11.20.18

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Germany Likes EPO in Munich, Litigation Factory in Düsseldorf and Mannheim (Like Eastern District of Texas)

Posted in Europe, Patents at 8:36 am by Dr. Roy Schestowitz

EPO money diagram

Summary: The architectural design of Germany as Europe’s patents capital, with billions of euros flowing into the pockets of German law firms, more so with a defunct and unjust Unitary Patent (UPC), which is unconstitutional

THE management of the European Patent Office (EPO) loves or at least tolerates/assists patent trolls. It never even mentions the word “trolls”; in other words, it denies the existence of such abuse/nuisance or simply doesn’t view it as abuse/nuisance. António Campinos and Mr. Iancu might soon meet and have a laugh about the ‘myth’ of patent trolls, then proceed to discussing new buzzwords for software patents in Europe (e.g. “AI”).

We are deeply concerned about the status quo, which Florian Müller is investigating and will report on quite soon. It’s about Germany. His constitutional rights are so far being denied on the face of it. There’s stonewalling.

In the US, unlike in Europe, patent trolls are viewed as a very big deal, not celebrated in so-called ‘IP’ blogs like IP Kat (yes, they actively express support for patent trolls, who are also their clients, albeit without disclosure). As we recently noted, the most vocal people in Team UPC are also working for patent trolls, even the biggest ones in the US.

Stopping trolls isn’t easy. They cannot be (counter)sued because they don’t have any products. The least and the best one can do is target (intercept) their patents. Some months ago Mr. Jain from Unified Patents mentioned Epic IP (IP Edge) and he has just referred to this patent troll as “an IP Edge subsidiary and well-known NPE.” It looks like the inter partes review (IPR) at the Patent Trial and Appeal Board (PTAB) is succeeding. To quote:

On November 16, 2018, Unified filed a petition for inter partes review (IPR) against U.S. Patent 6,434,599 owned and asserted by Epic IP, LLC, an IP Edge subsidiary and well-known NPE. The ’599 patent, directed to a system and method for online chatting, has been asserted in district court litigation against Backblaze, Blue Jeans Network, AutoNation, Sharp Electronics, JAND, and Fareportal.

Going back to Europe, the appeal boards (like PTAB) have lost their independence and earlier today Müller published the first of what we expect to be a series of posts about patent trolls in Germany (and Europe as a whole). I had explained to him that the financial benefits of the EPO being based in Germany might be why the top German officials let the EPO abuses carry on, even according to SUEPO, the EPO’s staff union.

He has just published “Call to action: Munich should remain a leading patent litigation venue in Europe” [via Twitter] and “while extorting businesses Europe-wide,” I responsed, “even German businesses that actually make something [...] [Germany is] attracting lots of patent litigation to enrich German lawyers” (or those based in Germany, having come from another country like EPO staff did).

Here are some interesting statistics from Müller, who has been dealing with underlying data recently (top plaintiffs for example):

Roughly two thirds of all European patent infringement cases are brought in Germany. Unlike in the U.S., where patent cases can be filed with any district court in the country, only a limited number of German courts have in rem jurisdiction over such cases, and only three of them really matter: Düsseldorf (this venue gets most cases, but not in the smartphone industry), Mannheim (the primary smartphone venue, where some judges almost deserve an honorary doctorate in radio frequency electronics), and Munich, where I grew up though I’m westbound by now.

Munich has two regional courts. Munich I has in personam jurisdiction over cases involving actions or persons within the city border, and in rem jurisdiction over patent cases; Munich II serves the outskirts (and doesn’t try patent cases).

[...]

While the government of the state of North Rhine-Westphalia, regardless of whether the state is run by conservatives in name only (as it is now) or by the self-declared political left (as it was before), recognizes patent infringement litigation as a regional economic development factor, the party that has been in government in the state of Bavaria for half a century (CSU) appears to be pretty clueless, which is irreconcilable with its “Laptop und Lederhose” (laptop and Oktoberfest-style leather pants) slogan. Instead of strengthening the “civil law chambers” (“Zivilkammern”) that hear patent cases in Munich, the court’s former chief judge even reduced staff size by one judge, which sounds like a minor difference but has huge practical implications whenever one of the three judges (and they need three to form a panel that can hear and adjudicate a case) is on vacation or ill.

That’s why I’m asking those of you who have a professional interest in Munich remaining a major patent litigation venue, also with a view to the future Unified Patent Court (UPC), to help those provincial folks figure out the problem and, more positively speaking, the potential.

[...]

None of this is meant to criticize the work performed by the court’s patent judges. It’s all about what the state government should do in order to let those specialized judges do their work as efficiently as their peers in other major German patent litigation venues.

“Better call for action,” I told him, would “reduce patent litigation by making patents more about information sharing, less about global tax that lawyers pocket billions from…”

Remember that the EPO came into being to advance science and technology, not to make “fat cat” lawyers (like IP Kat writers) even more “fat”; the UPC is a culmination of lawyers’ greed and their goal is to bring litigation magnitude (number, value, reach) to unprecedented levels.

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