There has been much talk about the tension between antitrust and IP protections – what, if any, evidence of this have you seen and do you think it is likely to develop into a big issue for practitioners?
Antitrust and IP protection are in potential conflict by their natures. IP protection is about granting, in exchange for the disclosure of an invention, a temporarily limited monopoly to promote innovation, while antitrust is about breaking monopolies to promote competition. Since IP and antitrust law both belong to one legal system and serve legitimate interests, the tension between them is intentional and should not be viewed as an issue, but as a challenge: how to find the right balance in order to foster technological progress and establish new technologies in a fair market. It might serve as guidance to the practitioners to keep in mind that courts will always seek to achieve this balance, and not to make business decisions that run into a harsh backlash from courts when one of the two outweighs the other. After all, IP and antitrust law can go hand in hand; IP protection safeguards a company’s investment into new technologies, while antitrust law secures healthy competition among businesses. Both aspects ultimately drive technological development.
How do you measure the success of an IP strategy?
For a non-producing entity, the success of an IP strategy might be measurable within a rather short timescale of a few years by offsetting the investment into an IP portfolio and potential litigation costs against the revenue created through licensing fees and settlements. For producing entities, the evaluation can be much more difficult. Sometimes this evaluation is measurable only on the timescale of a 20-year patent term, far longer than the quarterly results that businesses are nowadays pressured to consider. Some figures are available, like the number of patents in the portfolio, the overall costs of prosecution and annuities, the revenue in licensing fees and potentially the number of external investments in the company to develop a technology, among others. But such figures can be misleading, depending on the specific situation the producing entity is finding itself in. For instance, strong patents may be respected by competitors in that they content themselves with producing inferior, cheaper-selling products, rather than pay licensing fees. Offsetting costs against zero revenue may suggest a failed IP strategy in this case, while the opposite is true. Specific stress situations can show the success of an IP strategy to some degree. For instance, patent litigation between producing entities will reveal how much exposure the company’s own patent portfolio creates for the competitor as compared to the company’s exposure to the competitor’s portfolio. In any case, what is needed is an IP team, potentially including trusted outside counsel, which can build up, manage and maintain long-term, company-specific IP expertise. Otherwise, it will be difficult to judge whether the chosen IP strategy has a positive impact on the company. Whether a company has such an IP team should be considered a soft factor when measuring the success of an IP strategy. Any IP strategy is only as good as the people handling it.
What pressure are you seeing from clients for their law firms to focus more on diversity and inclusion – and is it having any impact on policies at your firm?
Some of our clients have addressed this issue. We put much effort into building up diverse and inclusive teams for all tasks in our firm, as respecting and combining the strengths of every individual regardless of race, religion, gender, marital status, nationality or disability is best for working in an effective, sustaining and successful way, which will benefit our clients and ultimately our firm.
The UPC is nearly ready to open for business – what do you expect some of the biggest challenges to be over the next 12 months?
On the side of the UPC, the implementation of the new system will challenge the judges who will run a new procedure and will have to establish new pan-European case law that has to overcome national particularities, despite being trained in these national particularities. Further, the functioning of the administration and the IT at the court will need very careful preparation, posing a challenge for the UPC’s employees. Preparations for the technical functioning of communication with the UPC are also needed within law firms. Attorneys may have to adapt their working style in view of the tight timeline of the UPC infringement procedure, particularly in countries where infringement proceedings previously progressed at a much slower pace. The law firms will also be challenged to advise their clients on UPC-related strategies without having actual experience with the UPC. As with all new things, the UPC opening for business bears a chance and a risk, but I personally think it will be a success.
What advice would you give to someone considering a career in IP law?
I would ask that person whether they are curious about sciences, understand technological concepts, are ready to quickly acquire knowledge about new technological concepts, like to work with language – potentially including foreign languages – in a technological and legal context, feel prepared for a continuing education in legal matters, can imagine working in an international team with highly qualified and specialised members, and want to take responsibility for high-profile cases. If that is affirmed, I would say that person may well consider a career in IP law.
You have won acclaim for your work in litigation proceedings both in Germany and in foreign jurisdictions. What major differences in German litigation should practitioners bear in mind when preparing for a case?
The plaintiff (patentee) should keep in mind that when filing an infringement complaint in Germany, the full infringement argument and evidence need to be presented to the court to meet the requirement of a conclusive complaint. It is crucial that the line of argument converges during the course of the proceedings and is not changed fundamentally. Therefore, any potential non-infringement argument and any potential invalidity argument, based on an internal search for prior art against the patent that is to be litigated, should be taken into consideration before presenting the infringement case to avoid any later inconsistencies in the line of argumentation. Such inconsistencies can potentially compromise the plaintiff’s credibility. For these reasons, a correspondingly higher workload is needed in Germany before filing an infringement complaint, and enough time should be reserved for this purpose.
The defendant can benefit from the new rules applicable in Germany since May 2022, according to which the preliminary opinion of the Federal Patent Court on the validity of the patent shall be rendered within six months after service of the nullity complaint to the patentee. This is because a preliminary opinion suggesting invalidity of the patent can increase the chances of a stay of the infringement proceedings. However, the short timeframe creates pressure for the defendant to search for pertinent prior art fast, to develop invalidity arguments that go along with the non-infringement defence and to present all this elaborate argumentation to the Federal Patent Court as soon as possible. Accordingly, the defendant should begin with the prior art search and development of invalidity and non-infringement arguments, where possible, at a time when the infringement complaint is not yet served, but the defendant knows that infringement proceedings are likely to begin, for example, due to a negative development of licensing negotiations.
You are highly experienced in the technical fields of telecommunications, electrical engineering, semiconductor technology and optics. What are some of the biggest challenges that clients face in these fields – and what steps can they take to overcome these?
Telecommunications, video coding, electrical engineering and semiconductor technology are ubiquitous nowadays and can be found in many products, such as household appliances or cars, that were originally developed for other purposes. The inclusion of different technologies makes a product vulnerable to patent litigation based on patents from various technical fields. The manufacturer of that product may not be acquainted with these technologies and their patent landscapes because they were previously thought to be from remote technical fields. For instance, car manufactures have become a frequent target of patent litigation over the past few years because of telecommunications patents, and some were ill-prepared. Companies need to assess the exposure of their products accordingly and should build teams with sufficient knowledge as well as technical and legal expertise to cope with this interdisciplinary challenge.
What is your firm doing in terms of succession planning to recruit, mentor and retain the next generation of talent?
Our firm has both prosecution and litigation teams, but without rigid separation. Our credo is that the most qualified person for a task shall join a team, which is possible due to a very collaborative working style throughout the firm. This working environment especially benefits young talents with high potential because they are not confined to specific technical or legal fields but can explore all areas IP law has to offer, including an early introduction to contentious proceedings. Young talents are not only trained thoroughly on the case and in inhouse seminars but are also offered a long-lasting working perspective in the area in which they excel. A friendly atmosphere both on the professional and personal level allows talents to unlock their full potential, satisfy their curiosity and grow with the challenge. Further, working conditions that fit individual needs of balancing work life and family life have allowed our firm to mentor and retain such talents. As for recruiting, we have been successful in the past at identifying and approaching the next generation of talent from our side, but we also welcome self-initiated applications.
As we start to emerge from the pandemic, what covid-prompted changes and restrictions are you looking forward to saying goodbye to, and which business developments of the past two years are here to stay?
While our firm had established remote access to our infrastructure a long time before covid struck, the pandemic intensified working from home and using modern media to communicate with clients, other firms, patent offices and courts. Some of these developments, like proceedings by video conference at the EPO, will definitely stay. I appreciate the flexibility that this working style brought, but also believe that it is indispensable to meet clients, colleagues and judges in person. Only when meeting face to face can we exploit the full potential of human verbal and non-verbal communication skills to optimally exchange and develop ideas or plead cases. What I appreciate is an optimal mix of the flexibility of remote working and the intensity of personal meetings. For instance, a video conference, which can be set up when necessary, may be preferable over time-consuming business trips in certain instances. In other cases, personal meetings can be more effective, particularly when a large group of people meets and creative approaches are to be explored.
How do you expect the German patent litigation landscape to develop in the next five years?
The new UPC system will be a game changer in many regards, not only because there will be a new venue for patent litigation which can be expected to draw cases and therefore reduce the number of German infringement proceedings. The UPC will allow attorneys from across contracting member states to contribute to, and participate in, the new system. I expect that there will be a larger pool of attorneys from which clients may build their team as a result, thereby increasing competition among attorneys and law firms.
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Joel Nägerl is a German and European patent attorney. His main practice area is patent litigation, where he advises and represents large multinationals in high-profile international disputes in the fields of telecoms, electrical engineering, semiconductor technology and optics. Dr Nägerl also serves as an appointed court expert at the Düsseldorf Higher Regional Court and co-authored the Handbook on Patent Law.