Karlsruhe, 20.3.2020

The Federal Constitutional Court (FCC) issued its long-awaited decision in the case 2 BvR 739/17 on the constitutional appeal of Dr. Stjerna about the compatibility of the German ratification law for the Agreement on a Unified Patent Court (UPCA) with the German Basic Law (BL) this morning. It declared the German Ratification Law as unconstitutional and void.

The decision was issued by the full 2nd Senate of the FCC and can be found here (in German)

The constitutional appeal was successful, because the ratification law was not signed by the requisite 2/3 majority of the “members of the Bundestag”. While the Bundestag’s decision was unanimous, only about 35-38 MPs were present when it came to the final vote.

The FCC held the constitutional appeal admissible only to the extent that it related to the (alleged) violation of complainant’s rights under Article 38(1), first sentence, BL in conjunction with Article 20(1) and (2) BL, and Article 79(3) BL by violation of the requirement of a qualified (i.e. 2/3) majority for the UPCA ratification law under Article 23(1), third sentence, in conjunction with Article 79(2) BL. Otherwise the complaint was held inadmissible.

This is significant because it allows the Bundestag, at least in theory, to repeat the vote and pass the ratification bill in an orderly and constitutional process. This, however, is extremely unlikely to happen, since the UPCA will have to be amended anyway to take the developments in the UK and the UK’s intended farewell from the Unified Patent Court Agreement into full account. It will therefore take some (!) time before a ratification bill will again be presented to the Bundestag.

However, this decision also means that at least the FCC will most likely not establish unsurmountable hurdles against the establishment of the UPCA. Negotiations about the future shape of the UPCA can therefore be started or resumed without a further sword of Damocles hanging above the negotiators’ heads.

The key reasons expressed in the decision can be found here in English, and I would direct readers there for more information. Interestingly, the decision was not uncontroversial and three of the eight judges issued a dissenting opinion, which is also summarized in the helpful English press release by the FCC.


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24 comments

  1. The other deeper legal problems raised by Stjerna were not addressed.

    So the other problems are still there.

  2. “However, this decision also means that at least the FCC will most likely not establish unsurmountable hurdles against the establishment of the UPCA. Negotiations about the future shape of the UPCA can therefore be started or resumed without a further sword of Damocles hanging above the negotiators’ heads.”

    Where is the above based on? I can’t find anything in the English summary that would suggest this. Is there a more detailed German version somewhere, maybe?

  3. I fear that the situation created by the decision of the FCC is not merely a problem of resending the bill through the German Parliament. There is more to it, and the FCC has taken the easiest way to deal the UPCA as it stands a blow.

    First of all, all those claiming that the complaint will be dismissed at once have been blatantly contradicted, and they were a lot.

    I can agree at a pinch that the FCC “will most likely not establish unsurmountable hurdles against the establishment of the UPCA”, but some of the conclusions are going quite far.

    The FCC made nevertheless one thing clear: “The Agreement is open exclusively to EU Member States.” So all the various people thinking that post Brexit UK, and possibly even more non-EU states could participate, have received a clear rebuff. All explanations of Mr Tillmann that C 1/09 did not close the door to non-EU members are void. The same goes for the hopes expressed by EPLIT.

    The FCC made clear that the UPCA does not result from a “unanimous decision of the Council and ratification by the Member States”. It adds even that “Until now, the political will has been lacking in this respect.”

    The FCC also noted that it “is because the necessary unanimity could neither be achieved for the way outlined in the Treaties by Art. 262 TFEU nor for an amendment pursuant to Art. 48 TEU.”

    That the FCC endorses the concept of enhanced cooperation is one thing. But does it bring something to add an extra layer of jurisdiction not applicable to all member states of the EU. Poland has said no, and the Czech Republic as well. In Hungary there are also constitutional problems.

    Without being applicable to all EU member states the UPC is a nuisance, the more so that it can interpret the EPC in way different from the Boards of Appeal of the EPO. Another source of problems!

    The FCC also noted that “A significant part of the Member States’ jurisdiction over private and administrative legal matters of economic significance is conferred to the exclusive jurisdiction of the Unified Patent Court by Art. 32 of the Agreement.” This cannot be adopted lightly, and it is amazing that it needed a decision of the FCC to show how far the UPCA interferes heavily with national legal systems.

    That a minority of judges see a problem which might block further European integration is understandable, and is to be respected. However such far reaching decisions should only obtained with an ample majority. It is not enough in such situations that “decision-making with narrow majorities must also be possible.”

    Let’s hope that the time needed to reconsider the UPCA, and also to solve the problems with the London section of the Central (sic) Division, will help to come up with something acceptable to all EU member states.

    There are so many different problems to be dealt with, and it should be the opportunity to rewrite the whole UPCA. I just name a few:
    – In spite of the statements before the House of Lords Committee that the UPC is for SMEs, it is clear that this is not the case. If it is for SMEs it should also show it with more than lip service.
    – Article 10 of the statute which allows a judge to be removed from office without giving him means of redress has to be amended
    – The Rules of Procedure, at least the first version of those should also be part of the ratification process. They should not be concocted by a self-co-opted group of people, as they also interfere heavily with national legislation.

    Last but not least, it should not be forgotten that barely a third of applications at the EPO stem from EU member states, so it is not difficult to see that the UPCA might turn out to be the opposite of its alleged aim. Why were the USA so keen that UK should stay in the UPC?

    The UPCA is not dead but it needs a long stay in intensive care. I would say a new Form of Complicated Corona virus hit it?

    As a new ratification process appears necessary, be it only due to Art 7(2) UPCA, all citizen should write to their MPs to warn them that it is not just for the sake of European integration that such a treaty has been signed, but for the sake of people with deep pockets and some of them wanting to fill them as well.

    Techrights and zoobab: FINGERS OFF!! Even by excerpts on Twitter!

    1. AO, I seem to recall suggesting that the only issue they would be considering was whether the vote in parliament met the formal requirements. This was met with a certain amount of invective to the effect that I didn’t know what I was talking about.

      1. Dear Light Blue,

        Lets be clear, the FCC took the easiest way to deal with the complaint, the vote in Parliament. This avoided the court to deal with the more political aspects which would have been much more delicate to decide upon.

        It also does not mean that those grounds could not be fatal to the UPCA. It is also for this reason that a first judgement about the EPO was denied as not being enough substantiated. Now we still have four complaints before the FCC about the EPO and the independence of the boards.

        As it stands, the UPCA has no valid reason d’être. Either there is something for all EU member states or for none. But adding a layer of case law is not justified if it is not applicable to all EU member states. Enhanced cooperation is just a fig leave for pushing something which is only of interest for big companies with deep pockets and their helpers in the legal profession. This is a matter of fact and not of opinion.

        Before anything is decided anew and ratified a second time, the CJEU should be asked for an opinion. This was also one of the big problems of the UPCA and its promoters who staunchly refused the CJEU to have a look at it, merely claiming that the whole treaty was in accordance with EU law. In this respect I agree with Concerned Observer.

        Techrights and zoobab: FINGERS OFF!! Even by excerpts on Twitter!

  4. An interesting decision.

    Is this the end for the UPC? We shall see.

    Whilst the more substantive grounds of the complaint were held inadmissible, it appears that the FCC has not provided conclusive rulings on those grounds – just assertions that the grounds were not sufficiently substantiated.

    In any event, it appears that the most interesting aspects of the ruling are to be found in the commentary relating to areas where there is an interaction between German law, EU law and the UPC Agreement.

    Firstly, it is interesting to learn that the FCC is of the view that an international treaty that breaches EU law does not necessarily lead to a breach of the Basic Law. The FCC therefore appears to have decided that it is up to the CJEU to take action in this scenario. We shall just have to wait to see how the CJEU will tackle this point.

    Secondly, the FCC is of the opinion that the EU Charter of Fundamental Rights is not applicable to the UPC… on the grounds that the UPC “is to be established as an independent supranational institution beyond the European Union”.

    This strikes me as perhaps the most significant part of the ruling. This is because the FCC seems to take the view that a court that will take over (from national courts) the task of interpreting and applying EU law, and whose rulings will be binding in EU Member States, is a “supranational institution beyond the European Union”. Frankly, it is difficult to square this interpretation with Article 1 UPCA. It would also appear to inevitably lead to the conclusion that the UPC – as currently constituted – threatens the unity and integrity of the EU legal system.

    For the latter reason alone, it appears that it would be sensible to start again from scratch with regard to the creation of a pan-European patents court. This is because to press on with a court that is a “supranational institution beyond the European Union” would merely invite the CJEU to bring the whole house of cards down by ruling it to be incompatible with EU law.

  5. Last paragraph:

    “Soweit Anhaltspunkte dafür vorliegen, dass die Festschreibung eines unbedingten Vorrangs des Unionsrechts in Art. 20 EPGÜ gegen Art. 20 Abs. 1 und Abs. 2 in Verbindung mit Art. 79 Abs. 3 GG verstößt … abschließenden Entscheidung kann vorliegend jedoch abgesehen werden, weil sich die Nichtigkeit des EPGÜ-ZustG bereits aus anderen Gründen ergibt.”

    I read this to state that the unrestricted primacy of Union law under to Art.20 UPCA would most likely NOT pass constitutional muster.

    Hence, even if UPCA’s implementation legislation would be submitted again and pass this time with the required majority, viability would still be doubtful.

    1. Dear MN,

      I also read this sentence as meaning they refrained from deciding on this matter because the law passing German agreement to the UPCA is unconstitutional for other reasons anyway.

      So, there may be other roadblocks, but for reasons the GCC has not given fully reasoned opinions and decisions on them….

      So much for the clear legal analysis by many UPC proponents.

      And the reasoning and decision finding of the CJEU is even more convoluted…

      I’m stacking popcorn for the time I hear this story being restarted or renegotiated.

      Thanks for pointing this out.

  6. As an examiner I am certainly not an expert in constitutional law. To me it reads a bit, as if the BVerfG has spelled out, what it would expect from Mr. Stjerna, should the bill be passed again, with the sufficient majority. After all, in most respects the judges simply held the complaint inadmissible because of insufficient substantiation, and then the they wrote what is missing.

    And I don’t see, how the bill could pass a vote again, with London and the UK written expressly in the Agreement…

    Just my two cents… I expect I won’t get an invitation for an interview regarding my application from the UPC soon. 😉

    1. Should you be an examiner at the EPO, I doubt that you will be allowed to be at the same time part of the pool of judges of the UPC. You will have to choose between one and the other.

      All members of the Boards of Appeal of the EPO having filed an application for a post of judge at the UPC never got a reply, not even an acknowledgement of receipt!

      There is also a problem which was not broached in the complaint before the FCC: can you be part-time judge at the UPC and part-time lawyer in a law firm or part-time examiner at the EPO? Honestly, I have some doubts.

      You might indeed be waiting a long time for an invitation!

        1. Dear Max Drei,

          It might be something acceptable on the other side of the Channel but I find it choking that a solicitor becomes a judge and at the same time stays a solicitor.

          Nothing against changing to the other side, in either direction, but it is not possible to serve two masters at the same time! That a judge becomes a lawyer is OK, but he cannot stay as judge!

          There is a famous well esteemed Dutch judge who opened a law firm, but to my knowledge he never sat as a judge afterwards.

          This is a particularity of English law we do not need on the continent!

          1. Well, Attentive, I hear you and can appreciate your revulsion but let’s discuss it a bit longer to see exactly where you see the mischief.

            Patent attorneys in private practice are often asked by their clients to render an opinion on infringement and validity. One can ask the EPO for an opinion on validity. Examiners at the UK Patent Office routinely hand down Decisions on infringement and validity when asked by parties in a patent dispute, and then return to their day jobs, examining applications. When a court passes judgement, what else is the judge doing but giving an opinion on infringement and validity.

            And if you were patent owner or accused infringer in a 50:50 case of infringement and validity, who would you want to write the opinion on infringement and validity: a greenhorn judge straight out of law school or the Head of IP Litigation at a top London law firm. And what if the court is over-loaded. Justice delayed is justice denied.

            So, I can see the advantages of parachuting in a “Deputy Judge” but can’t see the harm, or the conflict, which you fear.

          2. I believe it is quite normal for patent attorneys to act as technical judges in the Swiss patent court.

          3. We already have it on the continent (alas), for instance in Austria and Switzerland. IAM writes about one of those servants of two masters : “Physical chemist Tobias B. stands out, for sure – he’s a smart guy, and it’s certainly no coincidence that he has become the Second Ordinary Judge at the Federal Patent Court. He has an excellent knowledge of the procedural aspects of patent litigation – an all-around great attorney.”

          4. Attentive Observer,

            I agree with your position regarding the conflict between being a solicitor and a judge at the same time, and I disagree with Max Drei. A judge does not just give an “opinion” but a decision and the decision is based on the judge’s interpretation of the law. A solicitor is supposed to work first for the best interests of a client, not for the best interpretation of the law, which implies the leeway to pick the interpretation which will yield the desired outcome for the client.

      1. No, I am not at the EPO, thankfully.

        Regarding part-time judges: In German law (cp. § 79 Abs. 4 ZPO) it is stated, that a judge can not act as a representative before “his” court (which would usually happen only in pro-bono cases or representing family members or the like).

  7. What an eyebrow raiser from francis hagel. When I’m acting as a European Patent Attorney and am asked to render an expert opinion on obviousness, it is my duty to the client to give my considered opinion about what a court ought to decide, under the law, and not what the client hopes to hear from me. I will be held to account by the client if I fail in that duty. Business decisions by my client hang on the accuracy with which I can predict what the court will decide.

    Of course, once the dispute gets under way, I’m going to be advocating my client’s interests as vigorously and persuasively as I can. Pushing one side of the argument for all it’s worth and hoping the other side fails to see the counter-arguments. I don’t see any conflict between my opinion-writing work and my advocacy work. You do, it seems. Why?

    Often, I sit at the back in opposition oral proceedings at the EPO, as an interested member of the public, asking myself how I would decide, if I were on the Board. And what about he entire mediation/arbitration sector? Who is fit to mediate? Only judges? Or can you imagine an attorney at law in private practice managing to do that, with the acceptance of both sides in the dispute?

  8. Dear Max Drei,

    I have not been convinced at all with your arguments in favour of part time judges. To me there is a deep incompatibility between the function of judge and the function of solicitor or representative.

    That it is practised in some countries, like Switzerland and UK, is not reason to generalise it to the rest of Europe. By the way, Switzerland is not in the EU, and UK is on the way out. In Switzerland as far as I know, the representative acting as a judge is not sitting on its own. He is part of a group of judges. In UK he is sitting alone, and this is where I see a very fundamental problem. In my opinion it is bad enough in Switzerland, but it is worse in UK.

    I would go one step further, and for the sake of being called provocative, say that if a country is not able to have full time judges, then there is something wrong with the country.

    If you give an opinion as to how a court should decide, I am convinced that you do want to be as little biased as possible, but it is not you who will eventually be taking the decision, but a judge. It is intelligent guesswork what you are doing, but nothing more.

    We all have been at one time in our life greenhorns, and it is normal for greenhorns not to have a lot of experience, but a greenhorn should never decide on its own. It should have the support of experienced judges. The same applies to examining divisions, but with the departure of experienced examiners this might not any longer be the case.

    That examiners can give an opinion is not comparable with an opinion of lawyer which normally acting for clients. Examiners get their money at the end of the month, whatever they do or decide, they do not have a finger in the pie. They have simply to act in the interest of the public at large, exactly as judges should do.

    I mentioned in my first statement a much esteemed Dutch judge which decided to open his own law firm. But he was never sitting again as a judge. And that it is how it should be.

    I do not think that the deputy judge will be called to decide upon cases of its own firm, as this would be the worst possible situation, but telling justice should only be exercised by people whose independence cannot be suspected whatsoever.

    As far as mediation/arbitration is concerned, this is a private arrangement between parties, and if they want their case to be decided by private lawyers it is their free decision. But mediation/arbitration is by no means comparable with delivering justice. Delivering justice is not a private affair, as justice is normally given in the name of the people, unless we are in autocratic or dictatorial regime. That is why I do think it not right to have private justice deciding whether the investments of a company can lead to a decision which impacts the freedom of decision of a state, certainly not in a democratic state by making a country liable for damages.

    To come back to judges: that a former member of a Board, or even the chair of a Board, can after having left the Boards restart as representative or legal counsel is not at stake, but the members of the Boards do not appreciate being told by a former colleague how they should decide in a particular case, e.g. T 156/15. This would be even more intolerable if the judge deciding is a part time judge.

    I can agree on a lot of points with you, but on this point I fear that our points of view cannot be reconciled.

  9. Thanks for that, Attentive. We should be careful to stay on line. The debate ought not to be about whether a judge sitting alone can deliver justice. Important is an Appeal Court of three judges. See Haidt’s “rogue elephant” theory, in his “Righteous Minds” book, extrapolating from Kahnemann’s “Thinking Fast, Thinking Slow” theories. The only thing that will bring a rogue elephant on the rampage back under control is two more elephants, one each side of him.

    The point of view one holds depends on the decades of experience one has accrued and whether it is in an adversarial or an inquisitorial jurisdiction. In my career I have seen junior barristers move up to QC and then, after 20 years of advocacy, move up again, to sit as a judge. These people make decisions that are correct under the law and exemplary in their findings on the facts. With English fact-finding, discovery and cross-examination, there is little or no room for their subjective opinion to decide the case. There is no room for them to decide for themselves what the skilled addressee knows or thinks. Further, no fancy law firm or trial lawyer can pull them over the table or pull the wool over their eyes procedurally. That less than one in every three of their decisions are ever appealed, and that such appeals as are filed rarely succeed, speaks for the “quality” of their decisions. The stats, and questionnaires of user satisfaction, might show you that users prefer the English system of a single judge, deciding alone.

    What we are discussing is whether a senior specialist IPR lawyer in private practice is competent, as a “one-off” assignment, to serve as a temporary patents judge, and then return to private practice. Sure, this is not ideal. Sure, there should be enough permanent judges. But the notion that this person is per se not competent to deliver justice or per se not neutral enough to deliver justice. You and I agree on many things but, on this, I’m still not convinced by your argumentation. But that’s Europe, eh?

  10. Dear Max Drei,

    Should you have had the impression, I wish to reassure you. I have never doubted the competence of those people sitting as part time judges.

    It is just that I do not agree in a fundamental way to such kind of “one-off” assignment, and whether there are three judges sitting in appeal is irrelevant to me.

    The whole English fact-finding, discovery and cross-examination procedure does not compare with what goes on the continent, but it does not change my opinion on the matter of part-time judges.

    Now UK has left the UPC, I hope that all the influence of English practice will be removed from the RoP of the UPCA. There is ample time for this, and for a good revision of the UPCA itself, should it really correspond of a deep need.

  11. Dear Attentive, thanks for that. I have always said that one of the advantages of our present Flickenteppich or Patchwork patent litigation landscape in Europe is that the patent litigation community must endlessly debate the relative advantages and disadvantages of inquisitorial vs adversarial, civil law vs common law litigation to resolve patent disputes. Wouldn’t it be nice, if the patent judges of Europe, including those of England, continue to meet and debate, even while England ploughs its lonely furrow while mainland Europe completes a UPC Mk II. Each side is thereby stimulated to optimise its respective system.

  12. Dear Max Drei,

    I agree with your emphasis on European diversity. There are other major issues you could have added to your list ; problem-solution approach for the assessment of inventive step or not, with all the shades of grey among national courts ; bifurcation validity/infringement vs. single proceedings ; the sheer existence of “technical” judges, linked to the bifurcation ; evidentiary procedures. There are deeply entrenched positions related to national legal cultures. But one thing is also clear. Even it is slow, there is a process of mutual influence between national patent systems. For example, as to evidentiary proceedings (the French and Belgian “saisie-contrefaçon”) or as to case management (as practised for a long time by German courts).

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