“The market has gone mad – but keep calm”

We currently have a running joke in the JUVE Patent editorial office: if the phone is ringing, someone’s moving. Since January, it has been one move after another, whether individual partners or entire teams.

It began with an Aramis IP team moving to Jeantet and the latest — just last week — was CMS bolstering its Dutch team with a litigator from NautaDutilh. Whether lawyers or patent attorneys, whether in Germany, France, the Netherlands or the UK, the past nine months have seen constant movement.

Only eight days in, September is already proving extraordinary. In quick succession, JUVE Patent reported on two renowned partners moving from Hoffmann Eitle to Carpmaels & Ransford; the UK firm is expanding into the German market for national and UPC cases. One day later, we reported further partner departures at Klaka, dramatically shrinking the traditional Munich IP firm. To top it off, the largest spin-off in the German IP market for 25 years will occur in a few weeks when five partners from Taylor Wessing’s patent practice establish the firm Pentarc.

Madness in the market?

Last week’s bombshells are far from the end. Many firms are seeking to replace departing partners, strengthen existing teams or, like some US firms, enter the supposedly lucrative UPC market. One lawyer — also on the move — recently told me, “The market has gone mad.” Another claimed everyone is talking to everyone else and “currently testing their options”.

“National litigation cases are falling fast”

Moreover, many patent attorneys and lawyers express their doubts in conversations. The overall economic climate is unstable. Additionally, AI applications are making significant inroads into patent law work — perhaps even more so for patent attorneys than lawyers.

Most significantly, the market-changing impact of the Unified Patent Court is becoming increasingly apparent in its second year. National litigation cases are falling faster than expected across all EU countries. The UPC’s case numbers have risen, leading many to declare it a success.

Beyond mere ability

While signs are promising, it remains uncertain whether the UPC will become Europe’s definitive patent court. What is certain, however, is that lawyers and firms must cope with fewer national patent cases, even though UPC cases are not yet making up for this shortfall.

“UPC cases are not making up for the shortfall”

Additionally, many lawyers speak of considerable price competition for UPC cases. Clients are holding auctions. Some speak of unprofitable pricing. Firms target companies with offers when UPC cases against them become public — often so quickly that their regular advisers are left playing catch-up.

Some firms have prepared sophisticated strategies for the new UPC business. Those who positioned themselves early can command premium rates. Relying purely on patent expertise is no longer sufficient.

Individuals nervous

These factors create significant market uncertainty. Some firms actually have too little work. This was particularly evident in the Netherlands, where national cases declined and The Hague’s local division attracted few UPC cases for the first 18 months.

But the situation is improving. A large Dutch team recently moved from Simmons & Simmons, a firm which consciously invested in UPC work, to Taylor Wessing. The latter is among the firms said to have made an excellent start with many UPC cases.

But even this does not guarantee protection from setbacks. The German Taylor Wessing practice has suffered such a setback with five partners and seven lawyers spinning off to form Pentarc. This strikes a major blow to Taylor Wessing’s European ambitions. However, with rumours suggesting considerable client conflicts between German and UK lawyers, the split may have a cleansing effect. Taylor Wessing now needs a clear strategy regarding which client groups its pan-European team will serve.

Strategy essential

Many smaller IP firms long hesitated to engage with UPC cases. German firms often acted from a position of perceived strength. But relying solely on client relationships and legal excellence proved insufficient. Klaka’s fate is particularly dramatic. Although present in some UPC cases, the firm failed to retain its next generation of partners. By year-end, most soft IP partners and all three patent partners will have moved to other firms, seeking better international positioning and more UPC work.

“The UPC’s impact is too significant to lack a strategy”

The prospect of improved international business likely motivated the German lawyers moving to Powell Gilbert and Carpmaels. While US client connections are attractive, the UK firms’ high UPC ambitions and robust strategies also appeal to lawyers thinking about moving. In contrast, many German firms appear rather static.

The UPC’s impact on European law firms is too significant to lack a sensible strategy. Those without one should recognise the urgency. That said, panicking will get them nowhere — the most successful UPC strategy will not be determined in 2025 alone, but in the years ahead as the court establishes itself.