Invalidating a patent after expiry of the patent term? German Federal Court of Justice confirms broad standing to sue

Who has standing to sue in a patent invalidation action differs across jurisdictions. In the recent decision "data packet transformation" ("Datenpaketumwandlung"), the German Federal Court of Justice had to rule on whether, and under what circumstances, a party can sue for invalidity of a patent after the 20-year term of protection has already expired.

 

The case involved a European patent held by Koninklijke KPN N.V. ("KPN", a Dutch telecom company). KPN sued an unnamed party for infringement [believed to be HTC based on this source] only under claim 21 of EP 1 280 279 ("EP'279") related to a "method and device for transforming a series of data packets by means of data compression". The other party countersued KPN in the German Federal Patent Court for invalidity of EP'279 in its entirety.

In short, independent claim 1 of EP'279 relates to a method for converting data packets of a plurality of channels, whereby the data packets are, in particular, subjected to a compression process. Independent claim 21 relates to a device for compressing data packets.

EP'279 expired during the proceedings before the Federal Patent Court. As a result, the Federal Patent Court considered that the plaintiff for invalidation needed to make a showing of "special interest worthy of protection" to obtain a declaration of nullity of a patent that is no longer in force. The Patent Court considered such an interest to have been shown for independent claim 21 (which was being asserted in infringement proceedings against the plaintiff), but not for any of the other claims. The Patent Court eventually invalidated claim 21 for lack of novelty but declined to rule on the merits of the lawsuit for the other patent claims for lack of a legal interest in the declaration of invalidity.

The Federal Court of Justice disagreed and declared that the lawsuit for invalidity should have been examined on the merits for all patent claims. Eventually, it invalidated claims 1-20 in their entirety, but ruled that claim 21 (as well as the claims dependent on claim 21) is valid as limited by KPN during the proceedings.

The Federal Court of Justice emphasized at the outset that the bar of legal interest in a lawsuit for patent invalidity should not be set high. Suing for patent invalidity provides a defense to a person having a reason to fear that it will be sued for present or past infringement, whether or not the infringement lawsuit is based on a patent that has already expired. Standing to sue for invalidity is denied only where there is no longer any "reasonable possibility of being sued for infringement".

A pending patent infringement action creates a legal interest for the opposing party file a countersuit for invalidity of all claims of the same patent, irrespective of which specific claims are asserted in the infringement action. Standing to sue could be denied with regard to individual patent claims only if the attacked embodiment "evidently" does not infringe that specific claim, neither directly nor under the doctrine of equivalents.

In the present case, claim 1 (which is not alleged to having been infringed) relates to a method that can typically be performed by using a device protected under claim 21 (which is the claim alleged to be infringed). Hence, the alleged infringer has reason to fear that it may be sued for infringement of claim 1 at some point later as well. The alleged infringer has an interest in invalidating claim 1 and thus has standing to sue.

The Federal Court of Justice added that if the patentee had formally waived asserting claim 1, the infringement defendant's standing to sue for invalidity of claim 1 could have been questioned. However, the patentee had not made any such waiver.

 

Comment

Even expired patents can constitute a valuable asset when it comes to claims for financial compensation related to past infringement. The German Patent Court's decision is based on a rather formalistic view that in such cases only those claims can be invalidated that are being actively pursued in a pending lawsuit.

The Federal Court of Justice corrects this view by recalling that, under German law, the bar for standing to sue for patent invalidity is low. This principle should not depend upon whether the patent has expired or not.

There are two side aspects of the case that are also worth mentioning. First, the patentee could have prevented the invalidation of claim 1 (and the claims dependent on claim 1) by a declaration that it would not assert claim 1 against the other party. That could have preserved the independent method claim (that could have been used later against other infringers).

Second, the Federal Court of Justice emphasizes that the two independent claims in the disputed patent were related, in the sense that the device of claim 21 was "typically adapted to perform the method protected under claim 1". The Court does not formally declare that this is a condition of bringing an invalidity action. Still, it underscores that this fact is sufficient for a "reasonable fear" that the patentee will assert both independent claims against the alleged infringer, and thus sufficient to establish standing to sue for invalidity.

Importantly, the Federal Court of Justice does not argue that this condition is always met whenever a patent contains several independent claims. Nonetheless, when a European patent relates to several inventions, these must be "so linked as to form a single general inventive concept" (Art. 82 EPC). Therefore, cases in which an infringement lawsuit based on one independent claim will not create a "reasonable fear" of an infringement lawsuit under a different independent claim, will be rare. 

 

Picture on the left (c) by Dr Judit Banhidi