This article provides an overview on the purpose, legal requirements, procedure and risks/benefits of preliminary junction proceedings in Germany for potential applicants and defendants.
A preliminary injunction issued by a German court can help to protect your intellectual property in a number of ways. Most importantly, it can be used to stop the infringing action on a short notice, which will usually be the main reason for the owner of an intellectual property (IP) right to file a motion for a preliminary injunction. Apart from this cease-and-desist claim, a motion for a preliminary injunction can be directed at a claim for information and it can be used to secure the right for destruction of the infringing goods.
Summing up, it is a very powerful tool, if the owner of an IP right needs to take immediate legal steps in order to prevent themselves from suffering considerable harm or disadvantages.
On the other hand, it is also advisable to be prepared, if there is any indication that you might be seen to be infringing a competitor's IP right, for example, during a trade fair in Germany. The German legal system, however, provides a means which can help to avoid a preliminary injunction being issued, at least one being issued without court hearing, i.e. a so-called protective brief, which is filed in case a motion for a preliminary injunction by a competitor is anticipated.
What are the requirements of a preliminary injunction?
Preliminary injunctions can be asserted in case of an infringement of patents, German utility models, trademarks, designs as well as in the case of a violation of the German law against unfair competition. It should be emphasised that, in principle, a preliminary injunction may also be granted in patent cases. A preliminary injunction can be used to:
- enforce a cease-and-desist claim
- enforce a claim for the provision of information concerning the origin and the distribution channels of the infringing goods, and
- secure the destruction of infringing goods.
It can therefore not only prevent further infringement, but also be used as an effective tool to collect information about the infringing action.
In order to successfully file a motion for a preliminary injunction, the applicant must demonstrate to the court that:
- The matter is urgent. The standard usually applied is that the applicant should take action within one month after becoming aware of the infringement;
- If the injunction is based on a patent, its validity must be beyond doubt. This criterion is met if, for example, a patent has survived an opposition or nullity procedure. Trademarks and design rights have to be registered; and
- There is a clear-cut infringement. The judge must be able to understand the scope of protection of the IP rights without the support of a technical expert, which makes preliminary injunctions based on patents slightly more complicated than those based on trademarks or other non-technical rights.
How do I proceed with a preliminary injunction?
A warning letter to the infringer is not required and, in many instances, is not even desirable, e.g. if the applicant is concerned that the infringer might take steps to move infringing goods or other evidence. However, it must be borne in mind that if no warning letter is sent and the infringer immediately gives in upon receipt of the preliminary injunction, the applicant of the preliminary injunction will have to bear the infringer's costs.
A preliminary injunction can be issued by the court without a court hearing and without informing the opposing party (known as ex parte injunction) or after hearing the other party. This means that there is the option that the alleged infringer only learns about an injunction having been issued against him when the injunction is served upon him. He has the option to file an opposition against the injunction which will lead to the court arranging an oral hearing.
The court will typically make a decision within a few hours or a couple of days upon receipt of the motion for a preliminary injunction. The speedy process for obtaining a preliminary injunction is particularly useful for taking action against infringements, especially where the infringer will only be in Germany for a limited time, e.g. during a trade fair.
If the court declines granting the preliminary injunction, the motion for a preliminary injunction can be withdrawn and be brought before another court. If the motion for a preliminary injunction is rejected, this decision can be appealed.
Once the preliminary injunction has been issued by the court, it must be served upon the defendant within one month by the applicant for it to be enforced. If the applicant fails to do this, the preliminary injunction will cease to be enforceable. The preliminary injunction normally needs to be served upon the defendant through a bailiff.
If a court, upon an opposition being filed by the defendant, revokes a preliminary injunction on the grounds that it was not justified when applied for, the applicant is liable for any damages which the defendant may have suffered as a result of its enforcement.
It is worth bearing in mind that a preliminary injunction can also be obtained in anticipation of an infringement. So, if the owner of an IP right is aware that an infringer will be exhibiting at a trade fair and is likely to show infringing goods there, an injunction can be obtained in advance of the fair and served upon the infringer at the fair itself. This will effectively prevent the display of the infringing goods.
Furthermore, contrary to a regular law suit in Germany, the applicant does not need to prove the infringement. He must only make it plausible to the court, which means that an application can be put together and be filed with the court quite quickly (provided all documents and/or affidavits are available). This is a distinct advantage over the procedures and requirements of many other European countries.
The recoverable costs of the injunction are determined by the court and depend upon value-in-dispute, which the court allocates to the case - taking into account the economic importance of the infringed right. Generally, most preliminary injunction motions result in a costs award amounting from EUR 5,000 to EUR 20,000.
Once served, the defendant must decide whether to accept or appeal the preliminary injunction. Furthermore, the defendant is entitled to request, at any time, that the applicant initiates main proceedings. If the defendant does not contest the injunction within a reasonable period of time after its service, the applicant could send the opponent a letter of completion seeking an undertaking that the defendant accepts the preliminary injunction as a final injunction and renounces all of his legal remedies. If this demand is not met, the applicant would have to commence main court proceedings in order to obtain a final, not just preliminary, decision on the case.
Preliminary injunctions in Germany provide a quick and cost effective tool for owners or exclusive licensors of European or German intellectual property rights as well as for fighting unfair competition.
Such injunctions can be obtained ex-parte (without notice to the alleged infringer), at modest costs, and can be served - and therefore enforced - immediately on the defendant.
If you have any questions as to how you can best use a preliminary injunction in Germany or how you can create the best defence strategy against them, Thomas Mayer (Partner, IP/Patent Litigation, Munich) will be happy to support you.