Dr. Matthias Brandi-Dohrn, Rechtsanwalt

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I. Infringing activities

1. Infringing acts are set forth in § 9 PatG (German Patent Act) according to Art. 25 of the regional European Community Patent Convention (CPC) of 1975/1989. TRIPS has taken these regional prior works into consideration. Hence, as can be expected, there are only little and unimportant differences between Art. 28 TRIPS and the German law corresponding to Community Patent Convention. This is evidenced by a comparison of the legal text.

Art. 28 TRIPS § 9 PatG (1981) = Art. 25 CPC (1989) = Art. 29 CPC (1975)
(1) A patent shall confer on its owner the following exclusive rights: (1) By the grant of a patent only the patentee is entitled to use the patented invention. All third parties not having his consent shall be prohibited:
(a) where the subject matter of a patent is a product, to prevent third parties not having his consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product 1. from making, offering, putting on the market or using a product which is the subject-matter of the invention, or either importing or stocking such product for these purposes;

b) where the subject matter of a patent is a process, to prevent third parties not having his consent from the act of using the process

2. from using a process which is the subject matter of the invention or, when the third party knows, or it is obvious in the circumstances that the use of the process is prohibited without the consent of the proprietor of the patent, from offering the process for use within the territorial scope of this act
and from the acts of: using, offering for sale, selling or importing for these purposes at least the product obtained directly by that process. 3. from offering, putting on the market, using, or either importing or stocking for these purposes the product obtained directly by a process which is the subject-matter of the invention.

§ 10 PatG (1981) = Art. 30 CPC (1975) = Art. 26 CPC (1989)

(1) By the grant of a patent all third parties not having the consent of the proprietor of the patent shall be prohibited from supplying or offering to supply within the territorial scope of this act, a person other than the party entitled to exploit the invention with means, relating to an essential element of the invention for putting it into effect therein when the third party knows or it is obvious in the circumstances that these means are suitable and intended for putting the invention into effect.

(2) Paragraph (1) shall not apply when the means are staple commercial products except when the third party induces the person supplied to commit acts prohibited by § 9 second sentence.

(3) Persons performing the acts referred to in § 11 No. 1 - 3 shall not be considered to be parties entitled to exploit the invention within the meaning of paragraph 1.

2. Direct patent infringement is, in German law same as in Art. 28 TRIPS, making, using, offering, selling (putting on the market), importing and, in addition, stocking for commercial purposes. § 10 of the German Patent Act, corresponding to Art. 26 CPC, adds indirect or contributory patent infringement to the protection.

All acts must be committed in Germany.

3. a) Making is, in case of a protected product, not restricted to the production process mentioned in the patent or to the indicated use unless the indication of use would amount to a structural limitation.

Making of parts is prohibited if these part lack only trivial accessories or merely the very last act of assembling the product in domestic territory.

Mere preparatory acts, however, are permitted. To "have made" is the same as "making" if the person who causes the making controls it.

Repair is not permitted use if such repair extends the technical lifetime of the product thereby amounting to new making. Modification is infringement if the modified embodiment is again within the scope of the patent. Both, modification and repair must affect protected parts in order to infringe (not definitely decided in German law).

b) Use of a complex product embodying infringing parts is prohibited if the infringing parts are of technical importance for the complex product. Prohibition of use may, from case to case, be excessive so that the patentee may only be entitled to an indemnification (not yet decided).

A patent of use is already infringed by obvious confection for the protected use, for example through enclosed instructions for use leaflets.

c) Putting on the market in German law is somewhat more general than selling in Art. 28 TRIPS. Putting on the market comprises any transfer of the power of disposition within domestic territory. It includes leasing as well as import or export irrespective where the contracts leading to such transactions were concluded.

The product must be transferred into free commerce. Intercompany transactions are neither infringing nor exhausting. Also mere transit is no putting on the domestic market.

d) Offering is any public or individual offer to transfer the power of disposition including to sell and to lease. It does not matter whether the offered object already exists or is still to be produced. A mere display, e.g. at a scientific show, is not offering.

The act of offering need not itself exhibit the infringing features. It is sufficient if the offered object is in fact infringing.

Domestic offering for sale in a foreign country is allowed (disputed).

In case of a patent for a process, however, offering must be done for use in the domestic country. Such offer must identify the process sufficiently and not only contain a remote hint to the process.

Offering for the time after expiration of the patent is infringing (disputed).

e) Stocking is an additional infringing act under German law, but only so if stocking is done for commercial not private purposes.

4. § 9 No. 3 German Patent Act protects, in accordance with Art. 28 b) TRIPS and in line with Art. 64 (2) EPC, the products directly obtained by a protected process.

The process-product need not be novel but it must be produced not only treated by the process.

The product is directly obtained if it has received its final characteristics by the production process. Directness is lost through further chemical conversions, not so by mere finishing or confectioning.

It is a disputed question whether plants are still direct products of a genetic process for modifying the cells. It is also disputed whether later plant generations are still direct products of the original breeding process.

The product protection conferred by § 9 No. 3 German Patent Act is contrary to the protection conferred by a product patent, dependent on use of the process.

4a) In German law contributory patent infringement under § 10 German Patent Act (1981) , corresponding to Art. 30 CPC, offers an additional protection by prohibiting offer or sale of means for infringement even if purchasers buy them for private use. This prohibition may be excessive in case of ambivalent means which can be used as well non-infinging as infringing. Under former case law, in order not to contiributorila infringe, it sufficed, on a case by case basis, impose just a warning notice of the infringing use. New case law dealing with the problem of strict prohibition under § 10 German Patent Act (1981) is not yet existant.

5. Limitations of patent protection are set forth in § 11 German Patent Act following Art. 27 CPC.

a) Private use for private purposes is permitted only for non-commercial purposes. In this context it is an unsolved problem whether medical treatment, being for a therapeutical purpose, yet using a possibly granted process patent, is free or infringing.

b) Acts for experimental purposes are free including clinical tests even if they serve commercial purposes. The new case law allowing clinical tests is, however, overestimated. Clinical tests justify preventive injunctions against the commercial sale threatening to follow.

c) Extemporaneous preparation of medical prescriptions in pharmacies is free.

d) Furthermore, the effects of a patent are restricted by the doctrine of exhaustion. Under the principle of individuality patent rights are exhausted only with regard to the very object lawfully put into domestic or EC commerce. Exhausted are only the rights of using and of putting into commerce, but not the right of making, particularly not of new making by repair or modification.

e) A further limitation is the right based on prior inhouse use (§ 12 German Patent Act). This right of prior use is acquired by use or by arrangements to use in honest knowledge of the inventive concept before the priority date of the patent. The right of prior use is tied to the enterprise.

f) The effects of a younger patent are limited relative to an older utility model, the applicant of the older utility model having a positive right of use vis-à-vis the younger patent over and beyond the life time of the utility model.

II. Ability to sue

Patentee and exclusive licensee have standing to sue. It is possible for the patentee to assign claims for the past and the future to the licensee.

Under German Civil Law a license may be granted without any formality. Under German Antitrust Law, however, a license must be granted, almost always in writing (§§ 20, 34 Antitrust Act). The exclusive license may be registered in the patent register as a notice. Such registration is, however, not required for validity of the license.

III. Defendant

Activ employees and tolerating managers are personally liable.

1. Good faith is no protection aganist an injunction or against an action to render illegal enrichement in form of a reasonable royalty. A mangager must immediately give an undertaking with penalty to cease and desist if he wants to avail himself successfully of bona fide ignorance of infringement in his enterprise.

2. A prior dunning is no precondition for a court action. In special circumstances it protects against an unfavourable cost award.

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