The defence against unjustified attacks based on intellectual property rights on the opportunity of trade fairs and exhibitions taking place in Germany
By By Heinz Goddar and Carl-Richard Haarmann
Updated: 2011-03-01

Background

Germany is one of the world’s leading locations for international specialist and consumer trade fairs. Numerous important trade fairs and exhibitions take place in Germany’s exhibition venues, including, for instance, the computer fair, CeBit in Hannover, the Hannover Trade Fair, the IFA (consumer electronics) in Berlin, the Nuremburg Toy Fair, the International Weapons Fair (IWA) in Nuremburg and the Frankfurt Car Show. These fairs and numerous other shows have a leading role in the world and as such draw large numbers of visitors and exhibitors each year from all over the world.

Increasingly, Chinese companies are also taking part in such trade fairs as exhibitors, using the outstanding opportunities offered to present products and technology as well as establish and develop international trade relationships. As Chinese companies and Chinese products gain a greater and greater foothold on world markets, such trade fairs and exhibitions in Germany become more and more important for these companies. This increased significance and market presence of Chinese companies, though, also leads to a greater potential for conflict with competitors. In this respect, Western companies have traditionally used especially intellectual property rights, namely patents, trademarks and copyrights in order to defend their market share against competitors. Whilst this type of competitive conflict has in the past been fought between Western industrial companies, such attacks have recently been directed, in particular, against the newly emerging competition coming from China. These companies are closing the technological gap to Western companies and this, coupled with an aggressive pricing policy has led many Western companies to view such Chinese firms as dangerous competition. In this context, the holders of industrial property rights often take advantage of the fact that the German justice system provides excellent opportunities to take swift and effective legal action against actual or alleged rights infringements due its more specialised courts, quicker and more efficient proceedings and traditionally more protection rights friendly court decisions.

As such, the assumption is at times not wholly wrong, that the – not exactly beneficial – possibilities for efficiently asserting intellectual property rights are not only used in cases of actual rights infringements but are used by some rights holders, sometimes apparently also with the help of the courts and authorities, in cases where a patent, trademark or competition infringement is not evident or even probable. In some cases, the accusation can certainly be made that the possibilities afforded by intellectual property rights are knowingly exploited and the courts, customs and police are intent not on investigating IP rights infringements but on attacking unwanted competitors with the sharp sword of intellectual property rights protection. Such actions are necessarily often taken against Chinese companies with trade fairs and exhibitions playing a central role as such events are crucial to companies’ market activities whilst also offering the opportunity to attack several competitors in a concentrated fashion to great, often devastating effect within a short period of time, at times with justification but at times, sadly, also with none. In light of the considerable damage which can be suffered by those subject to such attacks, it can be of the utmost importance for any company planning to participate in a trade fair or exhibition in Germany, to develop suitable strategies in good time, on how to defend themselves against attacks based on patents, trademarks and copyrights. This requires a precise knowledge of the legal sanctions which can potentially be applied in Germany as well as the preparation of suitable defence measures in good time.

I. Potential risks: instruments rights holders’ can use to pursue infringements of patents, trademarks or copyrights

1. Main action before the civil courts

The German legal system sees the primary and preferred way of asserting intellectual property rights to be the filing of a claim in the civil courts. Such claim proceedings are heard by highly specialised divisions of the responsible regional courts (Landgericht) and a judgement is usually reached within 12 to 14 months. The German courts, especially the patent infringement chambers, particularly those of the Regional Courts of Düsseldorf and Mannheim, enjoy an excellent reputation worldwide as leading rights infringement courts.

Such main proceedings are not, however, particularly significant as far as trade fair participation is concerned. The exhibition or sale of a rights infringing object on the occasion of a trade fair in Germany does constitute grounds for the jurisdiction of German courts, even if the exhibitor is based abroad and there are often cases where main proceedings are brought against foreign exhibitors in connection with trade fairs or exhibitions. However, this type of proceedings does not represent an acute risk to exhibitors as the infringement courts do not issue judgements which are directly enforceable whilst the trade fair is taking place. Thus, bringing proceedings in a civil court does not affect the current trade fair participation nor does it hinder the respective conclusion of business and presentation of goods.

2. Preliminary injunctive relief at civil courts

An additional or alternative possibility for an assertion of intellectual property rights at short notice under German law is to effect a preliminary injunction at the responsible civil court. The object of such a preliminary injunction is usually a cease and desist order, furthermore, obligations to disclose information are usually also imposed. Where appropriate, in particular in connection with trade fairs and exhibitions, the court orders the allegedly rights infringing objects to be seized and impounded, for instance devices or machines displayed. A preliminary injunction cannot be used, however, to determine damages nor comprehensive claims for information.

The holder of a patent, a trademark registration or a copyright claim can file an application for injunctive relief through a duly licensed attorney at law at the court which has the respective jurisdiction ratione loci and ratione materiae. Claims in respect of the infringement of intellectual property rights, must always be addressed to the respective specialist court. In doing so it is possible but not necessary to give the opposing party a prior verbal or written warning demanding they cease and desist the rights infringing activity. In the application for injunctive relief to be filed at the court, the rights holder must argue and show credibly that he is the holder of an enforceable right, namely a granted German patent or German part of a European patent, a utility model, a registered German trademark or copyright exploitation right. Furthermore, it must also be credibly shown that there is a high probability that the protection right, on which the application is based, is legally valid. It must be argued and shown credibly that the case constitutes a clear case of infringement of a right, and the responsibility of the opposing party must also be evident. Finally, the applicant must show that the matter has a high degree of urgency; this is usually assumed by German courts provided the application for injunctive relief is filed with the court within one month of the applicant becoming aware of the infringing activity. A further requirement for a court to grant a preliminary injunction is that the case and the protection right upon which it is based is not too complex. This is particularly relevant in respect of injunctive relief proceedings in connection with alleged patent infringements as the circumstances are often too complex in such cases to be dealt with in summary preliminary injunction proceedings.

After receiving a request for preliminary injunction, the civil court will usually rule within 48 hours, often without oral proceedings and without hearing the opposing party. In matters involving trade fairs, decisions are often reached even within a considerably shorter timeframe. The court can either grant the requested injunction, reject it or alternatively order oral proceedings at short notice. If the case is clear-cut, a preliminary injunction will often be granted with no further action. However, German courts generally tend not to make decisions in patent infringement cases without oral proceedings unless the patent on which the application is based has previously successfully passed opposition or invalidity proceedings. Once a preliminary injunction has been granted, the court notifies the applicant but not the opposing party. The applicant itself must then serve the decision, with the help of a bailiff, on the opposing party. This service must be undertaken within one month of the applicant’s receiving the preliminary injunction otherwise the decision is lifted by the court.

A preliminary injunction of a civil court must be unconditionally observed by the opposing party immediately upon being served. If the court has ordered a seizure of property, the bailiff secures the respective objects and takes them into his custody until a legally binding decision in later main proceedings. In the case of violations, the court then orders, upon application of the applicant, either a monetary fine, usually of considerable height, or imprisonment.

The legal remedy available to the opposing party is that he can file an objection with the court which granted the preliminary injunction. Upon receipt of such an objection, the court must order an oral hearing which can then take place with extremely short summons periods. In these oral proceedings, only the actual evidence available is admitted, arguments which have not been shown credibly and absent witnesses are not considered. Following the oral proceedings, the court passes a ruling against which the losing party can appeal – a decision on such an appeal will, however, generally only follow after some time has passed. If the court of first instance confirms the preliminary injunction in its ruling following oral proceedings, the opposing party must continue to observe such injunction. However, the opposing party can force the applicant to file a main action in order to have the dispute dealt with in non-cursory proceedings.

At this point, one may summarize that the possibility of obtaining and enforcing a preliminary injunction is a dangerous and effective weapon in the hands of a rights holder. It is relatively easy to effect and simple to enforce whilst the defence possibilities of the alleged rights infringer are restricted. Furthermore, the enforcement of a preliminary injunction is often unexpected and at an inconvenient time such as the beginning of a trade fair or exhibition thus placing the success of the participation in the event in jeopardy. The consequences of such a preliminary injunction for the opposing party are often comparable with those of judgement in main proceedings; in many cases the opposing party has lost the battle before he is even aware of any attack.


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