Monday, October 26, 2020

Munich I Regional Court's official presentation of results of "evaluation" of local patent rules puts court's pro-patentee partiality on full display

One year ago, the Landgericht München I (Munich I Regional Court) celebrated the tenth anniversary of its Patent Local Rules ("Münchner Verfahren"). On that occasion, the court announced an "evaluation" study by the Max Planck Institute in order to find out how practitioners view the court's performance. Last week, the court officially presented the results in a videoconference. As of today, access to the recording (which the court originally made available to the public via YouTube) has been restricted.

Maybe someone decided to hide the presentation because the results are all too embarrassing--and even I, as a critic of the court's exceedingly patentee-friendly decisions, disagree in some ways.

The court has even stated its pro-patentee bias in writing. The December 2016 version of a four-page document outlining its Patent Local Rules (in German) states the following (my translation):

"The objective is to provide patentees, in a fair and transparent proceeding, swift and effective protection of their rights."

In other words, they view patent holders as their "customers" and seek to satisfy them. And they're shooting for speed at the expensive of getting things right:

"Written reports by court-appointed experts or stays [pending a parallel validity determination] shall be ordered only in very exceptional cases."

By way of comparison, German courts appoint experts in far simpler cases with small amounts in dispute. For instance, if you sue a painting company because you're dissatisfied with the quality of their work, a German court will most likely see a need to ask a court-appointed expert witness to furnish a report. Then you and the defendant can ask multiple rounds of written questions. The costs of the court-appointed expert (charging by the hour) may very well exceed the actual amount in dispute. In virtually every other field of civil law, that's the way it works.

But in patent cases, which involve far more complex technical questions and have huge economic implications, German judges rarely appoint experts. Does it make sense? No. It simply stinks. It's an agenda-driven system, and the administration of justice is nowhere near the top of the list.

To be fair, the practice of adjudicating cases without hearing expert witnesses is not unique to the Munich court. In Dusseldorf and Mannheim, it's just the same. Nevertheless, the court's own outline of its patent litigation procedures is shockingly forthright.

The latest absurdity is that a patentee enforcing an injunction during the appellate proceedings just has to make a deposit of a few million dollars to do what would amount to a multi-billion dollar damage to a car maker such as Daimler, with the court arguing that the defendant should simply take a license (which would, however, end the case).

Back to that "evaluation" study of the Munich court's performance in patent cases. The responses to the Max Planck Institute's survey suggest that Munich has shortcomings with respect to the quality of its legal work and its technical understanding, where Dusseldorf and Mannheim are rated more highly, but that Munich is still a popular venue because it's a rocket docket and very plaintiff-friendly.

But should the study be taken seriously at all? Not really. There were only 65 respondents, and there is no indication of any effort having been made to ensure this small sample is statistically representative. Based on where the respondents said they filed their offensive cases over the past five years, it's at least a possibility that practitioners with a strong preference for Dusseldorf were particularly active--and seized this opportunity to make Munich look bad by comparison with their home court. It's also possible that many lawyers' understandable frustration with the ever more plaintiff-friendly approach of the Munich court--especially (but not only) when it comes to standard-essential patents--informed their ratings of the judges' competence in their field.

I believe that this "study" (if one wants to use that term at all for a survey with only 65 non-representative repondents) underrates the Munich judges. In terms of technical competence, the Mannheim judges are clearly the best with respect to wireless patents. In other fields of technology, there may not be much of a gap. What I've heard from legal practitioners doesn't suggest that the Dusseldorf judges have a better grasp of technical matters than their Munich-based colleagues.

The part about last week's presentation that worries me the most is that the court's president (chief judge), Dr. Andrea Schmidt, appeared quite proud of the fact that plaintiffs like to sue in Munich--and less concerned about, for instance, defendant's procedural rights. For example, it's simply the law in Germany that a party must be granted leave to file a post-trial brief if its adversary made a belated filing (anything that isn't filed at least a week prior to trial is considered out of time). The Munich court blames defendants for stalling if they exercise that right only because a plaintiff purposely filed its final pre-trial brief very late. Lawyers actually owe it to their clients to exercise such a procedural right. But in Munich, defendants to patent infringement complaints are second-class citizens to an even greater extent than in other German venues.

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