1 Standard Essential Patent Litigation

Munich Local Court, Judgment of 24 June 2021, 7036/21 - Anti-Anti-Suit Injunction

In the judgment, the Munich Local Court affirmed its unilateral anti-anti-suit injunction (AASI) of January 11, 2021 and provided guidance for the risk of first break of so-called request for an anti-suit injunction (ASI)when it is believed to exist. In order to grant AASI in this case, the court had to determine such risks, as defendants had not obtained or even applied for ASI at the court.

For the background of this case, the two parties negotiated the SEP portfolio license through video conference in December 2020 but did not reach an agreement. In the video conference, the implementer (that is, the appellee in this case) mentioned to the patentee (that is, the appellant in this case) that in different cases and opponents, the implementer had obtained the anti-enforcement from the Supreme People's Court of the People's Republic of China Order (AEI) prohibiting adversaries from enforcing patent infringement judgments granted by the Düsseldorf Local Court in patent infringement proceedings between the implementer and the other adversaries mentioned above. Though the appellant have proposed corresponding requests, the implementer/appellee never issued a statement not to apply for ASI/AEI.

Thus, in January 2021, the plaintiff simultaneously filed a patent infringement litigation in the Munich Local Court and requested permission to AASI against the appellee.

The Munich Local Court held that in this case, in addition to others, the above-mentioned reports of the appellee's previous conduct in various cases constituted a threat to the appellee's application for ASI or AEI. Therefore, in accordance with the case law of the Munich Court, such a threat is enough to identify the necessary risk of a first-time breach in order to grant AASI, which is also applicable for the case where the appellee does not provide or request a statement of no request to apply for ASI or AEI.

2 Claim Construction

a. German Federal Supreme Court, judgment of March 2, 2021, XZR21/19-quickshift crankshaft

In this ajudication, the German Federal Supreme Court established a new type of case, that is, it is allowed to apply for a narrower protection scope than the literal meaning of the patent claims based on the patent specification.

The court explained that if, in the patent specification, known prior art is deemed to be disadvantageous, and if a feature in a patent claim is highlighted in the specification to overcome this disadvantage, then the feature should not be explained as being present in the prior art which should be overcome in case of doubt.

b. Higher District Court of Düsseldorf, Judgment of April 8, 2021, 1-2U41/20-Infusion Set

Similar to the above-mentioned ajudication of Federal Supreme Court, and without reference to the above decision, the Higher District Courts found affirmed in the ajudication:

Embodiments within the literal meaning of the claims must be excluded from the scope of patent protection, and if these embodiments do not have novelty compared with the prior art cited in the patent application, they are also applicable for this condition regardless of the technical function or usefulness of the embodiments. In other words: apart from a functionally oriented explanation, the term of a patent document cannot be understood as including embodiments (within the protection scope) that are not novel in comparison with the prior art discussed in the patent itself.

3 Determination of the litigation amount in litigation procedure of invalidation

German Federal Supreme Court, Order of May 11, 2021, XZR 23/21 - litigation amount in litigation procedure of invalidation III

In this case, the German Invalidation Court (Federal Patent Court) determined the litigation amount (determining statutory attorney fees and court fees) as the maximum amount permitted by German law (30 million euros). The invalidation court argued that the amount was appropriate as the controversial patents were standard essential patents.

In the appeal, the patent owner requested the Federal Supreme Court to set the litigation amount at 1,875,000 euros pursuant to the general long-standing case law on the determination of litigation value in invalidation proceedings. In accordance with the Case Law, the amount for action in an invalidation proceeding is usually appropriate to be defined as an additional 25% on the base of parallel tort action cases. Currently, there are 3 pending parallel infringement lawsuits based on the disputed patents with a lawsuit amount of EUR 500,000 each according to the judgment of the Court of Infringement Litigation.

The Supreme Court disagreed with the Invalidation Court and explained that just the  fact that a patent is a standard essential patent does not justify an increase in litigation sums based on rules established in the long-term case law. In most cases, entry into the related market is supervised and restrained not only by one SEP, but by the entire patent portfolio consisting of numerous (standard-essential) patents. Therefore, in this case, losing an SEP will not significantly change the market standing of the patent portfolio, so it is unreasonable to increase the litigation amount of the SEP.

In addition, a single patent for a standard essential combination may hinder market entry but does not cause various evaluations. The Supreme Court seemed to argue here that it has nothing to do with the amount of patent value, but is about the value of the enforceable infringement judgment. Contrarily, such SEPs asserted in infringement suits will be regarded as "agents" for many other SEPs. Therefore, economically, it is usually inappropriate to attach the influence of an injunction to a separate patent.

Therefore, at the request of the patent owner, the Federal Supreme Court determined the lawsuit amount at a much lower 1,875,000 euros.

It’s a good news for SEP holders: the ruling should be able to reduce the risk of SEP-based litigation costs.

4 Declaration of Priority

German Federal Supreme Court, judgment of 20 May 2021, XZR62/19 - Floor coverings

If the subject matter of the subsequent application can only be deduced from the content of the earlier application based on the discretionary considerations of those skilled in the art, then its priority claim is invalid. Whether it is obvious or not to consider like this does not matter.

5 Cross-border infringement / Territorial limits of German patents / German part of European patents

German Federal Supreme Court, Judgment of June 8, 2021, XZR47/19 - Ultrasonic Transducer

If a manufacturer located abroad supplies products to clients located abroad, though the specific indications/situations indicated that the customer will supply the delivered products or put them on the German market, despite the existence of patent protection in Germany, it is also applicable for other relevant clients based on the requests in German patent Claims against the manufacturer’s injunctive relief, information disclosure and compensation for damages, and as long as it can be demonstrated that the delivery to one of the above-mentioned customers is in the same illegal characteristic circumstances, it suits to other clients as well.

From VJP Germany Patent

November 2021