No right to continue legal action against an expired patent: Expansion and classification of the current BGH decision
With its judgment of July 19, 2022 (Case No. X ZR 110/21), the Federal Court of Justice (BGH) clarified that, as a rule, there is no longer a legitimate interest in legal protection for a nullity action regarding the intellectual property right after a patent has expired. With this, the court sets essential guidelines for the handling of patent nullity disputes and provides an important impetus for proceedings in the field of intellectual property law.
Legal background: Nullity action and patent cancellation
Companies and other holders of economic interests frequently resort to nullity actions when challenging the validity of a patent. The purpose of such an action is to have an invalid patent removed from the register, thereby safeguarding free competition in the market. However, if the patent is cancelled during the court proceedings, for example due to expiry or non-payment of annual fees, the question arises as to whether the lawsuit can be continued.
Key points of the BGH: Loss of the interest in legal protection
The BGH makes it clear that the expiry of the patent usually eliminates the interest in a ruling on the merits. The court thus follows the legal view that there is only a very limited public interest in declaring the nullity of an already cancelled patent. Such an interest might be considered, for example, if the retroactive effect of the nullity decision would significantly impact the legal position of third parties. As a rule, however, after the cancellation of the patent there is no longer any legally protected need to pursue the nullity process.
Exceptions and special constellations
Continued need for legal protection
Case law recognizes few exceptions, for instance, when a subsequent declaration of nullity could have direct effects on ongoing claims for damages or on license relationships. However, such a constellation requires that the decision in the nullity dispute would be of prejudicial importance for ongoing proceedings. Such exceptional cases are rarely recognized and are subject to strict conditions.
Practical significance
For companies, investors, and rights holders, the BGH decision increases legal certainty, as unnecessary litigation after the expiry of a patent is thus avoided. Especially in industries with high innovation speeds, such as information technology or the pharmaceutical sector, changes in the status of intellectual property rights can have significant effects on market opportunities and investment decisions. The judgment therefore serves to prevent conflicts and ensures greater clarity in proceedings, which should be taken into account especially by strategic patent managers and portfolio administrators.
Procedural consequences: Termination of proceedings and allocation of costs
After the patent has been cancelled, the court will generally discontinue the proceedings pursuant to Section 133 PatG. Since the main interest no longer exists, a decision on the nullity of the patent is no longer necessary. The termination of proceedings also affects the allocation of costs, whereby the costs incurred up to that point are to be apportioned in consideration of the status of the case. The decision also opens up the possibility of using procedural and economic resources more effectively and avoids placing further burden on the courts and the parties involved.
Summary and outlook
The BGH decision brings clarity to a previously disputed issue in patent law and enhances the efficiency of judicial proceedings. For business decision-makers and rights holders, this results in practical implications, for example regarding the planning of nullity actions and risk management in dealings with intellectual property rights. The consistent application of the lapse of the interest in legal protection for already expired patents helps focus legal disputes on matters relevant to the decision and increases the predictability of court proceedings.
Note on further developments and advisory needs
The legal situation in the field of intellectual property law is subject to continuous development, particularly through the case law of the highest courts. For specific questions and the assessment of individual situations, the lawyers at MTR Legal are available to provide both national and international advice.
