By Hetti Hilge/Dr. Simon Klopschinski
Today the German Federal Constitutional Court (FCC) has declared the German law ratifying the Agreement on a Unified Patent Court (UPC Agreement) to be unconstitutional and void (see here).
On 31 March 2017 a private person filed with the FCC a constitutional complaint against the German act of parliament approving the UPC Agreement. The complaint was in substance based on the argument that the approval of the UPC Agreement was an amendment of the German constitution, the so-called ‘Basic Law’, which requires a two-thirds majority in parliament. In case of the statute on the UPC Agreement this requirement had not been fulfilled. In fact only 35 members of parliament were present during the vote on the statute in the Federal Diet. Due to the pending constitutional complaint the Federal President neither executed the statute approving the UPC nor notified the ratification to the European Commission pursuant to Article 84(3) of the UPC Agreement. During the proceedings before the FCC the Federal Government, the Federal Diet, the Federal Law Society (Bundesrechtsanwaltskammer), the German Bar Association (Deutscher Anwaltsverein), the European Patent Office, the Deutsche Vereinigung für gewerblichen Rechtsschutz und Urheberrecht (GRUR e.V.), the European Patent Lawyers Association, and the European Patent Litigators Association filed amicus curiae briefs which all argued in favour of the constitutionality of the German statute approving the UPC Agreement.
In today’s decision the FCC upholds the constitutional complaint. The decision is in substance based on Article 23 (1) of the Basic Law which, inter alia, provides that “the establishment of the European Union, as well as changes in its treaty foundations and comparable regulations that amend or supplement this Basic Law or make such amendments or supplements possible” require approval by a two-third majority in both chambers of parliament, i.e. the Federal Diet and the Federal Council. The FCC regards the act ratifying the UPC Agreement to be an equivalent to an amendment of the treaties establishing the European Union. Since the Federal Diet did not pass the statute with the required majority, it did not comply with Article 23(1) of the Basis Law and therefore the statute is void.
In its decision the FCC does not say that the UPC Agreement as such is unconstitutional. Therefore, the German legislature could theoretically pass a new act ratifying the UPC Agreement, this time complying with the requirement of a two-third majority pursuant to Article 23(1) of the Basic Law. However, due to Brexit and the UK government’s expressed intention not to participate in the UPC, the agreement may require new considerations and revisions. In view of that, and the new challenges caused by the Corona pandemic, it seems unlikely that in the near future the UPC Agreement will be a top priority for the German parliament.
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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 that the FCC did not say that the UPCA is as such unconstitutional. One should however realise that they took the easiest part of the complaint to decide upon. It was thus not necessary for the court to say anything else, and especially to look into the other aspects of the complaint. However, some of the conclusions are going quite far.
The FCC made 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 also 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!
On the point that the main customers of the UPC, enforcing their rights against the competition, will be Big Corp and non-European rights holders, what can we learn from the EU’s Registered Design regime?
This was another well-meaning Brussels project to give domestic European industry more help in staving off competition from non-European design right holders. I suspect that the opposite is what we have today, but I have no evidence. Has the EU Commission learned anything from the ways in which its Reg Des regime has worked out in practice?
It is said that “We live and learn”. But do we? Scientists and doctors facing COVID-19 say they are. One hopes that our law-makers do so too.