‘Why Berlin can’t wait for Brexit in matters of UPC’, is the title of a recent article on the website of the German law firm Kather Augenstein. Main point: if the Federal Constitutional Court dismisses the constitutional complaint against the Unified Patent Court Agreement, the German government will have to finish the ratification procedure immediately, regardless of the Brexit. It was a reaction to a government statement that it will put ratification on hold until after the UK’s departure from the European Union. Kluwer IP Law contacted the author of the article, Christof Augenstein.

Could you explain why you think there is no room for delaying German ratification of the UPCA?

“The legislative project of the German parliament for implementing the UPC is complete. The only formal step that is missing is the signature of the Federal President. The only basis on which the Federal President can withhold his signature from a bill is because of doubts as to whether it is in compliance with the German constitution (Grundgesetz, often literally translated as ‘Basic Law’). That is the reason why, after the intervention of the Constitutional Court, the President had not yet signed the bill.

If the Constitutional Court now explicitly confirms that the UPC does not contradict the German constitution and, thus, the implementing bill is legal, it is not possible for the Federal President to withhold his signature. In particular, the federal government cannot instruct or request any further delay. In contrast, the government as the executing body must respect the intention of the German legislator, and has no powers to amend it. It is, therefore, legally obliged to implement the will of the legislator. Brexit, in particular, does not provide any room for further discussion or deliberations as the bill passed after the Brexit referendum.”

If, from a purely legal point of view, this makes sense, does this mean you think it is politically wise/desirable for Germany to complete ratification and – as the last member state whose ratification is indispensable – allow the Unitary Patent system and the UPC to start functioning? Wouldn’t this create legal uncertainty precisely because, as the German government has said, the opinion on the implications of the Brexit regarding the UPCA will have to be formed and agreed on at European level?

“Some member states may wish to keep the UPC as a bargaining chip for the Brexit negotiations. Depending on the political objectives, it might be useful to delay the implementation of the UPC and, personally, I wouldn’t discount the possibility that this will actually happen.

However, uncertainties will remain, even if the respective governments find a consensus. It is a fact that the UPC Agreement allows only EU member states as participants. Therefore, there is the legal argument as to whether it is sufficient that participants were member states at the time of ratification or whether they remain member states in the future. Realistically, the national governments are not in a position to clarify this. It would require a clarification in the text, which would then have to be adopted by all the participating member states again. Practically, this would not be feasible.

There will therefore, in any event, be a discussion about the applicability of UPC decisions in the UK. Imagine a generic company facing an injunction from a UPC division, banning sales in the UK. I am very sure that they will go to the courts in the UK and argue that the UPC decision is not enforceable. The stakes would be too high not to use this argument to seek to avoid an injunction. We will then see whether the UK courts respect the UPC system or deny its applicability to the UK. Until then, there will be no clear solution to this problem and arguments run both ways.

Personally, I think that the UK can still participate, if they accept the UPC rules, including the primacy of EU law including CJEU decisions. I am still surprised that the UK public did not protest against the UPC as precisely this primacy of EU law was a big argument for Brexit.”

Are you a supporter of the Unitary Patent system?

“Personally, I am very much looking forward to it, as litigators will be able to shape a completely new legal system. Judges will come from different legal systems, having different legal backgrounds. Given the rules of procedure, reporting and presiding judges will have a lot of discretion to apply these different approaches. Thus, we will have the opportunity to create a completely new legal system, incorporating the best approaches from various jurisdictions, improving the patent litigation system in Europe as a whole. It will surely be complicated to find the best solution, but at the same time very exciting to navigate clients through these challenges and discussions.

Patents are often litigated to find a worldwide solution. So, no doubt, Europe competes with other countries or legal systems, in particular the US and China. Given the number of consumers within the UPC member states, Europe will become more attractive to patentees. So, I believe that the number of cases will increase with the UPC.”

The UP system has often been presented as beneficial for SMEs, whereas it seems big industry has to gain most from this European-wide patent system. What is your view on this issue? 

“SMEs will be surprised about the costs and intensity of UPC litigation compared to the current position. Except for the UK, national litigation will be cheaper than UPC cases. Thus, I think that SMEs will litigate less, because they won’t have the necessary financial resources. Indeed, I would agree that because of the additional weight of international disputes, the UPC will be used by big industry more than SMEs, for whom it may not be economical.”

How do you think the UPC will affect the legal market?

“I think that it will be beneficial for national boutiques as they will now be able to cover most of Europe by themselves. One firm can resolve disputes in several countries. International firms will lose business, as internal coordination of several lawsuits is not needed anymore. You can already see that internal competition within international firms is increasing.

Having offices at the central division in London, Paris and Munich is nothing but marketing. Firstly, proceedings will mostly start at the local and regional divisions as they are primarily competent to hear infringement cases. Secondly, the panels at the central division are purely international. Judges will only arrive and meet for the hearings. There is no need for lawyers to be on site, because the judges are not.”

What are the chances for the system, taking into account the constitutional complaint in Germany and the hard Brexit prime minister Boris Johnson seems to be aiming for?

“I think it will start with or without the UK, as harmonization and other effects of the UPC are still beneficial for rest of the member states. Of course, there will be uncertainties if the UK still plays a part. But, this will not outweigh the advantages.”

In your recent article you wrote that the only possibility to reconsider the UP system in Germany would be a new parliamentary vote. Are you hoping for such parliamentary initiative?

“I don’t think that a new initiative would result in major changes, as the options available to member states are limited. Thus, a new initiative seems useless to me.”


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  1. What is meant by “the German government will have to finish the ratification procedure immediately”?

    If this just means that informing “the depository that they have received parliamentary approval to ratify,
    the Agreement on a Unified Patent Court” will happen immediately, then that works as it allows the provisional application phase (PAP) to start. You would then expect deposit of ratification itself to follow later, at least 3 months into the PAP, when the Administrative Committee indicate that the system will be ready within 3/4 months.

    If instead it means that deposit of the ratification will also happen immediately then that would automatically trigger the UPC coming into full operation on the first day of the fourth month that follows. According to notices from Preparatory Committee that would not give them enough time to recruit the judges etc and the court would seemingly be operational before it is ready.

  2. I agree that, if the BVerfG were to dismiss the constitutional complaint, there could be an interesting (theoretical) question about whether the Federal President would be obliged to sign into law the Geman legislation relating to the UPC.

    However, I am not sure whether that is the whole story. Just because the Federal President could sign into law legislation that ALLOWS Germany to ratify the UPCA, does this necessarily mean that the Federal President would also be OBLIGED to deposit Germany’s instrument of ratification? Is that not a separate step that would need to be agreed and coordinated with the government?

    Regardless of the technicalities of the role of the Federal President, I find it rather fascinating that anyone is still pressing for Germany to ratify the UPC under the current circumstances. This is because the current Brexit deadline of 31 October will have been and gone long before the earliest date that the UPC can possibly (or practicably) come into force. If the UK ceases to be an EU Member State after 31 October 2019, it is difficult to see how the UPCA, which REQUIRES the Participating Member States to be EU Member States, could EVER come into force.

    This could turn into a chicken and egg situation, as the preconditions for the UPCA to come into force would not be met … but an amendment to the definition of the Participating Member States (to make the UPCA a valid Agreement again) could not be made until AFTER the unmodified Agreement enters into force.

    In other words, it would be totally bonkers for Germany to press ahead with ratification under the current circumstances … and this does not even consider the still unresolved question of whether the UPCA is in accordance with EU law (either with or without the participation of the UK). The position of the German government therefore makes sense to me. What does not make any sense whatsoever is why a firm of attorneys (who, after all, tend to be a rather conservative breed) would advocate for such a reckless and irresponsible course of action. One can only speculate…

  3. Missing in this remarkable construct is one minor aspect: Support from German constitutional law.

    According to Article 59(1) of the German Grundgesetz, the Federal President is Germany´s sole representative in matters of international law, while the initiation of negotiations on the conclusion of an international agreement and the negotiations themselves (including the definition of political objectives and the contents of the agreement) are the sole responsibility of the Federal Government. The role of the Federal Parliament is limited to the legislative proceedings on the agreement’s ratification. A simple Google search will quickly confirm this legal situation.

    Hence it is difficult to see why the Federal Government as well as the Federal President would not have full and unimpeded discretion on whether and how to proceed in terms of the UPCA, subject to the overall political situation.

    But, yet again, the purpose of this piece is not about legal coherence. Some circles have long withdrawn from sensible legal discussion, instead resorting to the desperate spreading of wishful thinking, often disguised as pseudo-legal theories created out of the blue. Things must indeed be looking rather grim for the UPCA.

  4. One can only agree with the fellow commenters. The whole stance of Mr Christof Augenstein is a pro-domo plea, comforted by a heavy dose of wishful thinking.

    For a litigation lawyer shaping a completely new legal system is certainly a good perspective, at least moneywise. That judges might come from different legal systems is certainly to be seen positively, but in the countries with a lot of litigations there will be two national judges sitting in the panels of first instance. And even with a third judge, or on top a technical judge, the two nationals will be able to give the tone, as there will be always a majority possible for the two national judges, be it 2/1 or 3/2 as the chairman has a casting vote. It is not foreseen that a foreign judge will be chairman when two national judges will be in the panel, as this would be the only possibility to avoid a too heavy reliance on national legal traditions at the local level.

    It is good for the judges to have a lot of discretion, but which body will be able to check whether the discretion has been correctly applied? The UPC, like the Boards of Appeal of the EPO suffer from the fact that nowhere the discretion can be challenged. The EBA as well as the court of appeal of the UPC will only revise decisions from the lower instance on procedural points.

    Who said that the UPC will be incorporating the best approaches from various jurisdictions? The UPC foresees for instance a procedure called forced intervention. See R 316.2A UPC. This rule means that a third party can be bound by a decision of the UPC even if it has not taken part in the proceedings, after having been invited to do so.

    Such a rule only exists in some member states of the EU, for instance in France, where I never heard it was applied, but not in the vast majority of EU member states. This rule alone poses a constitutional problem, as it is difficult to understand, and even less to accept, that a party can be bound by the result of a procedure it has not participated in. As the UPC Rules of Procedure were not part of the ratification process, the constitutionality of such a measure has not been checked whatsoever.

    Another major constitutional problem which has not been resolved is the fact that a UPC judge can be removed from office by a decision of the Presidium, cf. Art 10 of the statute, but the same statute does not offer any means of redress to such a removed judge.

    The statute is integral part of the UPC, and one wonders how such an incredible rule has at all been ratified. I guess the CJEU may have some interesting comments to make on this point, but everything possible has been made so that the CJEU did not put its nose in the UPC beforehand. One wonders why?

    When talking about the necessity to find a worldwide solution for litigation, this is an alibi. How many patents are actually litigated worldwide? Probably a handful a year. May be two. The creation of a system like the UPC will only profit to either legal firms, or the big industry. So no wonder that Mr Augenstein is very keen on the UPC. Imagine the fees for a supranational litigation! That’s bingo.

    At least the truth about the usefulness of the UPC for SMEs has now come out: it is nil, contrary to what has been heralded by all the champions of the UPC, for instance the previous president of the EPO. The net result of the UPC is that the SMEs will be under an enormous pressure from the side of big industry, as they will never have pockets as deep as the latter. One can expect a war of attrition towards SMEs.

    This effect on SMEs, with on top about 2/3 of European patents granted to non-European applicants (official EPO figures), one wonders why on Earth the UPC was necessary for Europe? The few trans-EU litigations a year do not warrant such a monster like the UPC. I honestly do not see the advantages the UPC can bring about, certainly not for Europe.

    It has been said that the UPC is the revenge of the lawyers over patent representatives; I did not believe it when it came out, but the more time goes by, the more I have to agree.

    I personally hope that the UPC will never come into force, as this monster is by no means necessary to deal with possible problems, unless there is a wish to maximise profits. This only the case of lawyer firms and of big industry.

    The UPC is the result of intense lobbying by certain circles which pushed politicians to agree on something they could not understand, but looked good at a glance. The famous decision of the European Parliament about the non-patentability of software is a similar issue, i.e. the result of intense lobbying of anti-software patent groups.

    Techrights: FINGERS OFF!! Directly or indirectly!

  5. Attentive, I always read your stuff with interest. Here, I would confine my comment to one word you chose, namely “revenge” (of the attorneys at law, over the patent attorneys). I doubt they see it as revenge. I doubt the patent attorneys see it as revenge. Me, who started in the patent attorney profession before the EPO opened its doors for business in 1978, see the UPC thinking of the attorney at law community as simply (and understandably) the need to restore “service as usual” (after decades of inexplicable inability to corner the legal services market).

    What I mean is that the conduct of disputed proceedings at the EPO, with the fate of patent rights in up to 38 sovereign States at risk in one single opposition proceedings, inexplicably secure in the hands of patent attorney firms and NOT attorneys at law. Why? Because clients are not dumb. Rather, they are unsentimental, even ruthless. Simply, after the routine “beauty contest” phase, they place the commission in the hands of that firm which they think has the best chance of winning the case. And even now, the patent attorney firms are winning these beauty contests.

    What an outrageous affront to the dignity of the international law firms who see it as their unique privilege to handle such valuable cases. How must they feel when, after the ubiquitous “beauty contest” the client decides to entrust not them but, rather, a patent attorney firm, with the job of winning the core case at the EPO. Is it not this which is driving them on, to establish the UPC?

    Of course, one of their chief facilitators was the former President of the EPO. As to his motives, one can only speculate, but I doubt that it was to improve the efficiency of the prosecution of pan-European disputes as to the validity of a claim of a patent. The big thing is validity. The issue whether or not the claim is infringed is normally easier to settle without going all the way to a court of appeal. So, for the attorney at law profession, using the UPC to squeeze out the EPO is very important to their turnover and profit figures.

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