Federal Patent Court revoked the combination SPC. According to the court, the requirements of Article 3 (c) of the SPC Regulation were not fulfilled in view of the CJEU’s case law (Actavis I and II, cases C-433/12 and C-577/13 respectively).

The Federal Patent Court held that the date of market authorisation was the relevant one to decide that the mono-SPC was the first. Furthermore, the patent’s central teaching concerned the claimed compounds of the formula covering ezetimibe. The patent contained no specific information on the combination of ezetimibe with the public domain compound simvastatin. It also failed to describe the surprising effects of the combination, e.g. a synergistic effect.

Consequently, the combination was not a separate innovation of the patent. Post-published research results were not to be considered for this assessment.

The decision was not appealed to the Federal Supreme Court and therefore is final.

Requirements of the second part of the Teva/Gilead test – Royalty Pharma (Court of Justice of the European Union, Case C-650/17)

The case was referred to the CJEU by the German Federal Patent Court during appeal proceedings concerning the SPC application for sitagliptin.

The underlying patent related to a method for lowering blood sugar levels using DP-IV inhibitors. Sitagliptin is a DP-IV inhibitor which was developed after the filing date of the basic patent.

In the earlier Teva v Gilead decision (Case C-121/17), the CJEU established a two-pronged test for the assessment of Article 3 (a) of the SPC Regulation. In this case, the CJEU held that the first part of the test, namely that the active ingredients must fall under the invention covered by that patent, was fulfilled due to the functional feature “DP-IV inhibitor”.

However, the second part, namely that the product is specifically identifiable, was not fulfilled. Sitagliptin was not individualised in the patent and still had to be developed, which required an independent inventive step. It would be contrary to the objective of the SPC Regulation to grant an SPC for a product not relating to research results claimed under the patent.

The Federal Patent Court dismissed the appeal on 2 September 2020.

Obviousness of dosage claims - Tadalafil (Federal Supreme Court)

The Federal Supreme Court ruled on the inventive step of dosage claims in this dispute. The patent in dispute related to a tadalafil composition suitable for oral administration up to a maximum total dose of 5mg per day.

The prior art described tadalafil to be suitable for treating erectile dysfunction and a broad range of possible daily maximum dosages of 0.5 to 800mg. Furthermore, it was known that a similar compound, sildenafil, was already effective at a daily dosage of 5mg. Both compounds showed similar IC50 values in vitro (tadalafil even had a 33 % lower IC50).This was considered enough motivation for a skilled person to study the dose-response relationship within the relevant dosage range.

According to the Federal Supreme Court, if at the priority date a skilled person had at any given point in time (also at a later point in time) the motivation to conduct complete studies on the dose- response relationship, then a dosage which turns out to be advantageous based on such a study is obvious in view of the prior art. The patent was revoked. The outcome therefore replicates the decision of the UK Supreme Court’s 2019 ruling on the tadalafil dosage regime patent.

Public prior use - Konditionierverfahren (Federal Supreme Court)

The Federal Supreme Court dismissed a public prior use lack of novelty attack.

The underlying patent related to a method of conditioning semiconductor wafers and/or hybrid as well as a system for the said conditioning. The patent was revoked in the first instance in view of a public prior use of a customer with whom there was neither an explicit nor implicit confidentiality agreement and no commercial interest in keeping the system secret. A skilled person thus had the possibility to acquire knowledge of the system.

However, the Federal Supreme Court held that the delivery, installation, and implementation of a system at a customer’s site did not automatically justify a sufficient likelihood that any third party could investigate the system and thereby acquire the knowledge of an invention.

The court concluded that employees of the customer were unlikely to try to find out details on the functioning of the crucial chiller element of the system or let other competitors inspect the system. Furthermore, installation, routine checks and repairs of the system were exclusively provided by the patentee.

The patent was thus maintained as granted.

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