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Other U.S. firms have IP practices in Munich, but Jones Day is one ofonlytwo firms doing patent prosecution there. (The other is Chicago IPboutiqueLadas & Parry, which has one lawyer stationed in its Munich office.)JonesDay opened a Munich office last year and staffed it with German patentpractitioners who handle European patent prosecution for U.S. clients.Inthe past, if a U.S.-based client hired Jones Day to do patent work inGermany, it would refer the work out to a local firm. The firm hopes to gain an edge over its six U.S. competitors in Munich. That edge comes at a high price: German office space and patent lawyers are both costly commodities, says Robert Kahrl, who heads the 2,200-lawyer firm’s intellectual property practice. Munich is certainly the place to be. As home to the German and European patent offices, the city is the IP epicenter of Europe. The 31-year-old European Patent Office (EPO) grants patents for 28 European nations, including Germany, the United Kingdom, France, and Spain. About a quarter of the 160,000 patent applications the EPO receives each year come from U.S.-based inventors. Kahrl, who works in the firm’s Cleveland office, says that clients pushed Jones Day into Munich. They were disappointed with the German firms that represented them in patent-related matters. “The kind of hard-driven advocacy we’re so accustomed to in the U.S. — and in Britain — is not present in Germany, where appearances before a judge tend to be more of an academic discussion as opposed to a presentation of the client’s interests.” Clients found EPO opposition proceedings particularly nettlesome, Kahrl says. In an opposition, one party tries to block another’s patent from issuing, or to cancel a patent after it’s issued. In a number of EPO opposition proceedings, Kahrl says, German lawyers didn’t press their case with a detailed presentation the way American lawyers would before the U.S. Patent and Trademark Office. This is critical because patent disputes in Europe are generally resolved in opposition hearings, says Paul Kimball, a patent partner in the Washington, D.C., office of Womble Carlyle Sandridge & Rice. In the United States, patent disputes typically are resolved with litigation. Ironically, Jones Day decided to remedy the German lawyer problem by hiring German lawyers from one of its go-to Munich firms. The firm brought in partners Mathias Ricker and Richard Schl�tter and three associates from 60-lawyer Bardehle Pagenberg Dost Altenburg Geissler, one of Germany’s best-known IP shops. Ricker, who now heads the Munich office’s IP practice, has done work for Jones Day clients Promega Corp. and AstraZeneca PLC. To explain the contradiction, Kahrl says he and his partners are working with Ricker and the new hires to help them “pick up the same level of advocacy that the rest of the firm brings in other jurisdictions.” While Ricker won’t say that German patent lawyers are less aggressive, he does concede that there’s a difference between the two styles. “A lot of German attorneys work according to ‘give me the facts and I’ll give you the law,’” he says. And sometimes, he notes, German lawyers work uncomfortably close to deadline on patent issues, and that can make U.S. clients nervous. The goal with the new setup, Ricker says, is to become “more business-oriented, with an eye to the business of the client.” To some extent the difference in practice styles is a reflection of European patent law. In the U.S., when patent applicants file claims, they can amend or broaden them later in the patenting process. In Germany and at the EPO, applicants don’t have as much of a chance to amend or enlarge their claims, so it’s important to file broad claims early. “Even the order in which you file your claims can sometimes screw you up,” says J.D. Harriman, a patent partner in the Los Angeles office of Coudert Brothers. He says EPO examiners focus on the first claim, “even if other claims are broader.” Using U.S.-style aggression to expand the scope of patent claims is ineffective, Harriman says. Ricker says he’s probably the first partner in Jones Day’s 111-year history who didn’t go to law school. German patent lawyers take a different route to accreditation than their U.S. counterparts. After they complete their technical or scientific education, they serve lengthy apprenticeships with patent firms, and then take an examination to be admitted to the patent bar. They prosecute patents and can appear in opposition proceedings, but they cannot try cases in the German courts. Kahrl says Jones Day worked out a way to comply with U.S. rules barring partnerships with nonlawyers, but declined to give details. He joked that this was a trade secret. The firm’s Munich practice should also save clients money. Typically, if a U.S.-based client hired an American firm to do patent work in Germany, the firm would then coordinate with German lawyers, and the client would end up with two sets of bills. And, for many matters, German patent lawyers work from a statutory fee schedule, which can be higher than standard hourly rates. Typically, top-flight patent prosecutors at leading American firms bill in the range of $450-$500 per hour. Top German patent lawyers can earn between 500,000 euros and 1 million euros per year, says Malte K�llner, a partner in the Frankfurt patent firm K�llner & Partner. Jones Day is moving toward an hourly rate for German patent work. Ricker says he already bills by the hour. The clients we contacted for this story were reluctant to comment on German firms they’d used. John Mackie, general counsel at Gennum Corp., did say that Jones Day’s move into Munich benefits his company, a Burlington, Ontario-based semiconductor manufacturer. “Dealing with the same firm in two jurisdictions is important for billing, file management, and being able to centralize the patent process on a more effective basis,” he says. Centralizing the prosecution process with one firm also reduces the chances of making a mistake, says Richard McGuire, IP portfolio manager at HNI Corp. The Muscatine, Iowa-based furniture manufacturer has just started prosecuting patents overseas. When prosecuting patents in Canada, HNI goes through Jones Day and a Canadian firm. McGuire says that he prefers the consolidated Munich approach. The Jones Day approach also appeals to Richard Cox, who heads the technology transfer office at the University of Hawaii, and has used the firm to prosecute two sets of U.S. patents. “It would strengthen our resolve to use that firm for future cases. If we had a good working relationship and we knew that now there was this extra bit of value, we’d be more likely to go back with our next patent that would go international,” Cox says. Gilead Sciences Incorporated — not a Jones Day client — became so frustrated with paying two firms to prosecute European patents that the Foster City, Calif., pharmaceutical company now works directly with German lawyers. “I didn’t want to pay a U.S. attorney to act as a conduit between Gilead and a foreign patent attorney,” says Mark Bosse, Gilead’s vice president, intellectual property. Bosse declines to identify U.S. firms with which he’d worked, but says he felt he’d been burned in the past. “I’ve given up on hiring U.S. firms to represent me outside the country. It costs me tremendous amounts of money and takes twice as much time to get things done,” he says. Bosse likes the lean practice style of German patent attorneys he’s worked with over the last 12 years. American firms, he says, “seem to think you have to file reams and reams of paper to justify your claims.” In contrast, “the European response is to try the one-page form first and see what happens.” The jury is still out on Jones Day’s move. Training German lawyers to act more American may be offensive to Europeans, says Gladys Monroy, a partner at San Francisco’s Morrison & Foerster who prosecutes biotech patents. “These are different systems. Remember, European examiners are taught to examine in the European way,” she says. “Certain practices and traditions there are long-standing.” Litigator Henry Bunsow shares Monroy’s sentiments. Bunsow, a partner in Washington, D.C.’s Howrey Simon Arnold & White, has consulted with German patent lawyers in several patent litigations. “The last thing you would want to do is to try to impose what would be perceived as an aggressive United States approach to something that is a nationalistic and valuably considered practice over there,” he says. Competing directly with German patent firms “would exclude any further cooperation,” says K�llner. German firms would stop referring work to their U.S. competitors. We “would give that work to our friends,” he says. Christopher Foley, managing partner at Finnegan, Henderson, Farabow, Garrett & Dunner, calls Jones Day’s move “a lot of marketing hogwash.” Foley says he is satisfied with the way the referral system works, and says his firm would not want to compete with German firms. Kahrl dismisses the notion, saying that if firms were worried about competition like this, they’d never expand beyond their home-city offices. Lawyers at a few large U.S. firms say that they’ll eventually — reluctantly — follow Jones Day’s lead. In five years, “the biggest multinationals will all try to have a patent-prosecution presence in Munich,” says Paul Krieger, head of the IP practice at Houston’s Fulbright & Jaworski. Krieger doesn’t really think a U.S. firm needs a Munich-based prosecution practice, but he bows to marketing realities. “It’s a herd mentality,” he says, akin to the impulse that drove large U.S. firms to open Tokyo offices 20 years ago. Fulbright has a Munich office, but it handles litigation and transactional work. Coudert Brothers has offices in Frankfurt and Berlin, and is considering hiring Munich-based patent practitioners, says Harriman. Just as small IP boutiques were swallowed by large general practice firms in the U.S., German IP firms will be overrun by large international firms, Harriman predicts. Knobbe, Martens, Olson & Bear has already figured out a strategy for European patent prosecution. “We pretty much run the [prosecution and opposition] parts of the arguments ourselves,” says Don Martens, name partner at the 130-lawyer Irvine, Calif.-based IP shop. “We use the foreign [lawyers] to advise us on the peculiarities of their practice and ultimately to sign the papers, but the substance really comes out of here,” he says. Knobbe Martens has also hired licensed patent lawyers from various foreign jurisdictions and brought them to Irvine to work as advisers. For its next move, Jones Day plans on bringing patent prosecution to Tokyo and Shanghai. Earlier this year the firm opened a patent-prosecution practice in Taipei, headed by Gene Su, a patent prosecutor fluent in Mandarin Chinese and Taiwanese who came from the Silicon Valley office of Skadden, Arps, Slate, Meagher & Flom. Starting a patent prosecution practice in China will be more difficult, says Kahrl. The Chinese government is uncomfortable letting Chinese lawyers work in foreign firms, Kahrl says. So he’s on the lookout for more lawyers like Su: “a person who understands U.S. patent law and also Chinese patent law, who speaks Mandarin and understands the way things work in China. One of these days we hope to have lawyers writing patent applications in China.”

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