Monday, December 8, 2014

Patent Litigation Statistics from Europe and Japan

It's going to take me a little while to work my way through all of this material, but several recent publications provide a wealth of statistics on patent litigation and remedies in Europe and Japan.  I hope to report back on some of the papers below in greater detail in the weeks to come.

1.  First, the October issue of Mitteilungen der deutschen Patentanwälte has two articles of interest.  The first is by Malte Köllner & Paul Weber and is titled Rumor Has It:  Statistische Analyse der Rechtsprechungspraxis bei Patentverletzungsklagen (which I would translate as "Statistical Analysis of Adjudication Practice in Patent Infringement Actions").  The abstract reads (in my somewhat free translation from the German):
For a long time, there have been discussions about supposedly distinctive features in German patent infringement case law, which however are based on the weak foundations of subjective feeling and individual cases.  This essay creates a solid foundation for these discussions, by analyzing data from infringement actions in Germany and Europe.  We examine whether conventional assertions about the case law are verifiable or not, and in this manner attempt to contribute an objective basis for the discussions.
The nine conventional assertions the authors set out to test, and their conclusions, are as follows: 
(1) There's only literal infringement these days
Confirmed to the greatest extent possible
(2) Courts don't grant stays
Overwhelmingly confirmed for Düsseldorf.  No data for Mannheim and Munich.
(3) They no longer grant preliminary injunctions    
Probably not correct
(4) They are biased in favor of patent owners
Contradicted; the patent owner is merely structurally privileged by the bifurcation system.
(5) Every year it's getting worse for patent owners!
Weakly confirmed for Düsseldorf for infringement by equivalents and for the privileging of the patent owner in the court of first instance.
(6) They're always getting more cases
Not confirmed
(7) The BGH is in any event reversing cases again
(8) The Germans are faster   
Could be correct for individual courts, if you compare apples with oranges (that is, if you don’t take into account the time it takes to complete the parallel cancellation proceeding)
(9) The German bifurcation system is the best infringement litigation system in the world.  
Contradicted.  The bifurcation system should be abolished.

2.  The second article in the October issue of Mitteilungen is by Peter Hess, Tilman Müller-Stoy, and Martin Wintermeier and is titled Sind Patente nur »Papiertiger«? ("Are Patents Only 'Paper Tigers'?").  An English-language version is available here.  The abstract reads:
Patents, whose legal validity is assumed generally and particularly in infringement proceedings, are in fact subject to a considerable risk of being declared invalid. The present contribution confirms this based on a statistical evaluation of the case law of the German Federal Patent Court and the German Federal Court of Justice in nullity matters in the period from 2010 to 2013. A broad discussion on the causes, effects and possible corrective measures seems to be necessary.
The following contribution is to give occasion for this.FOSS Patents and EPLaw Patent Blog have already blogged on this article to some extent (respectively here and here).  The authors' analysis indicates that nearly 80% of patents challenged in revocation proceedings before the Bundespatentgericht (Federal Patent Court) are invalidated in whole or in part.  The Bundesgerichtshof (Federal Court of Justice) affirmed about 60% of all appeals from these proceedings.

3.  Joachim Henkel and Hanz Zischka have posted a paper titled Why most patents are invalid--Extent, reasons, and potential remedies of patent invalidity, available here. Here is the abstract:
The legal stability of granted patents is uncertain, a fact that entails inefficiencies for the patentee as for third parties. It is an important question for intellectual property policy and management how severe this problem is. Only few patents are litigated, and those that are are not a random selection. We thus ask: if a randomly picked patent underwent revocation proceedings with a thorough search for prior art, what would be the odds of it being invalidated? We address this question for the case of Germany, where revocation proceedings are separate from infringement suits. This bifurcation facilitates a focused analysis of the former. Our study is based on court decisions, expert interviews, and a survey among patent lawyers. We find that patents entering revocation proceedings are about as legally robust as the average patent. However, less than half of all revocation proceedings conclude with a decision, and those that do involve more robust patents. Thus, the share of court decisions that declare the focal patent partially or fully invalid—75% in Germany—is a conservative estimate of the share of all patents that would be partially or fully invalidated if challenged in court. Furthermore, the plaintiff’s budget was seen as having a positive effect on the likelihood of finding invalidating prior art, and so the assumption of a thorough search for prior art increases this share further. We show that our arguments carry over to other legislations. While we concur with earlier studies that a more detailed examination would not solve the problem, we do not consider “rational ignorance at the patent office” a satisfactory explanation. Even patents that are never litigated create inefficiencies. To address the problem that many patents are latently invalid we suggest a significant increase of the required inventive step.
4.  Katrin Cremers, Fabian Gaessler , Dietmar Harhooff, and Christan Helmers have posed a paper on ssrn titled Invalid but Infringed?  An Analysis of Germany's Bifurcated Patent Litigation SystemHere is a link to the paper, and here is the abstract:
We analyze the impact of the probabilistic nature of patents on the functioning of Germany’s bifurcated patent litigation system where infringement and validity of a patent are decided independently by different courts. We show that bifurcation creates situations in which a patent is held infringed that is subsequently invalidated. Our conservative estimates indicate that 12% of infringement cases in which the patent’s validity is challenged produce such ‘invalid but infringed’ decisions. We also show that having to challenge a patent’s validity in separate court proceedings means that more resource-constrained alleged infringers are less likely to do so. We find evidence that ‘invalid but infringed’ decisions create uncertainty which firms that were found to infringe an invalid patent attempt to reduce by filing more oppositions against newly granted patents immediately afterwards.
This paper has been mentioned on the PatLit Blog, here.

5. Yann Basire has a short article in the July-August 2014 issue of Propriété Intellectuelle titled Les dommages et interest alloués dans le cadre des action en contrefaçon:  Étude comparée en France, au Royaume-Uni et an Allemagne (“Damages and interest in infringement actions:  Comparative study in France, the U.K., and Germany”).  The article briefly summarizes a 170-page January 2014 report from the French government on IP remedies in France, Germany, and the U.K., available here.  I hope to start making my way through this document soon.  According to M. Basire, in France in 67% of the patent infringement cases in which damages were awarded the amount was less than €50,000, and in only 11% was it above €500,000.  In  Germany, damages exceeded €100,000 in 58% of cases and in the U.K. damages exceeded €1,000,000 in 50% of the cases analyzed.  French courts award reasonable royalties less frequently than do courts in Germany and the U.K. as well, although they are more likely to take into account préjudice moral.     

6.  An article titled Predictability of Monetary Damages under Article 102(3) of the Japanese Patent Law was recently published (in Japanese) by the Second Subcommittee, the Second Patent Committee, in 64 Intellectual Property Management 219 (2014).  Professor Masabumi Suzuki, who alerted me to this paper, informs me that the article presents a survey of 59 reasonable royalty decisions between 1999 and 2013.  According to Professor Suzuki, courts awarded a 5% rate in 28% of the cases, 3% in 22% of the cases, and 10% in 16% of the cases.  My research assistants will be translating this paper for me over the winter break, and I hope to report back on it in a few weeks.

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