Link to the Unified Patent Court Agreement: Agreement on a Unified Patent Court

On December 18, 2020, two constitutional complaints were filed against ratifying the Unified Patent Court Agreement (UPCA). The Federal President is still considering the two complaints (2 BvR 2216/20 and 2 BvR 2217/20). A spokesperson for the German Federal Constitutional Court (GFCC) has confirmed that the President will wait until the complaints are resolved before signing the bill.

What is the Unified Patent Court?

The Unified Patent Court (UPC) would be a single patent court that would hear cases for all European Union (EU) member states. The UPCA is an intergovernmental treaty originally signed in February 2013 by 25 states (all EU member states except Spain, Poland, and Croatia). The UPC's goal is to reduce translation and litigation costs. The current system requires that any patents granted by the European Patent Office essentially become "a bundle of national patents," subject to translation for each country and with each country requiring separate renewal fees.

To address the concern, the EU passed legislation in December 2012 for Unitary Patents that would have a "unitary effect" across the different member countries of the EU. The unitary effect would mean that such patents would be subject to a single renewal fee, single ownership, a single object of property, and a single court. To resolve the single court requirement, the UPCA was signed in February of 2013.

Problems Establishing the UPC

Since the UPCA was proposed, there have been many issues in getting it across the finish line, and some question if there is still hope of it ever coming into effect. One of the first roadblocks to the ratification of the UPCA came when the United Kingdom voted to leave the EU (the so-called "Brexit" referendum). For starters, one of the courts of first instance was slated to be in London (a thematic section of the Court of First Instance's central division that would focus on chemistry cases, including pharmaceuticals, as well as human necessities. Additionally, the UK is one of the dominant players in the EU's patent landscape. The result of Brexit was that the UPCA would need to be renegotiated based on their decision to participate. On February 28, 2020, the UK government spokesperson responded to why the UK's Approach to Negotiation, which discusses aspects of Brexit, did not mention the UPC. The UK spokesperson stated: "I can confirm that the UK will not be seeking involvement in the UP/UPC system. Participating in a court that applies EU law and bound by the CJEU is inconsistent with our aims of becoming an independent self-governing nation."

A constitutional complaint to the UPCA was also lodged in March 2017. The complaint was filed by a Düsseldorf lawyer, Ingve Stjerna, and addressed the operation of the UPC and independence of the judiciary in the context of German Federal Fundamental Law. After years of deliberation, the GFFC allowed the complaint in February 2020, rendering the UPCA void. In the decision, the GFFC noted that the UPC would effectively amend the German Constitution's terms and would therefore require a two-thirds majority approval in Bundestag. In the GFFC's press release, it stated that sovereign powers should only be conferred in ways provided for by the Basic Law: "An act of approval to an international treat that has been adopted in violation thereof cannot provide democratic legitimation for the exercise of public authority by the EU or any other international institution supplementary to or otherwise closely tied to the EU."

Despite the result of the constitutional challenge in February of 2020, the Bundestag voted in favor of the UPCA by a two-thirds majority in November, putting it back in play. However, as noted at the beginning of this discussion, two complaints were filed the month after the Bundestag vote, which led to the renewed halt in the UPCA's ratification.

Conclusion

Thus far, it has been a winding path for the enactment of the UPC, and there are significant questions as to whether the result of Brexit has been a factor in the Act's stalling. For now, we will have to see how things shake out and whether the GFFC allows either of the new complaints.