How the CJEU’s decision on patent validity could affect German preliminary injunctions

A decision by the Court of Justice of the European Union (CJEU) has sent unease rippling through German legal circles and prompted rights holders to reconsider how they enforce their patents, especially with regard to preliminary injunctions.

Preliminary injunctions in patent infringement proceedings – an exception?

According to Recital 22 of the Directive 2004/48/EC of the European parliament and of the Council of 29 April 2004 on the enforcement of IP rights, also known as the Enforcement Directive, a crucial instrument for ensuring effective protection of intellectual property in the European Union is the obligation on member states to provide IP owners with "provisional measures for the immediate termination of infringements, without awaiting a decision on the substance of the case".

In Germany, the primary provisional enforcement measures available to rights holders are preliminary injunction proceedings. In order to substantiate a cease-and-desist claim:

• the patent infringement must be probable;
• the preliminary proceedings must be urgent; and
• the validity of the patent-in-suit must be sufficiently established.

The third requirement caters to the fact that a patent may be challenged by anyone at any time during its term. In addition, the complexity of the subject matter requires a balancing of interests between averting irreparable damages for the patent holder while still providing effective legal protection for the alleged infringer.

Under German case law, the courts have dealt with the special urgency and limited technical competence available in preliminary injunction proceedings by partially outsourcing their prognosis on patent validity: they established that the patent in suit must have survived the first instance in any patent validity proceedings in order to be the basis for a preliminary injunction. Consequently, only relatively few patent holders benefitted from interim protection.

In December 2019 the Higher Regional Court of Munich adopted a more restrictive stance compared to its previous relaxed attitude, by requiring the patent at issue to have been confirmed in opposition or nullity proceedings (GRUR 2020, 385 – Elektrische Anschlussklemme). This prompted the 21st Civil Division of the District Court of Munich I to request a preliminary decision on this matter before the CJEU. The court considered that the change of jurisdiction precluded it from issuing a preliminary injunction, even though it had concluded that the patent at issue was valid and had been infringed. Therefore, the court raised the question of whether this practice complied with Article 9(1) of the Enforcement Directive. 

The CJEU's decision and its ramifications

The CJEU confirmed the district court’s suspicions, holding previous German case law to be incompatible with Article 9(1) of the Enforcement Directive, as the prior confirmation of the patent in validity proceedings imposes an additional prerequisite for preliminary injunctions and thereby undermines the directive's aim of ensuring a high level of protection for intellectual property. To support its conclusion, the CJEU pointed to a possible scenario where potential infringers could deliberately refrain from challenging a patent’s validity to hinder its preliminary enforcement. Further, the CJEU emphasised that other remedies were available to mitigate the risks for the alleged infringer (eg, the provision of adequate security by the applicant to compensate damages if the preliminary injunction later proves unfounded).

Although this decision has been viewed critically in some circles (including important judicial voices), a significant change in case law is now expected since the CJEU explicitly stated that national courts must adhere to its interpretation.

First and foremost, the number of preliminary injunction applications could increase – patent holders may assert patents without having to wait for a decision in first-instance validity proceedings. On the other hand, competitors may be compelled to pursue invalidity actions earlier and more frequently in order to rebut the presumption of the patent being valid based solely on the fact that it has been registered.

Overall, more emphasis will be placed on the competent court in preliminary injunction proceedings to assess the patent’s validity with a sufficient degree of certainty. It is likely that the courts will have to resort to applying the criteria developed for exceptional cases under previous jurisprudence under which survival of first-instance proceedings was not required. Such criteria includes:  

• relevant objections against the validity of the patent already considered in the granting procedure;
• the mere absence of validity proceedings as an indication that the patentability of the invention is recognised by experts;
• obvious irrelevance of arguments raised based on a summary examination; and
• successful parallel proceedings abroad.

As a result, competitors should keep an even closer eye on the market, while potential infringers should ensure that they are well prepared to present substantive arguments against validity either in a protective writ and/or at an oral hearing.

The CJEU's decision could also affect the urgency prerequisite. With confirmation of the patent at issue in first instance, validity proceedings have previously been the minimum requirement for obtaining a preliminary injunction; the urgency of these proceedings was not necessarily at stake if the patent holder awaited the decision first. On the contrary, such a decision constituted a substantial change in the facts of the case and triggered a new urgency deadline. The fact that awaiting a decision is no longer strictly necessary could call this principle into question.

Whether the courts will react to the lowered requirements for obtaining a preliminary injunction by taking a stricter approach regarding the legal consequences remains to be seen. The required adaption of case law may be affected by the recent reform of the German Patent Act which, among other things, introduces a codification of an exclusion to injunctive relief based on its proportionality.

Looking ahead

It remains to be seen how the German courts will accommodate the CJEU's request to change their established case law where necessary. Until then, actors on both sides should exercise caution and ensure they are prepared to present their arguments for and against the validity of a patent in a substantive manner.