Justus Kreuels - 6. September 2023

IP Compliance

When meeting legal compliance requirements, it is very important for companies to also consider intellectual property rights (patents, utility models, trademarks and designs).

In principle, it is difficult to transfer applicable compliance requirements to patent law issues. This may be due to the fact that risks arising from patents are often not entirely clear-cut or that subjective assessments of these risks vary. But it may also be due to the complexity of the patent situation in general.

In particular in situations with unclear areas of protection and questionable legal status of patents, it can ultimately only be decided in court how a patent situation is actually to be assessed.

If the owner and the user of the patent do not reach an agreement, such questions have to be decided by legal courts.

Monitoring of IP rights

In order to be able to develop one's own business fields in the competitive environment, the early recognition of patent issues among competitors is a relevant prerequisite.

This requires systematic monitoring of the IP situation in the respective market segment by analyzing IP rights identified through searches.

Protection of inventions

Effective protection of a company's own innovation serves to differentiate it from competitors and to secure entrepreneurial leeway. With ip-protected innovations, companies have better pricing power. The distance to competitors can be increased through protected innovations. Corporate success is secured in the long term.

The protection of a company's own innovations is also of great importance for the motivation and loyalty of employees to a company. If they are permanently motivated, employees can make a significant contribution to the company's success with their inventions.

Employee Invention Law

In Germany, the Employee Inventions Act (ArbnErfG) intervenes in the relationship between employer and employee as soon as employees make protectable inventions in the course of their work for the employer.

The employee invention law is also accompanied by the obligation to pay appropriate employee inventor compensation to employees for inventions used in the company. However, it is often not at all easy for companies to determine where and to what extent inventions are used by employees.

For this reason, monitoring the internal use of a company's own IP portfolio is also highly important for companies. Because only if companies know which of their own inventions are being used can appropriate inventor compensation also be paid.

Patent landscaping

Companies should know what their own patents and the patents of competitors mean for their products and services. Creating and regularly updating patent maps, which show for example patents in relation to products, is a valuable tool. Patent maps can show the portfolio of the company's own products and services and assign company-owned patents to each.

Creating patent maps is laborious and patent maps will certainly never be exact. However, they provide a good introduction to a company's patent portfolio and help identify patent risks and potential. The work of creating and updating patent maps themselves often provides a lot of insight that can be used to strategically develop a company's patent work.

Patent maps can also provide insight into where a company's technology is headed and what forces are driving innovation.

Respecting third party intellectual property rights

With the start of every new product development, it should also be checked whether third-party property rights may be infringed. The management of a company must establish appropriate monitoring processes, because infringements can lead to civil liability risks and may also have criminal consequences for those responsible. The earlier third-party property rights are identified, which can act as a showstopper for new products and services, the more effectively measures can be initiated to reduce or avoid risks.

Director's Liability

Managing directors are liable - also personally - if they fail to meet their due diligence obligations. Appropriate systems for monitoring risks arising from IP rights can be an essential part of meeting due diligence obligations.

Liability abroad

Caution is also called for in international business transactions, as the special features of the various legal systems can give rise to additional liability risks. Special requirements arise, e.g. for the USA, where the risk of intentional patent infringements can lead to massively increased risks of damages. Within the framework of a so-called "triple damages", greatly increased damages can be ordered to have a punitive effect.

Regarding Justus Kreuels:

Justus Kreuels, German and European Patent Attorney since 2011/2012, studied mechanical engineering at the TU Munich and the RWTH Aachen. He is co-founding partner of karo IP. A main focus of his practice is the enforcement of intellectual property rights in the field of mobile communication, Internet of Things (IoT), robotics, etc. in Germany.

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