Germany is an attractive market for international companies due to its strategic location, quality engineering and world-class infrastructure; foreign firms account for 40% of patent filings in Germany!
Unsurprisingly, most of the top law firms prosecuting patents originate from both the USA and Japan – an indication of a more balanced patent prosecution strategy.
Shifting IP landscape
German patent landscape is shifting quickly. In the past, foreign companies were frequently filing German patent applications based on domestic research and development efforts for large multinationals looking to establish local IP portfolios across European nations – but between 2010 and 2015 this trend slowed substantially.
Sisvel v. Haier has altered the framework for licensing and litigation surrounding SEPs in Germany. More specifically, it brings German law closer to that of Huawei v. ZTE by prioritizing SEP holders over implementers and public interest considerations.
This has implications for FRAND licensing negotiations and court cases where SEP holders allege patent infringement. For example, the high court ruling indicates that implementers must respond quickly to an infringement notice from SEP holders alleging patent infringement – though this may not always be possible when dealing with complex sets of patents and standards. Nonetheless, no specific timeframe was specified by the high court nor did it demand details explaining any claimed infringments such as claim charts from implementers; silence for several months could indicate unwillingness to enter negotiations for license agreements.
Patent owners are increasingly taking advantage of their strong IP position by seeking injunctions against competitors attempting to use their patents. Nokia, for instance, has filed several infringement actions against Daimler and other companies related to its LTE patents, which enable smartphones and connected cars to connect to mobile networks via LTE networks. Nokia holds one of the strongest SEP portfolios for cellular technologies including essential patents essential to 5G technologies.
Consistent monitoring of patent grants in Germany and Europe is critical in order to identify and act upon potential threats in a timely fashion, particularly European patents which only allow opposition for nine months after grant. Furthermore, monitoring can identify patents likely to be declared null and void soon enough.
Role of Germany and German companies in global patent strategies
Germany is one of the world’s foremost industrial powers and innovation hubs. With an excellent track record in applying research findings to practical applications, Germany is widely praised for pioneering modern car technologies like high-speed roads and digitally networked mobility solutions. Germany also stands out as a premier location for start-ups with tremendous purchasing power and highly trained workers available for hire.
German patent law promotes industrial growth and diffusion while simultaneously protecting designs and trade secrets, with particular attention paid to designs by enterprises themselves. Furthermore, Germany was one of the first countries to introduce design law enabling enterprises to patent both their inventions as well as their production processes – thus giving businesses access to employees’ creativity while capitalising on existing innovations.
One key feature of Germany’s patent system is that companies can use deferral requests to postpone patent approval up to seven years, giving them more time for market research and gathering intelligence before deciding whether or not they need one.
At one time, obtaining a patent in Germany required assistance from an experienced patent attorney; however, recent years have seen significant improvement in Germany’s patent lawyers and their quality has increased substantially. Furthermore, DPMA is developing a more user-friendly website to make filing applications online simpler for companies.
DPMA also provides the option of filing for utility models, which they describe as an “fast IP right.” While patent applications typically take years for review and approval, utility model registration can often occur within weeks.
Additionally, the DPMA launched in 2021 a new process for handling applications for deferred examination. This aim is to expedite patent examination by cutting through unnecessary red tape.
One year ago, Germany introduced a new patent law, changing SS139 and giving judges at patent infringement courts more discretion; yet its impact has not been seen in court decisions such as IP Bridge vs Ford or Nokia vs Daimler.
German companies are known to be at the forefront of innovation and technology development and here are some key aspects of their role:
High Patent Filing Activity
German companies are the world’s top patent filers. Patent protection is sought for inventions and innovations not only in Germany, but also internationally. Patents provide legal protection for intellectual property and give them a competitive edge. They also encourage further research and development.
Technology and Innovation Leaders
German Companies are Technology and Innovation Leaders. German companies are known for their technological leadership in many industries including automotive, engineering and pharmaceuticals. The German companies invest heavily in R&D, which results in an endless stream of inventions and technological advances.
Patent Licensing & Cross-Licensing Agreements
German companies are often involved in cross-licensing or patent licensing agreements with international companies. These agreements allow them to gain access to valuable technology that is owned by others, while generating revenue from licensing their own patented technology.
Patent Litigation
Patent litigation is not unusual, given the highly competitive global market. Patent litigation has involved German companies as both plaintiffs and defendants. German law is renowned for its ability to resolve patent disputes. This has led companies to use their patent rights whenever necessary.
Global Collaboration
German firms collaborate frequently with international partners on research and development. These collaborations can lead to joint patents and technologies. This allows them to benefit from the expertise of different countries.
Patent Offices and Institutions.
The German Patent and Trademark Office, or DPMA, plays a vital role in granting and managing intellectual rights within Germany. German companies also actively participate in international conventions and organizations such as the European Patent Office and the World Intellectual Property Organization.
Standard Essential Patents
German companies also have played an important role in standardizing technology and contributing essential patents for various industry standards. This involvement can result in significant licensing revenues and influence within industry.
Inclusion into Industry Standards:
A technology that is included in an industry standard is considered essential. This means that the companies who implement the standard are bound to infringe the patent. SEP owners commit to granting fair and reasonable access to their technologies by licensing them under fair, reasonable and non-discriminatory terms (FRAND).
FRAND licensing
FRAND licensing is a key aspect of SEPs. Patent holders must offer their SEP licenses under fair and reasonable conditions, without discriminating any potential licensee. This prevents abuse of market-power and ensures that standard technologies are widely available.
Importance of SEPs in Technological Advancement
The SEPs are important in promoting technological advancement. Companies can focus on developing novel applications and improving existing technologies by licensing standard technology. This encourages healthy competition as well as further research and developments.
Patent pools
In certain cases, companies with SEPs that are related to the same standard industry may form patent pool. These pools enable them to license their patents collectively to interested parties. This streamlines the licensing process, and avoids potential disputes.
Litigation and Disputes
Despite FRAND, there can be disputes between SEP holders (owners of the patent) and potential licensees about what constitutes a reasonable and fair royalty rate. Negotiations or, if needed, legal action may be required to determine the licensing terms.
Build IP portfolio cost effectively
Patent portfolio optimization typically offers fast cost savings without hindering a company’s innovative capabilities, since patent maintenance costs typically comprise 20-40% of total IP budget and restructuring your portfolio may lead to significant near-term cost reductions.
However, it’s essential to remember that building an effective IP portfolio requires more than simply patents; rather it should include trademarks, trade secrets, software applications, data & analytics and designs as well as patents. An integrative approach to portfolio creation will provide cost effectiveness and value creation.
To create an IP portfolio cost effectively, the first step should be a comprehensive audit of patents and trademarks to identify low-hanging fruit. This can be accomplished using two typical cost driver screening criteria – 1) patent age/country; and 2) country of patenting – as these will help identify those patents which require further review from a business relevance standpoint.
IP rights must also adapt and expand alongside an evolving business strategy, so trademark usage may expand into new areas, or additional patent citations may need to be added in order to safeguard emerging technologies.
Due to this, having a well-rounded legal team that can assist in strategically developing and managing an IP portfolio is of vital importance for business.
As COVID-19 threatens the global economy, companies may be tempted to reduce patent filing and prosecution expenditure in order to save money; however, such an approach could negatively affect a firm’s competitive edge over time.
Re-examining IP portfolio costs regularly can help companies reduce IP costs to an affordable level and maintain leaner portfolio structures, freeing up funds to invest in innovation. A slimmed down portfolio also makes selling company IP easier as buyers will feel more at ease with warranty risks associated with sellers.
German AI patent software assistance
Patentees in Germany have access to numerous tools that can assist them in improving the quality of their portfolio and lowering risk of infringement, including ABBYY Smart Classifier which uses self-learning categorization of documents to identify classification results automatically, then analyzes these classification results manually if any manual confirmation is required – helping ensure the software keeps improving itself and patent examiners have access to high quality document classifications.
ABBYY InfoExtractor can also be used to process text data and extract pertinent information from documents automatically, feeding this into the training set of its AI-powered search software to provide more accurate and precise searches; this reduces false positives – an invaluable cost saving for companies paying expensive patent license fees.
As a result, software industry companies are turning more frequently to ABBYY’s AI patent search and classification software, especially those who need to process large volumes of data or gain competitive edge in their markets. Furthermore, this technology can reduce time and effort spent manually searching patents.
In Germany, patent applications must be filed in German; decision from the German Patent and Trade Mark Office can take 30 to 36 months; this delay can be reduced by following all steps correctly of the patenting process and engaging a lawyer or patent attorney to assess your likelihood of success in Germany.
Patents granted by the DPMA are only valid within Germany; however, applicants are encouraged to file an international patent application with WIPO and apply for individual patents in other countries – this can significantly reduce the work needed to secure one in Germany.
A recent DPMA study has shown that software patents from Germany are being sought out by organizations worldwide. US software patents in particular are seen by firms as essential, likely due to its large and sophisticated technology market requiring such protection against competitors who utilize copyrighted works as part of their market presence.