IP-Compliance

In addition to IP rights (patents, utility models, trademarks, designs), intellectual property also includes copyrights and software as well as, for example, trade secrets and know-how.

“Compliance” means “fair treatment” of the achievements of other market participants. This therefore requires systematic monitoring of the IP situation in the respective market segment by means of research and analysis of the IP rights and, if necessary, official or judicial clarification.

In particular, “coordinated” procedures of several market participants, with respect to IP rights that are known to have been wrongly granted, must be avoided.

Avoiding infringements of IP rights by third parties

In order to protect the research results, companies are bound to verify whether the IP rights of third parties are infringed before starting the product development (keyword: patent and trademark analyses). The company’s management must establish appropriate monitoring processes, because violations lead not only to civil liability risks, but also to compliance violations and criminal consequences.

The consequences of a liability risk can include claims for injunctive relief, for providing information, for compensation and for recall / destruction. A valid assessment of damages that arise is complex and time-consuming and requires legal advice from patent attorneys.

IP Compliance Management

The establishment of an effective protection and control system can significantly help to protect one’s own IP assets and to reduce the risk of infringements of third-party IP rights.

The introduction of control mechanism, which on the one hand monitor whether patents, trademarks and designs of one’s own company are infringed and on the other hand ensure that one’s own company does not infringe the IP rights of third parties, are an essential component of IP monitoring. Corresponding guidelines and rules of procedure must be drawn up and regularly adapted. This is of particular importance in the case of company audits (IP Due Diligence) in the context of company purchase or sale situations.
In addition, in the area of license agreements, a regular review of cooperation agreements (e.g. license agreements, rights of use of a joint development, etc.) and a definition of instructions for the licensing of third-party IP rights are recommended.

Against the background of the daily handling of sensitive and confidential documents, a consistent data and document management – considering different access rights – is of significant importance.

Conclusion

The well-timed and careful examination of IP rights of third parties can prevent, or at least shorten, the infringement of rights and the associated long legal processes. For this reason, these processes are now also relevant to compliance for many companies. Patent attorneys can assist companies in developing tailored solution for its industry requirements and setting up corresponding IP guidelines.

Plagiarism and counterfeiting

Product piracy is understood as the targeted infringement of copyright or intellectual property rights (patents, trademarks, designs), in which protected works and goods are produced and distributed on the market. The focus of product pirates is not only on consumer goods, but increasingly also on capital goods, with high-margin spare parts and components being particularly affected.

Economic consequences due to the existence of counterfeit products

For the manufacturer, the infringement of patent and trademark rights primarily results in lost sales and profits. Further consequences for the companies include, in addition to a falling price level, the loss of brand image and the risk of possible product liability for pirated goods. Europol reports on the situation in Europe: “Counterfeited and pirated products account for about 5% of imports to the EU. Thus the relative impact of counterfeiting is twice as high for the developed economies of the EU as it is for the world as a whole.”

Prevention measures to ward off piracy and counterfeiting

In order to protect themselves from piracy and counterfeiting in a best possible way, companies must implement suitable protection and security concepts throughout the entire value chain. Technical protection measures, such as holograms, watermarks, micro colour codes or coding systems help to distinguish original products from counterfeits. Legal protection measures can prevent counterfeits from being put into circulation in the first place.

With an application for customs action it is possible to have plagiarism seized by customs. The prerequisite is that the products and goods are protected under patent or trademark law and that the infringement is obvious. This active action against product piracy is possible when importing or exporting to or from Germany.

With patent attorneys against product piracy

Patent attorneys can help manufacturers effectively fight piracy and protect their products. In order to prevent product piracy, we advise our clients on the extent to which the product in question is protectable and which product adaptations can be made in order to obtain patent, trademark or design protection.

When defending against product piracy, we support our clients in obtaining preliminary injunctions, especially at trade fairs, in border seizure proceedings and in asserting claims for information, damages and destruction.

Liquidation of claims in case of product piracy

With a claim for injunctive relief, the rights holder can prevent the further production and distribution of the plagiarism. In the case of a claim for damages, financial losses of the rights holder are to be compensated. With the right to information, information about the origin and course of the plagiarism can be demanded. The destruction claim obtains the destruction of the counterfeit product so that it does not come into circulation again.

In addition, numerous organizations – such as the “Initiative BASCAP” (Business Action to Stop Counterfeiting and Piracy) of the International Chamber of Commerce and the “German Aktionskreis gegen Produkt- und Markenpiraterie e.V.” (APM) – are committed to combating trademark and product piracy.

Misleading requests for payment and fee notices

The patent and trademark offices, including the German Patent and Trademark Office (DPMA), the European Union Intellectual Property Office (EUIPO) and the World Intellectual Property Organization (WIPO) warn against misleading offers, requests for payment and invoices that do not originate from them. These letters originate from private companies and relate to IP applications and renewals (esp. trademark applications and renewals, PCT applications).

Detailed testing is recommended

Since the public registers of the above-mentioned offices, in which a trademark application or registration, including the name and address of the trademark owner, is published, can be inspected by anyone, the utmost caution is advised when receiving letters with requests for payment.

Following the publication or registration of a trademark, it happens time and again that owners of property rights receive invoices that look very similar to official forms. You must not make the requests for payment contained therein for services such as publication, registration or inclusion in business directories, because such services are not required for the protection of trademarks and designs!

In such cases, be sure to contact the office responsible for your IP right or your attorney if he is registered as a representative in the trademark register. In the latter case, as the owner of an IP right, you will usually not receive an invoice from the Office requesting you to pay an invoice directly.

Further information can be found on the websites of the DPMA, EUIPO, WIPO, EPO as well as on the website of the German Protection Association against Economic Crime (DSW).

Patent infringement at trade fairs – what can you do?

If a patent owner discovers a patent-infringing product of another exhibitor at a trade fair, one can straight away apply for a preliminary injunction. This enables the patentee to remove the infringing product quickly and effectively.

What should be considered in the case of a preliminary injunction?

The application must be filed at the responsible district court. When discovering a patent infringement at a trade fair, it is crucial that the patentee reacts as soon as possible. The earlier the responsible attorney-at-law or patent attorney gets involved, the better the legal specialist can support in quickly clarifying the situation. The applicant must demonstrate to the court as unequivocally as possible that he the referred patent is undoubtedly valid (if necessary, by means of the register excerpt), that patent infringement is (obviously) existent and that it is urgent to enforce the preliminary measure. The patentee should also outline the disadvantages caused by the infringement.

Seizure of the patent infringing products

Within the framework of a balancing of interests, the court examines whether a sufficiently clear situation exists and which of the opposing parties will have a greater damage.

If the court grants an injunction benefiting the patentee, the competitor’s infringing products and catalogues can be seized with immediate effect. The injunctive relief can be enforced within 1-2 days and without prior involvement of the potential infringer.

What is the risk for the patentee?

In the event that the preliminary injunction proves to be unjustified after it has been issued and enforced, the patentee can be held responsible for the associated damage. An injunction may become unjustified if it turns out that either there was no infringement or that the patent was not legally valid.

What should be considered before a trade fair?

For exhibitors at a trade fair with innovative and patent-protected products, it is recommended to research and observe exhibitors and their products in due time before the start of the trade fair. It may also be of advantage to discuss strategies against possible infringements relating to the presentation during a trade fair with a patent attorney or lawyer in advance. This enables a quick response in the case of identifying a potential infringement.

If, on the other hand, an exhibitor fears that such an injunction will be filed against him, a so-called protective brief could be filed shortly with the relevant courts before the trade fair. Thereby, a refusal of an application for a preliminary injunction or at least a hearing at the court can be achieved.

The drafting and negotiation of license agreements

When drawing up an individual contract, it is regulated how and to what extent the use is permitted. In this context, the topics of license model, license fee, contract term, liability, warranty, contractual penalties, etc. are defined, among others. The design possibilities are manifold.

The license

Licenses can be granted for patents, utility models, trademarks, designs, in the area of copyright and for software. Licenses can also be part of other contracts, such as development contracts or cooperation agreements.

The right of use

The spatial, temporal and content-related use of the industrial property right must be defined.

When negotiating a simple right of use, the licensee can grant the same rights to any number of licensees and can also still use the licensed industrial property right himself.

In the case of negotiation of an exclusive right of use, the license holder transfers substantial parts of the right of use to the licensee, who then has the sole right of use to the licensed subject matter.

At the end of the contract, the right of use reverts to the owner of the industrial property right.

The license fee

The amount of the license fee is usually agreed as a flat license fee, a per-unit license fee or a royalty on sales.

The negotiation of contracts

Depending on the property right, the options for drafting contracts can vary greatly. For the drafting and negotiation of license agreements, it is therefore advisable to seek legal advice.

Patent Infringement

Legal background

The concept of a patent serves the purpose of protecting a technical invention of third party usage. If the protected invention is unrightfully used by a third party legal actions as well as out-of-court settlements can be sought. Initially it is important to note, that in the event of a patent infringement the respective national court is responsible. In Germany that would be the Regional Court. The patent or license owner essentially holds the following rights:

• Omission of the production of the questionable product.
• Damage claims,
• Information on origin, distribution channel and supplier chains as well as disclosure on the amount of the reproduction of the product in question
• Recall as well as elimination of all reproduced items
• elimination of all reproduced items
• Publication of the legal decision

In general, the patent holder has the choice of deciding between three possibilities of claiming the damage. The patent holder can either claim reimbursement of the infringing party or claim payment of the lost profit or payment of an appropriate license fee.

Out-of-court settlements

If a patent holder notices his protected invention being used by a third party, there are the possibilities of sending either an authorization enquiry or of sending a written warning. The main difference between these two out-of-court settlements is, that the authorization inquiry has no legal form specifications and is therefore a simple request made by the patent holder to a third party, if the infringing party is aware of the patent that prohibits unauthorized reproduction. This out-of-court action is a simple means of communication. If the authorization request does not resolve in the wanted solution, a claim can be enforced by a civil lawsuit.

Furthermore the patent owner holds the right to forward a written warning to any infringing third party. In comparison to the authorization request, the written warning suggests a mandatory request to refrain from any further production of the infringing product.

Once the written warning is send, the recipient either has the possibility to react to the letter by submitting or by also seeking legal assistance. Damage claims as well as restraining orders from further production can be enforced. If the third party submits to the warnings requests, a legal suit is averted.

If however it turns out, during further assessment, that the warning letter was unrightfully send, the opponent is entitled to damage claims on his side.

Court actions

In the event of a patent infringement case, the Regional Courts are responsible. Because of their relatively fast processing time of 8-14 months and the therefore resulting low cost, the Regional Courts enjoy a high standing amongst patent applicants. It is in any case important, to ensure evidence before the legal suit and have it assessed by experts. The German law states, that at this point a lawyer is obligatory.
Patent holders as well as license owners are entitled to file a legal suit in the case of a patent infringement.