Germany's bifurcation system is in crisis. For former judge Rainer Engels, more personnel are crucial to speeding up the Federal Patent Court. In an interview with JUVE Patent, Engels calls for structural reform and better networking between the German revocation and infringement courts.
2 October 2020 by Mathieu Klos
JUVE Patent: Mr. Engels, there is a great deal of criticism of the Federal Patent Court from outsiders. Decisions take too long; the court is too inflexible and it destroys patents too often. How is this criticism received by the judges?
Rainer Engels: The duration of proceedings is completely unsatisfactory for everyone. This has led to the current legislative initiative. But my former colleagues – like me, incidentally, when I was active there – do not see this as a criticism of themselves directly. The problem is more of a structural nature. Our headcount has been permanently reduced over many years and at the same time the number and complexity of proceedings, especially nullity suits, has increased. It is not possible to process so many cases quickly because of the permanent understaffing.
A lack of staff cannot be the only reason for increasingly lengthy proceedings?
That’s correct. The last patent reform in 2009, with its qualified opinion, brought about a restructuring of the nullity suit. However, the qualified opinion as the linchpin of the first instance proceedings – at the Federal Patent Court – has contributed to nullity suits becoming far more complex. It divided the proceedings into two parts and focused them, with regard to appeal proceedings as well, on the consequences of possible preclusion. This resulted in a more rigorous examination of the facts of the case. It is estimated that proceedings today require twice the amount of work as they did previously. On the positive side, what are usually complex problems are now being looked at more closely.
“Proceedings require twice the amount of work than before”
However, the crucial mistake made by politicians was to assume that this change could be managed without additional staffing. Admittedly, the number of appeal opposition proceedings decreased at that time. But the potential staff savings far from offset the additional work involved in nullity suits, both in terms of quantity and quality. We are still paying for that misjudgement today.
New posts have since been created. Has that helped?
These few new posts are a drop in the ocean. There is a shortage of both technically- and legally- qualified judges. Moreover, the current number of nullity senates and presiding judges is not enough to handle the many nullity suits in a timely manner. This means that the presiding judge of a senate is also the ‘eye of the needle’ since they must lead all proceedings.
After all, the number of nullity suits has levelled off at around 400 in the last ten years. Every year, there are around 250 new suits added to this, with 2020 likely to see further growth.
The federal government wants to better synchronise infringement and nullity proceedings, and set a binding deadline of six months for the qualified opinion. It will also tighten party deadlines. Does this solve the time issue, and the famous injunction gap?
Merely controlling the qualified opinion with a prescribed deadline is certainly not the solution. Nullity suits are extremely complex and, because of their economic importance, hard-fought. They require that judges fully understand the technical and patent law aspects, even at the time when they pass the qualified opinion. This is the only way to do justice to their leading role in nullity suits and the quality required as a basis for assessing suspension in infringement proceedings. This will be extremely difficult with such a short, fixed deadline. The proposed deadline seems far too optimistic to me, especially since any reduction in time means more staff required.
“A prescribed deadline is not the solution… it is too optimistic”
Why are nullity proceedings so complex?
It should be noted that a nullity suit must be handled by five judges, including all technical judges. They also prepare a written vote. In addition, a technical judge as rapporteur normally needs between three and four weeks for his vote. But that is only a part of the total time required, because each technical judge, where there is a total of three technical judges per senate, is in turn involved in the case work of his colleagues with his own votes.
The same applies to the legal judge of a nullity senate and the presiding judge. The tasks are already impossible to accomplish with an average workload. Without a significant increase in staff, these requirements cannot be met. Almost all the comments on the first discussion draft of the new law see it that way.
Deadlines should be very strict for everyone involved. Would a concentrated handling of complex cases help speed up proceedings?
Yes. But I fear that the current proposal by the federal government will not work. If the court has a deadline of six months from the date the action is brought, the two-month period for the grounds for opposition is deducted, and the court has a further four months in which to consider the arguments of the parties and draw up the interlocutory decision. In isolation, considered on a case-by-case basis, four months is quite sufficient in purely mathematical terms.
“The federal government’s current proposal will not work”
However, all judges regularly handle not just one but many cases at once, especially since each technical judge is assigned to a technical opposition senate and the utility model senate at the same time. So a judge not only has to keep their knowledge ready and up to date over a considerable period of time until the conclusion of the proceedings due to the interruptions caused by the proceedings, but also has to divide up the working time they have available. Effectively, this means that the amount of time available for each case is considerably reduced.
What do judges suggest instead of the six months?
In discussions with infringement judges, nine months has emerged as a realistic target, provided that the headcount increases. This goal seems more realistic, especially so as not to jeopardise the necessary quality of the qualified opinion. This quality calls for a determined response to the arguments of the parties and the patent law assessment by the entire senate, in order to guarantee its function for a relevant initial assessment and a concentration of the subject matter of the action.
“Nine months is a realistic target for a qualified opinion”
Moreover, the current legislative proposal does not take into account the fact that it is only reasonable to process the qualified opinion after the reply at the earliest. Only then do judges have the in-depth arguments of the patent holder, which are often decisive, and the counterarguments of the plaintiff, for example on the prior art. Then they may be able to take into account the subsequent responses of the patent holder.
Often, the defence of their patent claims in the reply is limited. Prior to the reply, processing would be reduced only to the version of the disputed patent issued. The initial arguments of the parties and the assessment in the qualified opinion would often be outdated in the infringement proceedings. They would no longer be relevant for the infringement judge. Furthermore, if the qualified opinion is to be made after six months, there is a high risk that judges would have to cut it down to a minimum. The quality would therefore drop significantly.
A new legal framework and more staff… but should the court also reform its structure?
Yes, it won’t work without structural reforms. The court would have to design the structures to concentrate capacities more flexibly where most of the work arises.
What exactly do you propose?
The number of cases in IPC classes fluctuates over several years, for example for economic reasons. The focal points change. It is therefore necessary to try to organise panels to allow them to deal with the different workloads more flexibly. The legal judge must of course remain in place. The Federal Patent Court has already started to allocate flexible technical judges to some nullity senates, regardless of their membership of certain technical appeals senates. But these approaches must be continued consistently.
In addition, further nullity senates need to be created in order to respond flexibly to the number of cases. Judges could also build more continuity in their specialised work in the senate if the assignment of both IPC classes and judges to a particular nullity senate were to change less often.
Patent experts repeat the criticism that court management is doing too little to remedy the drawbacks. Do you share this opinion?
No, the court management and the executive committee have always made great efforts to get more posts approved by the federal government. However, it has apparently not been possible to make it clear to those responsible that, despite a drop in the number of proceedings in the technical appeals senates, compensation for the nullity senates is insufficient and more staff is needed.
As I said before, the cases are becoming increasingly complex. For years, the focus of work has been on nullity suits.
Did the federal government perhaps turn a deaf ear for too long because the Unified Patent Court was about to launch? Why strengthen the Federal Patent Court if many cases could move to the new court in the future?
I don’t believe that was the federal government’s strategy. That wouldn’t make sense, for several reasons. Firstly, the UPC would remove the prohibition of double protection and many companies would then validate national and European patents in parallel. Secondly, the UPC would not be able to commence operations on a large scale so quickly. In any case, the UPC would not cause the Federal Patent Court to run out of work for years to come. Thirdly, the age structure at the court is so high in terms of the average age of the judges that one could hire additional staff in good conscience. The court could reduce a surplus within a few years by not filling the positions of those who retire.
“The UPC is no threat to the Federal Patent Court”
What have judges done to speed up the proceedings?
Informal contacts between judges at the Federal Patent Court and their colleagues at the infringement courts have grown in recent years. So far, we have tried to control our qualified opinion to send them to the infringement judges in time for the oral hearings. However, given the large number of nullity suits, this was not possible – at least not for the first instance in infringement proceedings – even if the nullity suit was brought early.
The injunction gap is piling on the pressure everywhere. Are there any ways to mitigate the problem beyond the qualified opinion?
Yes, we should tackle the problem more universally and consider, for example, the possibility of involving technical judges in infringement proceedings. This would have several advantages. The technical judges would increase their expertise in infringement proceedings, which would also be a valuable gain for the work at the Federal Patent Court. After all, judges in nullity suits should also be familiar with, for example, the interpretation of the features of a patent claim with regard to the discussion of the form of infringement in infringement proceedings. The work of the technical judges would also be valued more highly as offering added value for effective and high-quality work on the bench.
“We could involve technical judges in infringement proceedings”
Both sides in the dual system would network better, with a more robust exchange between the various parts of the system. The technical judges should also be seconded for a certain period of time to the Federal Court of Justice. There, with their technical expertise, they would provide support in processing cases as scientific assistants.
How would this be implemented in practice, given that the law does not provide for technical judges at German civil courts?
Of course, this would first have to be translated into law. This would allow ad hoc technical facts to be discussed in infringement proceedings that jurists alone cannot interpret. One could consider a case-by-case secondment of technical judges to the civil courts. These would then officially participate in the proceedings; in other words, sit on the bench.
The necessary capacities would have to be provided for at the Federal Patent Court. Additionally, the increase in staff would strengthen the court and allow for more flexibility. This would also ensure enough technical judges as experts for specific IPC groups, which is important.
Why not abolish the dual system altogether and put technical specialists and jurists on the bench together? After all, the German dual system’s fan numbers have been dwindling for years.
I support the dual system. It ensures that the current mixed bench is staffed with sufficient technical expertise by several technical judges. Although this form of work is elaborate, it takes the complexity of the technology into account. This is justified by the economic importance of patents. It is not without reason that Germany has one of the most respected patent jurisdictions in the world. But if you want to have such a complex system, you also have to provide the necessary staff.
“I advocate closer networking between the infringement and nullity courts”
Moreover, a case-by-case secondment of technical judges would not affect the fact that nullity suits and infringement proceedings would continue to be decided before different courts. After all, the Federal Patent Court is also responsible for all national patent oppositions and concentrates the technical judges from various technical disciplines in one place. But I strongly advocate closer networking between the two parts and a more rigorous and institutionalised exchange between the Federal Patent Court and the infringement courts going beyond the informal contacts of individual judges.
In the end, success depends on more staff. Where will the extra judges come from?
Regardless that so far, the problem has not been finding a sufficient number of qualified applicants – and even without exhausting the possibility of attracting patent attorneys to the job – one could consider seconding examiners from the German Patent and Trademark Office (DPMA) to the Federal Patent Court as technical judges for a period of two or three years on a trial basis. If, of course, the legal prerequisites were in place, this would build up a pool over time from which skilled staff could be recruited and qualified examiners could be returned to the DPMA.
Are three technical judges in a nullity senate too many?
No. An opposition division at the EPO or DPMA also consists of three examiners. This is for good reason, so that the examination is comprehensive and so that two examiners do not cancel each other out with conflicting opinions. Why should the number be lower in the supervising court?
Critics often complain that the Federal Patent Court destroys too many patents. What’s your view on this?
That is an old criticism that I find unfair. A simple comparison with statistics from the EPO or DPMA for opposition suits refutes this assertion, since about two thirds of all challenged patents are revoked in whole or in part. The ratios are therefore about the same.
“It’s unfair to say the Federal Patent Court destroys too many patents”
In nullity suits, one must also bear in mind that a company will only challenge a patent if it sees a sufficient chance of success for the costly proceedings from the outset. The patents, which are often economically valuable, are challenged with huge effort and expertise. It is logical that there are many partial or complete nullifications. But, once again, the ratio is within the normal range.
This interview was conducted by Mathieu Klos.