Thursday, August 19, 2021

Munich I Regional Court's third patent litigation division commenced its operation on Monday, first administrative decisions are already known

As the Landgericht München I (Munich I Regional Court) announced in late June, its new patent litigation division started its work on Monday (August 16, 2021). It's the court's 44. Zivilkammer (44th Civil Chamber).

The new civil chamber's Presiding Judge--Judge Dr. Georg Werner--was already known at the time. Today I learned that his deputy will be Judge Dr. Anne-Kristin Fricke, who joined the 21st Civil Chamber (Presiding Judge: Judge Tobias Pichlmaier) a couple of years ago and was available to help out the 7th Civil Chamber (Presiding Judge: Judge Dr. Matthias Zigann) as well with her background in antitrust law. Presiding Judge Dr. Werner's second side judge will be Judge Dr. Franziska Greiner-Wittner. According to the web page of a book she wrote, she studied in Munich and clerkships also took her to Hamburg and Jakarta. In 2015, Judge Dr. Greiner-Wittner was a visiting researcher at George Washington University.

With a view to intradistrict assignment, one needs to consider that the new division is initially operating at 50% of the regular capacity. From this one can infer that the 44th Civil Chamber will get approximately 20% of the total patent caseload in Munich, while either of the other two divisions will handle 40% of cases.

What wasn't clear before--but has been decided by now--is that the new division will not only be assigned cases filed from here on out but some cases already pending with other divisions will be reassigned to the 44th Civil Chamber.

At this stage, no hearings or trials before the new division have been scheduled yet. The current operating assumption is that the new division will be in session on Wednesdays (like the 21st Civil Chamber).

I'm coming from the assumption that Presiding Judge Dr. Zigann will soon be promoted to the Munich Higher Regional Court. In that case, one of the lower court's current deputy presiding judges will be promoted as well. The Munich court has several patent-specialized judges who could be promoted, or maybe a side judge from the appeals court will become a presiding judge on the lower court.

According to an announcement made by the Preparatory Committee of the Unified Patent Court (UPC), the new court with the authority to enter judgments with effect in a multiplicity of European countries, "will start operations around mid-2022." Munich is going to be a key UPC venue, and we're going to see some of the well-known Munich patent judges dividing their time between the courts run by the Free State of Bavaria and the UPC. The percentage of their time that they spend on UPC cases will increase as more and more patentees decide to avail themselves of UPC jurisdiction. Initially, many cases will still be filed with national courts where the case law is pretty settled and plaintiffs know what to expect. During a long transitional period, plaintiffs can choose where to bring their complaints.

Meanwhile, Germany's patent injunction "reform" has entered into force. It was signed into law by the Federal President and published in the Bundesgesetzblatt (Federal Law Gazette) last week. The following day, renowned patent litigation and prosecution firm Bardehle Pagenberg published a YouTube video discussing the potential ramifications for the pursuit of injunctive relief:

As Professor Dr. Tilman Mueller-Stoy ("Müller-Stoy" in German) explains, there may be some new types of discussion in connection with third-party interests affected by the enforcement of patent injunctions. Professor Mueller-Stoy gives two examples: "vital drugs when patients' lives are at risk" and critical infrastructure such as public telecommunications networks. As for the latter, I still don't expect any injunction against a network operator actually to be denied in a case in which the patent holder makes a licensing offer that is not facially absurd. The same Bardehle lawyers published an analysis of the reform bill in late June in which they noted the following, with which I concur:

"It may be advisable, as the case may be, to make a reasonable license offer to the infringer that has carefully been thought out before or when filing the complaint. If the infringer has the possibility of averting a claim for injunctive relief by accepting such a license offer, hardly any German court will limit the claim for injunctive relief based on disproportionality."

As for essential medications, just before the reform bill formally took effect the Munich I Regional Court's 21st Civil Chamber granted Bayer multiple preliminary injunctions over a cancer drug patent, as Juve Patent reported this week. Those PIs are more like temporary restraining orders as they'll only be in effect until a Federal Patent Court ruling next month. The availability of PIs over patents of doubtful validity is a tricky subject that gave rise earlier this year to a preliminary reference by the Munich court to the European Court of Justice. There has also been some back-and-forth lately between the lower and higher Munich courts in some other PI case.

While the new German patent bill with its explicit reference to third-party interests wasn't in effect when those PIs came down, the official position of the government and the parliamentary majority was that it was merely meant to draw the lower courts' attention to the possibility of denying injunctions on (dis)proportionality grounds. Passing a bill into law, even if it hasn't been formally signed or published, would be a sufficient means to the end of creating awareness, and at least the companies sued by Bayer apparently didn't get any benefit from third-party interests.

I'm pretty sure that automotive companies, smartphone makers, and telecommunications carriers will be enjoined just like it was 2020. Of course, this presupposes that counsel for plaintiffs won't blunder. In those kinds of cases, it's extremely rare that someone truly wants to force another company out of the market. It's virtually always about money, and with the availability of a license working just the opposite way in Germany from the United States (under eBay, a willingness to grant a license strongly weighs against injunctive relief as it's antithetical to the notion of "inadequacy of monetary relief"), patentees will normally make an offer. That offer doesn't have to be "cheap." It just has to be close enough to reasonable that the courts will, in case of doubt, order an injunction.

In the pharmaceutical context, licensing offers are far less common. It's typically about market share, not royalties. I believe the courts will ultimately also enjoin pharma infringers like before, but there's a bit of a risk. Should a pharmaceutical innovator like Bayer at some point be denied an injunction due to this year's reform bill, it would be a total disaster for the Federal Ministry of Justice and the Federal Parliament, as no one intended any collateral damage to the research-intensive pharma sector. It was all about automotive and telecommunications companies complaining about extortionate patent enforcement. But the process simply went in the wrong direction because neither the statutory language drafted by the Federal Ministry of Justice nor any of the proposals put forward by trade associations (like the VDA, which is Germany's automotive industry association, or ip2innovate) were any good. As a result, those who started it will have no tangible benefits (unless plaintiffs make mistakes), but others may (or may not) be adversely affected. That would be like a COVID vaccine that provides next to zero immunity while coming with severe, at times fatal, side effects. And everyone, regardless of industry sector, will waste money on expert reports and legal argument related to proportionality. Those costs will mostly hit defendants, though. They're going to have to give it a shot, but it won't save them license fees on the bottom line. So stupid.

Share with other professionals via LinkedIn: