Monday, October 26, 2020

Presiding judge of patent-specialized panel of Dusseldorf appeals court expressed bias against Asian defendants

For quite some time, the German patent judiciary has had a reputation of being plaintiff-friendly, but this year the system has simply gone off the deep end in terms of highly problematic decisions, all the way up to the Federal Court of Justice, which hit a new low with its Sisvel v. Haier ruling. Those courts should faithfully apply the law, but more than anything else they are simply agenda-driven.

It's beyond ridiculous that some German patent infringement judges tell their government--which may adopt a patent reform bill this month, which would then be submitted to the legislature--that plaintiffs flock to Germany because of the quality of the German patent judiciary. That is actually an insultant to human intelligence: common sense says that patent holders will simply sue where they expect to get leverage. They'd rather win on a clearly erroneous basis (especially if the appeals courts are typically too hesitant to stay enforcement before the defendant is forced to settle) than lose on a legally correct basis. Germany just offers the unique combination of

  • a large market (i.e., an injunction has a substantial effect on revenue production),

  • a draconian injunction regime,

  • a "bifurcation" system that enables patentees to get leverage by asserting patents that shouldn't have been granted in the first place, and

  • a swift process from complaint to decision.

If you transplanted those German patent courts to a small market, such as Switzerland, they'd lose most of their "business" (all other things being equal). And if those judges had the intellectual honesty to rely to a reasonable extent on technical expert witnesses (like their counterparts in various other jurisdictions) as opposed to claiming they can resolve pretty much everything (except validity, as they prefer not to stay their cases over validity doubts) as a matter of law, those courts could no longer claim to be "rocket dockets."

It's undeniable that the huge number of cases those judges get to decide (about two in three European patent infringement actions are brought in Germany) enables them to build extensive experience. But the broken system--with the future Unified Patent Court promising more lucrative and more prestigious posts---incentivizes bad decisions in favor of plaintiffs ("forum selling") over well-reasoned decisions. What's going on right now is a race to the bottom between certain courts that come up with ever more troubling and far-fetched theories only to please patent holders.

With all that's going wrong there, this post is part of a continuing effort to to expose and discuss certain issues. Some of this may help policy makers to better understand the extent of the problem of a patent judiciary that pursues its own interests in attracting infringement cases at the expense of the economy and to the detriment of innovation. The makers of the world's most innovative products dread the German patent judiciary that offers itself as a tool to patent trolls looking for extortionate leverage.

Those judges are the opposite of protectionists. They enjoin local companies just like foreign defendants. No qualms ever. But at least one German patent judge--and a relatively powerful one--appears to harbor prejudice against Asian defendants.

On January 16, 2020, Judge Ulrike Voss ("Voß" in German), who presides over one of the two patent-specialized senates (panels) of the Oberlandesgericht Düsseldorf (Dusseldorf Higher Regional Court, a regional appeals court) gave a speech at Munich's Ludwig Maximilian University on access to injunctive relief under the current legal framework and after the enactment of a hypothetical patent reform bill. She took some questions from the audience, and when everyone was walking out (the university hosted a reception outside the lecture hall, she was approached by a BMW in-house patent counsel and engaged in a short conversation with him. As the two were talking, other people were standing behind her or passing by. The conversation was, like her speech, about Germany's near-automatic injunction regime and potential reform, and she asked BMW to understand why the situation was the way it is:

"I hear you, but we have to deal with unrepentant infringers where injunctions are absolutely necessary. I don't want to... but, let me just say they are frequently from Asia."

I do know that some of Judge Ulrike Voss's decisions in recent years have been controversial, such as a case in which she identified an "infringement" even when there was no evidence in the record with respect to at least one critical claim limitation. What I don't know is whether she's systematically disadvantaged Asian defendants throughout her career. But what she told that BMW employee, with bystanders and passers-by hearing her say so (she spoke somewhat quietly, but it was audible), calls her impartiality into question.

The Dusseldorf appeals court has another patent-specialized senate (which in fact had been around for much longer than the new one to which Judge Voss was assigned). Its presiding judge is Dr. Thomas Kuehnen ("Kühnen" in German), author of the leading reference work on German patent infringement litigation. While I generally consider him to be far too patentee-friendly as well, he has adjusted his positions on standard-essential patents (SEPs) in recent years, which is a positively surprising development but of limited help as long as the Federal Court of Justice favors patent trolls like Sisvel over defendants (whether from Asia or elsewhere)...

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