German Federal Supreme Court ruling gives more effect to ‘torpedo’ actions on patents

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German Federal Supreme Court ruling on Mölnlycke case gives more effect to torpedo actions - .PDF file.

In a recently published decision (ref. no. X ZR 70/12 – Wundverband), the German Federal Supreme Court ruled that an exclusive licensee cannot bring patent infringement proceedings, if the patentee himself has already brought patent infringement proceedings against the same defendant and the license was granted only after proceedings by the patentee had been initiated. This decision might limit the options of a patentee to sue an infringer who has already filed a “torpedo” action under the same patent. 

The new decision is the latest development in a patent dispute between Swedish Mölnlycke Health Care AB and BSN medical GmbH that has kept courts in Europe busy since 2008. It provides insight into a common strategy of patent proprietors in dealing with the effects of a “torpedo” action. Torpedo actions are declaratory actions for non-infringement of a patent, commonly brought in a slow moving jurisdiction by a potential infringer and often covering patents in several jurisdictions. Torpedo actions – which may take several years in some jurisdictions – bar the patent proprietor from asserting its patent against the potential infringer, for conflicting pendency in accordance with Art. 27 of Regulation 44/2001 (“Brussels Regulation”). One way to avoid the blocking effect of a torpedo action is to license another party, which is not a party of the torpedo action, and have this party bring suit against the potential infringer. As the present case shows, this is not without risks…

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