The Court of Justice of the European Union (CJEU) has removed a key barrier to winning preliminary injunctions (PIs) in patent litigation in the EU. In Phoenix Contact v. Harting, the CJEU overturned a Munich court’s rule that a PI may not be granted unless the asserted patent has survived a “first-instance” validity challenge—holding that this practice is inconsistent with an EU IP directive governing injunctions. While the decision binds all EU member states, it could have a particularly acute impact in Germany, a venue widely perceived as plaintiff-friendly where permanent injunctions are already the default form of relief.

A brief primer on German patent cases may give US readers some helpful context for this appeal. Unlike the US and other jurisdictions, Germany has a bifurcated patent litigation system: infringement claims are decided in completely separate proceedings from validity challenges, which can take the form of either opposition proceedings, filed before the German Patent and Trademark Office (GPTO) or the European Patent Office (EPO) for patents within nine months of issuance, or nullity proceedings, filed with the German Federal Patent Court (Bundespatentsgericht) regardless of issue date. The split nature of this system can put defendants at a disadvantage. In contrast to infringement litigation, generally known for its speedy resolution in German courts, nullity proceedings often take years, leading to what is commonly called an invalidity gap—a period during which a defendant is deemed to have infringed a patent that ultimately, sometimes years later, may be ruled invalid. This can be particularly significant because permanent injunctions are virtually always awarded in German patent suits, forcing a defendant to stop selling an infringing product while its validity challenge proceeds.

Preliminary injunctions—that is, injunctions put in place before infringement proceedings complete—are also available to plaintiffs but have been rarely granted due to their relatively stringent requirements. While the exact requirements vary per court, the party asserting the patent has generally had to, among other things, make a clear showing on both infringement and validity—the latter through a first-instance opposition or nullity proceeding. [1] (“First-instance” generally refers to the initial or lower court proceeding, while second-instance proceedings are appeals.)

In a January 2021 referral to the CJEU, the Munich I Regional Court challenged the requirement that a validity ruling is a prerequisite to a preliminary injunction in an infringement proceeding, as implemented in controlling caselaw from the Munich Higher Regional Court. The lower court asked in that referral whether such a practice violates EU law—in particular, what is commonly known as the EU’s Intellectual Property Right (IPR) Enforcement Directive (Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights):

Is it compatible with Article 9(1) of [Directive 2004/48] if German higher regional courts (Oberlandesgerichte), which have jurisdiction at last instance in proceedings for interim relief, refuse, in principle, to grant interim measures for patent infringement if the validity of the patent in dispute has not been confirmed in opposition or invalidity proceedings at first instance?’ (Quote from provisional English translation of Phoenix Contact v. Harting opinion.)

In other words, as later paraphrased by the CJEU in its April 28 opinion, the referral asked whether Article 9(1) of Directive 2004/48 prohibits national caselaw requiring the denial of injunctive relief “where the validity of the patent concerned has not been confirmed, at the very least, by a decision given at first instance in opposition or invalidity proceedings”.

This question, the court held, must be interpreted in the context of the surrounding language in the directive concerning injunctive relief. That language, in part, requires EU member states to provide for the issuance of preliminary injunctions to “prevent any imminent infringement”. The directive further establishes that the applicable measures must “enable the infringement of an intellectual property right to be immediately terminated, without awaiting a decision on the merits”, particularly when a delay in granting such relief would cause irreparable harm to the patent owner: “Thus, the ‘time’ factor is of particular importance for the purposes of effective enforcement of intellectual property rights”.

In this context, the CJEU held that the Munich court’s rule requiring validity decisions “deprives Article 9(1)(a) of Directive 2004/48 of any practical effect”. The rule “likely” encourages competitors of the patent owner to “knowingly decide to abandon a challenge to the validity of that patent in order to prevent it from enjoying effective judicial protection”—meaning, to prevent the issuance of a preliminary injunction. Such outcomes “would render the provisional protection mechanism provided for in Article 9(1) of Directive 2004/48 devoid of substance”. Moreover, the CJEU explained, since a rule like Munich’s would be “ineffective”, it would also run afoul of other provisions of the directive that call for a “high level of protection of intellectual property” across all EU member states.

Any risk that removing the validity decision requirement would cause harm to defendants, the court further found, would be mitigated by other provisions of the directive that require rules to nullify PIs if the patent owner unreasonably delays litigating claims on the merits, that allow rules requiring the applicant for a PI to “adequate security or an equivalent assurance” to compensate for any prejudice suffered, and that permit rules that otherwise provide compensation for such injuries.

For these reasons, the CJEU concluded that this requirement violates EU law:

Article 9(1) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as precluding national case-law under which applications for interim relief for patent infringement must, in principle, be dismissed where the validity of the patent in question has not been confirmed, at the very least, by a decision given at first instance in opposition or invalidity proceedings.

Since German patent law does not actually require that PIs be conditioned on validity decisions, the court also found that “that legislation is fully compatible with Directive 2004/48”.

It will take some time for the Phoenix Contact decision’s impact on litigation strategy to become clear, but in the short term it is likely that the ruling will lead to a marked increase in requests for PIs now that  the need for invalidity proceedings has been removed. Phoenix Contact could also improve “reliability” among German courts’ handling of PI proceedings: as reported by Juve Patent, some patent attorneys have complained that courts in Düsseldorf, Karlsruhe, and Munich had inconsistently applied the relevant caselaw. That same article also included a call for broader systemic change from Tobias Pichlmaier, formerly the presiding judge in the litigation below and one of the judges who filed the CJEU referral. Asked for comment on Phoenix Contact, he argued that the ruling underscores the need to do away with Germany’s bifurcated system altogether and follow other jurisdictions’ combined approach: “[I]t would . . . make most sense to merge the jurisdictions for infringement and validity, as envisaged by the [Unified Patent Court]. It is also common practice in other countries”.

[1] Peter Picht, German Law on Patent Injunctions: Legal Framework and Recent Developments, 19 Chi.-Kent J. Intell. Prop. 219 (2020); see also, generally, Thomas Kühnen, Patent litigation proceedings in Germany: A handbook for practitioners (Frank Peterreins & Carl Heymanns Verlag tran., 6th ed. 2013).