German Patent Reform Targets “Automatic” Injunctions in Patent Litigation

Abstract

In contrast to other jurisdictions, German patent law still provides for automatic injunctions in case of patent infringement. In other words, injunctive relief is not a discretionary remedy, but must be granted as a matter of law. In particular, no proportionality test is implemented in the German Patent Act that would allow judges to, e.g., refrain from granting an injunction in cases where the infringement occurs within a sub-component of a complex final product. Therefore, a defendant risks the loss of the full value of the final good, irrespective of where in the supply chain the infringement occurs. The economic implications of automatic injunctions have been well illustrated in a recent dispute between Broadcom Inc. and Audi AG. The settlement payment range in this case is estimated at the high end at EUR 876 million and was likely around EUR 533 million.