GERMANY: An Introduction to Intellectual Property: Patent Attorneys: Contentious

The patent landscape in Germany – and beyond – is being reshaped by the Unified Patent Court (UPC), which was launched in June 2023. During 2024, the UPC developed rapidly, with a large number of cases before various divisions and important decisions at both first instance and appeal. Further significant developments are expected in 2025.

A Rising Trend

As of 1 January 2025, there had been a total of 635 cases filed at the UPC first instance divisions, including 239 infringement actions, 251 counterclaims for revocation, 62 applications for provisional measures and 55 standalone revocation actions. There have also been 27 appeals, 15 requests for discretionary review, 15 applications for suspensive effect and 25 applications for an order for expedition of an appeal.

The first instance cases have been spread across nearly all the UPC central, local and regional divisions. However, the four local divisions in Germany (Düsseldorf, Hamburg, Mannheim and Munich) continue to be the most popular. Indeed, during 2024 the Munich local division added a second chamber and further judges to meet the volume of work.

So far, the UPC judges and officials have generally succeeded in administering cases quickly and smoothly, despite the large caseload. Litigation preparation is subject to strict deadlines; hearings are handled efficiently and clearly; and reasoned judgments have been published promptly.

These developments inspire confidence among litigants and the likelihood is that the number of cases will continue to increase, particularly as the number of unitary patents rises; there were already some 46,000 unitary patents registered by the start of 2025.

Other important UPC developments in 2024 saw the opening of the Milan seat of the central division, which will handle mainly pharmaceutical cases; the ratification of the UPC agreement by Romania, meaning the system now covers 18 EU member states; and several appointments to the Mediation and Arbitration Centre.

English Overtakes German

One interesting change since the UPC started concerns the language of proceedings. While German dominated early on, according to the latest data English is now the predominant language of proceedings (53%) with German accounting for 39%, French 4% and other languages 4%. This reflects the fact that English is the international language of business, and most judges are very comfortable hearing arguments and giving judgments in English. It is likely therefore that English will continue to be the predominant language, even in divisions based in non-English speaking countries.

When the UPC was launched, there was much interest in which industries would see most activity. After 18 months, it is clear that there have been cases across all sectors, though the official data shows that the most common is class H of the International Patent Classification (IPC), which relates to electricity, followed by class A (human necessities). Anecdotally, it seems that the UPC has been especially popular among companies active in the medical devices, telecoms and electronics sectors. There have also been some interesting cases in sectors such as textiles and e-cigarettes. There have been relatively few pharmaceutical cases so far, but some interesting disputes are expected to come to trial in 2025.

Looking ahead to 2025, we expect to see the first substantive decisions from the Court of Appeal in cases on the merits. Judgments from the Court of Appeal will be very important in resolving difficult questions, particularly where first instance divisions have diverged, for example on the grant of injunctions, scope of protection and doctrine of equivalents, as well as procedural matters relating to evidence, confidentiality, compliance with deadlines, etc. We will also see the implementation of a new case management system for the UPC, which should improve the experience for court officials, lawyers and third parties.

Impact in Germany

While it is still relatively early days for the UPC, it is clear that the new system will have an impact on patent litigation in Germany. The UPC is proving a powerful forum, which can deliver remedies covering 18 EU member states (a number that is expected to grow in future). This makes it an attractive alternative to national litigation. Given the popularity of the German divisions, we are also seeing some of the most experienced German patent judges moving to the UPC.

Nevertheless, national litigation in Germany is likely to remain important for many years to come, particularly for smaller companies and/or where there is a limited market for the products concerned. Some companies, for example in the pharmaceutical sector, are also likely to prefer national litigation as there might be lower risk than the UPC. Moreover, there remains uncertainty about issues such as supplementary protection certificates (SPCs) in relation to the UPC.

SEPs and FRAND

In both the UPC and national courts, issues concerning standard essential patents (SEPs) and fair, reasonable and non-discriminatory (FRAND) licences continue to raise important questions. Many of these concern the definition of a willing licensor/licensee and the interpretation of the CJEU judgment in Huawei v ZTE. In one case, VoiceAge v HMD, which is pending before the Munich Higher Regional Court, the European Commission intervened with a brief addressing the risk of a patentee abusing a dominant position when seeking an injunction. A decision in this case is expected in early 2025.

Issues related to SEPs and FRAND are very significant for the telecoms industry, but they are also likely to be important for other emerging or evolving industries where technical standards are important, potentially including artificial intelligence, robotics, automotive, fintech, renewable energy and the Internet of Things. We are likely to see many companies in these sectors building and then enforcing patent portfolios to enhance their competitive position as the industries develop. This will inevitably raise new issues before the national courts and UPC.

Issues relating to the licensing of standard-essential patents are also being discussed at the EU level with the Commission proposal for an SEP regulation. This is being hotly debated, and it will be interesting to see if the regulation will be agreed and if so, what it will look like. Any changes to the regulation of SEPs in Europe will have a big impact in Germany, given the size of the market and the fact that many of these disputes are litigated in the German courts.

Importance of Patent Enforcement

Effective protection and enforcement of patents is critical to ensuring sustainable growth in Europe. As the 2024 Draghi Report clearly set out, Europe needs to close the innovation gap with the USA and China by translating innovation into commercialisation. The Draghi report stated: “Europe urgently needs to accelerate its rate of innovation both to maintain its manufacturing leadership and to develop new breakthrough technologies. Faster innovation will, in turn, help raise the EU’s productivity growth, leading to stronger growth in household incomes and stronger domestic demand.”

Patents have a key role to play in delivering this goal. The launch of the UPC and unitary patent are an important step forward in promoting innovation in Europe and the development of the system should lead to further progress. Businesses now have additional options when it comes to patent enforcement and defence, and need to consider the UPC as well as national courts in their IP strategies, bearing in mind the advantages and disadvantages of each system. Obtaining the advice of a skilled and experienced IP litigator is therefore more important than ever.