German efficiency shames Patent Court into rethink
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The Patent Court's principal judges Mr Justice Jacob and Mr Justice Laddie are hoping to shake up court procedure to make it cheaper and quicker in order to stop the flow of patents work to their more efficient rivals on the Continent.
They have set up a working party, chaired by BP's head of intellectual property (IP) Mike Barlow, to examine the current system. There are around 600 patent cases a year heard in Germany, which is the most popular European jurisdiction for these hearings. In the first six months of the year, the UK Patents Court, which is housed within the Queen's Bench Division of the High Court, heard just 26 applications or trials.
Jacob, a senior Patents Court judge, is behind the creation of this new working party, which Laddie will sit on. As well as Barlow, the working party features Christopher Floyd QC of 11 South Square, who heads up the Intellectual Property Bar Association.
The group will decide if the unique features of UK patents hearings, such as the cross-examination of witnesses, oral disclosure and the use of experiments, are necessary. There is a reluctance to lose these features of the 'Rolls-Royce' of patents court systems. But when the benchmark fee for a patents case in the UK is £1m, compared with £200,000 in Germany, and an English case takes one to three weeks compared with a typical German two hours, something has to be done.
"There are concerns about the cost of patent litigation in the UK - not among our lawyers, but among the clients," commented Barlow.
He added: "As a user of the Patents Court, if I want an injunction quickly, I'll often go to Germany."
Pan-European and multinational companies register their patents in every country in Europe. So if they believe their patents have been infringed they will have to bring a case in every European country. But it is that vital first case that will influence judgments in the rest of Europe.
According to leading English IP lawyers, many clients are turning to Germany to have their cases dealt with quickly.
"I've just given one patents case to our German best friend Gleiss Lutz, as a Japanese client wanted to start proceedings in Germany," said Herbert Smith IP partner Nick Gardner, who fully understands the client's reasoning behind the decision.
"Cases take nine months to get to court in Germany as opposed to 12 months here; and Germany's a lot cheaper and quicker. We tell clients that a case in the Patents Court will cost about £1m. It's about £200,000 in Düssel-dorf or Munich," he added.
In the Patents Court, it is usual to cross-examine witnesses, but there is no, or very little, oral disclosure in the German court, Gardner said. Another unique feature of the English Patents Court is the rigorous use of scientific experiments.
"These experiments cost an arm and a leg," said Bird & Bird joint head of IP Morag Macdonald. "Then the other side asks you to repeat them and they nearly always go wrong.
"I can't think of any other jurisdiction where you're required to repeat experiments if the other side asks for it."
But most of the main IP firms in the UK are unlikely to be seriously affected by the migration of patents cases to Germany, because they already have German offices or at least best friend relationships. Taylor Joyn-son Garrett (TJG) has just agreed to merge with Wessing; Herbert Smith has an exclusive best friends relationship with German firm Gleiss Lutz; Bird & Bird has just opened in Düsseldorf; and magic circle firms Clifford Chance and Linklaters both have presences in Germany, as do Simmons & Simmons and Lovells.
But this does not make the situation any less pressing for the Patents Court.
"There is competition between the European courts. This is good for the system and good for the companies, but it still affects the Patents Court," said Macdonald.
One prominent IP lawyer, Linklaters partner Robert Swift, said many of his international clients will purposely avoid the Patents Court in the UK because of their perception of the patents judges.
"One of the problems we have in England at the moment is the widespread perception, particularly among American clients, that the current patent judges tend to be anti-patent. They're seen to think that intellectual property rights generally are being misused and that the claimants sometimes bring unjustified claims.
"Since it's the claimants who choose generally where the litigation takes place, that's a major factor in their decision to litigate in other jurisdictions where they can."
But TJG IP partner Simon Cohen says the Patents Court should be kept as it is.
"The judges are seen as anti-patent, but this is because they're more thorough in examining a patent than the patent offices who grant patents are able to be," he said. "I think the system is satisfactory. I accept it's more expensive, but I think you get a thorough hearing from the judges."