Litigation and eligibility: Austria
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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. In Austria, preliminary proceedings are a frequently used tool, as they are fast, effective and comparatively low cost.
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.
Further, 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.
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 quite usual to try to settle an issue through negotiation. Further, it is common practice to send a cease and desist letter to an infringer before filing a law. In general, alternative dispute resolution is not a realistic or frequent alternative to litigation.
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 technically qualified expert judge, usually a patent attorney. The court also commonly appoints an expert whose opinion on infringement and validity of the patent is taken into account. At the Supreme Court, the senate consists of three professional judges and two technically qualified expert judges.
Q: Are validity and infringement dealt with together, or does your country have a bifurcated system?
Austria has a bifurcated system. The question of validity 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 may be invalid, it will suspend the proceedings. The defendant must then file either a nullity action with the Austrian Patent Office within one month or – if still possible – an opposition with the European Patent Office. Otherwise, the proceedings will continue on the assumption that the patent is valid. After the decision on validity from the Patent Office has become final, the court proceedings will continue based on this decision.
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 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 Switzerland. However, a party is usually represented before these authorities by a patent attorney rather than an attorney at law. Appeals against decisions of the patent office must be filed by a professional representative.
Q: To what extent is pre-trial discovery permitted?
Austria has no discovery system. 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 that has suffered infringement may request information about the origin and distribution channels of the infringing goods or services, during or outside an infringement suit.
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 proceedings open to the public. The court must rule based on the evaluation of evidence (eg, 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 may be examined by both parties.
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 parties must also be considered.
Q: Is the doctrine of equivalents applied by courts in your jurisdiction? If so, what form does this take?
The Supreme Court has established a doctrine of equivalence that is quite similar to the situation in Germany.
Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?
There are no specific problems directly relating to the type of patent. However, Austrian law excludes specific subject matter, as such, from patentability (ie, discoveries, scientific theories, mathematical methods, aesthetic creations, schemes, rules and methods for performing mental acts and computer programs).
Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?
There is no formal binding effect of previous decisions of higher courts, courts are bound only by statutory law. However, courts regularly cite previous related decisions and use the arguments of prior decisions. If one of the parties refers to a previous decision, the court regularly deals with it in its reasoning.
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 usually takes the reasoning of foreign decisions into consideration, especially decisions from the European Patent Office and the German Patent and Trademark Office. Decisions from other jurisdictions are of minor relevance.
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, a request for delay will often be rejected. However, this is at the discretion of the presiding judge.
Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?
Preliminary injunctions are an important and frequently used tool in Austria, as preliminary injunction proceedings are fast, effective and inexpensive. In order to convince the preliminary injunction senate to issue a preliminary injunction it is necessary to make it prima facie evident that the patent is infringed and that the patent is valid. Preliminary injunctions may be requested together with a demand for a judgment in infringement proceedings. In contrast to other jurisdictions, the plaintiff is not obliged to prove any urgency in order to obtain a preliminary injunction.
Q: How much should a litigant budget for in order to take a case through to a decision at first instance?
The costs of infringement proceedings will depend on the litigation value, which has a statutory minimum value of €36,000. Disputes over the value are rare in Austria and courts usually accept parties’ suggestions. The overall costs incurred to obtain a first-instance decision regarding a preliminary injunction can be estimated within a range of around €30,000 to €50,000. To obtain a first-instance decision regarding a permanent injunction in the main proceedings costs are around €30,000, while further costs depend on the number and duration of hearings and whether proceedings are suspended for the Patent Office to decide on the validity. All 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 the 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.
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 based on a tariff specified in statutory law, so it is unlikely to cover the winning party’s costs in full.
Q: What remedies are available to a successful plaintiff?
The remedies granted to a successful plaintiff include:
- interim and permanent injunctions;
- destruction of infringing goods;
- drawing up of accounts;
- publication of the decision or judgment; and
- monetary remedies, depending on the type of infringement.
In cases of mere unauthorised use of a patent, the plaintiff may demand appropriate monetary compensation. In cases of gross negligence or intent, the plaintiff is entitled to twice this amount of monetary compensation. In cases of negligence or wilful patent infringement, the plaintiff may demand damages, including the lost profits or the profits of the infringer directly relating to 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. Cases of gross negligence or wilful intent, consist of twice the usual licence fee. In criminal matters, the infringer may be fined up to 360 times the daily rate of calculating fines or, in cases 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 directed to discontinuation of the infringement. If the claim succeeds, the court must order a permanent injunction. However, if the infringed patent has already lapsed, the plaintiff’s request will be directed to monetary remedies only (eg, compensation or damages).
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 second-instance court (ie, the Vienna Upper Provincial Court). A first-instance decision of the Patent Office in nullification proceedings may also 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 is around one year 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 may generally file a request for extraordinary revision. In all cases the Supreme Court may decide on the admissibility of a revision. In general, a revision is admissible only if the second-instance decision raises a legal question of higher importance (eg, if decisions of the Supreme Court regarding this legal question are unavailable or the second-instance court decided against established case law).
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 valid and whether it is effective (eg, in case of a claimed right of prior use). The question of meritorious validity must be resolved by the Patent Office 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 and supported, if necessary, by the description and drawings, if available. In light of the abovementioned criteria and the possibilities for both parties to introduce their arguments and have them discussed properly before the respective senates, it is safe to say that Austrian courts are neither pro-patentee nor pro-defendant.
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 16 July 2015 (the date of the decision in Huawei v ZTE (C-170/13)), no similar cases have occurred in Austria. The Supreme Court usually strictly keeps to the findings of the European Court of Justice (ECJ).
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 suggests – 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 8 August 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 in Vienna.
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.