BGH: Appeal in patent invalidity proceedings

In its leading decision ‘Funkzellenzuteilung’ (allocation of radio cells), the German Federal Court of Justice ruled on the appeal in patent invalidity proceedings: the appeal must be brought against all parties to the dispute. An appeal only against individual plaintiffs is inadmissible.

Patent in suit – mobile telecommunications

The patent in suit is an European Patent 1 327 374 (with priority from four UK patent applications) that concerns mobile telecommunications, namely the allocation of radio cells to user terminals in a multi-cell network. It deals with the addition or replacement of second generation (2G) mobile networks with third generation (3G) networks, which was expected on the priority date.

The German Federal Patent Court (BPatG) had declared the patent in suit partially invalid in September 2018. Neither the plaintiffs nor the defendant patent proprietor agreed with this, both appealed, and so this case was heard by the German Federal Court of Justice (BGH) in May 2021. In its judgement, the BGH amended the BPatG’s judgement insofar as the patent in suit was declared invalid for the territory of the Federal Republic of Germany not only in part, but in its entirety.

Claim 1 had been correctly judged to be unpatentable, the BGH ruled, because it had been completely anticipated by NK1. Document NK1, which is designated as prior art in the patent in suit, deals with the selection of radio cells for a terminal in a cellular communication system when several cells with different service areas are present – and specifically for the constellation that individual networks already provide the newer technology GPRS compared to the first version of GSM.

But could the procedure disclosed in NK1 also be applied to radio cells with additional functionalities – in particular also for such functionalities which had not even been developed or standardised on the filing date of NK1?

The BGH answered in the affirmative. In favour of such a further development was in particular the fact that new functionalities are often introduced only gradually for cost reasons, so that at least in a transitional period not all available cells provide all functionalities. The BGH ruled that such a transitional period was all the more to be expected when a new generation of mobile phones was introduced.

Leading principle decision: Appeal against all opposing parties

In addition to the technically interesting decision on the patent in suit, the Federal Supreme Court also issued a guiding principle decision with regard to an appeal in patent revocation proceedings. In short, an appeal must always be brought against all opposing parties.

In patent invalidity proceedings, the defendant can only attack a judgement that is unfavourable to him with an appeal uniformly against all plaintiffs, the BGH formulated as a guiding principle. Accordingly, an appeal declared only against individual plaintiffs is inadmissible.

The BGH thus confirmed its case law, which has been practically prescribed in this way since 1957 (BGH, January 1957 – IV ZR 259/56, BGHZ 23, 73 = NJW 1957, 537, juris marginal no. 17; Federal Supreme Court, November 2011 – V ZR 45/11, NJW 2012, 1224 marginal no. 9). Indeed, it is also conclusive. Because the decision to declare a patent invalid in whole or in part changes the legal situation as a whole, such a decision has a uniform effect vis-à-vis all parties to the proceedings. Therefore, several invalidity plaintiffs are necessary intervening parties. This was also clarified by the BGH in October 2015 in its “Fugenband” decision (ref. X ZR 11/13).

If, however, an appeal validly filed against several necessary intervening parties is withdrawn against individual intervening parties and continued with regard to the others – this case is to be interpreted in case of doubt as meaning that the appeal is to be continued against all intervening parties, the BGH added to its decision.

Assumption of costs on appeal

Finally, the BGH also commented on the assumption of costs in the appeal of patent invalidity proceedings. If several plaintiffs are involved in the legal dispute as necessary co-parties, the court explained, the first instance costs decision must also be corrected, if necessary, in favour of a plaintiff who did not appeal the first instance decision. The same also applies to a plaintiff who initially filed an appeal and later withdrew the appeal.

However, this does not necessarily mean real costs. After all, a person who does not file any motions at an instance can neither lose nor prevail. Accordingly, the nominal participation of the litigant who does not file any motions is zero for the costs of the appeal.

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