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Difficulties in Resolving a Patent Dispute – Declaratory Judgment Action on the Existence or Non-existence of a Licence Agreement

Frequently, national or cross-border patent infringement disputes end with the conclusion of a licence agreement. The Regional Court of Munich I (in the follwoing “the Court”) recently had the opportunity to comment on international jurisdiction, the legal nature of such a licence agreement and the rules of offer and acceptance applicable to its conclusion (final judgment of 25 February 2021, ref. 7 O 8011/20).

While an action was pending before the Swedish Patent and Commercial Court in Stockholm with regard to the amount of damages owed, due to the infringement of the patent in dispute and its family members, the parties were disputing before the Court, by way of a declaratory action, thequestion of the conclusion of a licensing agreement in the context of settlement discussions.

First, the Court affirmed its international jurisdiction arisingfromArt. 7 No. 1a) Brussels I Regulation, since in an action for a declaratory judgment the focus must be on the place of performance stated in the claim, which is of primary importance to the plaintiff. German law is also applicable because the plaintiff has its registered office in Munich (registered office of the defendant: Sweden). The reason for this is that the place of performance for the fulfilment of the contractual obligation (the granting of the right of use),according to Sec. 269 para. 1 German Civil Code, is the plaintiff’s registered office as recipient of the relevant contractual performance (see also Art. 3 no. 1 b) Introductory Act to the German Civil Code in conjunction with Art. 10 para. 1, 5 para. 1 Rome I Regulation).

Furthermore, the Court clarifies that the question of whether the defendant is entitled to an unlimited right of use for the patents of a patent family on the basis of a license agreement constitutes a legal relationship capable of being determined within the meaning of Sec. 256 German Code of Civil Procedure, and is therefore open to an action for a declaratory judgment.

Furthermore, the Court states that a license agreement is a sui generis contract and therefore, in the absence of a fixed legal character, it is not predetermined whichcontent a declaration of intent aimed at the conclusion of such a contract should have.

Finally, the legal action pending in Sweden, which was brought by the defendant here concerning the license fee payments, does not have priority either, since the plaintiff here is concerned with the existence of a right of use.

As a result, the Court dismissed the admissible action as unfounded because no effective license agreement had (yet) been concluded between the parties.

The decision exemplifies difficulties that can arise in practice in the context of cross-border infringement proceedings and illustrates which aspects the parties and their legal representatives should take into account in settlement discussions to resolve such disputes, in addition to the often primarily commercial considerations.

Our blog contributions shall provide an overview with regard to legal topics, legislation and case law and are supposed to provide some general information rather than constituting any specific advice. Please do not hesitate to contact Maiwald and in particular the authors of the particular contributions if have any questions on the addressed topics or on other legal issues.

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Authors

Dr Christian Meyer

Principal

Attorney-at-Law

Certified Specialist Lawyer for Intellectual Property