Saturday, May 29, 2021

Patent injunction reform may not happen in Germany as Federal Parliament nears end of legislative term: only two more plenary weeks left

"For patent plaintiffs, Germany is the world's top jurisdiction, exclusive IAM survey finds"--that's beyond reasonable doubt. It's equally beyond reasonable doubt that this is not going to change anytime soon.

I've been skeptical of the German patent injunction reform effort for quite some time. There was a silver lining last September, but it lasted only a few weeks. The first plenary debate in the Bundestag (Federal Parliament) was a sweeping victory for those opposing reform, and a parliamentary hearing confirmed that pro-reform lobbying efforts had failed miserably.

The pro-reform camp didn't even do its homework. German automotive companies and their allies thought they could persuade politicians with anecdotal evidence, such as the Broadcom v. Audi dispute. If you have only one case like that to show, politicians won't be persuaded, as it could be an outlier and in a single case all sorts of things can happen, including mistakes by parties, counsel, or judges. I find that story representative of the problem and symptomatic of the injunction (and injunction gap) problem in Germany, but how could the actual decision-makers reach that conclusion? I've attended hundreds of patent trials and hearings over the last 10 years, so I know what happens, and I also know how one could produce hard evidence--and numbers and lists as opposed to anecdotes. The pro-reform forces don't. They also failed to build the kind of support from academics that would have borne weight with political decision-makers.

It would have taken professional, competent, and strategically clever efforts to be in a position to win. And it would have taken a budget about ten to twenty times larger than what those pro-reform companies and organizations had available between all of them. They brought butter knives to a gunfight (a quote from a document that surfaced in the recent Epic Games v. Apple trial). At least one Big Tech company (that wasn't as controversial when the process started as it is by now) approached German policy makers and legislators directly instead of figuring out a way to mobilize more German companies and contribute funding and expertise to their efforts.

There were people dabbling in patent policy because it was a welcome distraction from their everyday routine in the office. The French word "amateur" (like its Latin root) means that people do something because they love to do it--as opposed to being really good at it. "Amateurish" is a pretty good description of what they did for the most part, and if they had done nothing at all, could they have achieved less?

That is now the question. It's now literally about whether there'll be a useless "reform" undeserving of that label (though there will always be someone trying to give it a spin)--or simply nothing at all.

Time is ticking away. The Federal Parliament's calendar has only two more weeks marked with a magenta stripe before the September elections: the week of June 7, and the one of June 21. At the time I am writing this (weekend), there is a packed agenda on the Bundestag website for the week of June 7, and patent reform is not on that list.

Theoretically, things can change on ultra-short notice. They could hold a committee vote on one day and the plenary vote on the next. But in order to be able to do that, they need a political agreement between the government coalition parties (Chancellor Merkel's Christian Democratic Union, its Bavarian sister party named Christian Social Union, and the Social Democratic Party). Then they can work out the details with help from the Federal Ministry of Justice, which has an IP policy department.

Like all legislatures around the globe, the Bundestag has had to deal with a number of issues since last year that wouldn't have arisen if not for the pandemic. As a result, there are now numerous legislative projects and other policy issues competing for one of the coveted slots during the final voting week of the term.

This means the opponents to meaningful reform have won either way. There isn't enough time left for anything major. So the three options are now the following ones, and we'll know soon which one of the three materializes:

  1. The most likely outcome is still that they pass something into law that also touches on injunctions, for the sake of having something to show in that area, no matter how useless it will be.

  2. The second-most likely outcome is that they enact a reform without the most controversial part (injunctions) and possibly also without the second-most difficult one (stays; here the idea is just to demand faster preliminary opinions from the Federal Patent Court, and it's not going to work the way some people imagine and may even lead to fewer stays and weaker invalidity contentions). There's a lot of totally non-controversial stuff in there that is of an editorial nature. They might just adopt the bill so that the job is 99% done in quantitative terms, even if that's only 1% in qualitative terms.

  3. The least likely possibility is that the entire package gets postponed into the next term.

As none of the three possibilities leads to a solution, the discussion will continue. In the first scenario, the pro-reform movement will find it politically most challenging to get another reform effort started. It would take a lot of time presumably. And effort. And money. And the strategy would have to be way better than last time.

It's unpredictable right now what particular multi-party coalition will be in power in Germany after the September elections. Polls are volatile. With every single party from the far right to the far left opposing meaningful injunction reform, it won't be easier. But the reason it went wrong during this legislative term (which is already certain as the only thing that won't happen in June is a reform that actually moves the needle) is simply that those who wanted reform were C-L-U-E-L-E-S-S, but thought they knew how to win. Actually, I suspect one or more of them even wanted to sabotage the effort. Then, it's easy for the saboteurs to fool the amateurs.

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