Monday, April 9, 2012

Oh no: German courts and clueless politicians want to attract even more patent lawsuits

I just found out (from a German-language article published a week ago) that the Düsseldorf Regional Court as well as its appeals court, the Düsseldorf Higher Regional Court, have decided to staff up in order to attract even more patent litigation, following similar investments by other German courts.

The Düsseldorf Regional Court already has two chambers (panels of judges) that do nothing but patent and other intellectual property (design rights etc.) cases day in, day out. Now it has decided to become the first German court to set up a third (!) chamber for patent infringement cases. There are at least three judges on a panel of a German regional court. The Düsseldorf appeals court is also in recruitment mode and may set up an additional (second) chamber to hear appeals of patent infringement decisions.

There are three objectives here:

  1. While Düsseldorf still gets far more patent infringement cases than any other court in the whole of Europe, it has recently lost market share (so to speak) to Mannheim and Munich, where the regional courts currently adjudicate such cases in much less than a year, while the Düsseldorf Regional Court currently needs more than a year due to its huge backlog. With more judges, Düsseldorf wants to regain market share by getting a larger share of future growth in this area.

  2. The interest in more market share is in no small part due to the fact that several European cities are vying to become the venue of the central division of the envisioned European Patent Court. The German government so far preferred Munich (where the European Patent Office, the German Patent and Trademark Office and the German Federal Patent Court are already based), while other governments favor such places as London or Milan. And the existing courts of the European Union are based in Luxembourg.

  3. It's not just about institutional and regional but also personal ambitions: many German judges are trying to position themselves for nominations to different divisions of the envisioned European Patent Court -- and the pay hike and enhanced prestige that will come with it. It's key for a candidate to be able to point to the fact that he or she has already adjudicated a large number of patent infringement cases. (The number of cases is further inflated in Germany by splitting up lawsuits that involve more than one patent and/or more than one legal entity on the defendants' side into multiple lawsuits, even though in practice they are all heard and evaluated as one. This tactic increases not only the number of cases but also the total amount of court fees.)

Ultimately, politicians control the budgets of the courts, but those decisions are made at the state (not federal) level for regional and higher regional courts, giving particular weight to the institutional and regional interests in attracting as much patent litigation as possible. But in this particular case, we're talking about North Rhine-Westphalia, the same federal state from which Microsoft is relocating its European distribution center due to the risks connected with rampant abuse of standard-essential patents in Germany.

Meanwhile, international media reports highlight some of the current problems but at the same maximize awareness among patent holders (practicing as well as non-practicing entities) around the world.

Here are four recent English-language articles on the German patent litigation mess that I'd like to recommend (in reversely chronological order):

For Germany, this is not going to work as a strategy for growth. A trend reversal is needed, but last week's report from Düsseldorf shows that things will have to get a lot worse before they will start to get better.

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