Litigation and eligibility: Austria
Q: What options are open to a patent owner seeking to enforce its rights in your jurisdiction?
In civil matters, actions and requests for interim injunctions based on alleged infringements may be brought exclusively before the Vienna Commercial Court, while jurisdiction in criminal cases lies with the Vienna Provincial Court for Criminal Matters. Rights holders may apply to Customs to request the seizure of counterfeit goods being imported into Austria, as this is part of the European Economic Area (EEA) – thereafter, a court action may be commenced.
The owner of a patent or supplementary protection certificate (SPC) or its exclusive licensee may apply to the Austrian Patent Office for a declaratory decision against any party that allegedly infringes the patent or SPC. Declaratory proceedings may be launched even where there is merely an intention to infringe. Decisions of the Patent Office may be appealed to the Vienna Upper Provincial Court. Under certain circumstances, revisional recourse or revision to the Supreme Court of Austria may be admissible.
Q: Are parties obliged to undertake mediation/arbitration before bringing a case before the courts? Is this a realistic alternative to litigation?
There is no obligation to undertake mediation or arbitration before going to court, although it is usual to try to settle an issue through negotiation. However, patent owners should send a cease and desist letter to an infringer before filing suit, as patent infringement is regarded as wilful only after the infringer has been notified of it. In addition, sending notice in this way affects the monetary remedies available. In general, alternative dispute resolution (ADR) is not a realistic alternative to litigation, because it is not usually prearranged between a patent owner and an infringer. Even where ADR is used, decisions do not preclude the possibility of an eventual court case.
Q: Are there specialist patent or IP courts in your jurisdiction? If not, what level of expertise can litigants expect from the courts?
The Vienna Commercial Court and the Vienna Upper Provincial Court both consist of two professional judges and one expert, usually a patent attorney. The court also commonly appoints an expert whose opinion is taken into account. At the Supreme Court, the senate consists of three professional judges and two technical members of the Patent Office.
Q: Are validity and infringement dealt with together, or does your country have a bifurcated system?
The validity or effectiveness of a patent may be determined in advance by the court itself, which may also request a written statement from the Austrian Patent Office on the probable validity of the patent. If the court is of the opinion that the patent or SPC may be invalid, or if the defendant objects to the validity of the patent or SPC, it must suspend the proceedings. The defendant must then file either a nullification action with the Austrian Patent Office within one month or – in the case of a European patent that has been in force for less than nine months – an opposition with the European Patent Office; otherwise, the proceedings will continue on the basis that the patent is valid. Following a final, uncontestable decision on the patent’s validity, the court action will continue.
Q: Who may represent parties engaged in a dispute?
In patent infringement matters before the courts, parties must be represented by an attorney at law or a notary public, who may be accompanied by a patent attorney. There is no statutory requirement for representation before the Austrian Patent Office, provided that the party is based in the EEA or in Switzerland. However, a party is usually represented before these authorities by a patent attorney rather than an attorney at law or a notary public. Recourse or appeal to the Vienna Upper Provincial Court against decisions of the Austrian Patent Office requires professional representation by patent attorneys, attorneys at law or notaries public. Revisional recourse or revision to the Supreme Court requires representation by an attorney at law.
Q: To what extent is pre-trial discovery permitted?
Austria has no discovery system. However, the defendant must assist in providing evidence if the plaintiff has difficulty in proving the facts. If a request for a preliminary injunction has been issued alongside infringement proceedings, this request may be directed to securing not only the claim itself, but also measures for preserving evidence. A preliminary injunction may be ordered without hearing the defendant if a delay might result in irreparable damage to the plaintiff or if there is a risk that evidence might be destroyed.
Any party which has suffered infringement may request information about the origin and distribution channels of the infringing goods or services either during or outside an infringement suit. Such a request must be directed either to the infringer itself or to any person that has dealt directly or indirectly with the infringing goods or services. If necessary, the request may be followed by legal action.
In criminal proceedings the infringer’s premises may be searched for evidence, which may then be seized.
Q: Is cross-examination of witnesses allowed? If so, what form does this take?
Court proceedings are oral, direct and open to the public. The court must rule based on the evaluation of evidence (ie, documents, private expert opinions, court expert opinions and witness testimony). In the course of the oral hearings – which may be preceded by several preparatory writs – the case is discussed and witnesses are cross-examined.
Q: What use of expert witnesses is permitted?
The opinions provided by court-appointed experts help the court to understand the matter. However, private expert opinions submitted by all parties must also be considered.
Q: Is the doctrine of equivalents applied by courts in your jurisdiction? If so, what form does this take?
There are two types of equivalent: those that are still covered by the scope of the patent (so-called ‘technical equivalents’) and those that are already beyond the scope of the patent (ie, ‘patentable’ or ‘inventive equivalents’). A mere technical equivalent (ie, where some features have been exchanged without altering the subject of the invention and which fall within the knowledge of a person skilled in the art at the priority date of the patent) is covered by the scope of protection granted by the patent and therefore constitutes infringement. However, an inventive equivalent is not regarded as infringement.
Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?
Some things are not regarded by law as inventions as such, including discoveries, scientific theories, mathematical methods, aesthetic creations, schemes, rules and methods for performing mental acts and computer programs. However, all of these are patentable, provided that they are directed to or combined with technical features. If the plaintiff holds a patent that combines such mental features with technical features, the defendant may argue that the patent actually covers, for example, a business method or a piece of software and thus either should never have been granted or should be regarded as ineffective. Such patents can therefore prove difficult to enforce. The same may hold true of biological patents, because there are some restrictions to the patentability of biological matter on which a defendant may rely.
Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?
Case law is not relevant in Austria – courts are bound only by statutory law. However, courts may choose to cite previous related decisions. If one of the parties refers to a previous decision, the court must deal with it in its reasoning; failure to do so may give rise to a complaint or appeal.
Q: To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?
Decisions issued by courts in other jurisdictions are not binding on the Austrian courts. However, if one of the parties cites such a case, the court must refer to it in its statement of grounds.
Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?
Each party has the opportunity to submit requests for the extension of terms or postponement of hearings. If such a request is filed by both parties, it is usually granted. If such a request is filed by the defendant with due grounds for consideration, it will also be granted. Otherwise, especially on a counter-request by the plaintiff, any request for delay will be rejected.
Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?
Preliminary injunctions may be requested together with a demand for a judgment in infringement proceedings, even if no risk is proven. On receiving such a request, the court is bound to release a resolution.
Q: How much should a litigant budget for in order to take a case through to a decision at first instance?
The costs of a patent attorney assessing infringement before litigation may range from €4,000 to €12,000. The costs of infringement proceedings will depend on the value in dispute, which has a statutory minimum of €36,000. The overall costs incurred to obtain a first-instance decision regarding a preliminary injunction range from €9,000 to €22,000. To obtain a first-instance decision regarding a permanent injunction, the costs range from €9,000 to €42,000. However, these figures reflect only a range of costs and may be higher in complicated matters.
Q: How long should parties expect to wait for a decision to be handed down at first instance?
In main proceedings (ie, those directed towards a permanent injunction), a judgment may take several years. Provisional proceedings (which are usually launched by the plaintiff together with the main proceedings and directed towards an interim injunction) usually lead to a first-instance decision within several months to one year. There are few ways to expedite this process, because even in provisional proceedings there is usually at least one oral hearing, which may be postponed for different reasons (eg, at the defendant’s request).
Q: To what extent are the winning party’s costs recoverable from the losing party?
The losing party must refund the costs of the proceedings and representation to the winning party. However, the refund is calculated on the basis of statutory law, so it will not cover all of the winning party’s costs.
Q: What remedies are available to a successful plaintiff?
The remedies granted to a successful plaintiff encompass interim and permanent injunctions, destruction of infringing goods, drawing up of accounts and publication of the decision or judgment, as well as monetary remedies, depending on the type of infringement. In case of the mere unauthorised use of a patent, the plaintiff may demand appropriate monetary compensation or double this if the infringement was based on gross negligence or intent. In cases of wilful patent infringement, the plaintiff may demand damages, including the profits which it has lost or the surrender of profits gained by the defendant from the infringement. Disadvantages suffered as a result of wilful patent infringement but not leading to monetary loss may also be claimed.
Q: How are damages awards calculated? Are punitive damages available?
Appropriate monetary compensation is usually calculated based on equivalent licence fees. In case of gross negligence or wilful intent, it consists of double the usual licence fee. Punitive damages are not available in civil court proceedings, although publication of the judgment in several newspapers or magazines – which is usually very expensive – is regarded as a form of punishment. In criminal matters, the infringer may be fined up to 360 times the daily rate of calculating fines or, in case of professional infringement, sentenced to imprisonment for up to two years.
Q: Under what circumstances might a court grant a permanent injunction? How often does this happen?
The first claim of a plaintiff in infringement proceedings is generally for discontinuation of the infringement. If the claim succeeds, the court must order a permanent injunction. However, if the infringed patent has already lapsed, so that the plaintiff’s request will be directed to monetary remedies only (eg, compensation, damages), the court will primarily order the drawing up of accounts in case of proven infringement. It will also rule on the liquidated demand of the plaintiff.
Q: Does the losing party at first instance have an automatic right of appeal? If not, under what circumstances might leave to appeal be granted?
The losing party at first instance may appeal to the court of second instance (ie, the Vienna Upper Provincial Court). A first-instance decision of the Patent Office in nullification proceedings launched after the suspension of court proceedings may be appealed to the Vienna Upper Provincial Court.
Q: How long does it typically take for the appellate decision to be handed down?
The timeframe for an appeal or revision is around two years at each instance.
Q: Is it possible to take cases beyond the second instance?
The second-instance judgment must specify whether ordinary (regular) revision to the Supreme Court is admissible. Even if it is not admissible, the losing party might file a request for extraordinary revision, although this need not be accepted by the Supreme Court.
Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?
The court is obliged to decide only on the preliminary questions of whether the patent is or was valid and whether it is or was effective (eg, in case of a claimed right of prior use). The question of meritorious validity must be resolved by the Nullity Department in a nullification action. Faced with a valid patent, it is the court’s task to decide whether infringement occurred; in this regard, the scope of protection is defined by the patent claims, supported if necessary by the description and drawings, if available. Mere technical equivalents fall under the scope of the patent. In light of the above-mentioned criteria, it is not possible to state whether the courts are pro-patentee.
Q: Have courts in your jurisdiction handled cases relating to standard-essential patents and fair, reasonable and non-discriminatory licensing since the ECJ’s Huawei v ZTE decision? If so, what have they decided?
Since July 16 2015 (the date of the decision in Huawei v ZTE (C-170/13)), no similar cases have occurred in Austria.
Q: If they have not handled such cases, how would you expect them to approach the issue?
They would approach the matter in the same manner as the ECJ – that is, if the standard-essential patent owner offered a licence on fair, reasonable and non-discriminatory conditions and this offer was not accepted in good time, the Austrian court would allow the standard-essential patent owner to sue the infringer.
Q: Has your jurisdiction signed the Agreement on the Unified Patent Court? If so, when do you expect it to be ratified?
Austria signed and ratified the Agreement on the Unified Patent Court on August 8 2013.
Q: Will your country play host to one or more divisions of the United Patent Court?
Austria will host a local division of the Court of First Instance of the Unified Patent Court, which will have its seat at the Austrian Patent Office.
Q: Are there any other issues relating to the enforcement system in your country that you would like to raise?
The Product Piracy Act strengthens the position of rights holders, in addition to the EU Customs Regulation. Goods seized by Customs on a granted application for action will be destroyed with the consent of the rights holder, provided that the importer (and alleged infringer) does not file an opposition within 10 days. Even if a rights holder has not applied for a customs action, its Austrian representative (eg, patent attorney) will be informed by Customs if goods are to be imported which clearly infringe an IP right.
Barger, Piso & Partner
Tel +43 1 512 33 99
Fax +43 1 513 37 06
After studying industrial technology, Peter Israiloff has worked in the IP field since 1969. He holds an engineering diploma and has a doctorate in technical sciences from the Vienna Technical University. He is a member of the International Association for the Protection of Intellectual Property and handles patents and utility models in all fields of technology, except biochemistry. In addition, Dr Israiloff is a specialist in Austrian, EU and international trademark matters, and is a member of and Austrian contributor to the International Trademark Association.