Contrary to all expectations, the German government wants the Unitary Patent project to go ahead as soon as possible, despite the recent ruling of the Federal Constitutional Court, declaring void the Act of Approval of the UPC Agreement.

In a press release of 26 March 2020, the German minister of Justice and Consumer Protection, Christine Lambrecht, said: “I will continue to work to ensure that we can provide the European innovative industry with a Unitary Patent and a Unified Patent Court. The Federal Government will carefully evaluate the decision of the Federal Constitutional Court and examine ways to remedy the formal deficits the FCC found during this legislative period.”

„Ich werde mich auch weiterhin dafür einsetzen, dass wir der europäischen innovativen Industrie ein einheitliches europäisches Patent mit einem europäischen Patentgericht zur Verfügung stellen können. Die Bundesregierung wird die Entscheidung des Bundesverfassungsgerichts sorgfältig auswerten und Möglichkeiten prüfen, um den festgestellten Formmangel noch in dieser Legislaturperiode zu beheben.“

In the ruling of the FCC, in a constitutional appeal filed in March 2017 and comprising four complaints against the German ratification of the UPCA, only the complaint about the vote on the Act of Approval was upheld. The FCC judged it was void because in “its outcome, it amends the Constitution in substantive terms, though it has not been approved by the Bundestag with the required two-thirds majority.” Three more substantive points were held inadmissible.

In theory this allowed the Bundestag to repeat the vote of the Act of Approval and pass the ratification bill in an constitutional way. But virtually nobody expected this to happen any time soon, as the UPCA will have to be amended because of the Brexit and the UK’s decision to withdraw from the Unitary Patent project.

So a simple re-run of the previous approval law with the same UPCA text will not work. It would most probably also be contrary to EU law if Germany were to ratify an agreement that transfers sovereign rights (part of its jurisdiction) to an international court that is currently partly located outside the EU and in a state which has explicitly declared that it is not minded to follow EU law and does not want to be subject to the jurisdiction of the CJEU.

The ministry’s press release doesn’t give any clues about how these issues will be solved. Germany reportedly hopes to give more clarity in the upcoming months.


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18 comments

  1. And don’t forget the Rules of Procedure made by an administrative committee, which is contrary to the caselaw of the FCC, and caselaw of the ECHR on art6.

  2. It might be time to tell the Federal Minister of Justice what kind of treaty the UPC is, and to the benefit of whom it has been set up.

    There is more than just an amendment to remove London from Art 7(2) UPCA to be carried out, but to look at more deficits of this treaty.

    Especially, the false allegation that the UPC should be profitable to SMEs has to be rectified!

    There is a need to combat the lobbies of big industry and its allies in the large IP litigation law firms!

    Techrights and zoobab: FINGERS OFF!!!

  3. From the Ministry that brought you the late night shenanigans that ultimately killed the law approving the UPCA we are now served up a new strategy that has all the makings of another farce.

    Why prolong the agony and uncertainty? Why not state the obvious and acknowledge that, at the very least, the first step that will need to be taken is renegotiation and amendment of the UPCA? What is to be gained by not admitting that it will take more than just another vote in the Bundestag?

    Deeply disappointing.

  4. One expects of a single human being cognitive dissonance, wilful blindness and confirmation bias, an inability to recognise the reality. But an entire Ministry? But at this point, it’s nothing more than words, to save face. The reality will soon dawn.

  5. The last weekend, 21/22 March, the Süddeutsche Zeitung, a reference paper for the whole of Germany, published in its electronic version a complaint of the Confederation of German Industry (BDI) claiming that the decision on the UPCA by the German Federal Constitutional Court was not helping industry (in original “ein Bärendienst erweisen”) and it was thus an unnecessary set back.

    The lobbying of the big industry and the lawyers helping it must have worked superbly. Letting a few days later the Minister of Justice claim that the vote will be recast within the present legislature shows how biased the information she must have received. Recasting a vote before amendment of Art 7(2) UPCA is simply stupid.

    But thinking seriously about the issues raised by the UPCA is not something you can expect from all the supporters of it. They simply want to fill their pockets. It is as brutal as that.

    Another point worth mentioning: looking at the statistics published by the EPO it manifest that the number of applications stemming from EU member states has stayed for many years at around 30%.

    Where is then the interest to open the door to facilitate litigation by applicants from non EU member states? How is this helping European Industry at large and European SMEs in particular? I fail to see the necessity for something like the UPCA, the more so since it is not even valid for the whole of the EU.

    Techrights and zoobab: FINGERS OFF!!!

    1. Attentive,

      I do not doubt that the minister will have been lobbied long and hard on this matter. If any proof of the intense lobbying effort behind the UPC were needed, then one need only look to the (unprecedented and disturbing) utterances of Justice Huber in advance of the decision.

      I also do not doubt that the lobbying is ultimately funded by those who stand to benefit financially from the UPC. This much is evident from the fact that the current system for patent litigation in Europe could hardly be described as dysfunctional. Thus, potential financial gain is clearly the only possible reason that anyone would lobby so hard for a new system that at best might provide an incremental improvement in some areas … but that has a number of deeply troubling aspects, and that is beset by legal barriers / flaws that stand a strong chance of bringing down the whole system.

      All of the above is as plain as the nose on one’s face. What perplexes me, however, is the question of why the minister would allow herself to be persuaded by all of the lobbying. I mean, it hardly inspires confidence that the minister can be persuaded to proceed down a path that is so obviously littered with bear traps.

    1. Zoobab, I am not sure you are correct when you state that the BDI does not represent SMEs. The BDI is an umbrella grouping for German industry as a whole and as such has the interests of SMEs very much at heart. There concern is to reduce the cost of obtaining patent protection in Europe. It is quite reasonable to have the opinion that these costs are of more relevance to SMEs than litigation costs.

  6. Dear Concerned Observer,

    I cannot but agree with your comments.

    I just hope that eventually the voices of those who are considering that that the UPC as something only for the benefit of some people having concocted this in a close committee will be heard.

    The question is just how to make those voices heard! Any suggestions welcome!

  7. Good question, Attentive. Politicians make decisions on the basis of which way the wind blows. It was ever so.

    Ask who makes the wind and defines its direction. These days, of course, it is the lobby industry. If there is no lobby arguing the opposite from those who see profit in the UPC, then that lobby will win.

    In business leverage, farmers are more or less defenceless against the supermarket industry. Yet they have a powerful lobby, achieved mainly by giving up their time to drive their tractors, en masse, to Berlin.

    What is the equivalent approach, for those who see the UPC in its present form as advantageous only for forces that hurt European competitiveness and positively harmful to the Mittelstand and small business.

  8. Dear Light Blue,

    You seem to defend the BDI and claim that it also defends the interests of SMEs. I would be inclined to believe you if you are able to produce at least a few documents from which it appears clearly that the BDI is properly taking into account the interests of SMEs. I did not have seen one.

    I will leave you with your illusions, but when you claim that “There concern is to reduce the cost of obtaining patent protection in Europe. It is quite reasonable to have the opinion that these costs are of more relevance to SMEs than litigation costs”, you are merely comparing apples with pears.

    In the famous article of Süddeutsche, the BDI claims that the costs of patenting in Europe could be reduced from 36000 € to 5000€ thanks to the Unitary Patent. That is a figure which is regularly trumpeted by all the proponents of the UPC. But this comparison is biased.

    This figure is only valid if one compares validation in all member states of the UPC with the expected costs when a Unitary Patent is sought. How many patents from SMEs are validated in all member states of the EU? I do not take any risk in claiming that there are none.

    How many patents are validated over all the EU member states? Probably not a vast quantity as the average number of validations in EU member states is at most 4-5. Even the automotive industry barely validates in more than 5 countries. In this field you do not need to validate in all member states of the EU in order to control the market. And it is clear that the automotive industry is very powerful in Germany.

    How many litigations are conducted in more than two or three EU member states? I do not have the figure, but probably the fingers of my two hands would be largely sufficient.

    The UPC is a machinery by which the politicians have been lulled in something they do not understand thank to the very effective lobby of big lawyer firms primarily acting in IP litigation, and trying to convince the big industry that the system would be in their interest.

    The only industry which validates in a maximum number of states is the pharmaceutical industry. Even if it would mean a drastic reduction of costs, it has not shown a very intense interest in the UPC in view of the risks involved in confiding its patents to a court with a quite unknown case law.

    Nothing against a united Europe, but not a united Europe in which big lawyer firms lobby exclusively in order to fill their already deep pockets.

    Techrights and zoobab: FINGERS OFF!!!

  9. Dear LightBlue,

    Thanks for the information.

    The paper you quote mentions SMEs, but it cannot be considered as supporting SMEs. In the paper, “the BDI also regards itself as the voice of SME industry in Brussels”. But has it received the mandate of true SMES or of one of their organisations to be their voice? I have strong doubts about this.

    The paper expresses the wish of the BDI that the status of SME to be extended to firms which are presently too big to be considered as SMEs according the valid rules. And that can by far not to be considered as supporting SMEs as such.

    The paper also mentions the “umbrella association BUSINESSEUROPE”. Business Europe is one of the great proponents of the UPC, and like the BDI uses SMEs as a fig leave to hide behind.

    I even know for a fact that leading members of Business Europe helped by lawyers also supporting the UPC want to push the UPC through as quickly as possible, be it only to undermine future efforts of the UK legal profession to set up a litigation system which could be a competition for the UPC.

    They even go as far as to claim that the UPC could help restore economy after the Corona episode. If we were April 1st, it would be good joke.

    It does however not change the bare fact that the UPC is not for the SMEs.

    I cannot find it quickly, but I remember that of one of the lawyers acting in a big litigation lawyers firms made this very clear. I think he was German, but am not sure.

    SMEs have always been the fig leave behind which the supporters of the UPC are hiding. The last example are statements made before a Parliamentary committee in the UK. Both the former President of CIPA and a QC insisted upon the fact that the UPC was a good thing for SMEs. It is so touching!

    http://patentblog.kluweriplaw.com/2020/03/11/parliamentary-committee-asks-uk-government-to-clarify-position-on-unified-patent-court/

    To sum it up, you need more than the paper you have shown to convince that the BDI is truly caring of the SMEs interests.

    Techrights and zoobab: FINGERS OFF!!!

  10. Dear LightBlue,

    Nice try, but Mittelstand does not mean SME!

    I fear that the more you try to insist, the less convincing you become!

    But be reassured, I will now stop answering your comments. I have more important things to do.

  11. The arguments against the UPC on the basis of being too expensive for SMEs are simplistic. Patent activity whether as an applicant/patentee or as an opponent is generally expensive. This is because patent professionals need both a technical and a legal training. For example, professional fees for opposition proceedings against an European patent are typically in the 30-50 k€ range. However, the UPC would be beneficial to all businesses including SMEs by creating a unified case law as to both patent validity and infringement issues thus reducing uncertainty as to potential outcomes. It must be kept in mind that in the patent arena, litigation is the exception, what is common is the assessment of risks and for that matter, the key is to reduce uncertainty. The same type of benefits to SMEs and the public based on big business activity can be seen in patent filing activity. Multinationals file huge number of EPO applications thus prominently contributing to the EPO budget, which allows the EPO to provide free, efficient patent documentation of tremendous benefit to all businesses, and because it is free, it is of special benefit to SMEs.

    Another benefit of the UPC would be to establish authoritative interpretations of the EPC and validity assessment rules, to which the EPO Boards of Appeal should give considerable weight.

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