This country-specific Q&A provides an overview of the legal framework and key issues surrounding patent litigation law in Austria.
This Q&A is part of the global guide to Patent Litigation.
For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/patent-litigation/
What is the forum for the conduct of patent litigation?
Austrian has a bifurcated system. In infringement proceedings the Commercial Court of Vienna has exclusive jurisdiction. Invalidity proceedings and opposition proceedings against national patents take place before the Austrian Patent Office (APO).
Patent infringement cases before the Commercial Court Vienna are decided by specialist senates composed of two professional judges and one lay judge with technical expertise, who is usually a patent attorney. Decisions of the Commercial Court may be appealed to the Higher Regional Court Vienna, where patent cases are also decided by a three-judge senate, with one lay judge with technical expertise. An appeal to the Austrian Supreme Court is possible if the case depends on a fundamental question of law of importance beyond the particular case. At the Supreme Court, a senate of two technical judges and three professional judges decides patent cases.
Opposition proceedings are decided by the Technical Department of the APO and the Revocation Division decides in invalidity proceedings. Cases are decided by one legally qualified and two technical members in opposition cases and by two legally qualified and three technical members in invalidity cases. Decisions of the APO may be appealed to the Higher Regional Court Vienna and then – in cases dependent on a fundamental question of law – to the Supreme Court. The composition of the deciding senates at the Higher Regional Court and the Supreme Court is the same as in infringement cases.
What is the typical timeline and form of first instance patent litigation proceedings?
Infringement proceedings are typically initiated by a complaint. A preliminary injunction (PI) application may be filed together with the main action or separately before initiation of main proceedings. Furthermore, since urgency is not a requirement a PI may even be applied for during main proceedings.
Main and PI proceedings are held before the same court (Commercial Court of Vienna) and usually before the same senate.
In main proceedings, the court has to suspend proceedings if it doubts the validity of the patent (which is not uncommon). The defendant then has one month to file an invalidity application with the APO and provide proof of having done so to the infringement court. The infringements proceedings are only continued after there is a final decision in the invalidity proceedings.
There is not necessarily a special hearing on claim construction or on the issues of liability and damages in infringement proceedings. The course of proceedings is largely in the discretion of the judges, which may or may not decide to hold a separate hearing on these questions.
If a PI application is filed together with the main action, the latter is stayed until a final decision is reached in PI proceedings. If the PI application was filed separate from the main action and the PI is granted, the court will set a deadline for the applicant to file a main action (around 6 weeks). The subsequent main action is mandatory. If the applicant does not file the main action within this deadline, the PI may be lifted.
Contrary to main proceedings, in PI proceedings the infringement court has to rule on the question of validity on its own. It cannot suspend proceedings. In case of considerable doubts about the validity of the patent, it must deny the PI application or grant the PI only under a security deposit.
The duration of the first instance proceedings depends on the complexity of the case. Main proceedings that are not stayed due to an invalidity defence take between 1 to 2 years in first instance. A final decision in the invalidity proceedings before the APO takes between 2 to 4 years, which is, therefore, the duration that mains proceedings are prolonged in case of a suspension. First instance PI proceedings take between 3 to 9 months.
Can interim and final decisions in patent cases be appealed?
Decisions of Commercial Court Vienna in PI and main proceedings, as well as decisions of the APO in opposition and invalidly proceedings, may be appealed to the Higher Regional Court Vienna both on factual and on legal grounds. However, no new evidence may be submitted during the second instance proceedings.
In PI proceedings, the deadline to file an appeal is two weeks. In main proceedings, it is four weeks. These deadlines are not extendable. The appeal must contain all the grounds and arguments in its support; there is no possibility to bring further arguments at a later stage.
Decisions of the APO may be appealed within two months.
There is no permission required for an appeal against a first instance decision.
If a PI was granted in first instance it becomes immediately enforceable and appeals in general do not have a suspensive effect. However, the court may grant an appeal suspensive effect, if the purpose of the appeal would otherwise be frustrated and the applicant and the applicant will not suffer a disproportionate disadvantage due to the suspensive effect (rare in patent cases).
An appeal against a decision in main infringement proceedings or in proceedings before the APO does have suspensive effect. For main proceedings, this means that the decision is enforceable only after being confirmed on appeal in a final and binding way. For opposition and invalidity proceedings this means that the patent stays valid until the decision becomes final. Furthermore, a granted PI generally stays enforceable as long as there is no final decision in main proceedings and/or opposition or invalidity proceedings. There are limited grounds to lift a granted PI.
Decisions of the Higher Regional Court Vienna may be appealed to the Supreme Court if the case depends on a fundamental question of law of importance beyond the particular case. In its decisions, the Higher Regional Court has to state whether the case depends on such a question. If the Higher Regional Court denies that such a question is raised by the case, an appeal to the Supreme Court is nevertheless possible if the value of the matter in dispute is beyond € 30.000 (usually unproblematic in patent cases). However, in all cases, the Supreme Court may itself rule that there is no question of law of fundamental importance and reject the appeal outright.
In PI proceedings a second instance decision typically takes between 3 to 6 months and second and third instance decisions take between 6 to 9 months each. In main proceedings as wells as in proceedings starting before the APO both the second and third instance decisions usually take between 6 to 9 months.
Which acts constitute direct patent infringement?
Sec 22 para 1 Austrian Patent Act (PA) prohibits the manufacture, putting into circulation and offering for sale and use of an invention protected by a patent and possessing or importing it for these purposes on a commercial scale in Austria.
Any of these acts is a direct patent infringement.
Furthermore, according to Sec 22 para 2 PA if the patent protects a process, the protection of the patent extends to the products directly obtained by that process. This means that also the putting into circulation, offering for sale, etc of such a product infringes the patent.
Do the concepts of indirect patent infringement or contributory infringement exist? If, so what are the elements of such forms of infringement?
Indirect patent infringement
Indirect patent infringement is prohibits the offer for sale or supply of means relating to an essential element of the invention to persons not authorised to use the invention, if it is known or if it is obvious from the circumstances that these means are suitable and intended to be used in the use on a commercial scale of the invention (Sec 22 para 3-5 PA).
Although this provision was introduced over 15 years ago, there is no Austrian case law on it. However, since it was based on Art 26 of the European Community Patent Convention (CPC) and especially Sec 10 German Patent Act, German case law may be used for interpretation.
Under Austrian civil law, the general principle applies that assistants and instigators are equally liable as the direct infringer (Sec 1301 Austrian General Civil Code). This also applies in patent law and is independent of the provisions on indirect infringement. Assistant is a person who consciously supports the acts of infringement. Instigator is a person who designates or convinces another person to commit an act of infringement. Contrary to the direct offender both the assistants and instigators must act with intent, which also has to be proven in court.
However, if intent is proven, the other requirements of indirect infringement (e.g. essential elements) need not be met.
Since the assistants and instigators are treated exactly like the direct offender once their liability is established, the same remedies may be invoked against them.
How is the scope of protection of patent claims construed?
The scope of protection is determined from the perspective of an expert skilled in the art based on the patent claims. However, the description and the drawings shall be used for the interpretation of the patent claims (Sec 22a para 1 PA).
The claims, therefore, have priority over the content of the description and the drawing, which merely have an auxiliary function. Subject matter which is only mentioned in the description and the drawing but is not reflected in the wording of the claims is, therefore, irrelevant.
At the same time, the claims always have to be interpreted using the description and the drawing and not just when the meaning of the wording of the claims would otherwise be unclear.
Of secondary importance is information outside the patent, as the general language usage of the relevant experts or technical dictionaries.
Furthermore, the Protocol on the Interpretation of Art 69 of the European Patent Convention (EPC) is to be used in interpretation (Sec 22a para 1 PA).
According to the doctrine of equivalents, the scope of protection also extends to objects which fulfil all features of the patent equivalently.
Equivalent infringement is established by the following three-pronged test set out in the Austrian Supreme Court decision of Bicalutamid II (Austrian Supreme Court 20.05.2008, 17 Ob 6/08v; based on the German Schneidemesser decision) and recently confirmed by the Austrian Pemetrexed decision (Higher Reginal Court Vienna 12.04.2018, 133 R 15/18f):
a) The modified embodiment must solve the problem using modified, but objectively equivalent means (equivalent effect);
b) the person skilled in the art is able to infer the alternative means, based on his expert knowledge, as having an equivalent effect with regard to the solution of the problem (obviousness);
c) the considerations of the person skilled in the art are oriented towards the meaning of the technical teaching protected by the patent in such a way as to ensure that the person skilled in the art will take the alternative embodiment into consideration as an equivalent solution to the patented embodiment (‘equivalence’ or ‘parity’).
So far case law has confirmed that prosecution history and the Patent Office files are not to be considered for patent interpretation in infringement proceedings. However, Austrian law also contains the possibility of filing a declaratory action asking the court to rule if a certain object infringes the patent (Sec 163 PA; see Question 27.). In this quite rare proceeding, the court has to take the Patent Office files into account, which can potentially lead to a different outcome than an interpretation during infringement proceedings. However, also in these proceedings there is no strict prosecution history estoppel. Rather the Patent Office files are merely an additional basis for interpretation.
What are the key defences to patent infringement?
Besides contesting the infringement itself, claiming the invalidity of the patent is the most common defence.
Since in PI proceedings the infringement court has to rule on the validly of the patent and deny the injunction if it considers invalidity likely the question of validity often becomes the main subject of PI proceedings.
In main proceedings, the court may stay proceedings until the final decision in the invalidity proceedings before the APO once a substantiated invalidity defence is raised by the defendant.
Other kinds of defences are less common and include prior use, that the alleged infringer only practiced the prior art (Formstein defence), relying on (implied) licenses and invoking the statute of limitations. Furthermore, exhaustion of rights may be invoked regarding products placed on the market in the European Economic Area with the consent of the patentee.
In cases concerning pharmaceuticals, the so-called Bolar exemption (for clinical tests for regulatory approval) may be invoked.
Anti-trust arguments and the necessity of a compulsory license may potentially be invoked but are rare in practice.
What are the key grounds of patent invalidity?
The grounds for invalidity are:
- Lack of novelty.
- Lack of inventive step.
- Lack of industrial applicability.
- Breach of good morals.
- Insufficient disclosure.
- Added matter.
- Lack of patentability (Computer programs, therapeutic methods, plant and animal varieties, biotechnological inventions according to Directive 98/44/EC, etc)
Furthermore, a patent can be revoked if the patentee is neither the inventor nor his successor in title. However, only the real inventor or his successor in title may file a corresponding application before the APO. There is no case law yet on the question of how the possibility that a patent may be revoked because that patentee is neither the inventor nor his successor in title effects the infringement proceedings.
How is prior art considered in the context of an invalidity action?
certain grounds of invalidity but not others (e.g. lack of novelty but not obviousness).
Prior art is everything made available to the public by means of a written or oral description, by use, or in any other way, before the priority date. There are no restrictions as to the geographical location where or the language or manner in which the information was made available to the public; also no age limit is stipulated for the sources of the information.
In assessing novelty (but not obviousness), patent applications that were filed but not yet published on the priority date are also considered.
On the issue of novelty, it is not permissible to combine separate items of prior art. All relevant features must be disclosed in one document.
Case law has held that the problem-solution approach may be used to determine obviousness. However, other approaches may also be used.
The first step in accessing obviousness is to establish the closest prior art as a starting point for the problem-solution approach. The closest prior art is the document which is the most promising starting point for a development leading to the invention. In selecting the closest prior art, the first consideration is that it must be directed to a similar purpose or effect as the invention or at least belong to the same or a closely related technical field as the claimed invention. In practice, the closest prior art is generally that which corresponds to a similar use and requires the minimum of structural and functional modifications to arrive at the claimed invention.
In the context of obviousness, it is permissible to combine several documents. However, the fact that more than one disclosure must be combined with the closest prior art in order to arrive at a combination of features may be an indication of the presence of an inventive step.
Can a patentee seek to amend a patent that is in the midst of patent litigation?
The Austrian Patent Act does not provide for special amendment or limitation proceedings. However, the patentee may waive parts of his patent via an application before the APO (Sec 46 PA). The APO examines the admissibility of the waiver and especially if the scope of protection is not in any way broadened or extended beyond the original disclosure by the partial waiver.
In infringement proceedings, the patentee is allowed to amend a claim, irrespective of whether he already filed a formal waiver with the Patent Office. Case law has confirmed that a limitation is always possible, even during infringement proceedings, provided that it leads to a narrower scope.
Is some form of patent term extension available?
The term of patents for medicinal or plant protection products may be extended through Supplementary Protection Certificates (SPC) granted under the general EU SPC Regulations ((EC) no 469/2009), which provides for additional protection for a maximum of 5 years. This aims to offset the loss of patent protection for pharmaceutical and plant protection products that occurs due to the compulsory and lengthy testing and clinical trials these products require prior to regulatory approval.
An additional six-month extension is possible in accordance with the Pediatric Regulation ((EC) No 1901/2006) if the SPC relates to a medicinal product for children for which data has been submitted according to a Paediatric Investigation Plan (PIP). PIPs are required to support the authorisation of medicines for children and aim to ensure that enough data is collected on the effects of the medicine on children. The extension compensates for the additional clinical trials and testing that PIPs require.
An application for an SPC has to be filed within six months after the grant of an authorisation to place the product on the Austrian market as a medical product. If the authorisation to place the product on the market is granted before the basic patent, the application for the certificate has to be filed within six months after the patent was granted.
In the SPC registration procedure, the APO does not examine whether the marketing authorisation is really the first one or if an SPC for the product already exists.
How are technical matters considered in patent litigation proceedings?
Ultimately technical matters are examined by the technical lay judge (usually a patent attorney), who is part of the deciding senate in infringement proceedings.
Additionally, expert opinions are an important part of infringement proceedings.
Private experts are especially important in PI proceedings, since the court will generally not appoint an expert, because only readily available evidence is admissible in PI proceedings. Private experts are usually patent attorneys. In complex cases, however, more and more also experts from the relevant field are used to support the patent attorney.
In main proceedings, on the other hand, court-appointed experts (also usually patent attorneys) often play a deciding role. The court-appointed expert will render a written opinion on the validity and/or infringement of the patent. The parties then have the right to pose additional questions to the expert in writing and during a hearing.
Usually, the court will follow the opinion of the appointed expert. Even in second instance, his opinion will seldom be overturned. However, it should again be noted that if the court-appointed expert considers the patent likely to be invalid the infringement court must stay proceedings. The final decision on invalidity is always made by the APO, where the opinion of the court-appointed expert will have little effect.
If there are reasons to assume that a court-appointed expert is not objective and impartial the parties may file a motion the reject him.
Is some form of discovery/disclosure and/or court-mandated evidence seizure/protection (e.g. saisie-contrefaçon) available, either before the commencement of or during patent litigation proceedings?
Before and during proceedings parties may request the seizure of evidence via a PI application. This possibility was introduced in Sec 151b PA to implement Art 7 Enforcement Directive (2004/48/EG). However, Sec 151b PA provides little guidance regarding the specific evidence requirements for this kind of PI, in particular whether invalidity and infringement must be evidenced and to what extent of certainty.
Under section Sec 151b PA, in principle the preservation of all evidence necessary to prove an alleged patent infringement may be requested, without the applicant being required to specify in advance what piece of evidence precisely should be seized. Provided that these measures are proportionate it is therefore possible to request the large scale search of business premises and computer systems or taking of chemical samples. A PI for the securing of evidence is carried out by the bailiff, which – if necessary – may be assisted by an expert.
Apart from a PI under section Sec 151b PA, it is furthermore possible to apply ahead of pending proceedings for the securing of evidence in the form of an on-site inspection or hearing of witnesses or expert through the court itself, if there is a danger that this piece of evidence will be lost or changed before main proceedings (Sec 384 Austrian Civil Procedure Code (CPC)). However, this provision is now in practice largely superseded by the possibility of requesting the seizure of evidence in the form of a PI.
In main proceedings, it is furthermore possible to apply for an order requesting the production of documents and other pieces of evidence which are in the hands of the other party (Sec 303-307, 369 CPC). However, a requirement for this kind of order is that the piece of evidence is specified in detail. Furthermore, these orders in most cases cannot be enforced and the only sanction is that the court may draw an adverse inference from the fact that the ordered party does not comply. These measures are, therefore, largely toothless in practice.
Are there procedures available which would assist a patentee to determine infringement of a process patent?
In the case of process patents for the manufacture of a novel product, any product of the same nature is deemed to have been manufactured by the patented process unless proof to the contrary is provided by the defendant (Sec 155 PA).
This means there is a reversal of the burden of proof to the disadvantage of the defendant with regard to infringement if the plaintiff proves that
- the product that is manufactured by the patented processes is novel, whereas novel here has the same meaning as in patent law in general, and that
- the attacked product has the same nature as the product manufactured by the patented processes, which means that the attacked product has essentially identical properties, whereas differences that are explained, for example, by the usage of different additives which do not concern the process itself are irrelevant.
If the plaintiff is able to establish this, the defendant has to prove that the attacked product was produced by an alternative process. It would be insufficient if the defendant merely proves that the product could potentially be manufactured by an alternative process, without proving that the relevant attacked product was actually produced by the alternative process.
Are there established mechanisms to protect confidential information required to be disclosed/exchanged in the course of patent litigation (e.g. confidentiality clubs)?
Until recently, Austrian provisions did not provide for specific mechanisms in order to ensure the protection of confidential information during civil proceedings.
Only with regard to orders to provide evidence based on Secs 303-307, 369 CPC the law foresaw the right of the ordered party to refuse this order if the sought after evidence contained trade secrets. Furthermore, witnesses may refuse to testify if they otherwise have to reveal trade secrets (Sec 321 para 1 CPC).
However, there was no statuary possibility to ensure confidentiality vis-à-vis the other party regarding the information contained in evidence once the evidence was introduced to proceedings.
This was especially a problem regarding PIs requesting the seizure of evidence, since potentially large quantities of confidential information could be seized. However, since the Enforcement Directive required the protection of confidential information, the Austrian Supreme Court ruled that such information should be protected via ‘procedural measures’, but without specifying what these measures should be (Austrian Supreme Court from 30.08.2017, 1 Ob 75/17m).
However, at the beginning of 2019, the EU Directive on Know-How and Trade Secrets ((EU) 2016/943) was implemented and comprehensive procedural measures to protect trade secrets during civil proceedings were introduced in Sec 26h Austrian Unfair Competition Act. Based on this provision it is now, for example, possible that the trade secret is only fully disclosed to a court-appointed expert who then reports to the court and that a trade secret does not become part of the file which is accessible to the other party (in camera review).
However, there is no case law yet if this provision applies to all civil proceedings or only in proceedings where the infringement of trade secret is the subject matter. Nonetheless, due to the requirements of the Enforcement Directive to protect confidential information and the lack of other law on which this could be achieved, at least an analogous application with regard to PIs requesting the seizure of evidence is warranted.
Is there a system of post-grant opposition proceedings? If so, how does this system interact with the patent litigation system?
Against patents granted by the APO, anyone can file an opposition within four months from the announcement of the grant of a patent. It may be based on the same grounds as an invalidation action (see Question 8).
After a copy of the opposition is served, the patentee has two months to respond in writing. This time limit may be extended on reasonable grounds
The referee in charge of the respective case then decides on the further course of proceedings in respect of any further correspondence, hearing of the parties, obtaining evidence offered by the parties and the taking of evidence. The chairperson may order a public hearing on request or ex officio.
As described above under Question 2., the infringement court has to stay main proceedings if it considers the patent likely to be invalid. Pending opposition proceedings may be seen by the court as an indication of invalidity, but non-final decisions do not bind the court in any way. If the court stays the infringement proceedings the defendant has to file an invalidity action or opposition. If invalidity or opposition proceedings are already pending between different parties, the defendant may also join these proceedings. The court has to continue the infringement proceedings only after there is a final decision in invalidity proceedings.
To what extent are decisions from other fora/jurisdictions relevant or influential, and if so, are there any particularly influential fora/jurisdictions?
Since German law and legal tradition are similar and due to the fact that Germany is a far larger jurisdiction with case law on many more questions, Austrian courts and lawyers often use German case law and literature. This applies both in cases where no precedent in national law exists and with regard to decisions on foreign equivalents of a patent.
In patent matters, British, Swiss and Dutch courts are generally highly respected in Austria. With regard to questions of validity, the decisions of the EPO are of course also highly relevant and negative decisions of the EPO in opposition proceedings against European patents are binding throughout Europe.
Austrian case law states that foreign decisions on equivalents of a patent are not binding in Austria but their reasons may be submitted as evidence (Austrian Supreme Court from 19.11.2009, 17 Ob 24/09t - Nebivolol).
How does a court determine whether it has jurisdiction to hear a patent action?
The Commercial Court Vienna has exclusive jurisdiction in patent infringement cases. This also applies also if the action is based on a foreign patent.
In principle it is possible to sue in Austria based on a foreign patent, for example, if the defendant has his seat in Austria (Art 4 Brussels Ia Regulation ((EU) No 1215/2012)). However, if the defendant questions the validity of the patent the Austrian court will lose jurisdiction in favor of the court of the Member State of the EU in which the patent was applied for (Art 24 para 4 Brussels Ia Regulation). Since this is an exclusive jurisdiction, the Austrian court has to declare of its own motion that it has no jurisdiction and the parties cannot agree upon which country shall have jurisdiction.
What are the options for alternative dispute resolution (ADR) in patent cases? Are they commonly used? Are there any mandatory ADR provisions in patent cases?
Arbitration is possible but rare in patent infringement matters. The main reason for this is that invalidity may not be raised as a defense with erga omnes effect. In addition, a technical lay judge is part of the deciding court, so the judges are typically technically qualified.
What are the key procedural steps that must be satisfied before a patent action can be commenced? Are there any limitation periods for commencing an action?
No specific procedural steps are required before filing a lawsuit; neither engaging in mediation nor warning letters are necessary.
With regard to PI proceedings also urgency is not a requirement.
Only the general limitation period applies, which for all infringement claims is:
- (a) 3 years after becoming aware of the injuring party and damage or
- (b) 30 years after the damaging act took place (absolute time limit) if (i) the damaged person is not aware of the damage or the injuring party, or (ii) the damage results from an intentional criminal offense, with a possible prison sentence of up to 1 year.
Which parties have standing to bring a patent infringement action? Under which circumstances will a patent licensee have standing to bring an action?
Each patentee has a right to sue. This means that if the patent is held by more than one person, each patentee independently may bring a suit against an infringer (Sec 27 para 3 PA).
Also an exclusive licensee and a (non-exclusive) licensee with an express right to sue may bring a patent infringement action. The license agreement must neither be in writing nor be registered with the patent register. However, since the existence of the license agreement must be evidenced in infringement proceedings to prove standing, both can be useful.
Who has standing to bring an invalidity action against a patent? Is any particular connection to the patentee or patent required?
Everybody can bring an invalidity action against a patent. However, if the patent expired during invalidity proceedings, the applicant has to establish a legal interest in continuing proceedings (e.g. because he is involved in parallel infringement proceedings).
Are interim injunctions available in patent litigation proceedings?
Preliminary injunctions / interim injunctions are possible a PI application is usually the start of infringement proceedings. A PI request may be filed at any time, with the main action or before and – since urgency is not a requirement apart from ex parte requests – after initiation of main proceedings.
PI proceedings are held inter partes in most cases. Ex parte proceedings are possible if the enforcement of the claim would otherwise be prevented, (very rare in patent cases).
In inter partes proceedings, the court will serve the opponent the PI application within a few days after filling and grant a right to respond within a deadline of usually between 7 and 21 days. It is customary that at the request of the applicant the parties may file a second brief each; however, there is no statutory right for such ‘second round’. If such ‘second round’ of briefs is allowed, this prolongs proceedings for at least another 6 weeks.
PI proceedings are usually solely held in writing. However, oral hearings are possible in theory and are at the discretion of the court.
In PI proceedings (as in main proceedings) the applicant has to show ownership of the patent or a right to sue based on a license agreement, validity and infringement. In PI proceedings only prima facie evidence is required. This means that the parties only have to show the predominant probability of their respective positions and that only readily available evidence may be submitted. The exact meaning of ‘predominant probability’ is not entirely clear, but in practice it means a standard of proof which is only somewhat below the standard of proof in main proceedings.
The applicant therefore is advised to provide a substantiated argument with regard to validity and infringement (e.g. through private experts) already in its initial brief if he expects being challenged by the opponent on these points.
If the court doubts the validity of the patent it may not suspend PI proceedings but must rule on the question of validity itself. If the applicant failed to provide prima facie evidence for validity the court, therefore, has to deny the PI application.
Because of the principle that only readily available evidence is admissible, the court will generally not appoint an expert in PI proceedings. Private experts, therefore, have special relevance.
The only claims that may be asserted in PI proceedings are injunctive relief and possibly removal of the infringing goods from the channels of commerce. However, the extent of the latter is contentious and previous case law of the Austrian Supreme Court speaks against the possibility to ask for removal of products in the channels of commerce that are no longer in the sphere of control of the applicant.
There is no balance of interest requirement in Austria. Once infringement and validity are established the court will grant an injunction. Courts may, however, grant the PI under the condition that the applicant places a security for potential damages of the opponent due to an unjustified PI. If a security is ordered the PI will only become enforceable once the opponent places the security with the court. This is often done in the form of a bank guarantee.
In setting the amount of the security, the courts will at their own discretion estimate the potential damage without making any special inquiries or stating the reasons for their decision. However, the parties may provide prima facie evidence with regard to the amount of potential damages.
In theory, the law also provides for the possibility that the court sets a security for the opponent. In this case, the PI would be lifted once the opponent pays the security. However, according to case law, this provision is not applicable in patent infringement cases (Austrian Supreme Court 16.02.2011, 17 Ob 5/11a).
As stated under Question 2., first instance inter partes PI proceedings take around 3 to 9 months. In the rare case of ex parte proceedings, a PI can be obtained within a few weeks.
A PI becomes immediately enforceable once it was served to the opponent (and if applicable the security was paid). An appeal against the PI in general does not have a suspensive effect (see Question 3.).
What final remedies, both monetary and non-monetary, are available for patent infringement? Of these, which are most commonly sought and which are typically ordered?
The most common and important remedies are final injunctions (see Question 26.) and monetary claims (see Question 25.).
Additionally, removal from the channels of commerce and destruction of infringing objects can be ordered, provided the rights of third parties are respected.
The patentee has also a claim to the rendering of accounts in order to allow calculation of damages. Moreover, the patentee has a right to information about the origin and channels of distribution of infringing products.
Furthermore, courts may allow the winning party to have the verdict of the judgment published in an appropriate media at the opponent’s expense.
Lastly, it is also possible for the patentee to prosecute the infringer under criminal law. However, this has little to no relevance in practice since it is rarely possible to prove criminal intent.
On what basis are damages for patent infringement calculated? Is it possible to obtain additional or exemplary damages?
There are three different ways of calculating the height of monetary claims, which the claimant is free to choose between. They are:
- ‘reasonable compensation’, meaning a hypothetical license fee (or the double amount of this hypothetical fee in case of gross negligence or intent);
- the actual damages suffered including loss of profits; or
- surrender of profits, which the infringer generated by infringing the patent.
However, the options of b) and c) may only be claimed if culpable patent infringement (intent or negligence) is proven. Before deciding which method to choose the claimant is entitled to a rendering of accounts by the infringer. Dependent on the result the claimant may choose the best option.
How readily are final injunctions granted in patent litigation proceedings?
If validity and infringement are proven in main proceedings the courts will grant a final injunction, which upon becoming enforceable forces the defendant to immediately stop all infringing activities (see Questions 4 and 5).
Public interests are rarely taken into account in the decision to grant a final injunction. There is no possibility that instead of an injunction the payment of royalties is ordered.
Under certain circumstances, the infringer may potentially claim a compulsory license in a separate proceeding (Sec 36 and 37 PA). However, this has little relevance in practice (the last decision on compulsory licenses dates back to 1972).
Are there provisions for obtaining declaratory relief, and if so, what are the legal and procedural requirements for obtaining such relief?
Both a patentee and an alleged infringer may bring declaratory petitions before the APO (Sec 163 PA). These proceedings are 'abstract', meaning that they are limited to the question of whether an article or method infringes the patent. Validity is not examined.
As mentioned under Question 6., the APO in determining the scope of protection will take Patent Office files into account, which is contrary to the determination of the scope of protection in infringement proceedings.
Austrian declaratory proceedings at the APO cannot be considered ‘Arrow’ declarations, because they do not block infringement proceedings.
A declaratory petition will be dismissed if infringement proceedings between the same litigants are already pending at the time of the filling of the declaratory action. Contrary, if infringement proceedings are started after declaratory proceedings, the declaratory proceedings may be continued in parallel. The declaratory decision can only have a binding effect on the infringement proceedings if it is issued before the first instance decision in the infringement proceedings, which is rare, since the APO is usually slower than infringement courts.
If the decision of the infringement proceedings conflicts with a later declaratory decision, the parties cannot file a motion for a new trial before the infringement court. Therefore, the practical importance of declaratory petitions before the Patent Office is limited.
In addition, parties may also file a declaratory action with the Commercial Court Vienna instead of the Patent Office. However, the interaction between these two types of declaratory actions is not clarified by case law.
What are the costs typically incurred by each party to patent litigation proceedings at first instance? What are the typical costs of an appeal at each appellate level?
The costs include attorney and court fees, expenses for experts and translations and, if main proceedings are lost, the reimbursable costs of the prevailing party.
Court fees, as well as the reimbursable attorney fees of the prevailing party, depend on the amount in litigation, which is set by the plaintiff when filing the PI request or complaint. The amount in litigation is a value to be chosen by the plaintiff more or less according to its own discretion.
Court fees have to be paid separately for the first instance as well as the second and third instance proceedings. A response to a suit or an appeal does not trigger any court fees.
Legal fees usually include the cost of a patent attorney, since they are retained to assist the representing attorneys-in-law with the technical questions of the case. Since attorneys-in-law and patent attorneys are by statue not allowed to form a law firm together, the patent attorney has to come from a separate firm.
The actual costs highly depend on the complexity and duration of the case and the value in dispute and typically range between EUR 20,000.- to EUR 120,000.- for first instance PI proceedings and between EUR 10,000.- to EUR 60,000.- for second and third instance proceedings. The cost of main proceedings is comparable but typically lower if the main questions have been dealt with in previous extensive PI proceedings.
Can the successful party to a patent litigation action recover its costs?
The losing party is required to reimburse the winning party’s court fees and other expenses (e.g. for experts and court interpreters) as well as the legal fees calculated on the basis of the Attorney Tariff Act.
In patent cases, the legal fees based on the Attorney Tariff Act and, therefore, the reimbursable fees are usually well below the actual cost.
Security for costs may only be imposed on foreign parties who have their domicile outside the EU (Sec 56 CPC).
What are the biggest patent litigation growth areas in your jurisdiction in terms of industry sector?
Life sciences continues to be the most important industry sector in Austria. In particular, we see more and more patents covering biologics being litigated.
Moreover, we observe a growing trend of activity in the automotive sector, in particular in the field of electric cars and automated driving. Artificial intelligence continues to be an area of interest, but no litigation is seen in this area so far.
What do you predict will be the most contentious patent litigation issues in your jurisdiction over the next twelve months?
In the life sciences field, courts will have to get accustomed to more biologics litigation and the fine differences to “traditional” pharma litigation between an originator product and generics.
In addition, some legal questions concerning cross-label use and carve-out questions are ripe for a legal determination and will likely be decided by courts in the near future.
Which aspects of patent litigation, either substantive or procedural, are most in need of reform in your jurisdiction?
Although PIs for the production of evidence are available, there is room for improvement as to the availability and effectiveness of such measures. It also remains to be seen if courts will effectively apply the new tools under the implemented Trade Secret evidence to balance the interests of patentees and parties alleging trade secret protection.
Moreover, orders for the production of evidence under Art 6 Enforcement Directive are largely toothless, as refusals to obey do not carry a sanction.
What are the biggest challenges and opportunities confronting the international patent system?
Although a never-ending story, the implementation of the UPC agreement and the adaptation of stakeholders to the new system of course pose a number of risks and chances for the patent community. Lawyers must be prepared to advise clients on the ups and downs of the new regime.
From the perspective of litigators, the growing number of patents granted and diversity of players in particular in the IT and automotive sectors has a real-life impact on businesses. Navigating the patent landscape without interfering with prior rights is increasingly complex, while at the same time debates questioning the automatic injunction in Germany and Austria are seen as a challenge to patentees seeking to enforce their rights.