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Unified Patent Court ratification declared unconstitutional by German court

Following on from the announcement that the German Federal Constitutional Court (the "FCC") has upheld the complaint that, as it stands, the ratification of the Agreement on a Unified Patent Court (the "Agreement") is unconstitutional, further details have emerged as to the FCC's decision and the impact this may have on the survival of the Unified Patent Court ("UPC").

Only one element of the complaint brought in the FCC – that the passing of the domestic legislation to ratify the Agreement had not been passed by the necessary majority of the German parliament – was held to be admissible and valid. The FCC held that the domestic German legislation passed to ratify the Agreement interfered with the constitutional rights of German nationals, because it amounted to a transfer of sovereignty to the UPC (a supranational organisation) by granting to the UPC the exclusive competency to decide on certain legal disputes. Whilst the domestic legislation was passed by the German parliament by approximately 35 members who were sitting, the FCC held that this did not constitute the two thirds majority required by Article 23 Basic Law (the legislation which protects German nationals' constitutional rights).

Following this decision, Christine Lambrecht (German Minister of Justice and Consumer Protection) has expressed the intention to "examine the possibilities to remedy the identified lack of form still in the current legislative period" suggesting that the German government is not, at this point, ready to concede defeat on the UPC. Given that the FCC has cleared the path by dismissing all other elements of the complaint, it looks as though (if enough support can be raised in the German parliament) Germany may still ratify the Agreement.

Around 15 EU countries have ratified the Agreement but, on the current drafting, the Agreement must be ratified by France, Germany and the UK in order to bring the UPC system into existence. At the time of writing, of these countries, only France has successfully ratified the Agreement and plans to participate in the new system.

Despite its own ratification of the Agreement on 26 April 2018 (incidentally the day that World IP Day is celebrated), the UK government subsequently announced that the UK would not participate in the UPC. The successful argument in the FCC, being the unconstitutional transfer of sovereignty to the UPC, echoes one of the prominent pro-Brexit arguments – to regain the supremacy of UK parliament and courts.

In light of the UK government's announcement, it is clear that the Agreement will require amendment, not least to remove the requirement for the UK to ratify the Agreement for the UPC to come into being. This may open the door for further amendments. Willem Hoyng of the Drafting Committee of the UPC's Rules of Procedure has speculated whether the Agreement should be amended to open the UPC to European Economic Area countries (and possibly other countries).

Whilst the comments of Christine Lambrecht may be encouraging for the advocates of the UPC, it is inevitable that there will be further delay to the UPC, which was due to be operational several years ago. Notwithstanding the current Coronavirus outbreak, there is no guarantee that, due to the current status of the UPC, the German parliament will be able to secure the required majority the second time around or even that there is still the political will to pursue the UPC, both in Germany and across Europe.

This decision may prompt a reassessment as to whether the proposed UPC can still achieve the objectives it was designed to meet (which plans started over thirty years ago). The primary driving forces behind the UPC included reducing both costs and duplicate litigation (concurrent litigation in different jurisdictions). Given that the UK (a key territory for patent litigation) is no longer participating, the perceived benefits are no longer as clear. Moreover, it is important to remember that the UPC was not universally supported by all EU member states, with countries including Italy, Spain, Poland, Hungary and Croatia all raising objections, including on anti-constitutional grounds.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.

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About this Author

Patrick Cantrill Partner intellectual property law UK Overseas
Partner

Patrick has practised both in the UK and overseas in contentious and non-contentious intellectual property law for 30 years and is recognised by the Legal 500 and Chambers as an expert and leading individual. Actively engaged in the sector, he sits as a Council Member for the UK for the Licensing Executives Society International, the global technology transfer forum and is also a past chairman of the Parallel Imports Committee of the International Trademarks Association. 

Following the Vote Leave result, he sits on a working group of the Intellectual Property Lawyers Association...

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James Love Partner IP, Technology and Data
Partner

James’ expertise extends to all aspects of intellectual property including patents, trade marks, copyright, designs, passing off, database rights and confidential information. 

He has top level experience, spanning more than 30 years, of the protection, exploitation, challenge and enforcement of intellectual property including disputes in the Supreme Court. Work examples include patent litigation, cybersquatting, intellectual asset management, anti-counterfeiting, brand enforcement, licensing, commercial contracts and franchising, mediation, IT and software issues, and search and seize orders (including as supervising solicitor). Assisted by a Cambridge University science degree, James is also a solicitor- advocate, giving him full rights of audience in the higher courts. 

With wide-ranging international experience, James is a regular speaker at international conferences. Engagements have included at events organised by the Department of International Trade (DIT), China Britain Business Council (CBBC),  International Trademark Association (INTA), Chartered Institute of Patent Attorneys (CIPA), Intellectual Property Institute of Canada (IPIC) and Barcelona Bar Association (ICAB). 

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Tim Barber Intellectual Property Attorney Womble Bond Dickinson UK
Solicitor

Tim is a solicitor in the intellectual property team. He advises clients on a range of contentious and non-contentious matters in relation to all intellectual property rights including copyright, designs, trade marks, patents and confidential information.  

His non-contentious experience includes negotiating and drafting a wide range of commercial agreements including software licences, assignments of trade marks, patents and designs, as well as confidentiality agreements. Tim has assisted on the intellectual property aspects of various corporate transactions.

In addition to...

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