OPPO defends another 5G patent against Nokia's opposition: Mannheim trial scheduled for December, UPC PI motion conceivable, and what would the EUIPO do under the proposed regulation?

Nokia and OPPO are giving each other a hard time in different patent validity fora. Recently, even some Nokia patents that gave rise to German injunctions have been deemed invalid in other--but definitely reputable--jurisdictions. It's a monumental, earth-spanning dispute. There hasn't been anything so large and long-running in the wireless sector for years.

The latest development involves OPPO's EP3624524 on "wireless communication methods, network device, and terminal device." It's a 5G declared-essential patent that OPPO asserted against Nokia in Mannheim, with a trial scheduled for December 5, 2023. In early February, an opposition panel of the European Patent Office (EPO) declared the challenged claims non-novel, but did not take a specific position on (non-)obviousness. Yesterday, the panel upheld the patent in an amended form.

The Bardehle Pagenberg patent attorneys who achieved that partial victory are Tobias Kaufmann and Dr. Nikolaus Buchheim.

In June, another OPPO patent-in-suit was also defended in an amended form, and a modification of the claim language that looked like a minor clarification to me resulted in a non-essentiality determination by the Mannheim Regional Court. So I want to be careful about any predictions at this point. The patent may or may not be standard-essential in its narrowed form. And if it's not essential, then it may or may not be infringed, but an infringement allegation would have to be based on what Nokia's baseband stations actually do as opposed to a (rebuttable) presumption that what reads on the standard is infringed by a product that has been declared standard-compliant. As there is no pretrial discovery in Germany (in fact, nothing even remotely like U.S. discovery), it is far easier to properly plead an infringement case over a SEP than over a non-SEP.

I've recently attended several preliminary injunction hearings before Local Divisions of the Unified Patent Court (UPC): two in Munich (with Bardehle Pagenberg having won one case while the other is under advisement), and one each in Vienna and Helsinki. Companies are increasingly concerned about the implications of a patent surviving, in one form or another, a validity challenge, as the UPC appears rather willing to grant preliminary injunctions over such battle-tested patents, provided (of course) that other requirements, such as urgency, are met.

The Nokia v. OPPO/OPPO v. Nokia dispute showcases various of the things that can happen in SEP enforcement, raising the question of what would happen--or would have happened--if the proposed EU SEP Regulation was already in force.

With respect to what implications the amended claims of EP3624524 would have under the EU SEP Regulation, there are at least two interesting questions:

• If there had been an essentiality check based on the patent as originally granted, would the EUIPO routinely perform a new one in a situation like this?

• If the claim amendments pushed the patent out of the area of essentiality, but the patent could still be asserted as a non-SEP, wouldn't the patent holder actually be in a stronger position than if it was deemed essential for purposes of the EU SEP Regulation?

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Unified Patent Court's Helsinki Local Division denies preliminary injunction request over patent opted out despite previously filed (and still pending) national litigation

As I predicted, the Unified Patent Court's Helsinki Local Division today denied an application for provisional measures (the equivalent of a preliminary injunction request) in AIM Sports v. Supponor. The plaintiff had opted out the patent-in-suit from the UPC system despite previously filed national litigation (UK, Germany) that is still pending (before the appeals courts). The four-judge panel found that the opt-out had preclusive effect on the patent's assertion in the UPC, an effect that could not be undone by later seeking to reverse the opt-out.

I attended the first part of the hearing and quickly saw that the motion was a long shot. Apparently the national injunctions that are in force have not served to strengthen AIM's competitive position, particularly with a view to an ongoing tender (which will come to its conclusion in a matter of months) by European soccer body UEFA for digital stadium perimeter advertising technology. This is a case between direct rivals, making a licensing-based settlement unlikely.

The funny coincidence is that I am actually now on my way to a soccer match (Brighton and Hove Albion vs. AEK Athens, a Europa League group stage match). That's why I didn't stay in Helsinki until the decision was announced at 4:30 PM local time (2:30 PM UK Time, 3:30 PM Central European Time).

Let me show you the judges. From left to right: Judge Samuel Granata (Belgium), Presiding Judge Petri Rinkinen (Finland), Judge Mélanie Bessaud (France), and Technical Judge Éric Augarde (France):

If the case had surmounted this procedural hurdle and other jurisdictional challenges, it would have raised the interesting question of a so-called springboard injunction, which is an injunction that prohibits commercial activity that benefits from prior infringing acts (while injunctions are normally just a prospective remedy in every respect).

But the court would have had other ways of disposing of the motion. For instance, the urgency part looked weaker than in last week's Vienna case (where the question wasn't resolved either) and UPC Munich case (one such case resulted in a preliminary injunction on Tuesday while a parallel case is under advisement, with Presiding Judge Dr. Matthias Zigann having said in open court that the question of urgency could be decided either way).

It is easy to understand why the Vienna and Helsinki Local Divisions resolved the PI requests based on only a single issue in each case. It is the fastest way to adjudicate a PI motion, and especially the "smaller" local divisions may prefer to leave it to the likes of Munich to decide legal questions of first impression, which will ultimately be adjudicated by the Court of Appeal anyway.

AIM was represented by four law firms (Roschier, Powell Gilbert, Rospatt, and--only by video conference--Noerr). Supponor's lead counsel was Hogan Lovells' Dr. Henrik Lehment, whose English rhetoric was concise, easy to follow, and persuasive. During the limited part of the hearing that I attended, he was the only lawyer to speak for the defendant, but that is not meant to discount the potential contributions made by Gleiss Lutz' Dr. Matthias Sonntag and Hannes Snellman's Panu Siitonen.

It remains to be seen whether AIM will appeal. I don't think an appeal is likely to turn this case around, but many people--judges and practitioners alike--would appreciate the clarification that it could provide.

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BREAKING UPC NEWS: 10x.Genomics wins preliminary injunction against NanoString

The Unified Patent Court's Munich Local Division (Presiding Judge: Dr. Matthias Zigann) just announced a preliminary injunction in 10x Genomics v. NanoString. That is the case that was heard two weeks ago. The parallel case heard today raises some new questions, particularly also concerning urgency, with a decision scheduled for October 10.

I may add more detail later. For now I just wanted to share the information at the earliest opportunity. This is the first announcement of a UPC injunction in open court. In Vienna last week, an announcement was also made, but an injunction was not granted.

An appeal to the UPC's Court of Appeal in Luxembourg (Presiding Judge: Dr. Klaus Grabinski) pretty much a given.

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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 András 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.

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First-ever UPC preliminary injunction hearing held in Munich: decision scheduled for September 19

After two court sessions that exclusively served the purpose of swearing in judges and a video conference hearing on a validity challenge, the first "real" patent infringement hearing in the history of the Unified Patent Court (UPC) started yesterday as the Munich Local Division heard one of the 10x Genomics v. NanoString cases before it.

On this special occasion, let me show you not just one but even two pictures of the panel--standing as well as seated--that I took before the start of the session (from left to right: Judge András Kupecz (Netherlands), Presiding Judge Dr. Matthias Zigann (Germany), Judge Tobias Pichlmaier (Germany), and Technical Judge Eric Enderlin (France); click on an image to enlarge):

The language of the proceedings was German. The building (Denisstr. 3) is primarily used by the Munich II Regional Court, and for purely administrative purposes by the Munich Higher Regional Court, and now hosts the most popular UPC Local Division. In case you're wondering what the difference between the Munich I and II Regional Courts is: Munich I is the court for cases for which Munich proper is the forum, while Munich II hears cases from the surrounding areas. Only Munich I is among the relatively few German regional courts with which patent infringement actions can be filed.

There is limited capacity for the media and the general public, though the UPC transmits a CCTV signal to a second room on the same floor, which is called an "overflow room" (a term also used by U.S. federal district courts).

Plaintiffs 10x Genomics and Harvard are represented by Bardehle Pagenberg's Professor Dr. Tilman Mueller-Stoy ("Müller-Stoy" in German), and defendants by Bird & Bird's Oliver Juengst ("Jüngst" in German).

After a full day yesterday, the hearing continued this morning. The decision will be announced on September 19 after another PI hearing involving the same parties and a different patent from the same family. That other patent has already been litigated successfully before the Munich I Regional Court.

By just watching Judge Dr. Zigann's initial outline of the Court's preliminary assessment of the case, one wouldn't have thought that this was a premiere for the UPC as a whole and its Munich Local Division in particular. But there were signs of that event being special. For example, Judge Andreas Mueller ("Müller" in German), who used to preside over the Munich I Regional court's 21st Civil Chamber for many years and has been presiding over a different panel (which hears antitrust and copyright cases) for seven years was in the audience. Given the tremendous popularity of the Munich Local Division, more judges are needed and I believe he'd be a great candidate, as would be some others: they have quite a talent pool in Munich.

At this early stage, all those UPC hearings and trials inherently raises legal questions of first impression. At some point there will be well-trodden paths, but at this point even such fundamental questions as whether the moving party can modify its prayer for injunctive relief during a PI hearing must be answered for the first time in UPC history.

In the absence of UPC case law, the EU's Intellectual Property Rights Enforcement Directive is referenced more frequently than in patent infringement proceedings in national courts.

Most patent trials in German courts last only a few hours. This one took 1.5 days and it was "only" a PI hearing. But I can see why the judges want to analyze the matter carefully and ensure that the defendant's right to be heard is fully respected. From what I heard, defendants had to do most of the talking today, and what the court said yesterday also served to indicate that a PI may very well issue in this case.

The court tends to agree with plaintiffs' proposed claim construction, and non-technical defenses (such as pointing to a parallel U.S. antitrust litigation) did not seem to get much traction, but let's await the written decision.

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EU policy makers should have listened to judges before standard-essential patent proposal that is 'wholly bad idea' for lack of 'extraordinary care'

The separation of powers obviously rules out that the judiciary makes the laws it is meant to interpret. That bedrock principle, however, does not preclude European policy makers from drawing on judicial expertise when drafting legislative proposals. Case in point, the German justice ministry invited almost as many judges as industry representatives to a May 2019 roundtable labeled as an "expert talk" while contemplating a statutory amendment relating to patent injunctions.

Even if the reason for a legislative measure is policy makers' disagreement with jurisprudence, judges can provide valuable feedback to draft statutes and do not have the interests of particular companies in mind.

The problem with the "consultations" conducted by the European Commission's Directorate-General for the Internal Market (DG GROW) relating to the proposed regulation on standard-essential patents (SEPs) is not that they didn't talk to, and solicit input from, stakeholders over an extended period of time. It's that they didn't request feedback to specific proposals (and that they didn't make more of an effort to have industry provide researchers with confidential information). That webinar series, for instance, was pretty good, and I gladly contributed to one particular part of it, but there was nothing that set those webinars apart from what the likes of Concurrences organize all the time. By contrast, the UKIPO has just recently stated the right way to go about it:

"Any significant policy recommendations/interventions subject to public consultation."

"Significant" would actually be an understatement for the incisive measure proposed by DG GROW.

That's why I support IP Europe's call for a do-over: it would be an opportunity to arrive at a well-considered and balanced proposal, giving the European Parliament and the EU Council a far more reasonable basis for their legislative work.

I am unaware of a single European judge having commented favorably on the EU proposal. I do know that many of them are reluctant to speak out publicly and decline any related invitations. To the extent that anything has been said by judges, it has been not only negative but damning.

In early June I mentioned what the President of the Unified Patent Court's Court of Appeal, Judge Dr. Klaus Grabinski, said at his court's inaugural event:

• He voiced concern over "access to justice" issues, given that the right to request a judicial review of certain types of decisions is "a core fundamental right" under the EU's own charter. In fact, access-to-justice deficiencies were also among the first problems about the proposal that I highlighted (based on a leaked draft).

• Judge Dr. Grabinski urged DG GROW to rethink the plan.

The UPC has just received its first SEP infringement complaint(s), but some people in Brussels don't want to give the new court the chance to develop its jurisprudence without legislative intervention--and try to sideline the UPC's dispute resolution center, too.

Judge Dr. Grabinski was, in fact, among those invited by the German government to the 2019 roundtable I mentioned further above. But apparently no EU policy maker cared to ask for his opinion on the proposal before it was formally submitted.

While Huawei v. ZTE is still "good law" in the UK (though there is a potential for future deviation), the EU SEP Regulation won't apply there at all. That makes it even easier for British judges to share their views. At a recent Concurrences event (to which I contributed as well), Mr Justice Marcus Smith--the President of the Competition Appeal Tribunal who also presides over High Court of Justice patent cases such as Optis v. Apple--didn't mince words:

• He called the proposal a "wholly bad idea" (which sums it up nicely).

• Like his country's patent office, he says that any regulation in this complicated area "needs to be treated or regarded with extraordinary care."

While not specifically related to the EU proposal, I'd also like to quote the former Chief Judge of the United States Court of Appeals for the Federal Circuit, Randall R. Rader. He said the following at Huawei's Innovation & Intellectual Property event last week:

"The marketplace works quietly, silently, and voluntarily. Indeed, most of the use and benefit of intellectual property comes through voluntary agreements. Licenses. Those licenses by definition are beneficial to both parties because they have both voluntarily entered them. Now, we're accustomed to perceiving intellectual property in terms of legal conflicts but in fact the story of intellectual property is the story of a system that enhances cooperation, coordination, joint efforts to improve human situations."

The fact that most agreements fall into place without litigation doesn't mean that the SEP dispute resolution system couldn't be improved. But there is no urgent need for massive intervention, and especially not with respect to small and medium-sized enterprises (SMEs). The impact assessment accompanying the EU proposal has no hard evidence for actual SEP enforcement against SMEs to offer. All that one can find there amounts to unverifiable and partly rather dubious anecdotes.

If DG GROW gave this another try, they might also want to ask the judges whether SMEs are frequent targets of SEP assertions. The smallest defendant I've ever seen in European SEP litigation is the dominant market leader (70% market share) in the German WiFi router market. That one is not even an SME by EU standards.

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Will Huawei make European SEP case law history again? It may have brought first SEP complaint with Unified Patent Court (defendant: Netgear)

Potentially, Huawei v. Netgear could become the UPC equivalent of the Huawei v. ZTE ruling by the European Court of Justice. IAM was first to report on the first standard-essential patent (SEP) infringement action to have become discoverable in the Unified Patent Court's (UPC) registry. With a query involving Huawei, I've also been able to find the case details.

The UPC states this week's Monday (July 3) as the date of formal receipt. Apparently there have been other cases where the UPC's registry stated a date of formal receipt that differs significantly from the date of filing.

The patent-in-suit is EP3611989 on a "method and apparatus for transmitting wireless local area network information." Huawei previously asserted WiFi SEPs against Netgear in German courts. This, too, is a WiFi patent. Huawei's counsel is Dr. Tobias Hessel, who recently joined Clifford Chance from Hoyng Rokh Monegier.

Given the UPC's administrative childhood diseases, particularly with a view to its registry, it is not certain that this is the first SEP case to have been filed with the UPC. But at minimum it's the first one to have become discoverable.

The following screenshot shows how dysfunctional the UPC's register is (click on the image to enlarge):

That's a query for all pending infringement actions. It says there are 13 results, but the first results page lists only one case (instead of 9). Huawei v. Netgear is discoverable only if one runs a narrower search.

I also doubt that only 13 infringement cases have been filed with the UPC. A number of patent holders were preparing for the June 1 launch date.

The Munich I Regional Court has confirmed to me that a Huawei v. AVM (AVM is the WiFi router market leader in Germany) case will be heard by the court's 21st Civil Chamber (Presiding Judge: Dr. Georg Werner) on next week's Wednesday (July 12). The case no. is 21 O 2576/22, and the patent-in-suit is EP3337077 on a "wireless local area network information transmission method and apparatus".

Earlier today I shared via an email to those who have subscribed to notifications from this blog the announcement of Huawei's annual IP and innovation event, which will take place in Shenzhen and be webcast on Thursday, July 13.

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EU-only SEP register can't serve as basis for global FRAND determinations: proposed EU regulation on standard-essential patents suffers from incongruent provisions

The proposed EU regulation on standard-essential patents (SEPs) did not spark much enthusiasm when it was formally presented in late April. Since then, the companies that have spoken out strongly in its favor include Deutsche Telekom--which also celebrated a German patent injunction "reform" that has not made a difference after almost two years of being in effect--and some automotive industry players such as Continental. Not only do those companies hold only a small quantity of SEPs but they can't even be considered the most sophisticated SEP licensees. When Deutsche Telekom gets sued, it's always the makers of network infrastructure or of end-user devices that are invited to intervene and do the hard work.

The European Commission's Directorate-General for the Internal Market (DG GROW) may have viewed some of the criticism (particularly of the draft bill that leaked in late March) as an attack on the initiative and on the people behind it, but DG GROW should understand that a fair amount of criticism is warranted and actually helpful. Without any objective need to rush things, DG GROW put out a proposal that has fundamental flaws, gets some important details of patent law and SEP enforcement wrong, lacks an evidentiary basis, and is teeming with typos and linguistic errors like no other document I've ever seen from the Commission (even in far less important contexts). There's no denying that something went awry.

DG GROW doesn't seem to have coordinated its proposal with other DGs. For instance, DG COMP released its new horizontal guidelines on Thursday, and while they warn against price fixing in the context of standardization, they say nothing that would legalize a cartel setting an aggregate royalty rate for a given standard.

What about other European institutions that are key to standardization and SEP enforcement? The European Patent Office is not involved. The European Telecommunications Standards Institute (ETSI) strongly spoke out against the envisioned SEP Register. And this week the Unified Patent Court UPC) officially commenced its operation (the first lawsuits have already been filed), on which occasion the President of the UPC Court of Appeal, Judge Dr. Klaus Grabinski, "urged [DG GROW, whose director general was present] to rethink [its] SEP plan" according to a report by ManagingIP's Rory O'Neill that was also referenced by the former editor-in-chief of IAM, Joff Wild, on LinkedIn. Also on LinkedIn, one of the leading German patent litigators, Cordula Schumacher of Arnold & Ruess, welcomed Judge Dr. Grabinski's criticism of the proposal and warned against "a serious restriction of the fundamental right of access to the courts (including the UPC!) [that] might be a violation of the Charter of Human Rights."

In his inaugural speech, Judge Dr. Grabinski had expressed his support for DG GROW's "aim to enhance transparency, but access to justice is a core fundamental right."

That statement vindicates one of my blog posts about the EU SEP Regulation. On April 3, I was (unless I missed something) the first one to publicly criticize the fact that appeals appeared to be not even an afterthought. That post was based on the draft regulation, but the late April proposal didn't fundamentally cure that defect. The possibility of a second-opinion essentiality check does not solve the fundamental problem. Essentiality checks, aggregate royalty determinations for standards, and FRAND determinations between parties must all be appealable to the courts of law.

Sadly, the official legislative proposal not only failed to address many of the issues that were already identified based on the leaked draft, but it even raises new ones. I'll talk about the shortcomings of the proposal in multiple posts, just like last time. Today I'd just like to focus on one: the territorial incongruence between the SEP Register and the envisioned FRAND determinations (both agggregate royalty rates for entire standards and portfolio rates set in disputes between parties).

Between the leaked draft and the official proposal, DG GROW decided to make those FRAND determinations worldwide. As a result, the SEP Register and the FRANd conciliation rules are no longer co-extensive with respect to the patents covered (click on the image to enlarge):

The problem is real. For instance, there are patent holders who prioritize U.S. filings and don't obtain as many patents in Europe as they do in the States. And there are numerous SEPs that exist in China, but which do not have any equivalents in Europe.

That inconsistency guarantees that the FRAND determinations will be incorrect, as they will rely on the EU SEP Register and the related essentiality checks.

I've previously criticized that there is no provision in the proposal for making adjustments to those worldwide FRAND determinations based on judgments in other jurisdictions, such as Chinese FRAND rate-setting decisions. Why shouldn't Chinese courts have the right to set the rate for the Chinese part of a portfolio, or U.S. courts for the U.S. part?

In its explanatory memorandum, DG GROW points to "the context of global developments" concerning SEP-related legislation. If anything, the EU initiative will actually encourage and embolden other jurisdictions to take similar initiatives, which will result in multiple frameworks and potentially multiple jurisdictions claiming in a given case to have the right to make a global FRAND determination. When such conflicts arise, there is no rule that the first legislation of this kind to be enacted takes precedence over "younger" laws.

In the end, the EU proposal may have the opposite effect of what those worldwide FRAND determinations are intended to achieve. We may very well see a regional fragmentation of portfolios, with companies asserting U.S. patents in federal district courts and the ITC, Chinese patents in Chinese courts, and so forth.

Instead of going it alone with a deeply flawed proposal, the EU should engage with key trading partners such as the United States, which considers the proposed SEP Regulation unhelpful. And I don't think I'm asking for too much if I want any such proposal to be at least internally consistent. The disconnect between the SEP Register and the essentiality checks on one hand and FRAND determinations on the other is a structural issue.

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European Commission's formal SEP Regulation proposal addressed certain issues and is now criticized by both net licensors and net licensees of standard-essential patents

The European Commission yesterday announced--with only a one-day delay--its formal proposal (PDF) for a regulation on standard-essential patents. It's not a question of whether the glass is half-full or half-empty: while they fixed some of the issues that were highlighted in recent weeks (not only minor but also structural ones), other problems persist.

The most fundamental problem is that what the EC's internal market commissioner Thierry Breton presented yesterday is not really considered useful by anyone anymore:

• IP Europe, whose members are major net licensors, "[r]egrets the European Commission’s decision to propose a harmful and unbalanced [r]egulation."

• Its counterpart in Brussels, the Fair Standards Alliance (FSA), "regret[s] however that the proposal fails to live up to the objectives that earlier drafts sought to aspire to." The FSA represents the views of major net licensees like Apple and some automotive industry players. Apple additionally has ACT, which Bloomberg exposed as an Apple astroturfing operation. That Apple front "is deeply concerned with recent changes made by the Commission in its proposed regulation" and "troubled by" the removal of a passage that suggested a "license to all" policy.

Regrets, regrets, concerned, troubled. Everyone regrets or expresses concerns. No one is happy. According to commissioner Thierry Breton's logic, that would essentially make both camps "bad-faith actors"...

This reminds me of the doomed Directive on the Patentability of Computer-Implemented Inventions, which was jettisoned by the European Parliament in 2005 in a near-unanimous vote because neither camp wanted it anymore (an important difference being that in that case, the original Commission proposal was viewed very favorably by one camp).

Put another way, the current proposal amounts to a lot of bureaucracy and some uncertainty--but ultimately for nothing, even if one wanted to devalue SEPs and complicate their enforcement. It's useless, and I'm skeptical that the co-legislation process involving the EU Council and the European Parliament has the potential to change that. Whether through hundreds of amendments or a "trilogue" (backroom negotiations between EC, Council and EP), this approach is very likely to produce something unlawful or unworkable (or even both at the same time). They're just structurally on the wrong track, and they obviously weren't able to do a complete overhaul over the past month.

That said, I'm happy to see that some of the criticism has been validated by recent changes. I identified many issues myself and also pointed to other writings. For my previous commentary, see the most recent post, the one before, and the link list at the end of that one.

The way I read the current proposal, the de facto antisuit mechanism has been softened. Previously, a SEP holder starting a parallel proceeding in a non-EU jurisdiction (which they now refer to as a "third country") would have been deprived of the right to enforce in the EU because an implementer could have obtained a notice of termination of the FRAND determination proceeding based on the SEP holder's "failure to engage", but the SEP holder would not have received one. Now, both parties get a notice of termination in that scenario, and the SEP holder can then go ahead and enforce.

What they say now is that the EUIPO-led FRAND determination should set global rates unless the parties agree otherwise. While global portfolio licenses are indeed a commercial reality, DG GROW's insensitivity to the concept of international comity is still evidenced by the failure to consider scenarios in which parties may want to obtain valuations in other jurisdictions for the patents they hold or use there (for instance, China). Commissioner Breton is just doing too many things at the same time, which must be the reason why he gave an answer at yesterday's press conference that makes no sense: responding to the question of whether the EU would like other jurisdictions to create similar SEP licensing regimes, he declared himself in favor of others doing so, but the EU's approach--even without the radical antisuit mechanism they dropped--is simply designed to be incompatible with similar rules in other jurisdictions.

Instead of adopting Qualcomm's proposal of a Reciprocal FRAND Agreement, the proposed regulation does not require the parties to commit to be bound by a FRAND determination. The way it works is this:

• Whoever triggers the FRAND determination process (SEP holder or implementer) doesn't have to state initially whether the determination shall be binding.

• When responding, the other party will have to tell whether it wants the determination to be binding.

• But it won't be binding unless the party that started the process also says it accepts to be bound.

It's not even clear how binding a commitment "to comply with the outcome" is. The proposal doesn't clearly say that the parties have to enter into a license agreement on that basis. It envisions that the courts hearing SEP infringement cases between the parties will be informed of those commitments, but after a license agreement there would be no more basis for infringement action.

The term "enforcement", which I criticized as unclear, no longer appears in all contexts. At least Art. 34(1)(a) now says a SEP holder needs a FRAND determination "prior to any inititation of a SEP infringement claim" (emphasis added). That is clearer, though I'm still wondering whether SEP holders can save time by bringing declaratory judgment actions.

DG GROW tried--but in my view failed--to preserve the right to enforce SEPs during a FRAND determination. What the proposal now allows is to seek a "provisional injunction of a financial nature", which is not a sales ban but would merely require an implementer to make a deposit or post a bond to cover license fees. That's not going to discourage hold-out in the slightest. The way the proposal phrases it is also counterintuitive because they literally say that such an injunction should be sought in the courts of a Member States, but even when I asked around on LinkedIn, I got no indication that there is any jurisdiction in the EU (and possibly not beyond, other than interim payments ordered by Indian courts) that allows this. The way the proposal defines Member States courts, however, includes the Unified Patent Court (UPC). Is that a sufficient solution? No, it falls far short, not only because an obligation to make a deposit won't get any unwilling licensee to the negotiating table but also for the following reasons:

• Many patents have been, and will be, opted out of the UPC.

• Not even all EU Member States are UPC Contracting States.

• The UPC doesn't have jurisdiction over national patents.

In the original draft, the definition of "patent" included utility models. That is no longer the case and represents a loophole for right holders. It's actually pretty cheap, quick, and easy to get utility models in Germany. What limits their usefulness that they don't enjoy a presumption of validity, but if they mirror a patent that has been examined by a patent office, that shouldn't be a problem.

The Commission's edits were obviously done under time constraints. The proposal even has typos. It would have been so much better to engage in consultation, given that the people who drafted it clearly don't understand litigation and commercial realities. For instance, that whole idea of achieving through an awareness-raising effort by the EU's trademark office that car makers will let suppliers pass license fees down in the supply chain is nonsensical. In the end, there are market force in play, and the regulation won't move the needle. I'm not blaming public servants for not understanding how things work in the economy, but then they have to solicit feedback based on specific proposals. They refer to extensive consultations, but those were not about the type of proposal that is now on the table and at risk of going nowhere.

Now it's too late for proper consultation. The thing has been put out and now the legislative process must take place, though it could just result in a rejection of the proposal as I mentioned further above.

The SEP Register part of the proposal is still bad for patent pools and has been rightly criticized by the European Telecommunications Standards Institute (ETSI). I can't see any serious improvement there. The only significant change concerning the register is that SEP holders are now in a better position to get a peer review if they disagree with the initial essentiality check. But appeals to the courts of law are still not even an afterthought.

I'm going to take a closer look at the proposal, the impact assesment, and the studies the Commission is referring to. The proposal notes that "[t]he impact assessment relied primarily ... on two external studies." One of them was produced by Charles River Associates, which engages in SEP policy work for Apple and may additionally hope to be hired by parties (especially implementers) with a view to the FRAND conciliation proceedings. The other is co-authored by the founder of IPlytics, who has a vested interest in certain approaches to SEP licensing and litigation that generate more business for that company than others. I'll be sure to write many more posts throughout the legislative process.

This is going to be waste of time, energy, and resources. The chances of that proposal culminating in a useful piece of legislation are very slim.

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Unified Patent Court presumably can't order anti-antisuit injunctions, but can national courts bar defendants from seeking antisuit injunctions against UPC enforcement?

The ultimate answer to the question I'm discussing here may determine whether the UPC is or is not going to become an important venue for the enforcement of standard-essential patents (SEPs), given that most defendants are Chinese or American implementers (and even Samsung has availed itself of a Chinese antisuit injunction in a dispute with Ericsson).

In recent years, it has become pretty common for SEP owners to seek pre-emptive anti-antisuit (and anti-anti-anti-antisuit) injunctions at or prior to the start of any patent enforcement action. The first AASI in a SEP case was ordered by the Munich I Regional Court in 2019 (Nokia v. Continental) and affirmed by the Munich Higher Regional Court. The Dusseldorf Regional Court is also prepared to grant such injunctions in some circumstances.

I've already raised the question on LinkedIn: how will this work with a view to patent infringement cases filed with the UPC?

The UPC is only a patent court. My reading of the UPC Agreement is that it can order injunctions to stop or prevent the infringement of patents, but that's it.

A patentee preparing the filing of UPC enforcement actions may have a reasonable apprehension that the defendant-to-be is going to seek an antisuit injunction (be it in the United States, China, or elsewhere). But--unless I'm mistaken--the UPC itself can't do anything about that.

The European Commission's draft SEP regulation (initial reaction, table of contents and synopsis, impact on net licensees, lack of appellate options, conflicts with fundamental rights and treaties) imposes all sorts of requirements on patent holders that delay enforcement, but if someone seeks a FRAND determination abroad that encroaches on the EU's Single Market, the patentee is free to sue right away and even to seek customs seizures. However, that still doesn't bar the implementer from seeking an antisuit (or anti-enforcement) injunction abroad; it just creates a potential (but very weak, if not negligible) disincentive.

To obtain anti-antisuit injunctions that protect their UPC cases, SEP holders will still need help from national courts such as the Munich I Regional Court or Dusseldorf Regional Court. Can and will those courts do that?

It's a tricky question if my reading of Article 34 of the UPC Agreement is correct:

Territorial scope of decisions

Decisions of the Court shall cover, in the case of a European patent, the territory of those Contracting Member States for which the European patent has effect.

I understand the above as an all-or-nothing proposition: if you sue in the UPC over an EPO-granted patent, you can't just say "leave out Germany" or "leave out all countries other than Germany." Fragmentation by partial opt-out would defeat the purpose of the UPC.

German AASIs are based on the need to protect property rights (even to the extent of using self-defense as a justification). EPO-granted patents are typically valid in Germany (the largest economy among the UPC's Contracting States), and the existence of a German part of a European patent makes it a property right protected by Art. 1004 of the German Civil Code.

But German AASI decisions also have to respect EU law. That first SEP AASI (Nokia v. Continental) already referenced EU law, arguing that it was possible to take action against a potential U.S. antisuit injunction (which never issued) because non-EU jurisdictions are not covered by EU law, more specifically: the Brussels Regime, the latest iteration of which is Regulation EU No. 1215/2012. According to that one, a principle of mutual trust applies to rulings made by courts of other EU Member States.

The Munich appeals court argued in its December 12, 2019 Nokia v. Continental decision that international law is only part of--and not above--German federal law. It also said that any extraterritorial effects of an AASI are legitimized by the need to defend against a threat of interference with German patent rights.

There has never been a debate that a Munich AASI also bars an implementer from seeking an ASI against proceedings in other venues, such as Dusseldorf or Mannheim. The UPC raises a novel question, however, and that is primarily due to Art. 34 UPCA:

• There is an argument that a foreign ASI that would enjoin the enforcement of a UPC SEP injunction (based on an EPO-granted patent) violates German federal law because it vitiates German property rights (the German part of the European patent in question), and that it would merely be collateral damage (or, from the patentee's perspective, a collateral benefit) that an enforcement of an EPO-granted patent must be shielded from a potential ASI. The European patent could then be enforced in all countries in which it is valid, as per Art. 34 UPCA.

• An implementer, however, might argue that a German court can only order an AASI that prevents ASIs affecting German court proceedings, but does not have jurisdiction over the non-German parts of a European patent.

Art. 34 UPCA would be key either way. The patentee will argue that there is no way under Art. 34 UPCA to opt out from enforcement in all other countries, so the AASI will inevitably have some territorial overreach. The implementer will argue that such overreach deprives the German court of jurisdiction.

Now, what if the patentee petitioned for--and actually obtained--AASIs in each and every one of the UPC Contracting States in which the patent is valid? In that case, they would all agree and the UPC enforcement action should go forward. But they can't coordinate. In each country, the decision will have to be made without potentially knowing any (or in most cases one will at least not know all) other countries' decisions. If a German court ordered an AASI, it can't know whether a French court will grant or deny the petition before it. Would the answer be that the patentee has to seek conditional AASIs that say they apply to UPC cases provided that equivalent decisions have been made by the courts of competent jurisdiction in the other relevant Contracting States?

Is there an argument that even if the UPC ordered an injunction relating to all Contracting States in which a SEP is valid, the patentee could still tailor the actual enforcement by telling the infringer in writing that the injunction only has to be respected with a view to one or more--but not all--countries? There could always be national decisions, such as compulsory licenses, that would have that effect anyway.

At what point will we find out how the courts decide?

• If a patentee seeks an AASI that explicitly references enforcement in the UPC, then the national court will have to decide.

• If a patentee instead seeks an AASI that focuses on the intellectual property at stake (patent rights in Germany including German patents of EPO-granted patents) without referencing specific courts (or at least not making it sound like UPC enforcement wasn't meant to be covered), the implementer will have to decide whether to take the risk of potentially violating that AASI through the pursuit of a foreign ASI that would target UPC cases.

  At this post-AASI stage the implementer can't seek an ASI against cases before German courts anyway, so if the patentee has enough (and presumably strong) patents available that it can enforce in national courts, the implementer's problem can't really be solved (only reduced) through a UPC-only ASI.

  If the implementer decides to go for a UPC-only ASI anyway, then the patentee will move for contempt sanctions based on the AASI, and the question will have to be resolved.

As a patentee, I would be a little bit concerned that my AASI petition might be put before a judge with the attitude that if you have a problem with your UPC cases, you should ask the UPC for help, and if it can't help, you should file your complaints with national courts. That would not be a legal principle, but a human factor, especially with judges handling cases in national courts knowing how much more money (after taxes) their colleagues sitting on the UPC make and trying to attract as many cases as possible to the national courts in order to potentially get on the prestigious gravy train in the future.

The UPC will create interesting--even exciting--opportunities for patent holders. But there will also be some initial uncertainty about various questions, one of which is the availability of anti-antisuit injunctions.

It won't be easy for the IP chiefs of major SEP holders to convince their CEOs and CFOs of something that results in significant incremental costs, but the way to hedge your bets and to be in the strongest possible position is to engage in double patenting. Does that term make anyone wince? It's admittedly counterintuitive because it appears antithetical to the way the patent system works. But it's not strictly double patenting if the claims are distinguishable, and some national laws (in Germany and France) actually open the door to what practically amounts to double patenting. The best strategy with a view to the UPC is to obtain both European (EPO-granted) patents and national patents, particularly in Germany. I recommend an IP Quick Tip podcast by the Bardehle Pagenberg firm for further information on that topic. The transitional period with opt-outs will end sooner or later, and any patents resulting from the applications you file now are going to be affected during their lifespan.

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European Commission departs from best practices in hasty preparation of standard-essential patent policy proposal that is fundamentally flawed and unbalanced

Yesterday evening, MLex reported on the "draft of a highly anticipated regulation by the European Commission on the licensing of standard-essential patents." Reuters reported as well, but obviously in much less detail than the specialized subscription service.

IAM has already published two articles (paywalled): European Commission to propose radical new SEP/FRAND regime with major consequences for patent owners and Entrusting SEP/FRAND to EUIPO is fraught with challenges. Furthermore, IAM's former editor-in-chief (and now columnist) Joff Wild has criticized the forthcoming proposal on LinkedIn. In one post, he said "[t]his looks like legislation that has been drafted after listening to one set of interests without giving even the slightest consideration to those of people who actually understand SEP licensing" and expresses fears of "years of paralysis ahead": "Madness." In another post, he ironically notes the contradiction between the EU claiming that the Unified Patent Court will create legal certainty and encourage innovation, while now putting forward a proposal before the UPC has even decided the first SEP case.

That is something I also noted in my initial reaction on LinkedIn:

"It looks like the Commission doesn't trust the new #UnifiedPatentCourt because it wants to make the #EUIPO -- which has zero #patent expertise -- the mandatory #FRAND arbiter. The obvious alternative would be to wait a couple of years and see how the #UPC will adjudicate cases involving standard-essential #patents."

If one thinks it through, the very unbalanced draft (which is all about imposing additional requirements and costs on SEP holders without any element that would discourage hold-out) is not only an expression of no confidence in the UPC but also an attempt to overrule the European Court of Justice. In Huawei v. ZTE, the ECJ sought to strike a balance between licensors' and licensees' interests. It wanted either side to make a constructive contribution. Far be it from me to deny that the SEP licensing process could be improved for both sides. But what the EC has in mind (according to the reports I mentioned) comes down to putting a thumb on the scales only to the detriment of SEP holders.

There are issues that could have been--and still could be--addressed prior to a formal legislative proposal.

But in order to identify and fix those flaws, a proper internal and external consultation process would be needed. The Commission should simply act in accordance with best practices instead of shooting for an arbitrary date (World IP Day--April 26, 2023--is not a date that has any particular meaning for the EU legislative process).

It's not that there hasn't been any consultation. About a year ago I reported on one. And last year's Survey for start-ups and SMEs investing in, relying on or developing communication technologies is still open.

The problem is that so far the Commission has asked stakeholders only for some general input on how the SEP licensing process is working and what issues the respondents encounter. What the Commission has not done--but should do--is to let stakeholders comment on an outline of a potential legislative proposal.

Last time I engaged in patent policy work in Brussels the procedure was different. In early 2006, the European Commission outlined a European Patent Litigation Agreement (EPLA), a predecessor to the UPC Agreement. Stakeholders were able to comment on the specifics of that proposal. The Commission then held a hearing before the summer break. In parallel, the European Parliament was working on a non-legislative patent policy resolution.

If the Commission had done--or still decided to do--the same here, there would definitely be room for improvement. The draft bill that is described in those media reports would make the EUIPO--a trademark office with zero patent expertise--the mandatory arbiter over FRAND rate disputes. The EUIPO would furthermore be tasked with the accreditation of experts in a field (essentiality checks) in which the agency itself has no expertise. And the idea of a SEP register is nonsensical. Standard-setting organizations like ETSI already receive essentiality declarations. But the way DG GROW would like it to work suggests a static perspective on a dynamic environment. Major SEP holders are granted new patents on a daily basis. Patent claims change during the prosecution process (in response to rejection notices). And license agreements come with capture clauses that include patents granted during a future period. Transparency is important, but so are licensing realities.

DG GROW did not even involve other Commission DGs the way it should. That's what I learned from a reliable source I have to protect.

Normally, legislative proposals are discussed well in advance between the DG in charge of a bill and other DGs whose areas of responsibility are affected. Here, there are various DGs with a potential interest in this. From what I heard, DG COMP would rather not be involved. Should Mrs. Vestager make the announcement of the proposal, it will be in her role as the head of the EU's digital industry policy, not as antitrust chief. But there are DGs who should have been involved earlier: DG CONNECT (digital industry), DG TRADE, DG RTD (Research). Shockingly, DG GROW appears not to be listening to them at all. It appears those other DGs received the draft regulation only a couple of days ago. In other words, they were lucky to see it a day or two before MLex and Reuters.

Even the current presidency of the EU Council--the Swedish government-- was apparently blindsided as far as the specifics of the proposal are concerned.

All of this suggests that there are serious institutional (and also interinstitutional) issues. Why is DG GROW in such a hurry? There is no current crisis concerning SEPs. There's no problem with car makers spending $15 or so per car on cellular SEP license fees. That industry faces some fundamental challenges, but SEP royalties--a minor cost of doing business that affects the competitors of European automakers to the same extent--are not one of them. There isn't even a lot of SEP litigation: in most cases, license agreements are worked out without the need for patent enforcement.

The current proposal--if enacted--would weaken certain European innovators, override the ECJ, display a lack of faith in the UPC, and make other places in the world more attractive for SEP enforcement (for instance, Latin America) and standards development (the U.S.). In some other jurisdictions, the EC's proposal would likely inspire legislation that would further weaken SEP holders. Apparently the EC is also seeking to weaken ETSI, such as by reducing the voting rights of contributors and of non-EU companies. I can't elaborate on all those issues in this post, but the combination of all that's going on poses a serious threat to standards development in Europe.

The U.S. government acted more prudently. The Biden Administration ultimately decided not to adopt a new SEP policy statement, based on input from net licensors as well as net licensees.

Instead of making a hasty and ill-conceived proposal, DG GROW should discuss its ideas (as opposed to the topic of SEP licensing at an abstract level) with internal and external stakeholders, and fundamentally improve its proposal prior to officially putting it on the table. As a SEP litigation watcher I definitely see room for improvement, but no objective sense of urgency here that justifies skipping necessary steps when there is so much at stake.

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Using English in the Unified Patent Court: effectiveness beats elegance -- thoughts and recommendations for in-house and outside counsel as well as policy makers

The use of English in continental European patent litigation is already widespread:

• Most of the communication between in-house and outside counsel takes place in English.

• Therefore, even mock trials and rehearsals are often performed in English.

• Non-native speakers often plead to the Opposition Division and Boards of Appeal of the European Patent Office (EPO) in English.

• Formally, both the oral and the written parts of German court proceedings must be in German, but patent infringement judges are increasingly flexible. For example, if a judge asks a foreign party representative about the prospects of a settlement, the answer will likely be given in English without a need for simultaneous interpretation.

The advent of the Unified Patent Court (UPC) will take this to the next level, not only because of Central Division proceedings but also because Art. 49 (2) of the UPC Agreement (UPCA) gives each contracting state the option of designating one or more of the EPO's official languages (English, French, German) as a language of proceedings before local or regional divisions. Furthermore, any judicial panel (at all levels of the UPC) "may ... dispense with translation requirements" (Art. 51 (1) UPCA).

Judge Dr. Matthias Zigann--who needs no introduction in the patent litigation community--and his colleague on the Munich Local Division, Judge Tobias Pichlmaier, would like the German federal government to exercise its option under Art. 49 (2) with respect to English. A few days ago, I told many people that I am in favor of that proposal and solicited input.

As someone who has no English-speaking parents and wasn't raised in an English-speaking country, but who is now primarily working in English and has watched a great many German patent trials, I'd like to share my thoughts here and make some recommendations for the various stakeholders.

1. To anyone who has the ability to influence the German government's decision: make it clear to the patent policy officers in Berlin, and also to politicians if you have access, that there is no rational alternative for Germany to the designation of English as a language of proceedings. Otherwise the German UPC Local Divisions will be disadvantaged, and those venues will fall out of favor. They won't disappear into oblivion, but there is a considerable risk that the German Local Divisions would get a lower share of the overall UPC caseload than the present "market share" of German regional courts.

   If you talk to politicians and public servants, you'll be more diplomatic, but let me be blunt here: it's a Go Big or Go Home situation in which only one decision is responsible.

   Those German UPC Local Divisions will always need a third judge from a foreign country. The only native speaker of German who can help them out is Vienna-based Judge Walter Schober. I heard there are also some judges in other places (such as Slovenia) whose German may be sufficient, but make no mistake: the availability of foreign judges who can participate in German-language proceedings is going to be a severe bottleneck.

2. I also recommended that a given candidate's proficiency in English should be part of the consideration when appointing UPC judges even to the extent that virtually or actually bilingual German patent jurists should be recruited as (even if only part-time) judges. I could particularly think of two German law professors.

3. Based on my communication with local (Dusseldorf and Munich) patent litigation boutiques, it is clear that those firms--which the German government should particularly support--are all fired up for the UPC and ready to think global, act local. They'd rather see the Germany-based Local Divisions succeed than rely on an entrance barrier that could be a major turn-off relative to other venues.

4. The picture is a little more nuanced when it comes to the German offices of global law firms. There appears to be some concern there that partners from other offices--including UK-based or even U.S. (!) patent litigators who may obtain an Irish bar admission under some mutual-recognition regime--could capitalize on their closeness to major U.S. clients and just appear as lead counsel in front of the German Local Divisions, either sidestepping or sidelining their local partners. But those fears are not a reason not to do what is in the interest of all other stakeholders.

   First, I don't think U.S. and other clients would act in their own best interest if they didn't insist on a substantial and first-chair involvement of local partners. Further below I'll explain why native-speaker lawyers won't necessarily be more effective. And the local players know the local judges' thinking best.

   Second, even if the local offices of a few global litigation firms lost a limited amount of business (which is a big "if" anyway), that downside would clearly be outweighed by the benefits to all other stakeholders, especially considering that some countries will offer English-language proceedings anyway.

5. The world's lingua franca is not English. It's bad English as a journalist aptly put it. I would non-judgmentally call it English as a Second Language (ESL). Even in English-speaking countries, the language is increasingly shaped, or at least influenced, by non-native speakers. But in international enviroments such as the European Parliament, the English you hear there has distinct characteristics.

   The fact that the UPC will predominantly be an ESL court (and remain one even if the UK joins at a later stage) is something to bear in mind here. In the end, in-house and outside counsel want to win their cases--not linguistic awards. So let me share a few thoughts on what in-house counsel should (and should not) expect of the lawyers who deliver oral argument, and what outside counsel should focus on:

6. Let me start with some recommended reading (or, optionally, listening). It's a National Public Radio piece that begins as follows:

   Picture this: A group of nonnative English speakers is in a room. There are people from Germany, Singapore, South Korea, Nigeria and France. They're having a great time speaking to each other in English, and communication is smooth.

   And then an American walks into the room. The American speaks quickly, using esoteric jargon ("let's take a holistic approach") and sports idioms ("you hit it out of the park!"). And the conversation trickles to a halt.

7. When I have conversations with native speakers, I speak faster and use a wider vocabulary than with ESL speakers. In fact, that puts a strain on me and slows me down. I tend to speak really fast in English, German, and Spanish. Naturally. But with non-native English speakers, I'm always worried that I may use some idioms or rare words I picked up somewhere that my counterparts may not understand. I sacrifice fluency for effectiveness.

   As the NPR story notes, "definitions of 'good' and 'bad' English [from a native speaker's point of view] may be counterproductive if our goal is to communicate as effectively as possible."

   Effectiveness has always beaten elegance in a business or legal context. As in-house counsel with native or near-native English-language skills, don't ask yourselves whether your lawyers impress you: ask yourselves what works best. Just like messages can get "lost in translation", they may also get lost because of a judge not being familiar with a word or phrase.

   I've noticed that great American trial lawyers speak a different kind of English to juries (almost using what is called "restricted code") than to those smart and educated judges at pretrial hearings. I remember how Cravath's Evan Chesler explained Qualcomm's success story in San Diego. That was his opening statement during which the dispute with Apple was settled four years ago. There were passages that made him sound like a taxi driver ("up in La Jolla") more so than one of the very best trial lawyers in American history.

8. With the UPC judges, it's not going to be a question of their level of education, but of their past exposition to English. Counsel will have to focus on the lowest common denominator of a panel of three judges. Unless and until you know from experience how well they understand English, you can base your initial operating assumptions on someone's country of origin (and then make adjustments as you see how it actually works):

   • There are some European countries in which movies and TV are not synchronized: the Nordic countries and the Netherlands. They only get subtitles. As a result, they understand pretty much everything, way beyond the words and phrases they use actively. Also, their languages (except Finnish) are as close to English as it gets.

   • Compared to Scandinavians and Dutch people, most Germans do not speak English even half as a well as they think. Just look at people's LinkedIn profiles and the levels of proficiency they indicate--they simply overestimate themselves. English is a Germanic language, which makes it a lot easier for Germans to learn English than it is for those whose native language is a Roman or Slavic language. Regrettably, the way English is taught in German schools is pathetic because it lacks a clear focus on conversational skills. Today's teens and twens have good access to English-language media. They tend to use English online and in real life to a hugely greater extent than their parents. But the judges you are going to plead to grew up at a different time and the country's educational system (which has been overrated for a long time as studies such as PISA and TIMSS show for other subjects) failed them.

   • Those whose native language is Roman or Slavic are particularly challenged. English is structurally very different from those groups of languages. And for a long time, a mix of excessive national pride and other cultural factors prevented people in certain Mediterranean countries from reaching a very high level of English-language skills. That has changed recently. Fortunately, there are positive exceptions among patent-specialized judges from those countries. Still, be aware of certain limitations.

9. What is certainly not counterproductive is for lawyers to work on their transitions, such as the use of linking words. If you begin almost every sentence with "And" or "But", then you have to practice a diversity of ways to connect the points you make.

10. Up to a certain level, syntactic variety will make you more persuasive but not harder to understand. This particularly applies in Germany: given the grammatical similarities between English and German, and the emphasis that German schools place on grammar (even in English), advanced structures are still understood and may enable you to state your positions more efficiently and compellingly.

11. Native speakers pleading to ESL judges must be very careful about any cultural references, whether they quote literary works or movies or (as NPR mentioned in the piece I quoted above) sports. You can't assume that your audience will know the context, and even if a movie succeeded around the globe, the synchronized version may sound so different that your quote from the English original will not sound familiar. Soccer is similarly popular in Germany as in the UK, but don't expect German judges to know English soccer terminology.

12. Pronunciation is another difficult topic. Non-native speakers particularly struggle to understand some British accents. While certain other accents such as what is called "Bavarian English" are not too pleasant on the ears of native speakers of English, continental European judges will actually find it easier to understand them than many native speakers. This applies even if speaker and listener are from different continental European countries. For an Eastern European or Mediterranean judge it will be easier to follow someone with a strong German accent than even the London version of English. However, it is absolutely desirable to get words phonetically correct. When I hear German lawyers quote from English-language patent descriptions and claims, I identify too many mistakes in that regard, and they should work on it.

13. The use of ESL in UPC proceedings will have the positive effect of lawyers having to place an even greater emphasis on what they say as opposed to how they say it. Substance will matter more than style. In my observation, German patent infringement judges--particularly Judge Dr. Zigann--are not persuaded by rhetoric. They just filter it out.

14. The lawyers who will be most effective in German UPC proceedings are those who are great explainers and who develop the best arguments, based on a thorough understanding of the technical aspects of the case (as opposed to just being briefed by other partners and by associates). Those who overrely on rhetoric in national courts will have a problem (for example, one who is usually a showman was absolutely not forceful--and did not come across as confident--when I heard him plead in English to an EPO opposition panel).

15. Finally, I believe it would be desirable--though it would cost time and money--if English-language decisions authored by ESL rapporteurs could be copy-edited by a centralized "language service" of the kind they have in some EU institutions. Even if the UPC's Central Division could not or did not provide such a service, I would still advocate the use of English in UPC Local Divisions. The judges are going to get their points across. But non-native speakers will inevitably make mistakes, and some of those mistakes could result in a loss of clarity that could be avoided by having native speakers (or linguistically trained staff that is at the level of a native speaker) proofread their decisions prior to publication.

In a nutshell, the name of the game is not for lawyers to impress their clients with English-language skills, but to convince the judges (who typically aren't native speakers). Up to a certain level, better language skills will result in greater persuasiveness, but there comes a point where oversophistication will diminish someone's effectiveness. The same applies to pronunciation.

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Mannheim Regional Court now has *three* panels to which patent infringement cases can be assigned

One of the world's most popular venues among patentees seeking injunctions against infringers, the Landgericht Mannheim (Mannheim Regional Court), is already a rocket docket: judgments often come down within less than a year of the filing of a complaint. It has recently been the fastest one of the major German fora, though Dusseldorf has accelerated its proceedings and is not a distant second.

Given that Mannheim has no "backlog" problem and that some cases that would have been filed with the Mannheim Regional Court in years past are soon going to be brought in the Unified Patent Court (UPC), it's somewhat surprising that the regional court is upgrading its capacity for patent cases now.

The current version (PDF) of the document listing the types of claims that are assigned to the Mannheim court's various divisions entered into effect six weeks ago. In addition to the 2nd Civil Chamber (Presiding Judge: Dr. Holger Kircher) and the 7th Civil Chamber (Presiding Judge: Thomas Schmidt), the 14th Civil Chamber--whose new presiding judge is yet to be appointed--will hear patent cases.

There is an overlap between the 2nd Civil Chamber and the 14th: Judge Dr. Kircher's deputy, Judge Dirk Boettcher ("Böttcher" in German), is simultaneously also a member of the 14th Civil Chamber. Judge Boettcher previously served as a side judge on the Mannheim court, and temporarily on the Karlsruhe Higher Regional Court's 6th Civil Senate (Presiding Judge: Andreas Voss ("Voß" in German)) as this Juve Patent article on the appeal of a Nokia injunction against Daimler indicates.

While the Mannheim court's traditional two patent litigation divisions primarily adjudicate patent cases, they are not listed as the 14th Civil Chamber's number one priority. Primarily, that panel hears competition cases, such as a major antitrust damages case (known in the German antitrust community as "the sugar cartel case") that will be decided in April. According to the court's internal rules, one-sixth of the patent caseload will be assigned to the 14th Civil Chamber.

In other news involving German patent judges, I have heard from reliable sources that Judges Dr. Matthias Zigann and Tobias Pichlmaier of the Unified Patent Court's Munich Local Division would like to offer English as an alternative language of proceedings.

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Automakers' cellular patent licenses must be upgraded to 5G this year: Continental, FSA to argue with success (Avanci, Huawei) at Auto IP Summit in Munich

A few months ago, the Avanci patent pool announced that its 4G program had licensed most of the industry. This year, the world's car makers will have to upgrade their cellular standard-essential patent (SEP) licenses from 4G to 5G. Will that transition go smoothly? I think it should, but it's too early to tell.

In the first part of this post I'd like to draw your attention to an interesting automotive IP conference that will be held in Munich on March 1-2; subsequently I'll also share a few observations on IPlytics' efforts to market their services to the automotive sector in ways that may raise false hopes.

Auto IP & Legal World Summit (Munich, March 1-2, 2023)

Last April, conference organizer Ardensi held its Auto IP & Legal World Summit in Frankfurt, and it was a very interesting event in terms of attendees and content. This year's edition will take place in Munich on the first two days of March (click on the image to enlarge):

The conference covers a broad range of auto IP topics. The first part is about the ramifications of the Unified Patent Court (UPC), with speakers from industry players Thyssen Krupp and ABB, the EPO's Michael Froehlich (whom I remember from his days as Germany-based IP in-house counsel of BlackBerry), and two lawyers from well-known firms: Meissner Bolte's Philipp Rastemborski, who also spoke at last year's Auto IP Summit and now heads his firm's litigation practice, and Powell Gilbert's Rajvinder Jagdev, whose list of key cases is truly impressive.

A panel discussion FRAND litigation, negotiation, and dispute resolution promises some rather lively debate: Continental's Michael Schloegl ("Schlögl" in German) and the Fair Standard Alliance's Secretary General Evelina Kurgonaite will represent implementers in a debate with Avanci's Senior VP Laurie Fitzgerald and the head of Huawei's European IP department, Xiaowu (Emil) Zhang. As I wrote earlier this month, Huawei--which has recently signed up a number of car makers as licensees--has become an "accidental" net licensor, but remains a major implementer, too.

In a way, Conti and the FSA--represented at the conference by speakers who do not shy away from controversy--will have to argue with success: Avanci works. Huawei's licensing program works. But the FSA has members such as Apple and Continental who have a different vision for how they would like wireless SEP licensing to work.

One of Conti's key competitors, TomTom, will give a presentation on the changing licensing landscape.

Upon my request, the organizers provided the following short description:

The Annual Auto IP & Legal World Summit discusses the most pressing challenges faced by the global auto industry. Every year attendees from leading companies like Continental, VW, Bosch, BMW, Volvo, Mercedes Benz, Schaeffler and more gather to talk key issues, potential solutions surrounding IP risks, SEPs & FRAND negotiations, UPC, technology and more through panels, presentations and roundtable discussions. Join 100+ attendees and 30+ speakers from 01-02 March 2023 at the Hilton Munich City, Munich, Germany. Contact Vaishali on vaishali.popat@ardensi.com to get involved in the Summit.

IPlytics claims to speak for the automotive industry, favors complications over simple solutions

Patent database services are useful or certain purposes, but what I take issue with is when those offering them overstate the reliability of their results or the impact their tools can make.

A few days ago, IAM published an op-ed by IPlytics' founder, Auto industry demands a fresh SEP/FRAND focus in 2023. What does this mean? Has IPlytics become a lobbying front for the automotive industry? What mandate does Tim Pohlmann have to speak for an entire sector?

The automotive industry wants smooth and efficient solutions. But if things go too smoothly and efficiently, that industry may not have much of a need for patent analytics services. In that indirect sense, IPlytics definitely is an automotive stakeholder...

The previous day, IPlytics hosted a webinar, How to gain the competitive edge for V2X technology. Can a patent analytics firm really give innovators and implementers as "competitive edge"? You be the judge.

Back to the IAM op-ed. I disagree with the suggestion that something disruptive is needed: we're just talking about an upgrade from 4G to 5G. I also disagree with some specific statements.

Mr. Pohlmann says "[car makers' buying] power is so significant that most suppliers include indemnification provisions in their contracts." But in the Continental v. Avanci dispute (which ended last year when Conti finally stopped throwing good money after bad) Conti was unable to establish injury, and a key reason for that was that it couldn't point to any actual indemnification claim. Almost the entire automotive industry has the Avanci 4G license by now, but no indemnification claim by any of those licensees against any of their suppliers has become known to date.

The traditional allocation of liability in the automotive industry is indeed that suppliers are responsible. But by now that industry has accepted to take licenses at the end-product (i.e., car) level, which eliminates the need for indemnification clauses.

The following suggestion of a causation makes no sense to me:

"A battle of where to license in the value chain was fought in US courts between automotive supplier Continental, and Avanci and Nokia. Much of the heat dissipated from the dispute when Daimler opted to take a licence from Avanci."

Conti filed its U.S. complaint (in the Northern District of California, from where it was transferred at Avanci's request to the Northern District of Texas) in 2019. Daimler initially took a car-level license from Nokia, which was announced on June 1, 2021. But Continental's federal lawsuit had been dismissed (with prejudice) approximately nine months earlier: on September 10, 2020--and it took well over a year from that dismissal until Daimler took an Avanci license (December 2021).

A few months later, the Fifth Circuit affirmed the dismissal. My article on the initial panel opinion has since been nominated for the Antitrust Writing Awards by Concurrences and George Washington University.

The chronology of events renders IPlytics' theory implausible. If there was any causation, it was the opposite: the fact that Conti failed with its U.S. litigation may have persuaded not only Daimler but also other car makers that taking an Avanci license was a pragmatic choice.

After Daimler took not only the Nokia but ultimately also the Avanci license, Conti still brought two petitions for rehearing en banc with the Fifth Circuit. The only thing Conti did not try was to appeal the case further to the Supreme Court, presumably for lack of support from potential amici curiae who didn't deem such a weak case the right vehicle to push for an obligation to license SEPs at the component level.

No one stands to gain anything from fighting the lost war over component-level licensing again in connection with 5G, other than litigation firms and other service providers, such as IPlytics.

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