A medium-sized machine manufacturer A, who holds a European patent for a machine tool, visits a long-standing customer to provide after-sales service for a delivered system. During the site inspection, he is surprised to discover a second, newly installed machine that uses his protected technology in essential respects.
The customer B had procured the machine through an intermediary, in good faith that it was a legally unobjectionable product. He finds the situation uncomfortable because he does not want to strain his relationship with the patent holder—the business relationship is important to him.
A, on the other hand, faces a dilemma: on the one hand, he clearly recognizes the infringement of his property rights, but on the other hand, he does not want to lose the customer by taking legal action. It is important to him to maintain the business relationship. A suspects that the problematic machine originates from a foreign manufacturer, possibly a supplier from the Far East who deliberately ignores technical property rights. However, he lacks concrete evidence regarding the supply chain.
A central issue in patent law is the question of what claims the patent holder is entitled to if his patent has been infringed. These claims play a decisive role in the protection of intellectual property and the enforcement of patent rights. In practice, this means that the patent holder has the option of taking legal action against the infringer and asserting his claims. These claims usually include injunctive relief, damages, information, accounting, and destruction of the infringing products.
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The right to injunctive relief is one of the most important rights of the patent holder. It allows the holder to force the patent infringer to refrain from further acts of infringement. Once it has been established that the infringer has infringed the patent, the holder can demand that the infringer refrain from all further acts that infringe the patent. The right to injunctive relief exists regardless of the infringer's fault. It therefore does not matter whether the infringer acted intentionally or negligently. Once it has been established that a patent infringement has occurred, the patent holder is entitled to injunctive relief.
Once it has been established that the second machine installed at customer B's premises falls within the scope of protection of the patent, A could, in principle, demand that B cease any further use of this machine. This applies regardless of whether B acted in good faith or was unaware of the intellectual property rights situation. The fact that A may not enforce this claim for economic reasons does not alter the fact that the law grants A this claim.
This claim is particularly important because it is intended to prevent future infringements through coercive measures. Rather, the patent holder can obtain a court ruling (injunction/injunctive relief) that ensures that the infringer will not commit any further patent-infringing acts in the future. If the patent holder can establish that the convicted infringer continues to violate the legally binding injunction, they can demand that the infringer be sentenced to coercive penalties, i.e., fines, or, in the event of a repeat offense, imprisonment, if the violation of the injunction was at least negligent.
If A were to sue the customer B and obtain an injunction against him, B would be obliged in future neither to operate the patent-infringing machine nor to commit any comparable acts of infringement.
If B nevertheless continued to use the machine, A could apply to the competent court for coercive penalties to be imposed on B – in the event of a repeat offense, this could even include imprisonment. This demonstrates the considerable enforceability of the injunction claim in patent law.
Right to information
In the event of a patent infringement, the patent holder is entitled to information about the distribution channels. This is particularly relevant if the patent holder finds infringing items at companies such as customers or intermediaries, but the actual manufacturer of the infringing product is unknown.
In such cases, it is possible to request information about the distribution channels from the identified infringer, for example, the customer or intermediary. This enables the patent holder to identify the actual manufacturer or the party primarily responsible for the patent infringement and to take targeted legal action against them.
The right to information is therefore an important tool for obtaining information that is essential for enforcing claims against the party primarily responsible for the patent infringement. In many cases, the intermediary or purchaser will willingly name the manufacturer, especially if the patent holder does not assert any further claims against them. This enables efficient and targeted prosecution of the actual infringer, which facilitates both the enforcement of the patent and the assertion of claims for damages.
This is also the case with A: He encounters a patent-infringing machine at his customer's premises, but does not know which manufacturer it comes from. In order to locate the main responsible party, A asserts his right to information against B.
Option 1 – voluntary disclosure: B recognizes the situation and does not want to further strain his relationship with A. He voluntarily provides the requested information and names the intermediary or supplier C from whom he purchased the machine. In this way, A can take direct action against the actual source of the patent infringement without further straining his relationship with B.
Option 2 – Compulsory disclosure: However, if B refuses to disclose information, A would have recourse to legal action. By filing a lawsuit, he could compel B to disclose the information. In this case, the judgment would be enforceable by coercive measures, i.e., fines or imprisonment. This ensures that the right to information does not come to nothing, but actually gives the patent holder the opportunity to identify the main perpetrator C of the infringement and take targeted action against them.
Now A can also take action against C with a right to information in order to obtain information about their suppliers and customers.
Right to removal
The owner of an infringed patent also has a right to have the patent-infringing situation remedied. The infringer is obliged to destroy all patent-infringing products or at least modify them in such a way that future infringements are ruled out. This is to prevent the patent-infringing products from remaining on the market or being reused by third parties.
In the course of a court-ordered preservation of evidence on the business premises of C, patent holder A discovers a warehouse with four fully assembled machines which, in their current design, infringe the scope of protection of the patent. However, complete destruction of the machines is not mandatory. C is obliged to modify the devices in such a way that the patent-protected features are removed or technically redesigned.
Only these modifications will ensure that the machines can be marketed or used in the future without infringing the property rights.
In addition to the claim for destruction, the patent holder may also demand that efforts be made to recall patent-infringing products that have already been placed on the market. The infringer is obliged to take back all products that have already been sold and to ensure that they are not reused.
Based on the information previously provided, A knows that several patent-infringing machines have already been sold to end customers by intermediary C. C is therefore required to recall these devices and withdraw them from the market. Where a complete recall does not appear feasible, C must ensure that the machines are modified or adapted directly at the end customers' premises so that the patent-protected features are no longer infringed.
Claims for damages/monetary claims
In addition to the right to injunctive relief, the patent holder is also entitled to monetary compensation. However, this claim only exists if the infringer has committed the patent infringement culpably, i.e., either intentionally or negligently.
A person acts negligently if they fail to exercise the care required in the course of business. In the field of technology and machine manufacturing, this duty of care includes informing oneself about existing property rights before manufacturing or distributing a product. This includes, in particular, conducting a patent search or obtaining legal advice.
Since C failed to carry out this check, he could at least have recognized that the technology used could affect third-party property rights. This justifies the accusation of slight negligence. The infringer is therefore liable for damages, even if he acted in good faith. The decisive factor is that he did not observe the objectively required care.
If C continues to use the invention after A has already requested him to refrain from doing so, intent can generally be assumed.
The monetary claim serves to compensate the patent holder for all economic disadvantages incurred as a result of the patent infringement. Various methods are available for determining the amount of damages. The calculation based on the so-called license analogy is particularly relevant in practice: The patent holder can demand the amount that the infringer would have had to pay as a license fee if he had used the invention legally. This also compensates for those license revenues that the patent holder has lost due to the unauthorized use. This method of calculation is often the most practical, as it does not rely on proof of specific damages or the actual profits made by the infringer, but instead uses industry-standard license rates.
In practice, this can be seen in the case of machine manufacturer A: a machine sold by its competitor achieved a sales price of EUR 2,000,000. License rates of around 3% are common in the industry. If the invention had been used legally, the infringer would therefore have had to pay EUR 60,000 in license fees. This amount can be claimed by way of license analogy. In this way, the patent holder receives fair compensation for the lost license, even without having to prove the specific damage in detail.
In addition to the license analogy, the patent holder can also calculate their damages based on the so-called infringer's profit. This method skims off the profit that the infringer has made from the patent infringement. The basic idea is that the infringer should not be allowed to gain any economic advantage from the use of the third-party patent.
Competitor C sold the patent-infringing machine at a price of EUR 2,000,000. After deducting manufacturing costs, distribution costs, and a reasonable entrepreneur's salary, this results in a hypothetical profit of, for example, EUR 400,000. This amount can be claimed as lost profits.
These calculation methods license analogy and infringer's profit are alternative: the patent holder can only choose one of these methods for the same infringement case. The choice is final. If the patent holder opts for the license analogy and demands a fictitious license fee, the claim for surrender of the infringer's profit is extinguished. Conversely, the same applies: if he asserts the infringer's profits, he cannot additionally claim a license fee. This strict alternative is intended to prevent the patent holder from receiving double compensation for the same infringement. At the same time, however, it gives him the opportunity to choose the method of calculation that is most advantageous for him in the specific case.
A could, according to the license analogy, claim damages of EUR 60,000 for the patent-infringing machine sold at a sales price of EUR 2,000,000 based on the industry-standard license rate of 3%. This calculation is relatively straightforward and can be easily enforced in practice.
If, on the other hand, A chooses to calculate the damages based on the infringer's profits, he could claim the entire profit that the infringer made with the machine. Assuming that this would amount to EUR 400,000 after deduction of costs, A would be entitled to this amount. However, proving the infringer's profits is much more complicated, as A would need detailed information about the infringer's sales, manufacturing costs, distribution costs, and profit margins, and would also have to provide evidence of this in the event of a dispute.
This presents A with a strategic dilemma: while the license analogy guarantees secure and quickly quantifiable compensation, calculating the amount based on the infringer's profits opens up the possibility of significantly higher compensation, but is associated with considerable difficulties in proving the case.
Right to accounting
In the context of enforcing monetary claims, the plaintiff is also granted a right to accounting. This right enables the patent holder to inspect the infringer's business records in order to determine the amount of the monetary claim arising from the patent infringement. Without such accounting, it would often be difficult for the patent holder to quantify the extent of the damage and thus the damages.
This claim is particularly helpful for A because, without disclosure of the infringer's business records, he would hardly be in a position to realistically determine the amount of his claim for damages. Especially if A chooses the infringer's profit as his calculation method, he needs accurate information about the opponent's sales, manufacturing costs, distribution costs, and profits. The disclosure of accounts gives him access to this data and enables him to provide reliable evidence of the amount he is entitled to claim. However, the disclosure of accounts can also be useful in the case of license analogy, as it provides A with an overview of the actual number of units sold to which the license rate must be applied. The disclosure of accounts is therefore a key instrument for A to effectively enforce his monetary claims.
n practice, the patent holder often initially only sues for accounting without quantifying his monetary claim. Only after proving the patent infringement does he then obtain the necessary insight into the infringer's documents. Without such accounting, it would often be difficult for the patent holder to quantify the extent of the damage and thus the damages.
Accounting provides the patent holder with all the relevant information to calculate the amount of damages. For example, the infringer must disclose how many patent-infringing products they have manufactured and sold and what profit they have made from them. Based on the information obtained, the proceedings for damages are continued. However, this information often leads to an out-of-court settlement between the parties on the amount of compensation to be paid.
In the case of the machine manufacturer A, this means that he first takes action against C and files a lawsuit for accounting. Since A can already prove the patent infringement, C is obliged to disclose his business records and provide information about the actual number of units sold, sales generated, costs incurred, and profits made.
This information provides A with a reliable basis for determining the extent of its monetary claim – either by applying an industry-standard license rate to the disclosed sales figures in accordance with the license analogy, or by calculating the infringer's profits on the basis of the reported cost and profit structure.
If, after receiving this information, no out-of-court agreement is reached on the amount to be paid, A can again bring the matter before the court in a second proceeding and quantify the monetary claim on the basis of the disclosed data and enforce it in court. This allows A to effectively secure its claims, even though it did not have the necessary figures at the outset.
Right to publication
The right to publication serves to make the judgment or parts thereof accessible to the public if this is in the interest of providing clear information to the parties concerned. In particular, if the case has already received public attention in advance, the patent holder who prevails in the lawsuit can demand that the public also be informed of the decision. This enables him to clarify that there was indeed a patent infringement, which can usually also have a deterrent effect on potential future infringers.
The dispute between patent holder A and distributor C had already attracted considerable media attention in the run-up to the trial. The trade press and industry media had covered the case intensively, in some cases presenting C in a rather positive light. A can demand that the judgment be printed in a relevant trade magazine at C's expense – in particular in the medium that had previously reported positively on C. This not only makes it clear that there was indeed a patent infringement, but also sends an important signal. On the one hand, the specialist public is reliably informed, and on the other hand, the publication has a deterrent effect on other potential infringers, who are now clearly aware of the scope and enforceability of A's property rights.
However, the right to publication cannot only be asserted by the plaintiff. The defendant also has the right to demand publication if they win the case. In situations where the defendant has been prejudged in public, for example, publication ensures that these misrepresentations are corrected and their innocence is made public.
If it turns out in the lawsuit that the patent asserted by A is invalid and the defendant C therefore prevails, the situation is reversed. C, who was previously portrayed in public as a possible patent infringer, then has a legitimate interest in having the court ruling published.
Precisely because the dispute had attracted considerable media attention and C had already been critically examined in specialist articles, he can demand that the judgment be published in the relevant media at A's expense. This makes it clear that there was no patent infringement and that C was wrongly portrayed in a bad light.
For C, the publication means rehabilitation in the professional community: the damage to his reputation that had previously been done is corrected, his entrepreneurial integrity is confirmed, and at the same time it is signaled that he has successfully defended himself against unjustified claims. In this scenario, too, the right to publication fulfills its function of informing the interested public about the outcome of the proceedings in an appropriate and transparent manner.
The form of publication is often the subject of dispute. However, the publication must be designed in such a way that it reaches the relevant persons or groups affected by the case. Broad publication, such as on the front page of a major tabloid newspaper, is generally out of the question. Typically, publication in specialist and industry journals is required if the case was known in the relevant professional circles. In some cases, publication on the losing party's website may also be ordered.
In the present case, placement on the front page of a major tabloid newspaper would be disproportionate. Since this is a technical patent dispute, publication in a relevant trade journal that is read by experts and has previously reported on the case would be more appropriate.
However, it must be taken into account that the conflict between A and C attracted national attention and was even picked up by television stations. In such a constellation, it may be appropriate not only to limit publication to a specialist medium, but also to provide for publication in generally accessible media – for example, through a short announcement on the television program or on its online platform. This ensures that the public, which has already formed an opinion on the case, also learns of the court's decision and that misconceptions are corrected.
While publication in specialist and industry journals is sufficient in most cases, particularly widespread media attention may also require publication in general media in order to fully convey the information.
The court ruling also obliges the media outlet, e.g. the newspaper, to cooperate in the publication. The latter is to be compensated for its expenses. The costs of publication are borne by the obligated party, i.e. the party that has been ordered to publish.
In the case of machine manufacturer A against intermediary C, the court orders that the judgment be published in a relevant trade journal. This means that not only is C obliged to arrange for publication, but the trade journal in question must also cooperate in the publication.
Since the publication takes up half a page and the magazine usually charges EUR 1,000 per page for advertisements, the costs for publication amount to EUR 500. This fee is to be borne by C, as he was obliged to publish as the losing party.
The trade journal thus receives its standard market remuneration, while the cost regulation ensures that A, as the prevailing patent holder, is not additionally burdened with the financial costs of publication. The publication thus appears in a medium relevant to the professional world, reaches the relevant circles, and at the same time serves to correct the image that had previously arisen in the industry.
Criminal liability for patent infringement
Intentional infringement of property rights—such as a patent—can have criminal consequences. In this context, intent means that the perpetrator is aware of the infringement and commits it deliberately. Only when both knowledge and intent are present is there criminal intent.
A expressly points out to the intermediary C that his machine falls within the scope of his patent and explains the reasons for the infringement. Although C is aware of the legal situation, he continues to use and distribute the machine unchanged. This behavior constitutes the necessary intent – C is aware of the patent infringement and continues to act nonetheless. This fulfills the requirements for a criminal infringement of property rights.
Unlike most criminal offenses (e.g., murder or theft), where the public prosecutor's office takes action ex officio, criminal prosecution in cases of intentional infringement of property rights only takes place at the request of the rights holder. It is therefore the rights holder's responsibility to bring a private prosecution and thus initiate criminal proceedings. Without such a request, there will be no criminal prosecution.
After A has warned the intermediary C and proven the existing patent infringement, C nevertheless continues to distribute the infringing machines. Although this constitutes intentional conduct, the public prosecutor's office would not take action on its own initiative. Only if A actively files a private prosecution will criminal proceedings be brought against C.
The penalty imposed usually consists of a fine, which is calculated in so-called daily rates and is payable to the state. Depending on factors such as the amount of damage, the penalty can be up to 360 daily rates (equivalent to one year's salary). For comparison: The punishability of non-commercial patent infringement is comparable to offenses such as theft of items worth less than EUR 3,000.
However, if the infringement of property rights is committed commercially, which is particularly the case with counterfeit workshops in the context of trademark infringements, the penalty may also include imprisonment of up to two years. Commercial activity is deemed to exist in particular if the infringer's business model is based predominantly on the infringement of property rights.
In practice, however, criminal convictions are rather rare. In most cases, the property right holder has a primary interest in preventing future property right infringements rather than prosecuting a competitor. Even in cases of fierce competition, criminal convictions are rarely sought unless the infringer shows no willingness to cease the infringing behavior.
In the case of A and C, this means that although A could bring a private prosecution to obtain a conviction after C's continued infringement, the mere initiation of proceedings has a considerable deterrent effect on C. Faced with the threat of a criminal conviction, C ultimately changes his behavior, ceases the infringement, and refuses to make any further payments. However, the mere initiation of proceedings has a considerable deterrent effect on C. Faced with the threat of a criminal conviction, C finally changes his behavior, ceases the infringement, and only refuses to pay the claims for damages. Since A has thus achieved his actual goal—to prevent further infringements—he does not pursue the criminal proceedings any further.
Measures to preserve evidence
Regardless of the conviction, both criminal and civil proceedings also offer the possibility of preserving evidence. This makes it possible to obtain evidence from the alleged infringer that is difficult to access, including purely internal company evidence, against the will of the alleged infringer.
Despite a warning from A, C continues to exhibit the patent-infringing machine at a trade fair. By initiating criminal proceedings, A can have the machine seized at the trade fair. In this way, the infringing product is secured and, at the same time, evidence can be collected for subsequent civil proceedings.
A has evidence that C is currently manufacturing a new machine in its halls. He submits initial evidence for this, in particular initial plans and email correspondence. After the civil court has granted the preservation of evidence, a bailiff and an expert visit C's halls and take photos and copies of the plans. If necessary, the machine can also be temporarily removed.
