Munich Procedure enhances competition among patent courts

Ten years ago, the Regional Court Munich introduced the Munich Procedure in patent disputes. Now scientists from the Max Planck Institute for Innovation and Competition (MPI) have evaluated the process. The MPI asked stakeholders in the patent community about their experiences of the Munich Procedure, with the majority of respondents saying procedure meant Munich had become more attractive as a location.

Dietmar Harhoff ©MPI

MPI director Dietmar Harhoff said, “In patent litigation, lawyers appreciate above all predictability and well-founded decisions”. According to Harhoff, the technical competence of the judges as well as the duration of the proceedings also play a major role in the choice of court location.

Speed is key for Munich Procedure

According to the evaluation of the Munich Procedure, the Regional Court takes an average of seven months from application filing to the early first hearing. The time between the first hearing and the main hearing is generally just under five months. Altogether, the court takes around 15 months from filing the suit to reaching a decision.

Additionally, the respondents praised the high level of motivation and creativity of Munich’s patent chambers in dealing with new questions.

Respondents also answered that they were particularly happy to file a lawsuit if there is a chance the patent is invalid. Munich is also an attractive location for standard essential patents, although the Bavarian capital is on a similar level to Mannheim or Düsseldorf in this respect. Many respondents said they would prefer to file in Düsseldorf, if the party is likely to appeal a case outcome. This is, among other reasons, because of the Higher Regional Court Düsseldorf’s staffing levels.

Not enough judges

However, above all, survey respondents criticised the high staff turnover and high workload of the Munich patent chambers. Harhoff said, “Accordingly, the respondents recommend above all continuity in the composition of the chambers and a greater specialisation of judges in patent law for the further development of the Munich location.”

Although respondents rated the technical knowledge of the patent judges as good overall, here Mannheim and Düsseldorf fared better. However, only a third of respondents agreed that the Munich patent chambers should be supplemented by technical judges. Furthermore, only a few respondents considered the chambers specialising in individual technology areas a sensible option. On the other hand, respondents welcome a stronger exchange of experience with other patent institutions, such as the Federal Patent Court.

The recently-established chamber for copyright disputes is to relieve the burden on the patent judges at the Regional Court. Copyright proceedings can be complex and time-consuming; new chambers will allow patent chamber judges to concentrate on patent disputes. Sabine Rojahn, Of Counsel at Taylor Wessing, welcomed this step in the panel discussion.

Bottleneck at the Higher Regional Court

However, the court urgently needs to strengthen the second instance. Rojahn said, “It is of no use if the patent judges at the Regional Court are relieved by the Copyright Chamber, and at the Higher Regional Court the appeal proceedings are then backed up again”. Here, Rojahn speaks from the heart of many patent lawyers.

Speaking to JUVE Patent, Oliver Scherenberg, general counsel legal and business at Sisvel, said, “The staffing of the Higher Regional Court must definitely be improved, otherwise the competitive advantage of the first instance will quickly evaporate.”

Andrea Schmidt ©Kubinska & Hofmann – München

The court received the criticism well. During the panel discussion, Andrea Schmidt, president of the Regional Court Munich, said, “We want to try to ensure more continuity and to put the right people in the right place in a targeted manner. But we also have to give the next generation the chance to establish themselves in a legal field.”

Thomas Ermer, from the Bavarian Ministry of Justice, added, “Recently, new posts have been created, but it is the responsibility of the Higher Regional Court to decide how these are distributed. After all, the burden of criminal proceedings has also risen significantly recently.”

The number of lawsuits filed at the Regional Court has been declining for years. But Schmidt said, “the complexity of the proceedings is increasing enormously”. The proceedings are more demanding and time-consuming than in previous years.

Better predictability

Some survey respondents would like the Regional Court to make its decisions more predictable. Rojahn said during the panel discussion, “Of course, it is not good if a surprise judgement is handed down after the main hearing”.

Matthias Zigann is presiding judge at the 7th chamber of the Regional Court Munich. ©Kubinska & Hofmann – München

On the other hand, the judges should also be able to change their opinion between the first date and the main hearing, based on additional arguments and facts. Rojahn underlined that, at the early stage of a case, lawyers should get an idea of how the chamber assesses and interprets a claim. This is so that, in case of doubt, the lawyers can follow up with the court.

Cordula Schumacher, partner at Arnold Ruess, told JUVE Patent, “In my experience, the chambers are very well prepared and often give an initial assessment with the introduction”. Schumacher cannot understand some criticism highlighted in the survey.

She said, “I have personally experienced that the arguments against this assessment were also taken seriously.” Schumacher attests to the high legal quality and predictability of the current board composition.

Some respondents suggest that, during the oral proceedings, the court does not give sufficient time to hear their opinion. This could also be down to tight time management.

Scherenberg says, “In Munich, strict procedural rules ensure a streamlined course of proceedings. On the one hand, the rules restrict the parties involved. But on the other hand, the rules for streamlined pleadings discipline the parties. However, the rules also speed up the process.”

Extra competition

However, Munich aggressively setting itself up as a go-to location for patent disputes is also causing unease.

Axel Verhauwen, partner at Krieger Mes & Graf von der Groeben, says, “Abroad, and especially in the patent departments of major international corporations from the US, China and Japan – and not least in Germany itself – the competition between the patent litigation chambers in Düsseldorf, Munich and Mannheim is followed with great concern and attention.”

Tobias Pichlmaier is presiding judge at the 21st chamber at the Regional Court Munich. ©Kubinska & Hofmann – München

Verhauwen told JUVE Patent, “The international reputation of the German patent judiciary suffers greatly from this. The patchwork of FRAND case law, in particular the gap between Düsseldorf, and Mannheim/Munich, bears witness to this.”

“Attempting to abolish the injunctive relief is an incorrect reaction to this. Rather, the Court of Justice of the European Union and the Federal Supreme Court should work towards unification.”

Sisvel’s Oliver Scherenberg does not share this opinion. He says, “The competition strengthens Germany enormously as a location for patent disputes. It is good that international perception extends not just to Düsseldorf and Mannheim.”

“Munich gaining popularity does not take away the credibility of the other two courts.”

MPI director Dietmar Harhoff presented the results to the wider patent community on 22 October. Afterwards, a judicial panel and the legal profession discussed approaches for further development with approximately 200 patent experts, who connected to the survey by video. 65 professionals participated in the survey.

Two years on

From April 2022, Munich Regional Court will separate FRAND from infringement in SEP proceedings. In doing this, the three patent chambers aim to speed up disputes over standard essential patents. The court is currently testing this procedure in individual lawsuits, the first being Nokia vs. Oppo at the end of March.

This is one of several measures with which the Regional Court Munich is revising the so-called ‘Munich Procedure’. In adding the supplement, the court is also implementing the results of the above-mentioned survey among the German patent community, which demonstrated that the procedure is contributing to heightening the perception of Munich as an attractive patent location.

New additions to the Munich Procedure also include questions on video hearings, the electronic lawyer mailbox and changes due to the 2021 reform of the German Patent Law. However, according to Munich Regional Court, the core of the Munich Procedure remains unaffected by the changes. This is, namely, the focus on two dates for the merits and a strict time frame.

This article was updated on 11.04.2022 to reflect the latest developments with regard to the Munich Procedure.