Dr. Markus Herzog

German Constitutional Complaint Against The UPC Agreement

19.02.2018

- A Look in the Crystal Ball of German History -

1 Introduction

Great Britain and Germany are the only member states of the European Union which are yet to ratify the UPC Agreement in order to set same into force. Despite of all discussions about the Brexit, the presently valid forecast for the British ratification is autumn 2018. But in June 2017 the IP world was shocked when Federal President Steinmeier complied with a request of the Federal Constitutional Court to hold off on signing the UPC Agreement, which before had been passed by the Bundestag and the Bundesrat, due to a constitutional complaint filed by an individual (court ref.: 2 BvR 739/17).

Experts agree that the Federal Constitutional Court wouldn’t have approached Federal President Steinmeier if the judges deemed the constitutional complaint hopeless from the outset. Thus, it is fair to assume that the plaint has at least some strong arguments, which the Federal Constitutional Court needs to investigate in more detail before giving a decision. As a consequence, a vivid discussion about the chances of success of the plaint started among interested persons, groups and organizations. Soon, the discussion focused on one specific point, namely the lack of independence of the Boards of Appeal of the European Patent Office (EPO). Interestingly a former judge of the Federal Constitutional Court, Prof. Dr. Siegfried Broß, put himself at the top of those supporting the position that the Boards of Appeal are not independent from the EPO and as such may not be considered as independent court. 

For Germans this kind of discussion is not completely unknown. Rather, it reminds us that the Federal Patent Court was established back in 1961 as a consequence of a successful plaint before the Federal Administrative Court (court ref.: 6 U 950/58; GRUR 1959, 435 ff.) arguing that the Appeal Senates - at that time being part of the German Patent Office - were not to be deemed independent from the German Patent Office and as such did not constitute a  “court” within the meaning of Article 92 GG (Grundgesetz = the German Constitution). For this reason, the author thought that it might be interesting to have a closer look to the reasons of this Federal Administrative Court’s decision.

 

The Reasons of the Federal Administrative Court’s Decision 6 U 950/58
At the outset of its decision, the Federal Administrative Court stated that Article 92 GG entrusts the Judicial Power exclusively to judges, and concluded that, according to 
Article 92 GG taken in combination with the principle of separation of powers defined in Article 20 GG, any transfer of the right to dispense justice to members of the Legislative Power or the Executive Power constituted a breach of the Grundgesetz. This finding was in accordance with decisions issued by the Federal Constitutional Court (e.g. BVerfGE 4, 331) ruling that courts as part of the Judicial Power have to be special  institutions completely separated from the Executive Power.

In other words, the Federal Administrative Court found that if the Appeal Senates had to be considered as part of the German Patent Office, they could not constitute a court, as the German Patent Office clearly was part of the Executive Power.
The judges made clear that, according to their opinion, it was irrelevant that the Appeal Senates of the German Patent Office were deemed independent by the overwhelming majority of experts. Furthermore, they deemed the use of external signs similar to those used in courts, e.g. robes, titles and the like, irrelevant. Finally, they deemed it irrelevant as well that the Appeal Senates were called “Senates”, as, according to the judges, the Legislator had been free to define that an administrative act, e.g. the rejection of a patent application, is to be reviewed by another administrative body before being allowed to be brought before a court.
Rather, the judges focused on the organization of the German Patent Office as defined in the German Patent Law and the Regulation of the Proceedings before the German Patent Office.

To make a long story short: The judges of the Federal Administrative Court concluded that both, the Law and the Regulation, clearly assumed the unity of the German Patent Office, as they stipulated the position of a President heading the German Patent Office in its entirety. In particular, they found that the President of the German Patent Office was the supervisor of all members of the German Patent Office, and as such was entitled to transfer staff members from the Examining Divisions to the Appeal Senates and vice versa by simply changing the office’s Duty Allocation Plan.
Furthermore, the judges emphasized that all decisions were issued under the label “German Patent Office”, even if the designation of the respective Examining Division or Appeal Senate was added.

Summarizing, the Federal Administrative Court put a central focus on the role of the President of the German Patent Office and ruled that the Appeal Senates were not independent from the German Patent Office and as such could not be considered as court within the meaning of Article 92 GG.

As a consequence of this decision, the Grundgesetz was amended to authorize the Confederation in Article 96 GG to establish a federal court for IP matters. Based on this authorization, the Federal Patent Court was established in 1961 as a court having an organization completely separated from that of the German Patent Office.

 

3   The European Patent Convention and its Implementing Regulations

3.1  New Rules 12a to 12d EPC

Mid of 2016, the Implementing Regulations of the European Patent Convention (“EPC”) were changed by the Administrative Council of the European Patent Organization upon a proposal of the President of the European Patent Office (“PresidentEPO”). In particular, new Rules 12a to 12d EPC intend to emphasize the independence of the Boards of Appeal.

Having regard to the reasoning of the Federal Administrative Court’s 1959  decision, we will focus on the future role of the PresidentEPO.

According to the new Implementing Regulations, the Boards of Appeal and the Enlarged Board of Appeal are organized as a separate unit, the so-called “Boards of Appeal Unit” (Rule 12a (1) 1 EPC). Furthermore, the new post of a President of the Boards of Appeal (“PresidentBoA”) has been created (Rule 12a (1) 2 EPC). According to Rule 12a (2) 1 EPC, the PresidentEPO delegates functions and powers to the PresidentBoA, in order to allow him to manage the Boards of Appeal Unit. In exercising the delegated functions and powers, the PresidentBoA is responsible solely to the Administrative Council and is subject to its hierarchical and disciplinary authority (Rule 12a (2) 2 EPC).

 

3.2 The new Rules seen through the Eyes of the Federal Adminstrative Court

At first glance, the afore-mentioned amendments to the Implementing Regulations of the EPC indeed seem to be a huge step forward to more independency of the Boards of Appeal. However, Prof. Broß expressed considerable doubts, as the EPC itself was left unchanged . And in fact, there are several points, which might be at least open to discussion in view of the Federal Administrative Court’s 1959 decision:

 

i) From the new Rules, it is not clear which functions and powers have to be delegated to the PresidentBoA in order to allow him to manage the Boards of Appeal according to new Rule 12a (2) 1 EPC. Only administrative functions and powers, or disciplinary as well?

In this context, it is further to be noted that, according to the EPC which is legally higher ranking than the Implementing Regulations, all the  functions and powers delegated to the PresidentBoA are functions and powers intrinsic to the PresidentEPO (Article 10 (2) EPC), and still remain after delegation.

According to Article 10 (2) (i) EPC, the PresidentEPO may delegate his functions and powers. As such, it seems to be within the PresidentEPO’s discretion to decide which functions and powers should be delegated to the PresidentBoA. Furthermore, it seems to be within the PresidentEPO’s discretion to revoke the delegation, whenever he/she deems it appropriate.

Unfortunately, there is only little information to be found which functions and powers the PresidentEPO actually delegated to the PresidentBoA. In March 2017, the Official Journal of the EPO merely informed the public that

 

“on 14 February 2017 the President of the European Patent Office signed the Act delegating certain functions and powers to the President of the Boards of Appeal”. (underlining added)

 

And on the European Patent Office’s website, it was stated

 

“In an Act of Delegation, the President of the EPO delegated to the   President of the Boards of Appeal powers relating to the appointment   and re-appointment of members of the Boards of Appeal and managerial and disciplinary matters.”

 

Thus, it is still unclear whether the PresidentEPO delegated the full disciplinary power to the PresidentBoA or still reserved at least some rights, e.g. the rights to propose disciplinary action against members of the Boards of Appeal (Article 10 (2) (h) EPC).

 

ii) According to Rule 12a (3) 1, 2 EPC, the PresidentBoA has to prepare a substantiated budget request for the Boards of Appeal Unit and to forward it to the PresidentEPO for consideration for the yearly draft budget. It is true that Rule 12a (3) 3 EPC asks the PresidentEPO to provide the PresidentBoA with the necessary resources. However, it seems to remain within the PresidentEPO’s discretion to decide which resources are “necessary”, as, according to Article 10 (2) (d) EPC the budget continues to be under the PresidentEPO’s responsibility.

 

 iii)  Article 15 (f) and (g) EPC still refer to the Boards of Appeal and the Enlarged Board of Appeal as  parts of the European Patent Office. And the decisions of the Boards of Appeal and the Enlarged Board of Appeal continue to be issue under the label “European Patent Office”. The headline of Board of Appeal decisions reads “BOARDS OF APPEAL OF THE EUROPEAN PATENT OFFICE” and the headline of a recent decision of the Enlarged Board of Appeal read “European Patent Office” and in smaller letters “Enlarged Board of Appeal”.

  

Of course, many other aspects of new Rules 12a to 12d EPC could be discussed in addition to the above-mentioned points. However, having regard to the Federal  Administrative Court’s 1959 decision, the author focused mainly on the relationship between the PresidentEPO and the PresidentBoA.

 

4   Earlier Decisions of the Federal Constitutional Court

It should be noted that there are earlier decisions of the Federal Constitutional Court addressing the topic “rule of law of proceedings before the Boards of Appeal of the EPO” (e.g. 2 BvR 2368/99 and 2 BvR 1848/07 ). However, none of these decisions has been issued by a Senate of the Federal Constitutional Court diving into the details of the respective constitutional complaint. Rather, these decisions were issued by Chambers of the second Senate of the Federal Constitutional Court refusing to accept the respective constitutional complaint for proceedings before the Senate due to the plaintiff’s failure to provide sufficient reasoning. The actually pending plaint evidently doesn’t suffer from this drawback, and will allow the second Senate to examine all arguments brought forward by the plaintiff in detail.

 

Conclusion

Although the Administrative Council of the EPO, in an attempt to avoid a diplomatic conference, tried hard to strengthen the independency of the Boards of Appeal by amending the Implementing Regulations, it seems that there still are at least some points which might support Prof. Broß’ position in favor of a success of the constitutional complaint.

On the other hand, the situation doesn’t seem to be as clear-cut as the case decided by the Federal Administrative Court in 1959.

Furthermore, it will be interesting to learn whether the independency of the Boards of Appeal in fact was the point that made the Federal Constitutional Court ask Federal President Steinmeier to hold off on signing the UPC Agreement.

(published, IAM International reports 14.02.2018, http://www.iam-media.com)

 

 

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