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Twice a year, Steven Miller journeys from Cincinnati to Europe. As Procter & Gamble’s intellectual property general counsel, he tours the continent to survey his company’s patenting operations in the Old World. During these trips Miller visits with lawyers at the company’s five in-house sites, where a total of 25 attorneys oversee the company’s patent filings and disputes. He also usually visits with Munich’s ter Meer Steinmeister & Partners, the outside firm that for 15 years has helped P&G defend its inventions at the European and German patent offices. American companies, along with native companies, have been keeping intellectual property lawyers in Europe busy for many years. But when Miller arrives in Munich this year, he will discover that the city now, more than ever, has intellectual property lawyers ready to offer him their services. And, for the first time, the eager German lawyers who hope to win work from P&G and other multinational companies belong to U.S. firms. As it happens, Miller will already know some of the newcomers. Jones Day, the Cleveland-originated firm that has handled patent litigation for the company in the United States, opened an office in Munich in January. A second of P&G’s stateside patent law firms, Boston’s Hale and Dorr, settled in the city a year earlier, as part of its European collaboration with the now-defunct Brobeck, Phleger & Harrison. A third outside firm for P&G, Minneapolis’ Dorsey & Whitney, is looking in Munich too, say people familiar with its European plans. But these U.S. firms are not alone. They will have to compete with a flock of other foreign firms that have recently opened in Munich, as part of a new push to capture work in Germany, the world’s third-largest economy. In previous years, foreigners came to the country for the opportunity to advise investment banks and corporations on cross-border securities and finance matters. Most set up offices in Frankfurt, home to the leading stock exchange in Germany. As Frankfurt has grown thick with law firms, some newcomers now are opting to set up instead in Munich, a four-hour drive to the south. It’s a city with plenty of business opportunities for firms, particularly work involving patents and high technology. Many consider Munich the intellectual property center of Europe. The European Patent Office, which processes 150,000 applications each year, is located there. The German patent office is also based in Munich. And 80 percent of all European patent litigations are filed in German courts, according to the Patentanwaltskammer, the German association of patent lawyers. Procter & Gamble is one of the companies considering moving more litigation there. “We’re looking more at Germany because of the speed of the proceedings as a plaintiff,” says P&G’s Miller. Most attorneys believe the system favors plaintiffs: German civil courts don’t allow pretrial discovery, and some allegations available in U.S. courts cannot be pursued there. In all, pursuing disputes in Germany tends to be both cheaper and faster than in the United States or the United Kingdom. Germany’s third-largest metropolis, after Berlin and Hamburg, Munich sits near the Alps, in the heart of tourist-friendly and prosperous Bavaria. The city is a mix of old and new charms — beer-fests and boulevards full of museums, along with a jazz scene and the nearby ski slopes. “In Frankfurt, people live to work there. In Munich, and also Berlin, people work to live there,” says Nick Shilton, a director of the Shilton Sharpe International recruiting firm, which just opened a Munich office. The Bavarian capital is also a high-technology magnet. Large companies like BMW and Siemens, the electronics giant, have headquarters in the city. Patent lawyers have been busy serving spin-off companies from these corporations, as well as working for the biotechnology companies clustered in the western suburb of Martinsried. Trademark and copyright attorneys minister to the television and film production companies that congregate in the city’s north end. Munich specialists in software licensing, data protection, outsourcing, and venture capital transactions work with all types of clients. Munich started looking attractive to global firms during the peak of the New Economy. Two years into an economic downturn, though, many e-commerce companies have evaporated. The Neuer Markt, the German equivalent of the Nasdaq stock exchange, has closed. As a result, some local lawyers wonder: Can overseas giants like Jones Day find enough intellectual property work in recessionary Germany to support their efforts? The giants are confident. They are used to triumphing. To do so in Munich, they will first need to catch up to the city’s large full-service patent boutiques, like the Bardehle, Pagenberg, Dost, Altenburg, Geissler firm and Gr�necker, Kinkeldey, Stockmair & Schwanh�usser. In patent litigation, two British-controlled firms, Clifford Chance P�nder and Lovells, both have a high profile, along with several litigation boutiques, including stalwarts Klaka and Hoffmann Eitle. For most of the past 25 years, only one firm, Bardehle, combined patent lawyers (who apply for patents) and patent litigators. The two professions have entirely different licensing requirements; they are as distinct as tax lawyers and accountants in the United States. Until five years ago, most firms chose one path or the other. Then patent registration firms began recruiting litigators. The change was motivated by a desire to end the sharing of fees for handling patent disputes. These firms had the primary relationship with the client, and were already working on disputes: the proceedings in the patent offices that ran parallel to disputes in the civil courts. Now, with patent litigators on the team, says Anton Pfau, a patent registration partner at Gr�necker Kinkeldey, “patent work is something that you lock up for five years.” Jones Day is the first global firm to follow the mixed-firm strategy in Germany. Its office has four partners and seven associates. Its key players were veterans of the Bardehle firm. Mathias Ricker, 42 years old, is a patent attorney specializing in chemistry, and also experienced with litigation. Richard Schloetter, 39, is the main litigator. On the way to Jones Day from Bardehle, Schloetter took a six-month detour at Andersen Luther, the law firm affiliated with the defunct Andersen Legal network. At Andersen, Schloetter met Christian Meister, an intellectual property licensing lawyer who led its Munich office. All three agreed that the place to be was with a firm that had global litigation capabilities. For Ricker, the notion took hold after he began working on a sprawling litigation for the pharmaceutical company AstraZeneca PLC. With cross-border cases, Ricker says, “it is very hard to stay with one strategy when many firms are handling many jurisdictions.” A number of other German tech lawyers have made similar jumps into international firms, pushed in part by clients. In 2001 one of the nation’s leading patent litigators, Wolfgang von Meibom, defected from the 175-plus-lawyer, full-service firm he managed, then known as Wessing. He couldn’t convince his partners to merge with an international firm, but clients convinced him. “They were instructing other firms — increasingly we saw that tendency,” says von Meibom. “We had discussions with the clients, and they said, ‘Look, look into the market, you can see the German market is changing.’ ” He opened an office for London’s Bird & Bird, a 350-lawyer firm with a pan-European strategy. (His old firm has since merged with a British firm, Taylor Joynson Garrett.) Boutique lawyers argue that not all clients want large firms. Olaf Giebe of Klaka, a ten-lawyer patent litigation boutique that has worked on prominent disputes for Merck & Co. and other large companies, rejected a merger inquiry from Jones Day because the firm wouldn’t first work with it on a trial basis. Jones Day’s international partner-in-charge, David Clossey, confirms that it had an initial discussion with Klaka. By sticking with local rather than global firms, Giebe says, the client benefits from increased conscientiousness: “You have the ‘four eyes’ principle when you have lawyers at two different firms working on it.” AstraZeneca’s strategy proves Giebe’s point. While the British company now is working with Ricker at Jones Day, it is still working with his old colleagues at Bardehle, and with an assortment of local firms all across Europe. Is pharmaceutical and biotechnology litigation growing too complex for small firms to handle? The answer depends on who’s talking. In one case involving a billion-dollar technology that Ricker and Jones Day are handling for the Promega Corporation against Hoffman-La Roche, Ricker says that his side has submitted 150 attachments to the record. In the AstraZeneca case, he notes, “six partners at Bardehle were in discussions with the client.” Not every case is on the scale of a Promega/Hoffman battle, now entering its 11th year. In his defense of Merck, Giebe handled it with just one associate (though it should be noted that he was still working late on this past New Year’s Eve). Boutiques, of course, can brag that they’re more economical. Klaka partners, for instance, bill clients around 100 euros less per hour than do their counterparts at Clifford Chance, according to Munich lawyers. German partners who recently arrived at U.S. and U.K. firms, including Jones Day, are feeling this pressure from boutiques, and trying not to raise rates quickly to match those charged by their U.S. colleagues. But the management of global firms will clearly be pushing its new partners to exceed the lower local rate whenever possible — and occasionally rejecting clients that cannot pay enough. Boris Uphoff, an intellectual property litigator, last year joined the Munich office of Chicago’s McDermott, Will & Emery, excited about the entrepreneurial possibilities. But entrepreneurialism has its limits: Uphoff, a 31-year-old salary partner, has to get the approval of management in Chicago before offering a local rate to a prospective client. The competition between international firms and the local firms already is keen enough that some U.S. firms have chosen not to pass as local. One, Houston’s Fulbright & Jaworski, last year transferred U.S. lawyers to Munich merely to serve existing German clients. Jones Day in Germany aims to attract both local and multinational clients. The firm’s move to Munich gives it an opportunity to succeed in Germany, a market where, so far, it hasn’t. Jones Day’s Frankfurt office, open since 1994, has lacked luster. It suffered a blow a couple of years ago, when the office lost senior associates who worked on technology finance. Those lawyers created their own firm, Gr�nbaum Lachner Gruner Spamer & Kreitz, which the publisher Juve Verlag subsequently labeled its Frankfurt firm of 2001. (Juve and American Lawyer Media co-publish a guide to the leading lawyers in Germany.) Jones Day is setting its sights on potential clients like Steven Miller of Procter & Gamble. But will those U.S. clients shift work to the new Munich offices of the firms they rely on in the United States? Maybe. Miller puts it cautiously: “Once we know who’s going to staff those offices, we’ll consider that, because we’re familiar with the firms.” So it’s probably a good thing that Jones Day isn’t betting on just one client or practice. The office’s partner-in-charge, Ansgar Rempp, focuses on mergers and acquisitions. Munich is the country’s first address for private equity, he says, and large financial institutions are seated there. The insurance giant Allianz AG, which recently bought Dresdner Bank, has a looming headquarters to the north of the city. HypoVereinsbank, also the product of a recent merger, is native to the area too. “There will be heavy M&A and corporate activity in the Munich region over the next few years,” predicts Rempp, 40, who moved down from Frankfurt in January to assume his new role. The tech guys appreciate the cushion, but with the demand for patent work growing in Germany, they expect to succeed. Jones Day’s Schloetter adds that one key advantage of being with a U.S. firm is its more developed sense of client service. The entrenched attitude of many German partners towards clients is, he says, that “they should be happy to have me as a lawyer.” That hasn’t stopped colleagues in Munich from questioning Ricker about his choice to join up with “the hire-and-fire Americans.” Will a U.S. firm stick with him if his practice doesn’t soar quickly? Will he become a prisoner of those who don’t understand how Germans practice? The answers may change with the times. German practice is evolving, says Ricker — but some risk-averse German lawyers may not grasp that soon enough. He doesn’t see any signs that his marriage with Jones Day will fall apart. “Still, if that should happen,” he adds, “I don’t see what I lose. I will have had a lot of experiences and made all sorts of contacts that I would never have made if I had stayed at Bardehle.” For Ricker, New World connections offer a new kind of security.

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