Injunctive relief for patent infringement in Europe - the current state of play including most recent SEP case law after the Huawei decision: Permanent Injunctions - Preliminary Injunctions - German Bifurcation & "Injunction Gap" - SEPs & Injunctions - Take away's & Findings

1. Patent Litigation
Role of Injunctive Remedies
in Germany and other European
Jurisdictions
Dr. iur. Tilman Müller-Stoy
Partner, Attorney-at-Law, Certified IP lawyer,
Commercial Mediator (MuCDR)
BARDEHLE PAGENBERG
Partnerschaft mbB
Patentanwälte Rechtsanwälte
Prinzregentenplatz 7
81675 Munich
T +49.(0)89.928 05-0
F +49.(0)89.928 05-444
info@bardehle.de
www.bardehle.com
ISO 9001 certified

2. The availability of a permanent injunction for patent infringement is not perfectly
harmonized in Europe. While the award of an injunction is discretionary in the
UK (similar equity / proportionality considerations like in the US apply, albeit
less extensively, i. e. an injunction is rather the rule not the exception), other
countries, in particular Germany, and Italy provide an automatic injunction by
virtue of law generally without allowing for any equity / proportionality
considerations. This generally also applies to France and Holland although equity
/ proportionality considerations can play a role in exceptional cases.
To illustrate the difference: in contrast to the Anglo-American common law
systems, in the continental European civil law systems, a non-practicing entity
will get an enforceable injunction granted irrespective of any equity /
proportionality considerations. In Germany, for instance, there is just a single
(quite exceptional) case in which the Court of Appeals of Karlsruhe suspended the
preliminary enforcement of an injunction for patent infringement granted by the
lower Mannheim Regional Court in favor of a non-practicing entity against an
operating company. No similar cases have been reported since then, but many
cases in which a non-practicing entity was granted and allowed to enforce an
injunction against operating companies.
This does not mean that there is no principle of proportionality in the continental
European civil law systems. In fact, there is. However, civil law systems typically
require the (usually) codified law to provide an express reservation that
proportionality must be observed. By way of example, such a reservation exists in
the German law with respect to the scope of the claim for destruction of
infringing products but precisely not with respect to the claim for injunctive
relief. Thus, the unavailability of an injunction for disproportionality is only
imaginable in extreme and very exceptional cases.

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However, when it comes to preliminary injunctions (hereinafter: PI) for patent
infringement (similar to TROs under US law), the situation is quite different.
Here, proportionality plays a much bigger role when it comes to the question
whether or not a PI is granted. The typical scenarios for a PI are market launch
cases of an infringing product, in particular on a trade show. Again, the European
practice differs to some extent. In Germany, Holland, and Italy, PI proceedings
are pretty much a common tool, but less so in France (although more than in the
past) and the UK, except for pharmaceutical or other rather important cases. For
instance, in Germany, a weighing of the parties’ interests must be performed by
the court, considering all relevant circumstances of the individual case. The PI
may be granted within hours / days, in some cases even ex parte, i. e. without an
oral hearing, taking the infringer by surprise. It is summary proceedings with a
lower evidentiary standard than in main proceedings. Therefore, it is
acknowledged that with respect to patent infringement PIs particular care is
needed, because the injunction may significantly interfere with the respondent’s
business activities. The most important factors that have to be assessed by the
court when balancing the conflicting interests of the applicant and the
respondent are whether
 the patent-in-suit is clearly infringed;
 the concerned technology is readily understandable or the technical field
is difficult and complex (such as e.g. genetic engineering) requiring special
knowledge which the court does not have at hand so that it would have to
consult a technical expert;
 the validity of the patent-in-suit can be convincingly asserted, for
example, because the patent-in-suit survived opposition and / or German
nullity proceedings; in this regard it must also be taken into account if it’s
patentability is acknowledged by renowned competitors by having taken a
license in the patent-in-suit;

4. 3 | 9
 the applicant acted quickly to assert his rights and did not disprove the
need for urgent relief by having waited too long to bring a PI request
(rough deadline: one month);
 the patent-in-suit has just been granted or the opposition period has at
least already lapsed;
 the patent-in-suit has almost expired, so that the applicant does not have
sufficient time to address his claims in main proceedings and his patent
rights would be frustrated if the PI was not granted;
 the applicant might suffer severe disadvantages with regard to his market
position, such as price cutting or predatory competition, if the PI was not
granted;
 the respondent would suffer irreparable harm if a PI was granted, e. g. in
cases in which the attacked product / service is key to the respondent’s
business;
 the applicant is a non-practicing entity without the need to protect an own
operating business.
Having looked at the German PI practice above, the Dutch PI practice is also
specifically noteworthy in this regard. Here, PI proceedings are even a standard
measure in patent litigation, in particular as usually urgency is assumed in view
of a continuing infringement (but may be lost in very exceptional cases as just
decided in a so far single case in June 2016). Besides that, a similar weighing of
interests occurs like in Germany. Timing may be a bit different as typically a
mini-trial is held after some weeks of briefing before the PI is granted. Notably,
the Dutch courts have allowed for a so called cross-border PI – that is a PI
granted and thus enforceable for the territory of various designated member
states of the European patent-in-suit – in the famous Solvay case. In main
proceedings, a cross-border PI is not a practical option based on case law of the
European Court of Justice (hereinafter: CJEU) which does, however, not apply to
PI cases. Both, in Germany and in Holland, PIs may be tried to be avoided by the
respondent by so called anticipatory “protective letters” to the court arguing why

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a PI should not be granted if a PI request comes in. These protective letters are
usually kept and considered by the courts if and when a PI request comes in.
Another specialty in Europe is the German style bifurcation and the thus caused
so called “injunction gap”. In German patent litigation, infringement and validity
are decided by different courts in different proceedings, i. e. bifurcated
procedurally. In infringement proceedings, invalidity of the patent-in-suit is not
an admissible defense or objection. There is no counterclaim for invalidity. To
attack validity, the presumed infringer has to file an opposition with the
competent patent office or a nullity suit before the centralized German Federal
Patent Court in Munich. The best the presumed infringer can achieve on the
infringement side is a stay of the infringement proceedings until there is a
decision on validity. This requires not only that an opposition / nullity suit is
actually filed but also – in the current, long standing practice – that the
infringement court assumes a high likelihood of invalidation which is rather rare
in practice although the stay rates have increased a little in the last couple of
years. As the infringement court typically decides the case much faster than the
validity court / patent office (often times there is a gap of more than a year), an
injunction may be granted and enforced (even if an appeal is filed which has no
suspensive effect) long before a decision on validity is available. This German
“injunction gap” is obviously a strategic advantage for the plaintiff and one of the
key reasons (besides speed, quality, costs and market size) why the German
system is by far the most frequented system for patent litigation in Europe.
Notably, the “injunction gap” is as such not intended by the German law but a
practical consequence of the timing of the involved courts / patent office.

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The availability of injunctive relief when asserting standard essential patents
(hereinafter: SEPs) is currently probably the “hottest” IP topic in Europe. This is
the consequence of a landmark CJEU decision which was handed down in July
2015 (Huawei vs. ZTE Case C-170/13; hereinafter: Huawei Decision) based on a
reference for a preliminary ruling from the German Dusseldorf Regional Court.
The key point of this decision is that an injunction is available in Europe in cases
relating to the enforcement of SEPs under certain restrictions. However, the devil
is in the detail. As a bottom line, the decision tries to strike a fair balance between
patent hold up (on the side of the patent owner) and hold out (on the side of the
infringer) concerns. Or in other words: between the quite patent owner-friendly
practice of the German Orange Book case law and the more infringer-friendly
preliminary views of the European Commission in the Samsung and Motorola
investigations based on the rather vague “willing licensee” concept. In the
aftermath of the Huawei Decision which directly applies in cases of an earlier
FRAND commitment of the patent owner and requires the finding of a market
dominant position (the nature of the patent at issue as SEP is not sufficient alone;
a case by case analysis is necessary), some national decisions have already been
handed down providing further guidance, the vast majority of them in Germany.
Nevertheless, much is in flux at present and many further decisions will be
needed to have a somewhat reliable body of case law.
The key take away of the Huawei Decision is that a kind of ping pong interaction
(or dance) must take place between the patent owner and the infringer before
claims for injunctive relief and / or corrective measures (like a claim for
destruction) can be successfully asserted in court:
 First, the patent owner must alert the infringer by designating the patent
in question and specifying the way in which it has been infringed (notice
of infringement).
 If and when the infringer has expressed its willingness to conclude a
licensing agreement on FRAND terms, the patent owner must present to

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the infringer a specific, written offer for a license on such FRAND terms,
specifying, in particular, the royalty and the way in which it is to be
calculated.
 These obligations of the patent owner apply as long as the infringer
diligently responds to that offer, in accordance with recognized
commercial practices in the field and in good faith. Whether the latter is
the case, must be established on the basis of objective factors and implies,
in particular, that there are no delaying tactics. In particular, should the
infringer not accept the offer made, it must submit to the patent owner,
promptly and in writing, a specific counter-offer under FRAND terms.
Only then, the infringer can argue that the patent owner’s license offer
was not FRAND and that his request for injunction / recall constitutes an
anti- trust law violation.
 Furthermore, where the infringer is using the patent in question before a
license agreement has been concluded, it is for the infringer, from the
point at which its counter-offer is rejected, to provide appropriate
security, in accordance with recognized commercial practices in the field,
for example by providing a bank guarantee or by placing the amounts
necessary on deposit. The calculation of that security must take into
account, inter alia, the number of the past acts of use of the patent in
question, and the infringer must be able to render an account in respect of
those acts of use.
Another important finding – relating to the assertion of claims for accounting for
past acts of use and a respective liability for damages – is the following: the
patent owner is not prohibited from bringing an action for infringement against
the infringer seeking the rendering of accounts in relation to past acts of use of
that patent or an award of damages in respect of those acts of use.
This latter finding provides a very interesting strategic option for the patent
owner – at least under German law (already backed up by some case law and
literature): before or while negotiating with the infringer within the above
described interaction, the patent owner can file an infringement action asserting
claims for accounting and for a finding of liability for (past) damages. Such

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lawsuit could later be easily extended by bringing claims for injunctive relief and
for further corrective measures, if and when the negotiations fail because of un-
FRAND behavior of the infringer. Such extension does not need to have a
negative impact on the timing of the already pending infringement lawsuit, i. e. a
decision on all claims can still be expected within about a year as of the filing of
the initial infringement action. This means in other words that the negotiation
time does not impair the patent owner’s interest in effective judicial protection.
Further interesting findings are:
 Where no agreement is reached on the details of the FRAND terms
following the counter-offer by the infringer, the parties may, by common
agreement, request that the amount of the royalty be determined by an
independent third party, by decision without delay.
 The infringer cannot be criticized either for challenging, in parallel to the
negotiations relating to the grant of licenses, the validity of those patents
and / or the essential nature of those patents to the standard in which
they are included and / or their actual use, or for reserving the right to do
so in the future.
Nevertheless, there are lots of open questions. The first issues which were
decided by national German courts (subject to appeal and possibly further
references to the CJEU) are the following, wherein the Dusseldorf and Mannheim
Courts do partly differ in their opinion:
According to the Dusseldorf Courts (top-down approach), the FRAND dance is
consecutive, i. e. the counter offer of the infringer must only be analyzed if the
initial offer of the patent owner is found to be FRAND. In contrast thereto, the
Mannheim Courts (bottom-up approach) rather focus on the behavior of the
infringer. If the infringer does not reasonably react to a step performed by the
patent owner, the FRAND defense is rejected, i. e. the FRANDness of the steps
performed by the patent owner is generally not analyzed in detail.

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Some of the further decided issues are:
Mannheim:
 The notice of infringement must comprise the patent number and the fact
whether there was any FRAND commitment.
 The facts on which the assumption of infringement is based must be
explained in some detail. Sufficiently detailed claim charts are good
enough as long as these allow the infringer an independent assessment of
the situation in view of his existing technical knowledge wherein such
knowledge can be accessed by using external counsel.
 If a patent portfolio of some size shall be licensed, it is not sufficient to
provide such information only for one patent. A “representative” number
of patents must be considered (hard to determine in the individual case).
 FRAND offers: the patent owner has some leeway in determining a
FRAND license / royalty; if it is industry practice to license a global
portfolio (as usual e.g. in the telecommunications industry), the patent
owner can consequently demand a global portfolio license (as far as there
is patent protection and infringement); the explanations of the patent
owner must be objectively sufficient to allow the infringer to understand
why the patent owner thinks his offer is FRAND.
 The notice of infringement and initial FRAND offer must be filed prior to
filing the lawsuit (for injunctive relief or other corrective measures; not
yet expressly decided).
Dusseldorf:
 The notice of infringement must comprise the patent number, a
specification of the infringing embodiment and the attacked act of use.
 The notice of infringement must be provided at the latest before
advancing the court fees when filing the lawsuit (to allow avoiding
“torpedos”).

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 The reaction time of the infringer to declare its willingness to take a
FRAND license depends on the level of detail of the notice of
infringement; the more detailed the notice of infringement is, the shorter
is the reaction time for the infringer; a reaction time of more than five
months is too long in any event.
 FRAND offers: the more reference agreements the patent owner can (and
has to) produce, the stronger will be the assumption that comparable
terms, in particular a comparable royalty is FRAND; this applies also in
the case of a global portfolio offer; the patent owner does not have to
produce a specific mathematical explanation of the royalty rate as a
FRAND royalty is not one single value but rather a range of values.
 A valid FRAND defense has effect in the distribution chain; if a supplier of
products can raise a valid FRAND defense, an injunction against a
customer of said supplier with respect to the products of said supplier
cannot be granted.