Dr. Markus Herzog

Weickmann & Weickmann in the press

28.03.2020

Damper for Unified Patent Court: German Constitutional Court declares law to implement UPC unconstitutional – Translation of article that first appeared in Börsen-Zeitung, 28.3.2020

By Markus Herzog *)

Already for a long time the European unitary patent should enable companies to harmonize the protection of patents throughout Europe. But now the Federal Constitutional Court has put a further damper on the reform project: The law passed on March 10, 2017, by which the Bundestag approved the Agreement on a Unified Patent Court (UPCA) is null and void. The transfer of sovereign rights provided for in the law would result in a substantive constitutional amendment, which would have required a two-thirds majority of all Members of Parliament to vote in favor. However, only about 35 Members of Parliament were present at the night session. The law is thus unconstitutional, decided the Karlsruhe judges (Ref.: 2 BvR 739/17). It is not the first setback on the way to creating a court for disputes arising from European patents. It was only in spring that Great Britain announced its withdrawal from the Unified Patent Court (UPC), whose central chamber was actually to have a branch office in London. Moreover, in June 2018 the Hungarian Constitutional Court had declared the approval law there unconstitutional.


Controversial debate

Just as controversial as the lawsuit by Düsseldorf lawyer Ingve Stjerna has been discussed in numerous comments and articles in recent years, it seems to have been discussed in the Senate. After all, three of the eight constitutional judges did not support the decision and gave a dissenting opinion. However, this does not change the validity of the decision.

The decision does not mean the end of the UPCA. The constitutional judges merely criticized the circumstances of the vote in the German Bundestag. In contrast, they dismissed the constitutional complaint concerning all other points raised by the complainant as inadmissible. Thus, there is a good chance that the entry into force of the UPCA will not fail because of Germany. For the deficiency criticized by the Federal Constitutional Court can be remedied by a renewed vote in the Bundestag.


Unclear framework conditions

The currently unclear framework conditions caused by the corona pandemic, on the other hand, weigh more heavily. The timetable is relatively tight until the upcoming federal elections in autumn 2021. As the Federal Republic of Germany was one of the countries that pushed the UPCA most strongly, the Bundestag will hardly compromise itself again. The required two-thirds majority can be considered certain.

Due to the withdrawal of Great Britain from the European Union, on the other hand, the far more difficult question of where the branch office of the central chamber will be located must be clarified. About a month ago, the British government, contrary to all previous assertions, made clear that Great Britain did not intend to participate in the UPCA. Participation in a court system that applies EU law and is bound by the European Court of Justice is contrary to the goal of an independent and self-governing nation. Thus, the British government has put an end once and for all to all hypothetical discussions about adhering to the UPCA.

As a consequence, the question now arises as to which city should take the place of London. Milan and The Hague have already been brought up by their respective governments as possible substitute locations for London. However, it remains to be seen how quickly the remaining Member States of the European Union can reach agreement on this issue. Subsequently, the legal basis for the UPCA must be amended. And, there is a risk that some Member States might try to push through additional changes. This could further prolong the agreement process. In addition, the amended UPCA would have to be ratified again by the 27 Member States.

It can be assumed that the Federal Government will not introduce the ratification law on the UPCA again in the Bundestag until these questions have been clarified. This will avoid the need for Germany to ratify the Approval Act several times. The duration of the negotiations on the amendments to be made to the UPCA is difficult to predict.


Brexit biggest stumbling block

Brexit, not the vote from Karlsruhe, is thus proving to be the biggest stumbling block for the European patent reform. For most companies, however, this will not be a disadvantage. For large corporations it will be advantageous that with the unitary patent the scope of protection for a patent will once cover all member states of the European Union. For companies that only need patent protection in selected European countries, on the other hand, the unitary patent will lead to an increase in patent costs. Until then, they will continue to benefit from the proven European patent system, which is very popular in Germany.

*) Dr. Markus Herzog is partner at Weickmann & Weickmann in Munich

Translation of article published in Börsen-Zeitung 28.03.2020: www.boersen-zeitung.de 

Click here to read the original article (pdf-file in German)

 

 

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