Heinz Goddar and Carl-Richard Haarmann Boehmert & Boehmert 07.05.2018 Civil, Product Piracy, and Criminal Patent Enforcement Measures in Germany – and how to Defend Heinz Goddar and Carl-Richard Haarmann Boehmert & Boehmert - 1 -

The German Practice on Preliminary Injunctions Orders 07.05.2018 Outline The German Practice on Preliminary Injunctions Orders The German Practice on Border Seizures The German Practice on Police Raids The Necessity of Freedom to Operate Searches The Benefits of a Protective Memorandum General Strategy to avoid or reduce Preliminary Injuctive Orders, Customs Seizures and Police Raids - 2 -

The German Practice on Preliminary Injunctive Orders 07.05.2018 The German Practice on Preliminary Injunctive Orders In Patent infringement matters it is possible for Patent owners in case of infringement to file patent infringement action with a civil court Such proceedings are quite speedy and efficient, but do not provide for immediate relief because the infringement can not be stopped until at least a preliminarily enforceable judgment has been rendered In addition or alternatively to main proceedings the German Civil Procedural Code (ZPO) provides for the possibility to obtain a preliminary injunctive order Such court order includes a cease and desist order and mostly an order for limited information disclosure, it can also include a seizure order No damage claims or extensive information disclosure claims are awarded to the Patent owner in a PI - 3 -

How to obtain a Preliminary Injunctive Order? 07.05.2018 How to obtain a Preliminary Injunctive Order? A request for PI can be filed with the locally competent IP court No prior warning necessary IP owner needs to show - that he is owner of a granted German patent/ German part of European patent - that there is reason to assume that the underlying Patent is valid - that there is a clear case of infringement - that the defendant is responsible for this infringement - that the case is urgent (1 month after knowledge of infringement) Case and Patent may not be too complicated - 4 -

07.05.2018 How is a Pl granted? In many cases the IP court (District Court) issues the PI within 48 hours without oral proceedings and without notifying the defendant Court may reject the request or summon oral proceedings, but this does not happen in straight forward cases In patent infringement cases courts tend to summon oral proceedings before granting a PI if the patent has not been subject to opposition or survived nullity action Once the PI is granted the court still does not notify the defendant, this is the plaintiff’s part Plaintiff has 1 month to serve the defendant with the PI, in most cases with the help of a bailiff - 5 -

How are Preliminary Injunctive Orders enforced? 07.05.2018 How are Preliminary Injunctive Orders enforced? Upon service of the PI the defendant must immediately obey If the PI includes a seizure order plaintiff will seize the products and keep them in custody until a final decision has been rendered by the civil court If defendant does not obey the Civil court will fix severe punishment fees or even issue an arrest order against the defendant - 6 -

Legal Remedies for the Defendant 07.05.2018 Legal Remedies for the Defendant Appeal to the Civil Court The court will then summon oral proceedings which will, depending on the case, be held on very short notice In these oral proceedings the parties have to present all evidence, the court will not consider any facts or evidence not available in the oral hearing After oral proceedings the Court will issue a judgment which can be appealed by the losing party If the court maintains the PI the defendant must continue to obey Defendant can force plaintiff to file main court action - 7 -

Thus everybody doing business in Germany must try to avoid PIs 07.05.2018 Conclusion PIs are a very strong and efficient weapon in the hands of a patent owner in Germany They are easy to obtain, easy to enforce, hard to appeal and often come without prior warning at unexpected and unwelcome occasions (trade exhibitions) The consequences of a PI for the defendant are nearly as severe as the consequences of a full judgment In many cases the whole battle is already lost for defendant before he even knows that he is under attack Thus everybody doing business in Germany must try to avoid PIs - 8 -

The German Practice on Border Seizures 07.05.2018 The German Practice on Border Seizures The German border seizure regime is very strict and efficient Any patent owner can file a general request for customs seizure Basis: granted German patent/ German part of European patent Only some general information is provided to customs officers who are not able to understand and analyze complicated technical issues If upon importation customs is suspecting an infringement, goods will be preliminarily seized Importer and IP owner will be notified If importer does not oppose to seizure within 10 working days, goods will be finally seized and destroyed - 9 -

How to react to Border Seizures 07.05.2018 How to react to Border Seizures Within 10 working days importer can object to the seizure In this case the patent owner must obtain from a civil court a PI including a seizure order or IP owner must file main court action Otherwise customs will lift the preliminary seizure and release the goods If the seized goods are indeed infringing, importer should not oppose to the seizure and rather try to quickly negotiate a solution with the patent owner If the seized goods are not infringing (or infringement or validity of patent is doubtful) importer should try to prevent patent owner from obtaining a PI - 10 -

The German Practice on Police Raids 07.05.2018 The German Practice on Police Raids Any willful infringement of a granted German patent/ German part of European patent constitutes a criminal offence under the laws of Germany Patent owner can file a criminal complaint with police or public prosecutor In urgent cases police can act on its own, but usually police will only conduct a raid and seizure action upon instruction by the public prosecutor He can only initiate a raid after obtaining a search order from a criminal judge - 11 -

Requirements for a Search Order 07.05.2018 Requirements for a Search Order Criminal judge must have “reasonable initial suspicion” that a criminal offence is being or will be committed He must believe that the patent infringement is being willfully committed Basically, the judge (and the prosecutor) need to believe that the underlying patent is valid and being infringed In patent infringement cases prosecutors and judges can not be able to judge on the validity of a patent and on potential infringement involving complicated technical issues - 12 -

Police raids on trade exhibitions are quite common in Germany 07.05.2018 Conclusion Police raids on trade exhibitions are quite common in Germany Police raids related to suspected patent infringement used to be unusual due to the severe problems for prosecutors and judges to handle complicated technical matters Yet, as previously explained, recently a huge raid has been conducted in Berlin during IFA 2008 (as well as 2009) based on a number of “essential patents” and the patent owners allegation that more or less everybody making use of certain technologies must infringe his patents Thus importers and exhibitors must make sure to alert prosecutors and criminal courts in advance that complicated technical issues are involved and that they are not able to judge the questions of infringement and validity of the patent - 13 -

The Necessity of Freedom to Operate Searches 07.05.2018 The Necessity of Freedom to Operate Searches In view of the threats to potential patent infringers by PIs, main court actions, customs seizures and police seizures it becomes very obvious that it is very dangerous and can indeed be fatal for a company to infringe patents in Germany Consequently, before introducing a new product in Germany it is of great importance to make sure that no patents are being infringed This causes the need to conduct a freedom to operate search before launching a new product in Germany It must be conducted by experienced patent attorneys with insight into the current German jurisdiction - 14 -

The Benefits of a Protective Memorandum 07.05.2018 The Benefits of a Protective Memorandum The most efficient tool to avoid customs seizures and police raids is the Protective Memorandum (also useful and well-known for/in Civil Enforcement Procedures) There is no legal provision for a PM but legal practice has developed this tool over long years A PM is a court writ to be filed with all civil courts that may potentially be locally competent for the specific case: depending on if the case is about a potential infringement of patent, trademark, design or copyright different courts will be competent Usually, PMs are filed with about 20-25 different District Courts throughout Germany, in addition there is an online central register for PMs, but not all District Courts are yet using this register - 15 -

The Contents of a Protective Memorandum 07.05.2018 Parties of the conflict Rough outline of the patent involved Rough outline of the facts of the case Rough outline of the history of the conflict (if any) Reasons of the alleged infringer to assume that a potential request for PI is not justified: - no infringement - patent not valid - case not urgent - case too complicated to be decided in summary proceedings - 16 -

The Intended Effect of a Protective Memorandum 07.05.2018 Main goal is to prevent court from issuing a PI without oral proceedings and without notifying the defender that a request for PI has been filed In many cases the filing of a PI can even fully prevent the court from issuing a PI - 17 -

How do Civil Courts react to the Filing PMs? 07.05.2018 They keep them on file for a certain period of time (no longer than 3 months) If a request for PI for such case is received by the court, the PM will be submitted to the judge together with the PI request, so the court will consider both the complaint and the defense arguments at the same occasion The court is free to decide: - issue a PI despite the defense arguments - refuse to issue a PI - inform the plaintiff that oral proceedings must be summoned before a PI can be issued (plaintiff then often withdraws his complaint) - immediately summon oral proceedings - 18 -

Why is a Protective Memorandum beneficial for the Defendant? 07.05.2018 Only possibility to present defense arguments to the court before a PI can be issued Helps prevent the issuing of unjustified PIs At least helps winning time and reacting to the threat by preventing the issuing of a PI without oral proceedings Thus, PMs are the best and most efficient tools in cases of potential patent infringement to defend against aggressive patent owners - 19 -

General Strategy to avoid or reduce Preliminary Injunctive Orders, Customs Seizures and Police Raids 07.05.2018 In preparation for introduction of a new product a freedom to operate search should be performed In preparation for trade exhibitions or in view of threats with infringement action a Protective Memorandum should be filed with all potentially competent civil courts Copy of this PM should be sent to the Central Customs Authority of Germany (Zentralstelle Gewerblicher Rechtsschutz) and to the Public Prosecutor who might be locally competent (for example in the city where a trade exhibition is to be held) This serves - to alert customs and police/ prosecutors that not every claim of the patent owner in a request for PI, request for customs seizure or criminal complaint may be true and well founded - to alert customs and police/ prosecutors that complicated technical issues are involved regarding infringement and validity which they cannot and should not try to judge - 20 -

By following this approach you can try to avoid infringements Conclusion 07.05.2018 Well in advance of the launch of a new product, freedom to operate searches should be performed In view of a threat with patent litigation and in preparation of trade shows/ product presentations a Protective Memorandum should be filed if there is any reason to assume that any patent owner might feel tempted to launch an attack Copies of this PM should be sent to the Central Customs Authority and to all potentially competent public prosecutors By following this approach you can try to avoid infringements Even more importantly you can try to avoid the extremely negative effects of PIs, customs seizures and police raids - 21 -