Saturday, October 26, 2019

Presiding Judge Pichlmaier explains rationale behind granting Nokia's anti-antisuit injunction against Continental's U.S. antisuit motion

On Thursday evening, the Landgericht München I (Munich I Regional Court)--by now one of Germany's three leading patent litigation venues--celebrated the 10th anniversary of the "Münchner Verfahren" ("Munich procedure") for patent infringement cases. It's what U.S. district courts typically call Local Patent Rules.

Former Presiding Judge Dr. Peter Guntz--who left the regional court's bench several years ago to become a (presumably far better-paid after taxes) member of the Technical Boards of Appeal of the European Patent--and a patent litigator (Olaf Giebe) explained how Munich's Local Patent Rules came into being. There had been some informal exchanges between patent-specialized judges and lawyers, and one of the topics they discussed was Munich's conspicuous lack of popularity as a patent litigation venue as compared to Düsseldorf and Mannheim at the time.

Mr. Giebe wrote up a one-pager that laid out three priorities to work on toward improvement. One of them was that lawyers simply had a better idea of what to expect in procedural terms from the two aforementioned courts, and Munich needed to catch up on clarity. Speed obviously matters, too. The third item, however, was somewhat sensitive: it came down to suggesting plaintiff-friendlier claim constructions, but without specific proposals. There just was a feeling in the patent litigation community at the time that the courts in Düsseldorf and Mannheim were more willing to construe patent claims in a way that enabled plaintiffs to prevail.

Former Presiding Judge Dr. Guntz stressed that the fathers of Munich's Local Patent Rules didn't want to attract patent cases by means of patentee-friendly rulings--but it sounded like Munich was deemed too restrictive in plaintiffs' eyes.

Munich is Europe's patent capital as it's the primary seat of the European Patent Office and home to the Federal Patent Court of Germany (where nullity complaints or complaints over rejected patent applications are filed) and the Max Planck Institute for Innovation and Competition--and, by now, the Munich I Regional Court is a very significant venue for patent infringement cases and has two patent-specialized divisions, the 7th Civil Chamber under Presiding Judge Dr. Matthias Zigann and the 21st Civil Chamber under recently-appointed Presiding Judge Tobias Pichlmaier.

It wasn't always clear whether the state government and the leadership of the court truly appreciated the importance of being a significant patent venue. Thursday's keynote speakers--Chief Judge of the Munich I Regional Court Dr. Andrea Schmidt and Bavarian Attorney General Georg Eisenreich--made it clear not only in their speeches but through their mere presence that there is awareness at the highest levels.

Chief Judge Dr. Schmidt mentioned that she just recently sat in the audience to follow a patent trial and heard the term "FRAND" for the first time--up to that point, she said, she only knew the English words "friend" and "friendly."

After the keynotes and the historic flashback delivered by former Presiding Judge Dr. Guntz and Mr. Giebe, there was a panel on which Meissner Bolte's Dr. Tobias Wuttke (one of two lawyers who frequently serve as lead counsel for Deutsche Telekom in patent infringement cases) and the two presiding judges of the patent-specialized divisions gave an update on current legal developments. I'll talk about Judge Dr. Zigann's new SEP litigation guidelines (still work in progress) later. Judge Pichlmaier refocused his panel presentation on short notice and talked about something that has drawn the interest of--and, from what I hear, been welcomed by--many members of the German patent law community: the two anti-antisuit injunctions the court granted against a U.S. subsidiary of automotive supplier Continental (who was seeking to shield Daimler from Nokia's German patent infringement lawsuits) as well as against Continental AG, the German group parent.

The Oberlandesgericht München (Munich Higher Regional Court) has recently postponed the appellate hearing by two weeks from Halloween to November 14 at Nokia's request as their lawyers have to participate in a doubleheader hearing (on two of their ten pending infringement cases against Daimler) next Wednesday (which would have been just the day before the appellate anti-antisuit hearing). Continental's counsel will also be present next Wednesday, but only as an intervenor, while Nokia is the plaintiff.

Judge Pichlmaier reminded everyone of what used to be the most popular stalling tactic employed against German patent infringement actions: companies that expected a patent holder to sue them in Germany (or some other European country with reasonably fast patent courts, such as the Netherlands) over a particular patent or set of patents often brought declaratory judgment actions in Italy. That tactic was called "the Italian torpedo." What they asked the Italian courts to adjudicate was whether they infringed the German (or Dutch, British etc.) parts of European (= EPO-granted) patents--only to seek a stay of any subsequent German cases under EU regulations.

This week, the question of extraterritorial adjudication of patents was at the center of a UK Supreme Court hearing (Unwired Planet v. Huawei/Conversant v. ZTE). The previous post was my seventh post this week just on that case.

From what I heard a long time ago, Nokia also filed some "Italian torpedo" DJ actions against non-practicing entity IPCom earlier this decade. The reason that torpedo tactic worked was simply that Italian courts aren't the fastest ones in Europe, and they're particularly slow when a plaintiff does nothing to speed things up. Those Italian proceedings were so very slow that defendants didn't merely delay a German injunction--in many if not most cases, they simply avoided it altogether because a patent would either expire in the meantime or be invalidated by the Federal Patent Court of Germany.

In recent years I haven't heard of any example of an "Italian torpedo," except that an appeals court in Milan held that Italian courts didn't have jurisdiction over foreign parts of EPO-granted patents since those foreign parts couldn't be infringed in Italy. Judge Pichlmaier, too, mentioned that the Italian torpedo has lost relevance.

He then said that antisuit injunctions, typically obtained in the U.S., have recently played the role that the Italian-torpedo tactic used to play. What he didn't mention, however, is that antisuit injunctions are very rare, while the Italian torpedo was allegedly a rampant problem at a time.

When Nokia's creative lawyers filed their anti-antisuit motion with Judge Pichlmaier's division, the first question was in rem jurisdiction as the motion related to Continental's U.S. antisuit motion, which targeted not only cases pending in Munich but also some pending in Düsseldorf and Mannheim. (By the way, the Nokia v. Daimler Mannheim cases are pending before Presiding Judge Dr. Holger Kircher's 2nd Civil Chamber, and Dr. Kircher handed down two patent injunctions in Motorola v. Microsoft in 2012 that never got enforced because of Judge James L. Robart's U.S. antisuit injunction in the Western District of Washington.)

The three-judge panel quickly determined that the nationwide geographic scope of the patent infringement cases in action (those Daimler cars are sold all across Germany) enabled the Munich court to decide this matter even with respect to cases pending in other German venues.

Judge Pichlmaier--who was involved when the court granted the original ex parte (without notice or hearing) injunction against Continental Automotive Systems, Inc., but was on vacation when the case against the German group parent was decided--explained on Thursday why the Munich court believes their anti-antisuit injunction has a basis in German law even though U.S.-style antisuit injunctions do not: they distinguish the narrow scope of the anti-antisuit injunction, which does not prevent Continental from pursuing the U.S. case as a whole (only the antisuit motion, from the maximalist scope of Continental's (original) U.S. antisuit motion, which sought to prevent Nokia from pursuing its German infringement cases against Daimler in any or all respects.

I wonder what the court would have done--and what Judge Pichlmaier would then have said on Thursday--if Continental had merely sought a Microsoft v. Motorola- or Huawei v. Samsung-style U.S. antisuit injunction barring the enforcement of patent infringement injunctions. I believe the German court wouldn't have liked that either, and would presumably have argued that--as German patent judges and litigators often say--injunctive relief is "the king of patent remedies," which is why an anti-enforcement injunction would also have been deemed a major encroachment on Nokia's rights. That is just speculation, of course. However, looking at the totality of what has recently happened in the U.S. (two denials) and in Germany (though anything can still happen at the appellate hearing on November 14), it's fair to say that Continental's original U.S. motion was overreaching, thus didn't work out.

Judge Pichlmaier noted that they had--though not through filings with their court--heard of Continental's unsuccessful pursuit of an anti-anti-antisuit injunction and concluded his presentation saying that the anti-antisuit injunction was meant to defend what everyone was celebrating at the Thursday event: Munich's role as a leading patent litigation venue.

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