SONN Patentanwälte – IP Attorneys

Conditions for termination of a granted preliminary injunction for patent infringement against a monetary security

Already in the first Austrian Patent Law of 1897, there was the special provision that the Court had to terminate the effect of an interlocutory injunction when an adequate security was offered by the infringing defendant. The Court had only to judge whether the amount offered was adequate. Over the years, the circles concerned complained that in fact the enforcement of a preliminary injunction was impossible since defendants nearly always paid such a security which was mostly set at an affordable value. This unsatisfactory situation remained till to a major reform of patent law in 1988. With that, this stringent provision was changed into a possibility. The Court could now on its own finding terminate such a preliminary injunction against adequate security in consideration of specific circumstances. From then on, only in very rare cases the effect of preliminary injunctions were terminated for one or the other specific acts, but not generally, e.g. to allow finishing the construction of a certain building.

Due to implementation of the EU Enforcement Directive, the old provision were cancelled and a totally new paragraph (§ 151b) on preliminary injunctions was introduced which is, however, silent on the circumstances under which it can be terminated against security. The official commentary said that from now on the general provisions in the Law on Executions will apply. However, these provisions do not refer to specific circumstances but only again to a security the Court assumes to be sufficient.

In a recent final decision handed down by the Appellate Court Vienna, this stipulation was applied the first time. The 1st Instance had granted a suspense of the effect of its preliminary injunction for less than one year for a security of 2 mio. Euros. Upon appeal of the patentee, this decision was annulled. According to existing case law, an injunction (a cease and desist order) can principally not be secured by an amount of money. Therefore, the termination of such an order was already denied in cases of trademark infringement and in cases of actions for unfair competition.

This is now also true for patent infringement cases. Only exceptional circumstances can warrant a derogation of that principle which were not shown in that case. Therefore, it will be practically impossible for the defendant to set aside the effect of a preliminary injunction by providing a security.