The conversation—like so many that take place in Munich—started over beer. About six years ago, Johannes Heselberger, a partner at German intellectual property boutique Bardehle Pagenberg; Olaf Giebe, a partner at the IP firm Klaka Rechtsanwälte; and several other intellectual property lawyers and judges met after work one evening at Zum Augustiner, a 1300s-era brewery and beer hall, for an informal gathering of young IP practition­ers and judges organized by Heselberger and Giebe.
Seated in the beer hall that features worn wooden tables beneath an opulent brass chandelier and mounted deer heads, Heselberger and Giebe started complaining about the Munich district court, their home venue for patent infringement cases. It was slow and unpredictable compared to its counterparts in Düsseldorf and Mannheim. The most important and interesting cases went to Düsseldorf and lawyers stationed there, says Giebe. "We wanted to be a part of the best cases," he says. In Germany—known as Europe’s patent infringement litigation hub, thanks to the rocket dockets in Düsseldorf and Mannheim—Munich was missing the main action.
As Heselberger and Giebe griped, an IP judge seated with the group made a suggestion: If Heselberger and Giebe were so concerned about the court, perhaps they ought to do something about it.
After that night, Heselberger and Giebe kept talking. The ideas they came up with would help set the foundation for the so-called Munich procedure—a streamlined approach to patent infringement litigation that has increased the number of infringement matters handled by the city’s two IP chambers by more than 10 percent and has put Munich on the map as a viable venue for high-profile patent infringement. International firms such as Jones Day, Allen & Overy, and Quinn Emanuel Urquhart & Sullivan are making the Bavarian city a key part of their IP strategy.
Since World War II, Germany’s IP practices have been spread out across the country. Near the end of the war, as Berlin was on the brink of Soviet takeover, the national patent office moved to Munich. But the small community of patent litigators went to Düsseldorf because they considered it far enough away from the Soviets, who placed little value on patents, and because the city, located near the country’s coal and steel industries, was at the time a center for technical innovation. Düsseldorf has since flourished as the country’s most popular jurisdiction for patent infringement cases, with Mannheim a close second, and Munich trailing third.
History wasn’t the only reason that Munich lagged. Patent courts in the other cities ran more smoothly. "In Munich only the next deadline was set," says Heselberger. "When a complaint was filed, you had until so-and-so date to respond. What happened after that was completely in the dark." The two other main criticisms that lawyers frequently voiced against the Munich court were its judges’ tendencies to stay a case and their frequent reliance on expert witnesses—two habits that tacked months, if not years, onto a proceeding.
"Imagine being a Munich lawyer and being asked by a client, ‘Where should I file?’ Nine out of 10 times you have to say, ‘Let’s go to Düsseldorf. Let’s go to Mannheim,’ " says Heselberger.
A few weeks after their meeting at Augustiner, Heselberger and Giebe drafted a paper outlining their concerns with the Munich court and how it compared to the country’s other dominant IP venues. "It said that if you file an action today in Düsseldorf, you know that in one year you’ll have a judgment." Giebe recalls. "In Munich, you never knew if it’s going to take one year or three years or five years."
The paper eventually found an attentive reader in Peter Guntz, who in 2009 was appointed the presiding judge of Munich’s 7th chamber, which—along with the 21st—handles IP matters. Guntz recognized the shortcoming of his court early in his tenure. "There was some disappointment about the length of our procedure, so I thought we could streamline that a bit," says Guntz. "For attorneys, the issue was economic; they didn’t want to lose out on the big cases. But for me, it was about self-esteem. I don’t want to work at a court that’s ranked second class," he says. In August 2009 Guntz began rolling out a new system on a case-by-case basis that drew from the paper authored by Heselberger and Giebe.
The new system requires two oral hearings; an early first hearing, then a main hearing. The preliminary hearing—held about three or four months after the defendant has responded to a complaint—isn’t just procedural. In addition to setting the schedule for the litigation, it allows the judge to ask questions about the facts—which hints at his or her thoughts in the case—and about the technology behind the patent at issue, which helps avoid the use of expert witnesses. "With the first hearing, as a lawyer, you get a clear idea of what the court thinks," says Heselberger. That information is especially helpful to plaintiffs, who have the burden of proof, since it often indicates which aspects of their argument need strengthening.
Prior to the implementation of the new litigation procedure, a case filed in Munich could take anywhere from a year to five years to resolve, according to estimates by lawyers who argued cases there. The two-hearing system cut that time down to a year on average, a speed that makes Munich competitive with Düsseldorf, where judgments typically take 12 to 15 months, and Mannheim, which also resolves cases within a year, according to Christoph Ann, chair for corporate and IP law at the Technische Universität in Munich. Plaintiffs have responded to Munich’s quicker pace by filing more cases there. The court handled 152 patent infringement cases in 2012, a 13 percent increase over the 135 cases handled in 2010, according to statistics provided by a court spokeswoman. Meanwhile, the number of patent cases in Düsseldorf, whose courts were slowed by overloaded dockets, tumbled 33 percent in that same period, from 590 to 396, according to a court spokesman. The Mannheim court saw 230 patent cases in 2010, 268 in 2011, and 243 in 2012, the court says.
One of the first high-profile cases to test Judge Guntz’s new system was an early 2011 infringement suit that Apple Inc., represented by Bardehle Pagenberg, filed against Motorola Mobility, represented by Marcus Grosch of Quinn Emanuel’s Mannheim office, over patents related to the slide-to-unlock and scroll-over, bounce-back technology featured on Motorola’s Android smart phones. In February 2012 Judge Guntz found that Motorola had infringed in part on both patents at issue. The decision is currently on appeal, though the German Federal Patent Court has since revoked Apple’s slide-to-unlock patent.
That proceeding was followed by a string of patent infringement cases filed in Munich courts by the smartphone heavyweights. In April 2012 Apple, again represented by Bardehle Pagenberg, filed an infringement case against HTC Corporation, represented by German IP boutique Preu Bohlig & Partner, over the two patents it had enforced against Motorola in the same court a year prior. Quinn’s Grosch is advising Google Inc. and its Motorola Mobility subsidiary in a patent infringement suit brought by Microsoft Corporation in Munich over Google Maps. He’s also representing Google in a suit focused on Google Talk technology filed by Nokia Corporation against ViewSonic Corporation and HTC, represented by German firm Gleiss Lutz and Hogan Lovells, respectively.
Munich Bird & Bird partner Boris Kreye says that he used to advise his clients to file their patent cases in Düsseldorf or Mannheim. "If we’d file a complaint in Munich, we wouldn’t hear anything for months," he says. "Then the court would say it had to turn to an expert. The whole thing lasted an incredibly long time." Currently, however, he is defending Nokia in dual patent suits filed by HTC in Munich and Mannheim last summer. (The parallel suit structure is common in Germany, Kreye says: "If one court obviously gets it wrong, you can hope for the other, and you don’t have to wait for the appeal court to decide.") As of early March 2013, the Munich case was outpacing the one in Mannheim: The second oral hearing in the Munich matter, which will focus on the merits of the case, is scheduled for June. The first hearing in the Mannheim case will take place in May. "HTC already learned from the [first hearing in the] Munich case and supplemented its briefings accordingly in Mannheim," says Kreye. Prior to the implementation of the Munich procedure, Kreye says, this case never would have gone to Munich.
Grosch, who leads Quinn’s Mannheim office, says he first started appearing in Munich court on a regular basis about two years ago. "Traditionally, Mannheim and Düsseldorf have been the best venues, but Munich is certainly catching up," he says.
ntil the 1970s, patent attorneys and patent litigators in Germany were prohibited from working at the same law firm, and law firms were barred from operating in more than one city under the same name. The result was an IP legal market made up of boutique firms that specialized in either patent validity matters or patent infringement, but not both, says Michael Alt, a patent attorney at Bird & Bird in Munich. The loosening of those rules fostered some practice integration, but many of the boutiques remained independent. When M&A–minded international firms entered the German market in the 1990s, intellectual property was often an afterthought, prompting some practice groups to set up their own shops. The few IP–only firms and spin-offs from international firms that resulted from these trends still capture a good portion of the country’s IP work. Among them: Reimann Osterrieth Köhler Haft, started—in part—by former Clifford Chance partners in 2004, and IP boutiques Krieger Mes & Graf von der Groeben; Bardehle Pagenberg; and Rospatt Osten Pross.
In the past decade, though, these boutiques have seen increased competition from U.K.– and U.S.–based firms that have come to realize the value of IP litigation—a few patents can now underpin entire corporations—and have seen the recession slow high-profile mergers and acquisitions work. In Munich, about half of the 18 Am Law 100 firms with offices in the city have intellectual property practices, including Fish & Richardson (eight IP lawyers, representing clients such as Boston Scientific Corp. and Bose Corporation); McDermott Will & Emery (six IP lawyers, representing clients such as solar technology company SunPower Corporation and Korean drugmaker Komipharm International Co. Ltd.); and Hogan Lovells (15 IP lawyers, representing clients such as HTC, Qualcomm Inc., and BlackBerry). Hogan Lovells’s predecessor firm Lovells traditionally kept the majority of its patent infringement team in Düsseldorf, while its Munich office handled primarily corporate work. That’s changing, says Steffen Steininger, head of Hogan Lovells’s Munich patent law group. The firm recently added three associates to the patent law group in hopes of developing partners for the practice organically. "There’s a clear feeling that the number of lawyers on our patent infringement team in Munich will continue to grow," Steininger says. The Munich office of Jones Day lost all of its IP lawyers through several group departures in 2008, but has rebuilt its IP practice to be the largest of any U.S.–based firm; its 17 IP lawyers in Munich represent The Procter & Gamble Company’s Gillette brand; Tiama SAS, a manufacturer of equipment for glass bottle factories; and zipper maker YKK Corporation in patent litigation in the Munich district court.
More foreign firms are boosting their IP practices in Munich, have just opened offices there, or are on the way. In November 2012, as part of a plan to strengthen its dispute resolution practice in Germany, Allen & Overy—which lost star litigator Grosch to Quinn in 2010—hired patent litigation heavyweight Joachim Feldges, Field Fisher Waterhouse’s Germany managing partner, who works in Munich. In the past A&O considered Düsseldorf and Mannheim the German hubs of patent infringement work, but it recently made the decision to focus on the Munich IP market too, says Neil Weiand, the firm’s senior partner in Germany. (Fellow Magic Circle firms Clifford Chance and Freshfields have one and three IP lawyers in Munich, respectively.) The Munich court’s faster pace—along with the prospective opening of a central court in Munich to hear unitary patent cases [see "One Patent to Rule Them All"]—prompted U.K.–based Simmons & Simmons to open an office in Munich in March. The firm is following its clients there, says patent litigation partner Thomas Adam, who joined Simmons from Field Fisher’s Munich office. Quinn Emanuel plans to open a Munich office in 2013, according to a firm spokesperson; not yet decided, says Grosch, is whether it will reassign a partner to Munich or make a lateral hire there. (The firm already has German offices in Mannheim and Hamburg.) "There are many cases in Munich, and having people on the ground would definitely help," he says.
Heselberger and Giebe no doubt weren’t the first lawyers to complain about Munich’s slow system back in 2007, but they might have been the first to do it so openly. "We openly criticized the courts at a time when most people didn’t, and I give Dr. Guntz credit for listening to us," Heselberger says. "For us, personally, changing Munich’s approach to patent litigation was a little dream," he adds. "We wanted it to happen, and years later, we can say that it did."