What determines the plaintiff’s court selection in patent litigation?

Patent infringement disputes frequently fulfil territorial jurisdiction requirements at multiple courts, giving the patent holding plaintiff the option to freely select the court of his choice to seek remedies. While these so-called forum shopping activities are frequently observed, the factors influencing court selection have remained largely unexplored. New academic research, presented at the European Policy for Intellectual Property (EPIP 2015) conference in Glasgow, organized by CREATe (Research Councils UK Copyright Centre), examines the determinants of the plaintiff’s court selection at German regional courts.

The study, by researcher Fabian Gaessler of the Max Planck Institute for Innovation and Competition, finds that plaintiff consider the expected economic loss from delayed judgment when choosing their court. Speedy patent enforcement is in particular valued, if plaintiff and alleged infringer compete in the product market.

German regional courts differ primarily in their time until judgment

To analyse forum shopping in patent litigation, the researcher utilises a dataset of patent litigation cases in Germany which covers all proceedings filed at the regional courts in Düsseldorf, Mannheim, and Munich between 2003 and 2008. These three courts account for approximately 80 to 90% of all patent infringement proceedings in Germany.

The results indicate that judges at the three courts differ in their tendency to draw on time-consuming expert opinions depending on the patent’s technology. Furthermore, judges seem to differ in their propensity to stay the proceeding due to a parallel validity challenge.

Overall, judges at the Düsseldorf regional court are less likely to call for an expert opinion or to grant a stay than judges in Mannheim and Munich. Although ordinary proceedings take the longest at the Düsseldorf regional court, the low likelihood of delays gives it the lowest expected length of proceeding for a major share of patent disputes, which explains the popularity of the Düsseldorf regional court among patent holders.

The results of the study further show that the distance to a particular court has a significant negative effect on court selection. Especially small plaintiffs highly value local access to court.

Valuable insights for the discussion about the design of the unified patent court

The study’s findings are of particular importance for the discussion about the design of the Unified Patent Court (UPC), which is scheduled to commence operations in late 2016. Although the implementation of the UPC has in general been welcomed as a solution to the currently fragmented European patent litigation system, practitioners, scholars, and policy makers disagree how well the UPC will balance the trade-off between uniform judicial decision-making and the provision of local access to court.

In its currently planned form, the UPC will consist of multiple entry courts spatially dispersed over Europe to provide litigants with the option to seek remedies in close proximity – namely, a central division in Paris, regional divisions in London and Munich, and a still unspecified number of local divisions. The provision of multiple entry courts will assure that small patent holders are not disfavoured due to the lack of a nearby court when trying to enforce their patents.

However, the plurality of courts has also raised concerns that plaintiffs may exploit differences in decision-making and case management. While a centralized appeals court at the UPC will promote uniformity in judicial decision-making, judges maintain considerable discretion in the form of procedural options prior to rendering a judgment on the merits, such as whether to transfer the proceeding, stay the proceeding, or decide on validity. Refined procedural rules seem crucial to avoid additional court heterogeneity resulting from different interpretations of statutes by judges.


Notes for editors: ‘What to Buy When Forum Shopping – Determinants of Court Selection in Patent Litigation’ by Fabian Gaessler is a paper presented at the European Policy for Intellectual Property (EPIP) Conference, University of Glasgow, 2-3 September 2015. For more information visit: http://www.epip2015.org/

Fabian Gaessler is Research Fellow at the Max Planck Institute for Innovation and Competition in Munich, Germany.

For further information contact the study academic Fabian Gaessler (email: fabian.gaessler@ip.mpg.de) or the CREATe PR team (email: contact@create.ac.uk).

New research presented at the EPIP 2015 conference will be shared on social media using the hashtag #epip2015