Has the CJEU re-opened the door for preliminary injunctions for patent infringement in Germany/Europe?
On April 28, 2022, the CJEU (docket no. C-44/21) cleared the way for civil courts in Europe to issue a preliminary injunction in patent infringement cases even if the validity of the patent in suit has not yet been confirmed in first instance opposition or nullity proceedings. The CJEU responded to a referral from the 21st Chamber of the Regional Court of Munich (Presiding Judge Pichlmaier) and in its decision overturned the preliminary injunction practice of the Higher Regional Court Munich (and potentially other Higher Regional Courts) in Germany to the extent that a confirmation of the validity of a patent in first instance opposition or nullity proceedings can no longer be required as a general prerequisite for the issuance of a preliminary injunction. The decision is authoritative not only for Germany, but for the entire EU and may further influence the handling of preliminary injunctions in all European member states, and under the upcoming Unified Patent Court (UPC).
Background of the case
The underlying case of the CJEU’s recent ruling is a lawsuit filed by Phoenix Contact against competitor Harting over EP 2 823 536 before the 21st Chamber (Presiding Judge Pichlmaier) of the Regional Court of Munich. The patent in suit concerning a “plug connector comprising a protective conductor bridge“ was granted on November 26, 2020. On December 14, 2020, Phoenix Contact applied for a preliminary injunction before the referring Regional Court of Munich (docket no. 21 O 16782/20). The notice of the grant of the patent was published in the European Patent Bulletin on December 23, 2020. On January 15, 2021, Harting filed an opposition against the grant of the patent with the European Patent Office (EPO).
The patent proprietor could not possibly have gone through respective first instance invalidity proceedings because the patent was only recently granted. The Regional Court judges were convinced that the patent was infringed and valid, but did not believe to be in a position to grant a preliminary injunction, given the established case law at their appellate court. The Higher Regional Court of Munich held that the legal validity of the patent in suit is only sufficiently secured as a basis for a preliminary injunction once it was confirmed in first instance opposition or nullity proceedings.
Since the referring Regional Court of Munich considered the above case law to be incompatible with Article 9 (1) of Directive 2004/48/EC, it decided to stay the proceedings and by court order of January 19, 2021 referred the case to the CJEU pursuant to Art. 267 Treaty of the Functioning of the European Union (TFEU). The Court posed the question
“whether the practice of a second instance Higher Regional Court to require a confirmation of validity in first instance opposition or nullity proceedings before the issuance of a preliminary injunction as a matter of principle is compatible with Article 9 of the Directive 2004/84/EC.”
According to the view of the referring court, the granting of a preliminary injunction should be the principle, and not the exception (para 14 et. seqq.).
The CJEU’s ruling
The CJEU answered the question to the negative, thus finding the previous preliminary injunction practice of (at least) the Higher Regional Court of Munich in Germany incompatible with the Directive. Hence, a confirmation of the legal status of a patent in first instance opposition or nullity proceedings must not be required as a strict rule for the issuance of a preliminary injunction (para 54) if the competent court is convinced of the patent’s validity (para 54).
In its reasoning the CJEU clarifies that under Article 9 (1) of Directive 2004/48/EC in conjunction with recitals 10 and 22 in the preamble, the Member states are required to ensure that the competent courts have the possibility of ordering interim measures, at the request of the applicant, against an alleged infringer after the examination of the particular circumstances of the case that enable the infringement to be brought to an end without delay and without need to await a decision on the merits (para 30-32).
Case law allowing national courts to only grant interim measures in case the patent in suit has survived first instance invalidity proceedings even if the competent court considers the patent at issue valid and infringed establishes a requirement which deprives Article 9 (1) of Directive 2004/84/EC of any practical effectiveness, since it precludes the national court from ordering an interim measure to immediately end the infringement of the patent in suit (para 34, 40). According to the CJEU, European patents enjoy a presumption of validity from the date of publication of their grant and, thus, enjoy in full the protection afforded, inter alia, by Directive 2007/48/EC (para 41).
In that regard, the CJEU further notes that EU law provides for legal instruments such as an appropriate bond or an equivalent security which can be ordered by national courts and make it possible to reduce the overall risk that the defendant will suffer harm as a result of interim measures and thus to protect the defendant (para 44-46). Moreover, pursuant to Article 9 (7) of Directive 2004/84/EC it is possible to order the applicant to pay appropriate compensation for damages caused by unjustified interim measures (para 47). The CJEU considers those legal instruments to constitute sufficient safeguards for the adverse interests of a defendant as a counterpart to the rapid and effective provisional measures (para 48).
Since the German legislation as such does not contain any provision under which the adoption of an interim measure prohibiting patent infringement is subject to a judicial decision in proceedings relating to the validity of the patent at issue, it is therefore for the referring court to ensure the full effectiveness of Article 9 (1) of Directive 2004/84/EC by overturning – if necessary – any national case law which is incompatible with the objectives of that Directive (para 51-53).
A look behind the scenes: Previous validity requirements
To better understand the potential impact of the CJEU’s ruling on the German preliminary injunction practice, it might be helpful to take a look at the actual requirements established by the German Higher Regional Courts most frequently concerned with patent matters for obtaining a preliminary injunction in terms of validity.
Preliminary injunctions are generally available in patent matters, but will usually only be granted if, in addition to the urgency in terms of time, both infringement and validity of the patent in suit can be found clearly in favor of the applicant, so that a revision of the decision in main proceedings is not be expected (cf. Higher Regional Court Düsseldorf, judgment of September 26, 2019, “Wärmedämmelement II”, docket no. 2 U 23/10, para. 31; Higher Regional Court Munich, judgment of December 12, 2019, “Elektrische Anschlussklemme”, docket no. 6 U 4009/19, para 61).
General rule: Patent must have survived first instance invalidity proceedings
Prior to the CJEU’s decision, as a general rule the relevant Higher Regional Courts of Düsseldorf, Karlsruhe and Munich1 all agreed that the validity of the patent in suit can only be considered sufficiently secured if it was maintained in first instance opposition or nullity proceedings. The participation of the alleged infringer in those invalidity proceedings is not a requirement.
Reference is often made to the judgments of the Higher Regional Court of Düsseldorf “Olanzapin” (judgment of May 29, 2008, docket no. 2 W 47/07) and “Harnkathetherset“ (judgment of April 29, 2010, docket no. 2 U 126/09) and the judgment of the Higher Regional Court of Karlsruhe “Ausrüstungssatz” (judgment of September 23, 2015, docket no. 6 U 52/15, para 41). In 2019, this established case law was also adopted by the Higher Regional Court of Munich in its judgment “Elektrische Anschlussklemme”2 (judgment of December 12, 2019, docket no. 6 U 4009/19).
Exhaustive or non-exhaustive list of exceptions
All three Higher Regional Courts apply a number of established exceptions to the general rule which can be summarized in two groups (cf. Kühnen, Patent Law, 14th ed. 2022, Chapter G para. 58 et. seqq.).
- Firstly, the issuance of a preliminary injunction is possible even without having maintained the patent in first instance invalidity proceedings if the legal status of the patent can be considered to be sufficiently secured for other reasons (e.g. where the defendant’s objections against the patent have already been considered during the examination procedure, or where a parallel patent has proven to be valid in foreign proceedings).
- Secondly, an exception is also considered if it is unreasonable to expect the applicant to wait for the outcome of the invalidity proceedings or to file such action due to special circumstances (e.g. in cases relating to generic drug manufacturers or in cases in which the expiry of the patent is imminent).
Importantly, the Higher Regional Courts Düsseldorf and Karlsruhe – at least formally – always made it clear that the above listed case groups are only particular examples for exceptions, whereas the Higher Regional Court Munich in its (now overturned) practice tended to consider the above case groups to be exhaustive.
Immediate effects on Germany and outlook on the UPC
Preliminary injunction proceedings open up a way for the patent proprietor to obtain an immediately enforceable injunction even more quickly than by filing a complaint on the merits. Consequently, the German injunction gap (i.e. the time period between the issuance of a preliminary injunction by the infringement court and a court decision on the validity of the patent) is even bigger than in case of an injunction issued in main proceedings.
Furthermore, there is less time available in preliminary injunction proceedings to research and discuss the prior art for the patent at issue. A procedural stay is not available due to the character of summary proceedings, thus the risk of damages to the alleged infringer through a preliminary injunction based on a patent that may later prove not to be legally valid tends to be even greater than in main proceedings. Incidentally, the alleged infringer has no opportunity to initiate comparable summary proceedings with regard to the invalidation of the patent.
Further, it must be noted that over the past couple of years we have seen a high invalidation rate both with the EPO and the German Federal Patent Court, where only in a clear minority of cases the patent survived the opposition or nullity action as granted3 . In light of that, it is a legitimate question whether the presumption of validity of an examined and granted patent holds up in reality. Against this background, there are certainly valid reasons for the more restrictive approach taken by the Higher Regional Courts in Germany.
Increased likelihood of obtaining preliminary injunctions in Germany?
It becomes apparent from the CJEU’s ruling that the lack of completion of first instance invalidity proceedings can now no longer be considered a “safe harbor” with regard to the assessment of a preliminary injunction risk in Germany. Instead, one will have to expect the national courts to make their own prognosis on validity and decide about the grant of preliminary injunctions based on a summary assessment of the specific circumstances of each case.
This might, notwithstanding recent personal changes at the Regional Court Munich4 , lead to more plaintiffs choosing the Munich venue when seeking a preliminary injunction for patent infringement in Germany. Even in cases where highly complex technology patents are litigated (and where it was so far almost impossible to succeed in preliminary injunction proceedings), it may well be that preliminary injunctions in Germany are back on the table. In terms of methodology, it can be expected that the prognosis of the Munich Regional Courts will be based on a more flexible standard of the specific case at issue where with respect to the validity of the patent in suit the grant of the preliminary injunction is the rule, and not the exception. This prognosis might be made on a summary assessment of the prior art submitted by the defendant (similar to the stay decision in the main proceedings).
Even if the CJEU’s decision leads to a more patentee-friendly approach of the Munich courts with respect to the validity requirement, other requirements such as the necessary “urgency” remain unaffected. The patent proprietor must still file for a preliminary injunction within just a few weeks as of obtaining knowledge of the infringement. In particular in complex cases where initial demands are accompanied by claim charts and longer pre-litigation correspondence, the motion for a preliminary injunction will often fail due to a lack of urgency.
When it comes to other venues in Germany, things are even less clear. It cannot be assumed that the CJEU’s ruling will result in any immediate change of case law with regard to the Düsseldorf and Karlsruhe approach. As outlined above, in contrast to the Munich appellate court’s approach, the Düsseldorf and Karlsruhe Higher Regional Courts both already emphasized previously that the exceptions in which a preliminary injunction can still be issued despite the absence of successfully survived first instance opposition or nullity proceedings are not exhaustive. In light of that, arguably the CJEU’s ruling is not (directly) applicable, as these courts never required the confirmation of validity “as a matter of principle”. They may see their previous practices as being sufficiently flexible in view of the various exceptions (see above) applied and hence no need for any (major) changes.
Practical implications for Europe/the UPC
The CJEU’s recent ruling will also influence the landscape for preliminary injunctions in other EU member states and for the upcoming UPC. Under the planned UPC system – which is expected to start most likely in early 2023 – it will become even easier for the competent divisions hearing infringement claims to make a reliable prediction on the validity of the patent in suit. While the UPC foresees the possibility of bifurcation, it is widely expected that most divisions will in most cases where the defendant brings a validity challenge make use of the option to combine the proceedings and also decide on the validity of the patent in suit, as has long been the practice in other European jurisdictions.
1 Only the Hamburg Courts seemed to apply a more flexible approach according to which the Court must be able to assume with a high degree of probability that the objections of the preliminary injunction defendant against the validity of the patent will prove to be without merit and that the pending opposition (or nullity action) will be unsuccessful, so that a preliminary injunction can issue (judgment of April 19, 2001, “Spannbacke”, docket no. 3 U 231/00).
2 The Higher Regional Court Munich insofar reversed its long-standing previous case law according to which a more flexible standard was applied (cf. Higher Regional Court Munich, judgment of July 26, 2012, docket no. 6 U 1260/12 for further details).
3 In the period 2018-2020, nullity actions before the German Federal Patent Court ended only in about 20% of the cases with the patent being upheld as granted. In about 37.5% of the cases the patent was invalidated in its entirety, and in about 42.5% the patent was partially invalidated.
4 Presiding Judge Pichlmaier meanwhile moved from the 21st Chamber to the antitrust senate at the Munich Regional Court.