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Sunday, 2 July 2017

German Supreme Court holds that extra-territorial delivery can result in patent infringement

The German Supreme Court stretching out
to catch extra-territorial patent infringement
(in some circumstances...)
About a month ago, AmeriKat friend Jérôme Kommer (Quinn Emanuel) authored this guest post on infringement from products (data) obtained form a patented process and the problem when the patented process occurs outside the jurisdiction.  In that post, the AmeriKat mentioned a case (X ZR 120/15) recently heard before the German Supreme Court about the liability for patent infringement in Germany if the infringer "only' delivers infringing products to customers outside Germany which might end up in Germany.  

Last  week the written decision was finally published online (copy here).  The main finding is that the Supreme Court has held that the foreign supplier can be liable for patent infringement of its customers in Germany even if the supplier itself only delivers outside of Germany.  The supplier is liable if there are specific enough circumstances that make it appear obvious that its customers will deliver its products to Germany and offer them there.

Not speaking German, the AmeriKat is relying on Dr Felix Trumpke (Quinn Emanuel) to summarize last week's groundbreaking findings.  Look out for this analysis this week.

6 comments:

Claus Beckmann said...

Is the IPKat falling back into the habit of calling the Bundesgerichtshof Germany's "Supreme Court"? -- A discussion about this (admittedly somewhat marginal) point was had here a while ago. Since then, the more appropriate translation "Federal Court of Justice" (used by the court itself (www.bundesgerichtshof.de/EN/Home/home_node.html) and, e.g., the ECJ) was, as far as I can see, used here.

Well, the Bundesgerichtshof is Germany's highest civil (and criminal) court, but is not "supreme" since there are four other courts of the same rank and the Federal Constitutional Court above it. (But perhaps one has to be a (German) patent attorney to find such terminology issue worth commenting on...)

Anonymous said...

Very confusing reporting... German Federal Court of Justice? Bundesgerichtshof? Or the actual "Supreme Court" I.e, German Federal Consitutual Court (Bundesverfassungsgericht)?

Christopher Weber said...

Some if it is basically an old hat. If the foreign supplier knows that at least some of the products will end up in Germany, we have infringement in Germany. If you then think further about this, it becomes clear that the foreign company can arguably also be subject to a claim for recall. I remember an old case on this pertaining to car seats.

Jerome Kommer said...

Two comments:

I prefer the translation "Supreme Court" because that makes it easier to understand what the Bundesgerichtshof's function is in the German court system for non-Germans (i.e. the apex of the civil and criminal court system). The Federal Constitutional Court is really something different, limited to constitutional law issues.

Second, this is the first case in which the foreign supplier did not have positive knowledge that his products would end up in Germany (both in the decision "Funkuhr" and "Audiosignalcodierung", the defendants had at least knowledge of their products being destined for Germany). So the main question addressed in the judgment really is how far does liability for patent infringement in Germany extend to extra-territorial acts (here: deliveries outside of Germany to third parties situated outside Germany).

The recall issue is subsidiary and has been handled this way by the lower courts for a while.

Anonymous said...

The world's gone (even) mad(der)! If this is followed to its logical conclusion, any act of supply (of goods patented in Germany) anywhere will infringe a German patent.
For the patentee, why bother with getting any other patent? Just get it granted in DE and sue everyone everywhere.

Claus Beckmann said...

Jerome, I would not agree that the term Supreme Court (without further explanation or qualification) "makes it easier to understand what the Bundesgerichtshof's function is in the German court system for non-Germans (i.e. the apex of the civil and criminal court system)." -- I mean, if I called Poseidon the Supreme ancient Greek deity, would that help a non-ancient Greek to understand that Poseidon was really only the apex of the sub-system of maritime deities and demi-gods?

I think the term Supreme Court for the German Bundesgerichtshof is confusing rather than helpful. I would suggest that, when writing in English about the German Bundesgerichtshof and when readers may not know already what that court is, it would be more helpful to use the "official" translation (Federal Court of Justice) and add a parenthesis such as "Germany's highest court on patent law matters". -- By the way, the Wikipedia article on "Supreme Court" states: "In Germany, there is no de jure single supreme court."

But yes, perhaps I should really be spending my time on more important causes than eradicating that mistranslation...

So, on the central issue of this decision, perhaps it helps to provide the following English translation (by me) of the key passage (point II.3.c.bb of the reasons):

"However, contrary to the view of the lower court, a supplier's obligation to protect [the interests of the patentee] can exist not only if the supplier knows that the purchaser delivers or offers the goods to/in Germany.

On the contrary, the supplier is obliged to check the facts already if there are concrete indications which make such [infringing] actions appear to be likely.

The mere abstract possibility that the purchaser could deliver or offer the goods to/in Germany is not enough, tough. Since, in principle, the supplier is not obliged to check or monitor the behavior of his customers, he can normally not be expected to carry out a check simply because a patent-relevant use appears possible, for example because the customer has business relations within Germany or because the customer has already delivered or offered similar products to/in Germany.

Against this background, concrete indications for delivery to Germany may, in practice, often only be assumed to exist when the supplier has been informed of an actual or impending delivery. However, depending on the circumstances of the individual case, sufficiently concrete indications may be present in other circumstances, for example because the quantity of goods ordered is so great that it could hardly be sold on patent-free markets alone or because the purchaser's behavior correlates conspicuously with a perceptible and potentially infringing activity of the purchaser on the German market.

If such concrete indications have become apparent, the supplier shall no longer be able to trust that his customer will refrain from infringing acts. On the contrary, he then has reason to ask the customer about deliveries and offers to the German market and, as a precaution, to point out the possibility of a patent infringement. If a plausible response is not made to such an inquiry, the supplier must seriously consider the possibility of participating in a patent infringement, albeit without positive knowledge. If, in this situation, his deliveries are continued, he violates a duty to act which serves the protection of the foreign patent, even if, subjectively, he assumes a legally compliant behavior of the purchaser."

That sounds fair to me (and may help Anonymous @2017-07-04-1637BST to better understand what the decision really says and why it need not be taken as a sign of [further] world madness ;-)

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