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Patrick Oliver

Patent law reform strengthens Germany as a location for innovation; Europe needs to follow suit to enhance its competitiveness

Berlin, June 11th 2021- The Bundestag today adopted legislation to modernise German patent law. The changes are an important step towards creating a better balance between patent protection and innovation protection. European patent law needs to follow Germany’s lead.

 

"German patent law has finally arrived in the 21st century. We welcome the fact that the Bundestag has passed a balanced reform” said Ludwig von Reiche, chair of the German group within European trade group, IP2Innovate.

 

The reforms adopted during an overnight session of the Bundestag this morning will for the first time enable courts to apply the principle of proportionality in cases where injunctive relief would represent a disproportionate hardship to the alleged infringer or third parties as well as to substitute compensatory payments for injunctive relief, instead of courts automatically handing out injunctions.

 

"After consulting widely with science, industry and the judiciary, a change in the law is now being implemented that for the first time takes into account the complexity of modern products in the digital age,” says Mr von Reiche.

 

Products from a wide range of industries contain hundreds, sometimes even hundreds of thousands of patented technologies. Lawmakers recognized that the threat to block the sale of such a product due to a dispute over one or a few patents is often disproportionate.

 

We also welcome the German Parliament's diligent effort in the context of the new law to explicitly proscribe the practice of patent assertion entities (also known as patent trolls) who acquire patents purely for the purpose of extorting excessive settlements under the threat of an impending injunction.

 

The reform brings Germany’s patent code more into line with applicable EU law, and in particular with the Intellectual Property Rights Enforcement Directive, which calls for courts to apply the principle of proportionality to patent disputes.

 

Unfortunately, like Germany so far, many other EU countries also fail to respect the proportionality principle.

 

IP2Innovate and its members will keep a close eye on the implementation of the reforms and will continue to push for a modern and balanced patent system across Europe which respects the proportionality requirement.

 

IP2Innovate is an initiative of research-intensive companies and associations interested in a high level of patent protection, including German corporations such as Adidas, BMW, Daimler, Deutsche Telekom and SAP.

 

Dr Stephan Altmeyer, Deutsche Telekom, Vice President Patent Strategy and Defence: "It is particularly important that the third party interests to be taken into account are included in the law. Because patent attacks on the network infrastructure - with which we have been struggling for years - not only affect us as network operators, but even more those who urgently depend on the functioning of the Internet and telephony, such as hospitals, companies and public authorities."

 

Reinhold Diener, BMW Group, Head of Intellectual Property - Patents, Trademarks, Licences: "The modernised Patent Act offers companies that develop and manufacture innovative and highly complex products in Germany the opportunity to reduce a considerable locational disadvantage. The proportionality test in patent infringement proceedings is particularly important in this context."

 

Kevin Prey, SAP, Director, IP Policy and Chairman of IP2Innovate: "We appreciate the effort and diligence of legislators in drafting this important reform of patent law. The new law provides judges with the necessary tools to prevent abuse of the patent system and takes into account today's reality of complex, multifunctional digital products and services such as cloud computing. With the consistent application of the proportionality principle, judges can ensure a fair balance in patent disputes. “

 

"Christin Eisenschmid, Intel Germany Managing Director and Vice President Government Markets & Trade:"As a supplier of key technologies for future markets such as connected and autonomous driving, Industry 4.0 and the broad Internet of Things, we see first-hand how unconditional injunctive relief under patent law can hinder the market implementation of new technologies, slow down innovation and harm our customers and consumers. We therefore welcome the modernisation of German patent law, which now explicitly allows for a balanced proportionality rule when granting injunctive relief."

 

Media Contact: 

Paul Meller 

paul.meller@interelgroup.com

+32 497 322 966

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Other press releases

Patrick Oliver

European Entrepreneurs CEA-PME and IP2Innovate launch a joint campaign to fight patent abuse by Patent Assertion Entities

BRUSSELS April 26th 2021 - European Entrepreneurs CEA-PME and IP2Innovate today launched a joint campaign to fight patent abuse by Patent Assertion Entities (PAEs), otherwise known as patent trolls.
IP2Innovate

IP2I welcomes the European Parliament's formal request, adopted today, calling on the Commission to investigate the practices of patent assertion entities in Europe.

Brussels, 11 November 2021 – The European Parliament has instructed the European Commission to investigate in-depth how PAEs, also known as non-practising entities, or more colloquially patent trolls, game the European patent system.
Patrick Oliver

Wide cross-section of industry urges the European Commission to take action to stop PAEs from gaming the patent system in Europe

Thirty-five companies and four industry groups representing over 150 companies from different industry sectors, have written to European Internal Market Commissioner Thierry Breton, urging him to take action to clamp down on Patent Assertion Entities (PAEs) – otherwise known as “patent trolls”. “The experience of our member companies indicates that Europe’s patent system is not working properly and is undermining Europe’s ability to compete globally in the next frontier of technologies,” said Patrick Oliver, Executive Director of IP2Innovate, one of the industry groups that signed the letter. “The European Commission needs to take steps to stop PAEs from gaming the patent system. We are urging Commissioner Breton to draft a set of guidelines that address imbalances in the patent system – in particular guidelines that support the application of a proportionality requirement in patent enforcement by judges around Europe, as required by EU law,” Mr Oliver added. Many European courts issue automatic injunctions upon a finding of a patent infringement, without considering a remedy that could be more proportionate. So for example, an unintentional infringement of just one patent among many others could result in a popular product being withdrawn from the market. PAEs don’t invent, build or sell anything. They just buy up patents to assert them against innovative companies, including SMEs, and extract high settlement fees not based on the value of the underlying invention but rather based on the damage that would result from the removal of the entire product from the market. “As litigation by PAEs has slowed in the US we have witnessed its rise in Europe,” Mr Oliver said, adding: “It’s not just big firms that are targeted – SMEs are also picked on by PAEs. Unjustified product withdrawals can sink a company. They also deprive the public of consumer choice and the benefits of innovation.” Clear enforcement guidelines would help ensure Member States apply EU law properly. They would also bring more balance to the patent system and help avoid disproportionate outcomes and abusive litigation practices, Mr Oliver said. “We stand ready to work with the Commissioner and his team on specific solutions to prevent PAEs from further exploiting the legal system to the detriment of Europe’s digital economy,” he said. Notes to editors: 1. The letter to Commissioner Breton and full list of signatories can be found here. 2. IP2Innovate (IP2I) is a coalition of small and large companies that create innovative products and services in Europe and collectively hold thousands of European patents, as well as European industry groups that collectively represent 65 companies. Our members include: Adidas, Amadeus, Atos / Bull, Daimler, Dell, Freebox, Google, Intel, Microsoft, Nvidia, Proximus, SAP, Spotify & Wiko. IP2I is concerned about a number of imbalances in Europe’s patent legal system that are being exploited to the detriment of innovation and growth in Europe. The exploitation of these imbalances is in particular shown by the rise of litigation related activity by Patent Assertion Entities (PAEs) in Europe. 3. European Commission’s IP Package of 29 November 2017: In its IP Package of 29 November 2017, the Commission acknowledged that there are differences in the way Member States apply certain provisions of the EU Directive on IPR enforcement (IPRED) (such as those on injunctions) across the Single Market, thereby limiting the effectiveness of the Directive. The Commission therefore undertook to “work with Member States' national experts and judges on further, more targeted guidelines, to give more detailed and practical guidance on specific IPRED issues, based on best practices experience” (here, p. 29) with a view to improving the system of judicial enforcement in the EU. Two years after the publication of the IP Package, the thirty-four companies and four associations signatories to the letter to Commissioner Breton call on the European Commission to expand its work with Member States, judges and stakeholders to publish targeted guidelines to support the homogenous and effective application of the proportionality principle to patents. 4. For further information, please contact: Patrick Oliver Executive Director, IP2Innovate Email: contact@ip2innovate.eu Mobile: +32-477-597065
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