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."
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