A cursory glance at The Legal 500’s IP coverage – which was recently split into a distinct patents table alongside a trade marks, copyright and design table – makes for a head-scratching read. In a legal discipline that attracts sophisticated, technical expertise, fortune favours the innovative as much as the who’s who of the City elite, or indeed the prestigious US names that are continually encroaching on London territory in the corporate space.
But even within this diverse, cutting-edge practice area, comprising teams as unique as the clients instructing them, there is much contention as to which approach fits best in a rapidly changing environment.
‘21st-century patent litigation is multidisciplinary, and having expertise across the board means clients get analysis from all directions.’ Allen & Overy (A&O) partner Mark Heaney’s statement reflects what he sees as a dramatic shift in how high-stakes patent disputes are devised and conducted, pointing to an increasing need for sophisticated antitrust and arbitration expertise in today’s highly technical conflicts. The multidisciplinary nature of these disputes, Heaney observes, ‘is demonstrated by the extent to which we now work with non-patent counsel, perhaps as much as 50% of the time’.
Similar comments made throughout the latest Legal 500 research cycle are likely to be received with interest by the boutiques competing at the top of the IP ranks alongside their full-service, international contemporaries, with ostensibly a narrower pool of expertise to draw from.
One partner of an international firm points to the dramatically increasing prevalence of jurisdictional battles being fought in the courts in recent years, making the bold declaration that ‘most boutique firms have never done a jurisdictional challenge in their life’.
Most prevalent in the technology sector, English courts have witnessed a surge in these jurisdictional challenges, deployed by savvy lawyers hesitant to simply assume English purview when it comes to enforcing certain IP rights. Multinational firms stressing their advantage in such disputes point to impressive global networks and broad internal practice strength that can be deployed on such mandates.
However, reality paints a considerably more complicated picture than that. ‘Were it the case that full-service firms had an advantage in jurisdictional challenges, you might expect them to have a better record of success than boutique firms in such challenges, however that’s not the case,’ rebuts Simon Ayrton at Powell Gilbert, one of London’s most successful IP boutiques. Ayrton points to numerous recent firm wins – including at first instance for HEVC Advance against Turkish company Vestel – to back his comments up.
As another specialist firm – albeit one with a more diverse set of service lines than others – Bristows has likewise had to step up its game in this fast-changing and complex litigation environment. ‘Jurisdictional challenges are the new black for us,’ states co-head of the patent disputes team and Hall of Fame recipient Myles Jelf.
Although Bristows does not have an extensive network of international offices to match some more global rivals, Jelf doesn’t necessarily see this as a negative. ‘In a very specialised practice area, being able to pick up the phone to whomever is doing the leading work in another jurisdiction is probably more helpful than only being able to talk to colleagues in the same firm, particularly where foreign offices may not have the same depth of experience in the field.’
EIP is one modestly sized, mid-tier boutique seemingly defying odds to secure some of the highest profile technical patent litigation mandates on the market. The firm turned heads after representing the likes of Conversant and Unwired Planet before the Supreme Court in law-defining trials with global implications for the telecoms sector, themselves subject to various – and unsuccessful – jurisdictional challenges. Such underdog wins against the Goliath that is Huawei represent remarkable successes for an outfit historically regarded primarily for its non-litigious patent prosecution services.
Whether this indicates a shift in the market or a rare exception to the rule is unclear, for few similar outfits have managed to make a comparable impact as seen from EIP, which is not to say the tables do not include other patent attorney firms with fairly adolescent litigation offerings; for example Carpmaels holds its own and attracts peer praise for litigation – including trials – in the pharmaceuticals sector.
Plenty of choice
In truth, despite some notable exceptions, the IP legal sector is not one to have witnessed considerable lateral volatility or disruptor penetration compared to the likes of private equity; although their offerings are individually diverse, the top tiers across the patents table and the trade marks, copyright and design table comprise a mixture of sizeable London outfits – Bird & Bird, CMS, Taylor Wessing and Hogan Lovells to name a few – and premier specialists, namely Bristows and Powell Gilbert. A&O, it is worth noting, stands as the only Magic Circle name across the top two tiers, with Linklaters solely present in tier three. This is unlikely to change in the short term.
Kirkland & Ellis is a substantial exception, owing to a high-profile recruitment drive in recent years which saw Nicola Dagg cross over from A&O (having first cut her teeth at Hogan Lovells), along with a slew of talented associates. It marked one of the few ambitious forays by a large US firm into London’s IP scene and by all accounts it has made every success of it, most evidently in the life sciences sector given Dagg’s track record.
In Dagg’s opinion, sitting in an elite US law firm (not to mention one with a tier-one rated US patent litigation practice) presents some clear natural advantages. ‘Some firms have a very dated attitude to developing their businesses and their practices in the sense that they just keep doing what they’ve been doing for donkey’s years without moving with the market. The thing is, a lot of work these days is for large US clients and being a US firm gives you immediate access to the c-suite in those very large US corporates. Being at a US firm provides opportunities to learn from and partner with C-suite individuals in US businesses as well as those in Europe, which provides tremendous global insight into the markets we serve.’
Recent developments at WilmerHale reinforce this point. Despite being fairly new to the London IP scene (having recruited Justin Watts and Matthew Shade from Freshfields in 2017), and fielding a smaller bench than many of its competitors, the US firm impressed competitors after securing the mandate to defend Apple in cutting-edge patent litigation currently being played out in the Patents Court, with claims reaching into the multibillion-dollar range. It would be hard to deny that the parallel nature of these proceedings, coupled with WilmerHale’s significant reputation for patent litigation in the US, didn’t play more than a small part in securing such an impressive mandate.
In a highly technical, multi-disciplinary practice area like IP – which thrives less on the coveted, eight-figure-earning rainmakers in the private equity space – head-turning lateral hires are not as fundamental to how the market operates. So it was of significant market interest when Hogan Lovells made a successful bid for Herbert Smith Freehills’ (HSF’s) previous practice head Joel Smith at the end of 2020, bringing an end to a career at the firm spanning multiple decades.
Undoubtedly, the commercial clout fielded by Smith (and partners of a similar profile) puts him in an enviable position. One only needs to point to the top-dollar global deals being executed on the back of the Covid-19 vaccine rollout as proof of the increasing necessity for robust transactional IP expertise. Simply put by Hogan Lovells’ global IP head Burkhart Goebel: ‘IP assets are at the core of a strongly growing number of transactions and having top-notch experience is a key differentiator.’
Furthermore, recent comments by Smith have reverberations with Heaney’s earlier assertion of the increasing necessity for a multidisciplinary approach in today’s IP environment. For although HSF’s global network is not to be sniffed at, Hogan’s ‘wider global service’ and ‘highly regarded regulatory and transactional practices’ will greatly complement his, according to a statement released regarding his transition.
In terms of future predictions, interviewed partners observe a more bullish approach from US competitors than domestic, despite no significant new land grabs being executed at this point. Reasons for this are fairly clear; US litigation is a greater driver of revenue (not least due to millions of dollars worth of discovery exercises alone) than in the UK, and so US firms have a sharper focus to the money-making potential of all forms of litigation, including IP, than their UK contemporaries.
Regardless, what clients expect to receive from IP counsel includes a sophisticated knowledge of highly technical sectors; a top-down strategic approach to IP protection and exploitation; a creative approach to case law; and the knowledge that their invaluable IP assets are in safe hands. Given the diverse nature of the practices occupying the top end of The Legal 500’s rankings, there is little doubt that global clients see these values across a broad spectrum of market offerings.
Who snapped up the big-ticket vaccine work?
After a shaky – some might say disastrous – start to the government’s pandemic response, the UK vaccine rollout has been one of the most successful globally. As legal counsel in the various negotiations under crushing deadlines, these teams were an essential component in the first steps to a post-pandemic world.
Gowling WLG’s longstanding client AstraZeneca entrusted the London IP team with the landmark collaboration agreement with the University of Oxford for the successful Covid-19 vaccine development.
Arnold & Porter also found itself front and centre of the Covid-19 vaccine rollout when it supported AstraZeneca and Pfizer/BioNTech in various negotiations with governments and other bodies across the globe. The global significance of these deals cannot be understated, and although a large chunk of operations were led out of the US, the firm’s London IP team played a substantial role in the deals. Curiously, in early 2020 Richard Dickinson joined Bristows after a 12-year stint at Arnold & Porter. Bristows then went on to advise the University of Oxford on its R&D agreement with AstraZeneca.
Pinsent Masons is another big name to mention here, having advised the UK government on its agreement with Pfizer to get the supply rolled out to the public, while Clifford Chance was another key player, having acted for Pfizer in negotiations with BioNTech for the initial co-development of their vaccine; Powell Gilbert was on the other side of the table.
FRAND litigation: A closer look
For the uninitiated, fair, reasonable and non-discriminatory (FRAND) disputes arise when a holder of a standard essential patent (SEP) is accused of licensing their technology on unfair, unreasonable and discriminatory grounds. Inevitably, the telecoms industry is at the frontline of the FRAND litigation battle given the layers of standardisation baked into the technology.
The monetary values and business-critical stakes at play make for a highly profitable field of litigation, so recent developments were undoubtedly seen as a boon for litigators invested, perhaps even dependent as is possibly the case for EIP, on a thriving market for FRAND litigation.
Specifically, when the Supreme Court in August 2020 shot down various appeals brought by Huawei (instructing Powell Gilbert) against Unwired Planet and Conversant, it put to bed the long-running question of jurisdiction and ascertained that the English courts can, in fact, set global FRAND terms.
‘If people believe that they can come to the UK to get global FRAND decisions, then we will – and I think we are already beginning to – see an uptick in them,’ predicts CMS’ IP co-head Gareth Morgan.
Of course, because of Brexit, there is another potential outcome: If a licensee deems the segregated UK market as insignificant in the grand scheme of things, they can simply withdraw their technology from the market all together, thus circumventing any injunction brought by a SEP holder through the English courts.