Germany: Ongoing Development Of Inspection Proceedings In Theory And Practice

Last Updated: 16 January 2012
Article by Florian Bewer

The claim to inspection in commercial intellectual property law is currently developing on an ongoing basis. However, differences can be seen between the practices of the Regional Courts. Submission of design drawings? Remote access to a server abroad? Enforcement by removal of all servers? Unexpected opportunities arise and new questions are raised.

With the implementation of the enforcement directive on 01.09.2008, a claim to the inspection of an item and submission of documents were implemented in various intellectual property laws (cf. Sections 140c Patents Act, 101a Copyright Act, 24c Utility Model Act, 19a Trade Mark Act, 46a Design Act). A comparable claim already existed in previous German law in Sections 809, 810 German Civil Code. The content and requirements of the claim have continued to be developed further in case law, and this development is not complete to this day. In particular there is still no unanimous opinion about what toleration and cooperation obligations are imposed on the party obliged to grant the inspection, and the ways in which these obligations can be compulsorily enforced. Due to the limited legal remedies against inspection orders, it is also not to be expected that all issues will be clarified in the near future by judgements from the Federal Court of Justice.

The possible content of the former (toleration) order is a field in which a considerable amount of activity can be observed at present. The "classic" decision, which contains little more than the fact that the party obliged to grant the inspection must tolerate the visual inspection of an item by an expert, who may use a camera and dictating machine to this end, has been far exceeded by some Regional Courts. As far as the author is aware, this development peaked in a recent decision by the Munich I Regional Court. On the one hand, this decision set out very far-reaching cooperation and toleration obligations, and on the other hand enforcement measures, hitherto known more in the sphere of theoretical debate, were ordered.

In the decision, which is based on Section 101a Copyright Act and which concerned a suspected infringement of software copyright, the Munich I Regional Court pronounced an obligation to allow remote access to a server located outside the company's premises. The previous case law limited individual inspection measures to specifically-designated commercial premises. In this case, on the one hand there is doubt about the prerequisite of the power of disposition by the party obliged to grant the inspection, and on the other this measure could prove problematic if the server in question is abroad. In these times of worldwide data networks within groups of companies this is a subject that requires closer consideration.

It is doubtful whether such a measure was intended by the legislator on implementation of this enforcement directive, when it was stated, "As a basic principle, the injured party may determine the type of inspection required to obtain the information."

One area that has as yet not been clarified in the courts is the compulsory enforcement of an inspection order.

It is reasonable to assume that the toleration obligations will be enforced by direct compulsion (although the necessity of a court search order and the responsibility for issuing it are not fully clarified) and the implementation of cooperation obligations by application for a fine. The fine procedure is complicated, however, and in practice is not a particularly convenient means by which to achieve the ultimate aim of the proceedings, i.e. to prove a suspected industrial property right infringement.

In its decision, the Munich I Regional Court has now started down the route of an analogous application of Section 883 Code of Civil Procedure, which provides for the enforcement of a claim for restitution of property by removing an item. The application of Section 883 Code of Civil Procedure for enforcement of the inspection claim has been discussed in the literature, but is still disputed. In cases where the party obliged to grant an inspection fails to comply with its cooperation obligations, this entitles the bailiff to remove the item to be inspected (if necessary by force, with the involvement of the police) and to take it to another location to be inspected by the expert. The consequences of such an enforcement measure could be very drastic for the respondent. In this specific case, the bailiff was empowered to seize all the servers and PCs on the company's premises.

How should one proceed when such a decision is issued? Fast legal protection against an inspection order is scarcely achievable, as the available reaction time is only a few hours. In this short period it is hardly possible to apply to the court for a suspension of the inspection, let alone for a decision to be made. However, the applicant is also walking on thin ice in the case of enforcement by this route. Claims for damages, should the inspection be found to be unjustified because no legal infringement is present or threatened, are irrespective of fault and can soon add up to high amounts. This is all the more the case where the inspection has a substantial adverse effect on the business of the respondent.

Inspection proceedings are an effective method of clarifying the actual circumstances of a suspected intellectual property right infringement. The lower courts have to date allowed drastic measures to obtain the aim of securing evidence. The permissible extent of such decisions should surely be examined by the supreme court. We await developments with bated breath!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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