Market Development – Patents UK 2020

FRAND and pharma shaping the UK patent market

During the research for JUVE Patent’s 2020 UK rankings, the frowns and furrowed brows on the faces of UK patent attorneys and litigators spoke volumes. The firms, dotted around the UK High Court at New Fetter Lane, are well aware that 2020 may decide the future of the UK patent market.

Four major developments and issues affecting the attractiveness of the British patent court could coincide in the first quarter. Depending on how events unfold, they could either be a major setback for patent firms or propel them to unprecedented heights

All eyes on the UK Supreme Court

UK patent lawyers are also waiting on a ruling from the UK Supreme Court. The UK’s highest court is set to rule on a case of global significance.

In the Unwired Planet vs. Huawei case, the Supreme Court must decide whether the UK patent court is entitled to order a global FRAND licence on the basis of a UK patent and whether it may also set the licence fee for the patent. Renowned High Court judge Colin Birss caused an international stir when he did just that in 2017. In 2018, the Court of Appeal largely upheld the ruling. Within weeks, the UK High Court became the number one court globally for lawsuits involving standard essential patents and FRAND.

Mobile technology research company InterDigital, for example, turned to the London court when it sued Lenovo. SEP owners Sisvel, Philips and IPCom are also currently very active in the High Court when it comes to suing mobile phone providers and manufacturers. Although all three are also suing in German courts, the parties have moved their main activities to London; Chinese manufacturers Xiaomi and Lenovo are feeling the effects.

UK patent lawyers are hoping the Supreme Court will confirm the two previous instances in the Unwired Planet vs. Huawei case. Then the High Court could become the most important global court for SEP actions for FRAND licences.

If the court overturns Birss’ ruling, however, London would revert back to an outdated model of dealing with FRAND and SEP cases. The High Court would just be one of many courts for FRAND cases and its most important focus would again be pharmaceutical lawsuits. In patent law, this has been the London court’s traditional strength.

Staffing problems

Nevertheless, even if the Supreme Court upholds Birss’ verdict, the UK’s attractiveness for such cases is by no means secured. The promotion of High Court judge Richard Arnold to the Court of Appeal this summer, as well as the death of popular patent judge Henry Carr, means the High Court is facing a diminished bench.

Currently, Colin Birss is the only full-time judge at the High Court, the court of entry for high-volume patent litigation. Birss is supported by deputy judges, mostly experienced barristers from the specialised IP sets dotted around Holborn. The search for successors is in full swing, but suitable candidates are proving difficult to woo. The High Court usually recruits its junior staff from the few specialised IP sets. But ever since the UK government cut the judges’ pensions, barristers are less keen to move up.

If no successors are found, it is not only the High Court that will have a serious problem on their hands. Patent firms will also be facing a lack of clarity regarding UK litigation proceedings. Cases are likely to drag on, potentially resulting in fewer companies suing in the UK.

However, there are rumours in London patent circles that if not a crop then a sprinkling of new judges will be announced in the first quarter of 2020.

The end of the Brexit drama?

With the Conservative Party having won the UK election, if Boris Johnson has his way the UK will finally leave the European Union on 31 January. Brexit initially has no direct impact on patent law in the UK. The country remains a member state of the European Patent Office and its national patent legislation continues to apply. But how will clients from the US and Asia continue to do business in the UK after Brexit? Will companies still use the recognised patent expertise of the High Court?

A speedy Brexit, however, will have a direct impact on the UK’s participation in the Unified Patent Court. The UK has already ratified the UPC Agreement, but whether the court actually opens its doors still depends on the completion of German ratification. Currently, this is being blocked by a complaint to the German Constitutional Court. Recently, hopes that the UPC will launch within the next two years were stoked when Peter Huber, constitutional court judge and rapporteur in the complaint, announced a decision for the first quarter of 2020.

A victory for Labour, the Liberal Democrats or even a hung parliament would have bought more time for a different approach to Brexit. It might have increased the likelihood of participation – provided the UPC complaint is dismissed by the German court. Now that the Conservative Party has won a majority, however, it might be too late for the UK to participate in the UPC.

Bristows and Powell Gilbert lead litigation market

Early 2020 will therefore be a crucial time for the London patent market. If things go badly, it is facing a hard Brexit and no UPC, as well as the loss of its new-found status as the go-to location for SEP litigation. These, alongside long-drawn-out proceedings and a lack of competent judges, could have potentially devastating impacts on the UK patent market.

But, while things are looking so rosy, these issues aren’t as prominent in the minds of many patent litigators. This is regardless of whether these are solicitors or barristers working on revocation or infringement claims for pharmaceuticals or mobile phone patents. It is not just telecommunications taking the headlines; in the past twelve months, London has played host to numerous proceedings concerning pharmaceutical and biosimilar patents, as well as their SPCs.

Indeed, the battle between Warner Lambert and Actavis over pregabalin ended up at the UK Supreme Court. Abbvie and competitors such as Biogen also fought over the blockbuster Humira in the UK. But setting the tone for the quality of cases at the UK High Court was the SEP lawsuits of NPEs against mostly Chinese mobile phone manufacturers.

JUVE Patent’s research showed two highly-specialised law firms emerging as leaders in the London market, thanks to their strength in both pharma and telecommunication disputes. Bristows and Powell Gilbert are not unknown to the international patent community, but JUVE Patent was surprised to find them far ahead of persistent challengers Allen & Overy, Bird & Bird and Hogan Lovells.

Certainly, Bristows and Powell Gilbert have leading individuals such as Brian Cordery and Penny Gilbert in their respective ranks. But both firms also boast a variety of older and younger litigators who enjoy a very good reputation in the market.

More important, however, is their high profile in the most important cases before the London patent courts. Bristows, for example, represents SEP holders IPCom and Philips in numerous FRAND lawsuits, and is also defending ZTE against an SEP lawsuit from Conversant. With Janssen Science, Fresenius Kabi and Teva, the firm is positioned on the side of manufacturers of both originator and generic pharmaceuticals.

Meanwhile, Powell Gilbert was strongly present alongside Huawei, Lenovo and Xiaomi in mobile phone cases. It also shone in pharma disputes. Highlights here were the representation of Actavis against Warner Lambert concerning pregabalin before the Supreme Court and the work for Biogen concerning Humira. With clients such as Boston Scientific and Edwards Lifesciences, the firm is also strongly positioned when it comes to medical device patents.

Snapping at the heels

The main challengers to the leading duo are Allen & Overy, Bird & Bird and Hogan Lovells. All three are also highly active in pharma and telecommunication cases, but do not quite match the two market leaders for breadth of client. In addition, their lawyers are not quite as present in the market as those at Bristows and Powell Gilbert.

More importantly, each of the three challengers are dealing with obstacles that need to be overcome if they are to attack the top of the market.

Allen & Overy, for example, had to cope with leading partner Nicola Dagg jumping ship to Kirkland & Ellis in 2018, along with a small team. For Dagg, the move was a successful one, thanks to the strength of her European network in cross-border disputes. However, the remaining patent team at Allen & Overy is still recovering from the setback.

Hogan Lovells can count on a stable patent team, but one that is narrower at the partner level than the other two challengers.

Most obvious for many observers are the problems at Bird & Bird. The once-leading UK team has not yet fully recovered from the loss of Trevor Cook who moved to WilmerHale in 2017 to establish a UK patent practice for the US firm. In addition, the partners between 35 and 45 still operate too much under the market’s radar. The firm’s presence in the market was also affected by the fact that Nokia, its most important client, is increasingly shifting its litigation activities to Germany and is rarely active at the UK High Court. Nevertheless, Bird & Bird has in Sisvel a stronger plaintiff at its side in SEP disputes. In pharma disputes, the firm is as solid as ever representing generics manufacturers.

Broad midfield

In the third tier of the JUVE Patent UK ranking for solicitors there is a broad group of litigation practices that either have a balanced ratio of cases across a broad technical spectrum or, like Carpmaels & Ransford and Herbert Smith Freehills, have an incredibly strong practice in pharmaceutical cases. In terms of the quality of their work and the reputation of their lawyers, both law firms even rival the market leaders in this field. However, they are barely present in mobile communication lawsuits.

This tier also contains two of the most noteworthy climbers of the past year. In the UK market, EIP is regarded as perhaps the best example of a former patent attorney firm that has successfully established its own litigation business. Clearly positioned on the side of NPEs in SEP disputes, EIP is currently acting in two FRAND litigation cases at the UK Supreme Court, namely for Unwired Planet and Conversant.

But it was Nicola Dagg’s move to Kirkland & Ellis that grabbed the headlines over 2018/19. At Allen & Overy, Dagg was already a leading individual in the market. The speed at which she was able to establish herself and her team, with three solicitors made non-equity partners at Kirkland, was surprising. Lawyers at other firms describe Dagg as “assertive” and “acquisition-wise, very talented,” talents on which Kirkland has been able to capitalise in only a few months. The team is active for Xiaomi and Lenovo in SEP disputes and represents top names in the pharmaceutical industry such as Novartis, Pfizer and Regeneron. However, in some cases the Kirkland team is co-counselling alongside more established teams

Given this rapid success and Dagg’s relatively young team, many competitors are wondering if Kirkland will be able to sustain the patent practice’s development.

Another US law firm that has managed to establish itself quickly in the UK market is WilmerHale. WilmerHale was able to build on its intensive relations with Apple in the US and the tremendous renown of Justin Watts, who joined the outfit from Freshfields Bruckhaus Deringer in 2017.

But the UK market not only consists of law firms that manage high-profile cases in pharma and telecommunications. A relatively large group of litigation teams from very different law firms is regularly involved in High Court cases. These law firms tend to have much smaller teams than the market leaders. In some cases, the practices are still in their infancy.

Tending towards a mixed approach

Like in Germany, and more recently in France and the Netherlands, mixed firms of patent attorneys and lawyers are in vogue in the UK. Marks & Clerk was a first-mover here many years ago; other firms, such as EIP and Carpmaels & Ransford, are successfully adopting this strategy.

However, none of the litigation teams from these firms have yet managed to catch up to the market-leading litigation teams such as Bristows or Powell Gilbert. EIP, for example, is generally strong in mobile communications, but hardly present in pharmaceutical cases. Likewise, Carpmaels & Ransford is considered one of the five or six outstanding law firms in Europe for life sciences. However, its litigators rarely appear in telecommunication disputes.

UK patent attorney firms are mostly present in patent filing throughout Europe and compete for work primarily with German prosecution firms. Law firms such as Carpmaels & Ransford, Marks & Clerk and Kilburn & Strode are among the most active before the EPO.

This is unlikely to change after Brexit either, because the EPO is not an EU authority. Some of the patent attorneys at these law firms are among the best known in Europe and widely regarded as outstanding representatives of their profession.

Above bar

Among the barrister chambers nestled among the historic buildings of Holborn, the QCs and junior barristers of 8 New Square are consistently recognised for their in-depth technical knowledge and impressive client base. Present in some of the most important cases shaping the European patent landscape, including Unwired Planet against Huawei, and Pfizer against Hoffman-La Roche, 8 New Square delivers patent litigation for telecommunications and life sciences. It also works in an array of emerging fields, such as medical devices.

Overall, the most recommended barrister in JUVE Patent’s research was Richard Meade, described by more than one lawyer as a “star” of the IP bar. It is his name, alongside that of fellow QC Daniel Alexander, most frequently touted as being perfect ‘judge material’ to make up the deficit felt on the judicial bench.

However, second-tier sets 3 New Square and 11 South Square are as close in reputation as they are in proximity. The former is particularly strong in pharmaceutical work, the latter in electronics and telecommunication cases. But both are recommended by clients and solicitors as being among the best barristers the UK IP bar can offer, and often frequent the higher court instances. 3 New Square, for example has been on the side of Actavis, Teva and Mylan against Eli Lilly and ICOS over tadalafil at the Supreme Court. A three-strong team at 11 South Square defended Zyxel against TQ Delta over DSL technology at the Court of Appeal.

The UK bar also boasts other IP expertise, in sets which are less specialist but nonetheless have capacity for patent litigation. Blackstone Chambers, for instance, has impressive antitrust capabilities. But it is the top three sets which catch the eye of many teams litigating in front of the UK courts. Top names like Meade and Alexander are currently standing firm for now, however. Whether the top barristers are willing to make the leap from bar to bench will determine the near future of the UK’s patent courts.

Important to note

JUVE Patent ranks the most significant patent filing firms in the UK according to eight key fields of technology that are most relevant for the industry. Readers will benefit from this new tool when choosing advisors for patent filing. The ranking is structured according to expertise in certain fields of technology and based on patent community recommendations for filing firms.

For more information on our research criteria, please click here.