It’s good to litigate a patent or two

LSIPR talks to Thomas Friede and Johannes Heselberger about why Germany fits this mould.

LSIPR: What are the advantages of litigating a life sciences patent in Germany?

Thomas Friede: I believe that the litigation procedure in Germany is an advantage. It is a very streamlined procedure, which is basically an exchange of written briefs—usually two rounds— before an oral hearing. The oral hearing is very condensed and focused. Even in a large case, a hearing would only be four or five hours long. If that is compared to a full trial in the US or the UK, it’s a fraction of the time and therefore it costs less.

Johannes Heselberger: Some would say that is a disadvantage because you cannot go into too much detail, but experience shows that questions about the interpretation of the patent and what the facts are can be handled in a couple of hours. They don’t get much more illuminated after a week of discussion. That often comes down to philosophy, semantics and so forth, which don’t give you real additional substance for argumentation in a case.

TF: Related to that is the speed of proceedings. In quick courts, like Munich and Mannheim, you can have a main hearing and then a decision within six to eight months. Düsseldorf, traditionally the most-frequented litigation venue, has become slower simply because of the number of cases it hears. Right now, big cases can sometimes take well over one year before they are decided by the first instance.

JH: The overall litigation costs in Germany are significantly lower than in the UK, for example. As a rough guide, one may assume that the costs for an average first instance case in Germany may be about a third to a fifth of the costs of the corresponding UK case, and may be less than a 10th of the costs of a full-blown litigation case in the US. This is also a reason why Germany may be attractive for large US companies. They can use Germany as a test venue before starting a corresponding litigation in the US.

TF: Discovery is only available in Germany in a very limited sense, so that could be considered a disadvantage. Medical devices can be analysed, so you don’t need discovery. It’s the same for pharmaceuticals. If the patent relates to a manufacturing process, then it may become more difficult. For these cases, information from foreign discovery procedures may be helpful, if available (they may be shielded by a protective order).

Party experts do not have as much room as they do in the UK and the US. This is not a severe disadvantage, but certainly in some instances, a party expert might be able to explain things a bit more tangibly and credibly to a court than an attorney can.

JH: But it’s often surprising how judges, particularly those in Düsseldorf, have a technical understanding. Even in biotech, when a generally good understanding is not enough to fully grasp a patent in a case, judges can find their way through the cases in a profound and technically accurate manner.

LSIPR: What is a split court system, and what are the advantages and pitfalls of such a system?

JH: In Germany, infringement and validity proceedings are heard separately. Validity proceedings focus on the legitimacy of the patent, allowing the plaintiff to directly challenge the grounds for it being granted in the first place.

By separating the two types of proceedings, judges can approach the fundamentally different ways of thinking separately. Interpreting the patent and then looking at the accused embodiment that infringes, and analysing the prior art and then trying to find out whether the subject of the patent is novel and inventive, are different ways of thinking, so separating these tasks is generally a good idea.

TF: The attorneys in both sets of proceedings are usually the same, which provides consistency for clients. In an infringement case, the attorneyat- law, the litigator, presents the case but is supported by a patent attorney, and this patent attorney is then the person who handles the validity case. All of the knowledge is always there and it means that the points of view are generally harmonised. The old fear was that you could speak with a split tongue—in theory that exists, but in reality it isn’t an issue.

JH: An infringement case may proceed and be decided before the validity case is even heard. This is an advantage for the plaintiff because, if the validity attack is not convincing as such, the case on infringement can simply be decided before validity is heard and decided. The same can be a disadvantage for a defendant, very clearly, but that’s a particularity of the system. This can be praised or cursed depending on what side you are on.

LSIPR: When should a life sciences company bring validity proceedings before the Federal Patent Court?

TF: Validity proceedings should be brought whenever possible, as long as there is no opposition pending. A plaintiff should always bring a validity complaint because there is always a chance that the Federal Patent Court will, for example, find the subject matter of a patent not inventive, not novel, or perhaps it cannot be carried out without undue burden, and so forth.

The Federal Patent Court is not bound by a previous European Patent Office (EPO) decision and can therefore invalidate a patent which was maintained by the EPO on opposition.

This can even happen on the basis of the same prior art documents. Although there is a trend of harmonising German case law with EPO case law, there are still differences. For example, an invention related to a second medical use based on a different dosage regime which is considered to be patentable by the EPO is invalid under German case law. Unless the validity of a patent is set in stone, then our advice is to always bring a complaint so the validity of the patent can be refuted.

LSIPR: Have there been any changes to Federal Patent Court proceedings that life sciences companies need to be aware of?

TF: There was a major change, effective from October 1, 2009, that affects all companies involved in litigation in German courts. A de novo trial on appeal has been changed to a limited review on appeal. That is limited in the sense that new facts, new claim versions and new requests cannot be submitted at will. It will become important to provide a full pleading of the case, possibly including party experts in the first instance.

LSIPR: How do validity proceedings work and how can they affect parallel infringement actions?

TF: The validity proceedings are started by filing a invalidity action with the Federal Patent Court in Munich. If the patentee defends the patent, the Federal Patent Court issues a preliminary opinion similar to the EPO in opposition proceedings. The patent court will take no longer than a day to make a decision on the validity. The losing party can then file an appeal to the Federal Supreme Court. In principle, the validity and infringement proceedings have no connection.

The connection is made by the possibility of the defendant in an infringement case requesting a stay of the procedure until validity is decided. The defendant’s argument would be that the court can either wait until infringement is found or wait until the validity of the patent has been confirmed, otherwise one will negate the other.

The infringement court’s standard for granting a stay request is an ‘overwhelming likelihood’ that the patent will be revoked or declared invalid in the validity proceedings. That standard is pretty high and is not easy for the defendant to show.

LSIPR: What are utility models and how useful are they as tools in life sciences patent litigation?

JH: A German utility model gives the owner the same rights as a patent does, in principle. They protect product claims rather than process or method claims. A utility model also has a shorter lifespan than a patent—it lasts for a maximum of 10 years instead of 20. Utility models are not available for gene-related inventions.

They may be important litigation tools for pharmaceuticals, diagnostics or medical devices. Even second medical uses can be protected by utility models. A major advantage of a utility model is the grace period. When an inventor has a published invention for no longer than six months, a utility model can still be granted while patent protection in Europe is excluded.

TF: Utility models are useful tools to use in litigation because they allow the plaintiff to start proceedings early. The typical situation in which to use them is when a patent, or soon-to-be granted patent application, has an independent, broad product claim that allows an invention to be developed into several individual product lines.

Each utility model can be tailored to each specific development, and even to specific infringing embodiments. Litigation could then be brought against the infringing embodiments before the patent has even been granted.

Dr Thomas Friede is a partner at Bardehle Pagenberg. He can be contacted at: thomas.friede@bardehle.de

Johannes Heselberger is a partner at Bardehle Pagenberg. He can be contacted at: heselberger@bardehle.de