In the early 2010s, as the energy industry increasingly sought sustainable solutions, several companies were working in parallel to develop highly efficient lithium-sulfur batteries that promised significantly higher energy density at lower cost for the first time. Two teams, one from a European start-up A and one from a large American corporation B, independently arrived at the decisive solution at almost the same time: a special electrolyte mixture that prevented the rapid aging of the sulfur cells and thus enabled stable long-term performance.
The patent applications arrived at the office within a short time of each other – the application from A on the evening of July 3, the application from B in the early morning of July 4. According to the priority principle applicable at the time, A was given legal priority, even though the technical solution was almost identical.
What was particularly controversial, however, was that B had already put his battery technology into practical use and delivered the first prototypes to business partners before A submitted the application. Nevertheless, this early start was irrelevant for legal priority – the only decisive factor was the date of the application. This allowed A to claim the patent and determine the further use of the technology, while B had to take a back seat despite his practical advance work.
The right of prior use is an important defense against allegations of patent infringement. It serves to protect individuals who were already in possession of the invention before the filing or priority date of a patent application and who used it in secret. This is to prevent someone who has developed an invention independently of a subsequent patent holder and has already put it into practical use from being excluded by the subsequent patent.
Without the institution of prior user rights, only the earlier right from A's application would be decisive. Since A filed his application one day before B, only A would be granted a patent; B's application would not be new due to the earlier right.
This would have serious consequences for B: although he had already developed the technology and produced prototypes, he would no longer be allowed to continue producing or distributing the batteries after the patent was granted. He would be forced to cease his work or purchase a license from A at his own expense.
This would render all of B's preliminary work, including investments in research, development, and initial applications, legally worthless. A would have the sole right of use, while B would be completely excluded from the market despite his early practical implementation.
A prior user right only arises if the alleged prior user already possessed the invention before the filing date of the subsequent patent. This means that he must have mastered the technical teaching to such an extent that he was able to put it into practice and that it falls within the scope of the patent claim. Purely theoretical knowledge or mere ideas are not sufficient.
In the case of lithium-sulfur batteries, B was already in actual possession of the invention before the filing date of A. Not only had he developed the theoretical idea of a special electrolyte mixture, but he had also mastered the technology to such an extent that he was able to produce functional prototypes. Thus, B had more than just technical knowledge or an idea: he was able to put the technical teaching into practice, and his solution fell within the scope of A's subsequent patent claim. This would fulfill the first requirement for a prior user right – possession of the invention before the filing date.
The prior user must act in good faith. He must not know or even suspect that someone else has made the same invention and applied for a patent. Good faith therefore protects the independent inventor. In practice, the burden of proof lies with the patent holder: they would have to prove that the prior user was not acting in good faith. This is often difficult due to the internal nature of this fact. Bad faith would only be provable in clear-cut cases, such as when the prior user obtained the invention through industrial espionage.
In the battery example, B acted in good faith. He developed the special electrolyte mixture independently of A and began to manufacture the first prototypes and deliver them to business partners – without knowing that A was working on the same solution or would register it shortly thereafter. Since B had no indication of a parallel development, he could neither know nor suspect that another inventor would claim the same technology. In this case, it would also be virtually impossible for A to prove bad faith on the part of B, as this concerns an internal fact. B therefore also fulfills the second requirement for a prior user right: he was in good faith possession of the invention before the filing date of A.
However, if A can prove that B obtained the invention unlawfully, for example if A had disclosed his development results to B under a confidentiality agreement, good faith would no longer apply.
Mere possession of the invention is not sufficient. The prior user must have seriously used the invention or at least taken serious steps toward commercialization by the filing date of the patent. This includes, for example, setting up production facilities, concluding supply contracts, or conducting pilot tests. Only those who have made practical preparations for their invention are granted a prior user right.
In the case of lithium-sulfur batteries, it is not sufficient that B had merely developed the special electrolyte mixture in theory or tested it in the laboratory. The decisive factor is whether he had also taken serious steps toward practical use by the filing date of the A. This is precisely the case here: B had already manufactured prototypes and delivered them to business partners. In doing so, he had not only tested the invention internally, but had also taken concrete steps towards commercialization. Such deliveries undoubtedly constitute a serious act of use, as they go beyond mere research and point towards practical market use. Through these activities, B fulfilled the third requirement: he not only possessed the invention, but also seriously used it until the filing date and worked towards its commercial implementation.
Public prior use is not necessary for the acquisition of prior user rights. The prior user does not have to have published the invention in order for his rights to arise. Secret, internal use within his own company is sufficient.
This creates a difference with regard to the issue of invalidity: if B had used or published the invention publicly before A's filing date, A's patent would be invalid because it lacked novelty. In the case of secret use, however, the patent remains legally valid, but B acquires a personal prior user right and may continue to use the invention.
The creation of a prior user right does not mean that the patent itself becomes invalid. Rather, it remains legally valid, with the special feature that the prior user receives a personal exception. Only the patent holder and the prior user may use the invention in parallel. This is particularly advantageous for the prior user, as they do not have to acquire a license or pay license fees. He may use the invention “free of charge” within the scope of his prior user right.
Even if A is granted the patent for the lithium-sulfur battery, the property right remains in principle. The patent is therefore not invalidated simply because B had already developed and used the same technology previously.
However, the prior user right grants B a personal exception: he may continue to use his battery technology even though A is the sole patent holder. Both A and B are thus allowed to use the invention in parallel, but all other competitors are excluded. This is particularly valuable for B, as he can continue his work without having to apply for a license from A or pay license fees. He may use the technology within the scope of his prior user right.
The prior user right is territorially limited. It only applies in the country where the prior use actually took place. For example, if B has prior used the invention in Austria, his prior user right applies exclusively in Austria. In other countries where he cannot prove prior use, he would not be able to invoke this right.
In the battery case, this means that B could only invoke a prior user right where he actually used the lithium-sulfur battery before the filing date of A. If, for example, B had only manufactured his prototypes in the USA and delivered them to partners there, a prior user right would only arise for the USA. In Europe—for example, in Austria or Germany—B could not invoke this right if he cannot prove prior use there. In these countries, only A's patent would apply, and B would have to refrain from using the battery technology or acquire a license. The prior user right therefore does not protect B worldwide, but only in the countries where prior use actually took place.
The prior user right allows the prior user to continue using the invention even after the patent has been granted, but only to the extent of the prior use. This means that he may use the invention as he already possessed or applied it before the filing date, with all the features that its specific design exhibits. An increase in the number of units is permissible, as the right is not limited to the previous production volume, but to the specific technical design. It is not permissible for the prior user to add additional patent-protected features and thus expand their implementation. The prior user's right extends only to the original technical solution, not to variants of the patent that go beyond it. However, modifications that do not fall under the patent claims are permitted, as they do not infringe on the property right.
B had developed a lithium-sulfur battery with a specific electrolyte mixture before the filing date of A, which prevented the cells from aging quickly. This specific design falls under A's later patent claim. B may continue to rely on this variant even after the patent has been granted – and he may increase the number of units.
However, it would not be permitted for B to subsequently equip his battery with a new cathode material that is also claimed in A's patent (e.g., a special conductive polymer layer). This further development would go beyond the original pre-used object and thus exceed the scope of the pre-user right.
B may therefore continue to produce his original battery with the pre-used electrolyte mixture, but may not install the cathode variant additionally protected by the patent.
The prior user's right protects not only the prior user itself, but also its customers and distribution channels. A lawsuit by the patent holder against the prior user's customers would also fail, as they are indirectly protected by the privileged legal status of the prior user.
B has been manufacturing lithium-sulfur batteries with its special electrolyte mixture since before the filing date of A. After the patent is granted, A attempts to take action not only against the prior user B, but also against its customers. For example, it sues a large Austrian manufacturer of power tools that installs B's batteries in its products for patent infringement.
However, this lawsuit would be unsuccessful. Since B has acquired a prior user right, its effect also extends to the protection of its customers and distribution channels. B's customers may continue to purchase and use the batteries without hesitation and without fear of patent infringement. A cannot therefore attempt to force B out of the market “through the back door” by attacking its customers.
The prior user right thus ensures that B is not only protected itself, but that its existing business relationships also remain legally protected.
