Thursday, September 14, 2023

UPC's Vienna Local Division demonstrates its potential to become attractive, efficient, inexpensive patent litigation forum

Yesterday I attended the UPC's Vienna Local Division's first-ever court session: a preliminary injunction hearing (CUP&CINO Kaffeesystem-Vertrieb GmbH & Co. KG vs. Alpina Coffee Systems GmbH) over a patent on a device to produce high-quality milk foam. The PI request was denied, but that does not mean to suggest that plaintiffs don't have a chance to obtain great results there. The reason was technical and highly case-specific. The outcome didn't surprise any of the lawyers in the audience that I talked to during breaks nor me.

There are various interesting takeaways, particularly for in-house counsel looking to identify venues complementary to the "usual suspect" fora such as Munich and for law firms seeking to expand to other UPC venues. In the past, there wasn't much to gain from enforcing patents in a market that's only 10% the size of Germany. In the UPC era, I could see two reasons for suing in Vienna:

  • It would make sense as a mix of multi-venue enforcement campaigns. If you put all your eggs in only two or three baskets, some of your cases won't come to judgment too soon. As for judicial philosophy, if you bring a case in Vienna and German is the language of proceedings, you're likely to find one German judge on the panel.

  • While court fees are obviously the same, you can find local litigation talent in Austria at lower rates--and if you identify the right people, you may even like them to become involved in one form or another with your German cases.

Before I go into more detail, let me show you yesterday's judges. From left to right: Judge AndrĂ¡s Kupecz (from the Netherlands; he's very fluent in German and also served on the Munich LD last week; Presiding Judge Dr. Walter Schober (Austria); Judge Professor Maximilian Haedicke (Germany):

In Austria, Presiding Judge Dr. Schober is an appellate judge. Austrian appeals courts generally don't conduct hearings: they decide on the pleadings. Make no mistake: the way he managed yesterday's hearing was highly efficient (it took only one morning, with the bench ruling come down shortly after noon). He's a "no bullshit" facts-focused type of judge with an analytical approach--and makes it quite clear how his court views the outcome-determinative issues in a case.

One pattern that has already emerged after the Munich and Vienna PI hearings is that side judges play a more active role than in German courts, where they may also ask questions but the conversation is typically dominated by the presiding judge. Those international UPC panels have different dynamics. Also, some of the UPC side judges are or were presiding judges on national courts.

Like at last week's Munich hearing, Judge Kupecz pressed counsel to take clear positions. In particular, he insisted on some clear line-drawing concerning claim construction and infringement analysis, and that turned out to be the outcome-determinative issue. Judge Haedicke, who is the editor of a German patent law treatise but also has ample experience as a Dusseldorf appellate judge, als contributed greatly to the discussion. A long time ago I criticized him for his work as an expert witness on Google's behalf, but that's water under the bridge.

All three members of yesterday's panel are legally qualified judges. The patent-in-suit clearly lacked the technical depth that would have required a fourth judge from the pool of technically qualified judges.

The panel could have denied the PI motion as non-urgent. The plaintiff failed to show how an upcoming trade show (HostMilano) and the presence of two of the defendant's coffee machines at Oktoberfest (some kind of promotion by a reseller) represented an imminent threat of irreversible harm, and the accused product has been on the market--in one form or another--since 2019. But the UPC has yet to develop its PI case law. Judge Dr. Schober noted that there might be a strong German influence (which means that you'll want to bring your PI motion within a month of becoming aware of an infringement), but that it's too early to tell.

Some of the lawyers in the audience expected a denial on non-urgency grounds. Plaintiff arguably couldn't make a particularly strong showing in that regard, and defendant didn't really specify how the design of the accused products evolved over the years. I wasn't persuaded by either side's urgency-related representations, but that's obviously a bigger problem for the moving party.

It appears wise to me that the Vienna Local Division does not intend to take a position on the question of urgency, which it simply doesn't have to reach in this case. However, future cases may present questions of first impression (first for the UPC) that must be resolved, and I'd have expected that panel to do so in a well-reasoned fashion.

Long before the decision came down, I was already thoroughly impressed with Torggler Hofmann patent attorneys Dr. Markus Gangl and Florian Robl (PhD)--who are formally qualified as European Patent Litigators--who represented the defendant. By just listening to them, one would have thought they were attorneys-at-law: a large part of their argument was legal, not technical. The way they mocked the plaintiff's arguments was typically Austrian (and appeared very effective). That would be done a bit differently in Germany, but that's just a cultural aspect. For the right of patent attorneys to represent clients in UPC infringement litigation without having to team up with attorneys-at-law, yesterday's hearing was a great start, not only because of the result but also because of those two patent attorneys' superb lawyering.

I want to be fair: plaintiff's lead counsel--Taylor Wessing's Dr. Thomas Adocker--has presumably built his very good reputation on stronger cases than this PI motion. He'll probably win some other UPC cases, just not this one.

Toward the end of the hearing, Judge Dr. Schober asked both sides to specify the costs they wanted to be reimbursed if they were to prevail. The amounts seemed rather low compared to the cost of German patent litigation (EUR 50K for plaintiff, only about half of that for defendant), even for a case that was technically relatively simple. Maybe the actual costs were higher, but they didn't believe they could obtain a fee award offsetting their total expenses.

Based on what I saw yesterday, I would encourage UPC litigants to give Vienna a try, provided that they bring stronger cases than the one that failed yesterday.