Austrian market shifts as patent litigation business shrinks

Although not everyone anticipates a downturn, “patent litigation is losing importance” is a common refrain among Viennese IP partners when discussing their practice development. Austrian SMEs and companies from various hi-tech sectors are increasingly taking their cases to the UPC. Only pharmaceutical companies still predominantly fight for their most important products in national courts. Much like in Germany, there are signs of a decline in economically significant patent disputes before national courts in Austria.

Even so, compared to the German UPC divisions the local division in Vienna has handled few cases to date. This is partly because Vienna only has one permanent judge and draws two from the pool. In contrast, plaintiffs can expect two permanent judges at the German divisions. Additionally, the UPC replaces several parallel national proceedings with a single procedure at one of the UPC divisions.

As a result, plaintiffs in countries that were not previously considered premier venues for patent proceedings are even less likely to file their cases in those countries, now that they can choose between various — and potentially more experienced — divisions. Consequently, fewer Austrian law firms are involved in a significant number of patent infringement proceedings.

Rising stars in Vienna

One of the winners of this development, for example, is IP boutique Geistwert, which remains hot on the heels of the market leader Gassauer-Fleissner. The latter is still at the top, primarily due to its strength in life sciences. Gassauer-Fleissner’s team led by Dominik Göbel and Manuel Wegrostek continues to be the go-to representative for pan-European pharmaceutical proceedings.

These long-running proceedings have not yet transferred to the UPC. For instance, Gassauer-Fleissner successfully represented Bayer in a preliminary injunction against Stada. The case involves Bayer’s top-selling blockbuster Xarelto, which is part of one of the largest ongoing pharmaceutical proceedings in Europe.

However, it is the international firm Taylor Wessing that has made the greatest strides in Vienna. With the addition of Thomas Adocker in patent law, it has firmly established itself in the national market over the past two years.

Meanwhile, ABP Burger und Partner has bucked the market trend with a completely different strategy. The firm has long cultivated a close cooperation between lawyers and patent attorneys, which is unusual for the Austrian market. Thanks to its small, mixed Munich office, it is one step closer to the EPO and the UPC’s Munich local division than some of its competitors. Most recently, however, the firm has attracted new clients primarily through its innovative strategy of AI solutions.

Shift away from litigation

Law firms with a wide range of setups have shifted their business away from patent litigation. For example, the IP boutique Salomonowitz and the large law firm Freshfields are currently more active in infringement proceedings but are also successful in other areas, such as soft IP.

This shift could gain even more momentum, especially if battles over pharmaceutical blockbusters and biosimilars move to the UPC. This is because all Austrian law firms that currently still do good business in patent litigation are particularly strong in life sciences litigation and are thus involved in pan-European disputes. However, these firms are not the first port of call as representatives before the UPC, having less experience in UPC cases than, for example, their German counterparts. Many work for the same clients but rarely act in a coordinating role in pan-European proceedings.

That said, a few will certainly establish themselves as excellent additional advisors, especially when specific Austrian issues are relevant. Taylor Wessing remains the only international law firm to have established its own team in Vienna.