The Federal Court of Justice has insisted courts weigh the parties' interests more carefully. This is the result of a recently published judgment in the dispute between Silimed and Polytech over silicone implants. Thus, the court has provided more clarity after the German government strengthened the protection of trade secrets in the new German Patent Act.
29 September 2022 by Konstanze Richter
In its ruling in Silimed vs. Polytech, the Federal Court of Justice has examined the issue of trade secrecy in patent cases.
In German civil proceedings, it is the responsibility of the parties to obtain the documents that are important for their argumentation. If a party does not have a document, it can request that the other party submit this information to the court.
In practice, civil courts in patent suits often reject this request in the interest of confidentiality for the document owner. This principle was further strengthened by the German Patent Act reform, which came into force in 2021.
A recent ruling by the Federal Court of Justice now places a greater obligation on the courts to weigh up individual cases more carefully. Accordingly, a blanket rejection of a request for documents is not justified (case ID: X ZR 1/21).
The ruling is based on entitlement proceedings between the Brazilian manufacturer of silicone implants, Silimed, and its German competitor, Polytech. The two parties are in dispute over a special manufacturing process for breast implants.
The technology is based on a mold formed by an implant cap containing uncured silicone. The foam layer and the implant shell, which contains silicone, are bonded to the front and back of the implant casing in a single step using vulcanisation. Silimed claims to be the inventor of this technology.
On entering the European market, Silimed formed a distribution agreement with the German company Polytech. Products were manufactured by Silimed in Brazil and exported to Germany for the final packaging process. The commercial relationship between the companies ended in 2008.
In 2011, Polytech registered the basic patent EP 2 581 193, which protects a process for manufacturing implants. Silimed accuses the German company of using information about the technology invented by Silimed. The Brazilian company claims that it provided this information to the former German distributor for certification with the CE mark when it entered the European market. The certification is a prerequisite for marketing certain products in the EU and the European Free Trade Association (EFTA).
Brazilian implant manufacturer Silimed then filed an entitlement action at Frankfurt Regional Court, which dismissed the suit (case ID: 2-06 O 378/17). Additionally, an appeal to the Higher Regional Court also failed (case ID: 6 U 79/19). The second instance ruled out a further appeal. Following this, Silimed filed an appeal against the denial of leave to appeal, which was granted. Thus, the plaintiff then appealed to the Federal Court of Justice.
The Federal Court of Justice reversed the decision of the second instance and referred the case back to the Higher Regional Court Frankfurt for a new hearing. In its decision, the Federal Court of Justice criticised the previous instances for not having sufficiently examined the plaintiff’s claims to the invention. Furthermore, the judges in Karlsruhe saw the documents submitted by Silimed as “strong evidence” that the information for the original invention came from the plaintiff.
At the same time, the Federal Court of Justice addressed the question of defendant Polytech’s obligation to hand over documents.
In the course of the entitlement action, Silimed sought various technical documents from Polytech. The plaintiff hoped these documents would prove that Silimed invented the original technology.
According to the German Code of Civil Procedure (Zivilprozessordnung), a court may order a party to hand over documents. However, judges often value the protection of trade secrets over the need to provide documents. This was the case at the Higher Regional Court in Frankfurt, which denied the plaintiff’s request that Polytech provide technical documents.
In principle, the Federal Court of Justice confirmed that the protection of trade secrets is an important factor. However, the Higher Regional Court Frankfurt should also have considered the interests of the plaintiff. For example, the defendant’s trade secrets could have been protected by censoring certain passages in the requested documents. In addition, a protective order under the Trade Secrets Directive, under which the parties involved undertake to maintain confidentiality, was also a possibility.
As a result, the Federal Court of Justice is calling on the Regional and Higher Regional Courts to consider the parties’ interests more carefully. In the future, judges will need to provide greater justification for when they place the need to protect trade secrets above the need to provide documents. And they will need to consider if or how both can be reconciled under certain circumstances.
Now, the Higher Regional Court Frankfurt will need to hear the entitlement action again. At the same time, Silimed has filed an objection to Polytech’s divisional patent EP 3 002 101, which covers further aspects of the technology. The EPO gave the green light for granting the patent in March 2022.
However, the EPO suspended the granting of the patent as the Brazilian company has filed a further entitlement action against Polytech at the Munich Regional Court (case ID: 7 O 6695/22). In addition, lawsuits are pending in Brazil concerning authorship, among other things.
From the beginning of the proceedings, Silimed relied on a mixed team from Hoffmann Eitle. The firm has many years of experience in patent entitlement actions. In the current case, the litigator and patent attorneys worked closely together with Licks Attorneys from São Paulo. IP partner Rob Rodrigues and litigator Karlo Tinoco manage the cross-border litigation and instruct firms in Germany.
In addition to Hoffmann Eitle, these include mixed law firm Eisenführ Speiser. Litigator Michael Schneider, who joined Eisenführ Speiser from Pinsent Masons in 2021, is leading the entitlement action at Munich Regional Court.
Polytech is represented in both German proceedings by Boehmert & Boehmert. The German implant manufacturer is one of the long-standing prosecution clients of patent attorney Karl-Heinz Metten. Litigator Michael Rüberg coordinates the proceedings, as well as the cooperation with Ricardo Nunes from the Brazilian law firm Daniel IP.
The former owner of Polytech, Wilfrid Hüser, was co-litigant for Polytech. He relied on Düsseldorf-based patent lawyer Henrik Holzapfel of McDermott Will & Emery.
Holzapfel came to the intruction via Frankfurt-based corporate partner Clemens Just, who advised Wilfrid Hüser on the sale of Polytech. Holzapfel’s team advised the client not only on patent law but also on acquisition law issues.
Hoffmann Eitle: Mike Gruber, Niels Hölder, Anne Schön (patent attorney, all partners), Diana Máric (patent attorney)
Hall (Karlsruhe): Reiner Hall (lawyer admitted to the Federal Court of Justice)
Boehmert & Boehmert: Michael Rüberg, Karl-Heinz Metten (patent attorney, both partners); associate: Lars Eggersdorfer
Rohnke Winter (Karlsruhe): Christian Rohnke (lawyer admitted to the Federal Court of Justice, partner)
For Wilfrid Hüser (former owner of Polytech)
McDermott Will & Emery (Düsseldorf): Henrik Holzapfel (partner); associates: Maximilian Kiemle, Philip Uecker
German Federal Court of Justice, 10th Senate, Karlsruhe
Klaus Bacher (presiding judge), Fabian Hoffmann, Hermann Deichfuß, Helga Kober-Dehm, Hartmut Rensen