Germany: special inspection proceedings and trade secrets


Jens Künzel

For ten years, German intellectual property courts, above all the Düsseldorf District Court and Court of Appeal, have been developing and refining a procedure that allows IP owners to seek an inspection of devices presumed to infringe their rights.

Until 2002, German courts had been very reluctant to even consider such a claim, which was granted only if the claimant could establish a “high likelihood” that a right was infringed.

The Düsseldorf courts have developed a particular procedure (the so-called Düsseldorf procedure) that seeks to balance the parties’ interests. On the one hand, there is the claimant’s interest to acquire knowledge of all facts relevant to establish the infringement, and on the other is the defendant’s interest to keep his trade secrets secret.

In order to achieve that balance, the Düsseldorf courts combined two kinds of procedure that had already been available in German procedural law. The first part regularly includes an order to have a court-appointed expert examine certain specified devices or machines to determine whether a particular right is infringed. The expert is asked to inspect the device and prepare a written opinion.

The second part of the order is a preliminary injunction requiring the defendant to acquiesce to the inspection. The defendant cannot alter the inspection’s subject matter after the order has been served and must provide all information/codes/access to the information necessary for the expert to perform its inspection duties.

Refining the law

For about ten years, the courts have been refining the case law on the requirements for such an order and the particular problems that the written opinion’s content presents to the parties’ interests. In principle, until the question of whether the defendant can invoke relevant trade secrets that are worthy of protection is finally resolved, the opinion may not be submitted to the applicant. Its attorneys and patent attorneys of record are expressly obliged to keep the opinion and all facts relating to its subject matter secret, even vis-à-vis its own clients, until it is expressly released from this duty of confidentiality.

Sometimes, the dispute over whether there are protected trade secrets contained in the opinion, whether the opinion shows that the IP right is infringed and whether the opinion must be at least in part redacted in order to protect the defendant’s interests, takes months even after the opinion has been rendered.

The particular procedure of inspection that has been developed by the Düsseldorf courts has been mostly met with agreement by corporations and lawyers alike, but there have been critics who emphasise that in some instances the defendant’s interests are not protected as they should be, eg, by setting up requirements for the establishment of protected trade secrets that are perceived as too harsh.

On the other side, claimants feel that opinions should be handed over to them in cases where the asserted trade secrets have no real value, and even if the opinion shows that the IP right in question has not been infringed.

"until the question of whether the defendant can invoke relevant trade secrets that are worthy of protection is finally resolved, the opinion may not be submitted to the applicant."

In 2009, Germany’s highest court in civil matters, the Federal Court of Justice, in principle sustained the special inspection proceedings developed by the Düsseldorf courts and further refined its requirements, also regarding trade secrets protection.

Recent case law suggests that some questions remain open, including how soon after ‘learning’ that a right may be infringed must the rights owner act and file an application for an inspection order? Normally, in preliminary injunction matters, there is a requirement of ‘urgency’ that is not met if the rights owner has waited too long before actually asserting the claim.

But in inspection cases, there is as yet no ‘claim’ based on the infringement of an IP rights since at that time there can only be a suspicion. It is difficult to require a rights owner to act when all it has is a suspicion. Some of the more recent case law is not clear enough when it comes to the question of what knowledge and degree of suspicion is sufficient to require a rights owner to act and file a claim for inspection.

In patent infringement matters, the Düsseldorf courts have traditionally said that the special character of these cases requires that urgency need not be established, since it would be tantamount to denying sufficient protection for IP rights if—after some time—not even the means to establish an infringement in the first place are admissible, especially when the degree of knowledge and suspicion is not clear. That is arguably an insecurity that is not compatible with the purpose of inspection proceedings, which is to provide a procedure to overcome insecurity in order to protect IP rights as best as possible.

Jens Künzel is a partner at Krieger Mes & Graf v. der Groeben. He can be contacted at: 

Jens Künzel, Krieger Mes & Graf v. der Groeben, trade secrets, IP, infringed,