Over the years, the Supreme Court of the United States decided a number of patent cases, which is reflective of how important some controversies in that field of law are. Critics of the Federal Circuit would say the Supreme Court just had to step in all the time to restore sanity.
There may be a trend now toward ever more top-court patent rulings in the European Union, too. While Nokia is stalling and still delaying the Dusseldorf Regional Court's referral of component-level standard-essential patent (SEP) licensing questions to the Court of Justice of the European Union (CJEU), the 21st Civil Chamber of the Munich I Regional Court (Presiding Judge: Tobias Pichlmaier) announced last week that it would like the top EU court to answer the following question (I've taken some liberties in translating it):
"Is it a correct application of Art. 9 para. 1 of Directive 2004/48/EC that higher regional courts, whose decisions cannot be appealed further in preliminary injunction proceedings, generally deny injunctive relief over patent infringement if the patent-in-suit has not survived an opposition or nullity proceeding in the first instance?"
The cited directive is the EU's Intellectual Property Rights Enforcement Directive (IPRED).
I sharply disagree in policy terms (too many junk patents out there to justify preliminary injunctions unless a patent has been battle-tested). If the CJEU lowered the hurdle for patent PIs, that would have terrible repercussions all over Europe.
Therefore, I call on large companies and industry associations interested in balanced patent policy to get in touch with defendant Harting Technology Group (found the name in a Juve Patent article) and push back really hard. In my view, one cannot prevent the referral from happening; just like Nokia, one could try to delay it. But when it happens, it will be key to ensure that the governments of as many EU member states as possible understand the huge patent quality problem that justifies the stance of the Dusseldorf, Karlsruhe (for Mannheim) and Munich appeals courts on patent PIs.
Despite my disagreement, I want to be fair. It's no secret that the patentee-friendly leanings of both patent-specialized divisions of the Munich court are too extreme for my taste. And I criticized this particular division's covidiocies last year. But that doesn't mean they're not good at what they do, even if what they do is bad for the economy.
They phrased their question clearly and concisely, while the Dusseldorf court's component-level licensing questions are at least twice as long as they'd have to be.
Lower courts have the right to make those referrals to the CJEU, and in this particular case, the Munich court accurately notes that the higher regional courts' (regional appeals courts') decisions on PIs aren't reviewable. So if the Munich judges are concerned about a misapplication of EU law, this referral is the only option they have to fix what they, in their pro-patentee radicalism, consider to be a problem. I view the status quo as a pragmatic solution because otherwise you'd see PIs over patents in Germany all the time, and they'd give the prevailing patentees so much leverage that hardly any of those patents-in-suit would ever come to a validity judgment by the Federal Patent Court (or be reexamined by the European Patent Office in an opposition proceeding).
This is the relevant EU statute:
"1. Member States shall ensure that the judicial authorities may, at the request of the applicant:
(a) issue against the alleged infringer an interlocutory injunction intended to prevent any imminent infringement of an intellectual property right, or to forbid, on a provisional basis and subject, where appropriate, to a recurring penalty payment where provided for by national law, the continuation of the alleged infringements of that right, or to make such continuation subject to the lodging of guarantees intended to ensure the compensation of the rightholder; an interlocutory injunction may also be issued, under the same conditions, against an intermediary whose services are being used by a third party to infringe an intellectual property right; injunctions against intermediaries whose services are used by a third party to infringe a copyright or a related right are covered by Directive 2001/29/EC;
(b) order the seizure or delivery up of the goods suspected of infringing an intellectual property right so as to prevent their entry into or movement within the channels of commerce."
That statute doesn't say anything about the standard applied to a patent-in-suit. It's just a summary of what structural options exist to enjoin an infringer and prevent further infringement. But the Munich judges apparently hope that the CJEU may be concerned about those three German regional appeals courts restricting access to PIs to an extent that vitiates the statute in question.
The same directive also requires remedies to be proportionate (see this presentation by Cleary Gottlieb's Maurits Dolmans at a Brussels conference I organized in 2019). That is the most controversial part of the debate in the ongoing German patent reform process. On January 13, 2021, that patent reform bill was formally delivered to the Bundestag (Federal Parliament). The Munich court's CJEU referral obviously runs counter to the reform efforts. While automotive and other companies have been lobbying hard against the current regime of near-automatic permanent injunctions, the Munich court is now trying to leverage EU law in order to lower the bar for preliminary injunctions.
About a year ago I already warned some pro-reform forces against the risk that the German patent injunction mess might be even worse after the reform than before. That seemed counterintuitive, and it's possible that some thought I was exaggerating. By now, there's a clear and present danger of a further exacerbation of the German patent injunction situation:
Pro-reform forces made the mistake of not pushing hard and loud for a serious reform. They say they initially had to make very modest demands to get the ball rolling at all. I'm not denying that overreaching demands can be counterproductive--but if you ask lawmakers for too little, and not only at the outset of a process but even at later stages, you're simply not going to get anything useful and helpful out of it.
By contrast, those opposing reform make it sound like the sky was falling down when statutory amendments are being discussed that won't actually change the situation in more than maybe one or two cases per year. They fiercely oppose anything that maybe a future generation of judges could interpret differently, even though they have pretty much nothing to fear from the judges currently deciding German patent cases.
Pro-reform forces have lost one lobbying battle after the other, most recently with respect to the Federal Council's advisory opinion. When are they going to get tired of losing? Why don't they realize they simply lack what it takes to win? They are just so misguided.
The proposed reform won't impact SEP cases in the slightest, not even in the opinion of Presiding Judge Dr. Thomas Kuehnen (Dusseldorf Higher Regional Court). But the Federal Court of Justice has meanwhile issued its Sisvel v. Haier decision, and the way the lower courts apply it comes down to saying that there's no such thing anymore as a willing licensee, as Professor Christian Donle explained in my recent podcast.
Now there is that real risk of the top EU court agreeing with the Munich court that the standard for preliminary patent injunctions should be lower than the one applied by the three regional appeals courts that hear the vast majority of all German patent infringement appeals (Dusseldorf, Karlsruhe, Munich).
What could possibly go wrong?
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