Patent invalidation and legal certainty – What can patent holders expect?

Abstract: Germany is one of Europe’s most important patent centres: as regards patent grants and also as regards patent infringements. This may be why the German patent scene in the last two years has been looking at the success rates of nullity suits filed with the German Federal Patent Court (BPatG) – under two different aspects: In 2014, a first legal article concentrated on the problem of lack of legal certainty for patent holders and on investment risks posed by the seemingly boundless possibilities for challenging patents in nullity proceedings. The article called for these risks to be addressed more carefully, not to the least in view of Art 14 German Grundgesetz (GG), which safeguards the right to property. Another article from the same year, motivated more along the lines of innovation theory, took said success rates as a reason to fundamentally criticise patents under the provocative title “Why most patents are invalid”. This article scrutinised both, individual points within the criticism, as well as allegedly far-reaching conclusions regarding patents at large. According to industry reports, these conclusions have been affecting patent value, and they also may pose a threat to the system as such – unjustly so, as this article will show!


I. Introduction

Patents are frequently utilised across Europe, though according to application figures from the
German Patent and Trademark Office (DPMA) and the European Patent Office (EPO) nowhere
more so than in Germany. However, patents are of value only if valid and enforceable. Only then
can patents fulfil their role to ensure exclusive access to a technical solution to a technical problem
for the inventor, and only then can they justify the significant cost that the applicant needs to incur
for a patent’s grant, maintenance, and enforcement.
Although much debate is focused on issues of patent enforcement, the risk of patent invalidation
was rarely discussed; until recently. This risk, however, is real, because anyone can file a nullity
action, even once the opposition period has expired. Invalidation action is possible even after the
opposition period before the patent office has expired and it is even possible for various nullity
plaintiffs to lodge identical nullity actions against the same patent, theoretically until one is
successful. The present article discusses the success rates of nullity suits and the conclusions that
may be drawn.

II. Patent value: nullity action and systemic hygiene

In any free market economy, patent protection must comply with quality requirements. Hence,
proceedings before patent offices and patent courts must aim to only grant patents satisfying all
substantive patentability requirements, i. e. novelty, inventive step, and industrial applicability.
Only then does a claim to a German or to a European patent exist. If patentability was incorrectly
assumed in grant or opposition proceedings, a patent can be revoked in cases of e. g. nonpatentable
subject matter, insufficient disclosure, usurpation of a third-party invention and
inadmissible extension of scope of protection. Given that grounds for revocation are not always
identifiable in opposition proceedings, there will always be a number of patents that will be granted
while not fulfilling the substantive patentability requirements.
Regardless of any systemic hygiene, which the possibility of suing for patent nullity does guarantee,
the interminable admissibility of this opportunity for challenging patents comes at the expense of
legal certainty. Patent holders are placed at a disadvantage affecting their incentives to innovate,
and for SMEs faced with competitors with sufficient financial means to use nullity actions to raise
litigations costs this can be a problem. Yet another problem arises in light of the fact that the
classroom example of cases based on novelty-destroying documents undiscovered by the patent
examiner is the exception rather than the rule. More frequently, such actions are based on the
assessment of patent documents by examiners, raising the question of examination standards with
regard to the ‘person skilled in the art’, novelty and inventive step. Patent court judges are
particularly disadvantaged in this respect, not only by routine, but also by the convenience of
hindsight, which makes them tend to - in retrospect - underestimate the merit of any given

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