Germany: Changes to patent law would cut R&D spending, jobs, innovation

“Don’t make Germany a safe haven for patent infringers” warns pro-innovation industry group

[Berlin, Wednesday, 23 September] The Brussels-based industry group IP Europe is sounding the alarm that proposed changes to the German Patent Act would have grave consequences for German innovation and investments in R&D.

In comments submitted to the Federal Ministry of Justice and Consumer Protection (BMJV), IP Europe expresses particular concern about limiting access to injunctive relief, which is a court order to stop patent infringement. For IP Europe, it would be a mistake to replace the long-standing approach to injunctions in Germany with an untried and untested system of ‘proportionality tests’ and ‘compensation claims’.

Francisco Mingorance, Executive Director of IP Europe, said, “Anyone interested in supporting innovation should be deeply concerned by the proposed changes to the German patent law. Patent owners’ ability to seek injunctive relief from the courts, to stop unauthorized use of their IP, is a fundamental and internationally-recognised right. The draft law would sharply limit access to injunctive relief, opening the door to patent infringement. If Germany becomes a safe haven for patent infringers, research and innovation jobs and spending will rapidly relocate to other countries.”

Significant questions remain about the effectiveness of the compensation claim mechanism, proposed as a replacement to injunctive relief, including: (1) How can this mechanism be considered an adequate replacement for injunctive relief if it is only available to “the extent that this seems appropriate”, rather than in all cases of persistent infringement? (2) What methodology would the court use to establish levels of compensation, and how this would relate to the license offer made by the patent owner? (3) How would the mechanism be applied to licenses offered for global patent portfolios?

Mingorance continued: “If the financial cost of paying ‘compensation’ for infringing IP rights is less than the cost of paying a license fee, this new mechanism will incentivise IP infringement rather than investments in R&D and innovation.

“This draft Patent Act would fundamentally change the balance of rights and obligations between patent owners and users of patented technology. It would create enormous risk for Germany’s world-leading businesses, universities and research institutes, which invest billions of euros each year to develop cutting-edge technologies.”