BREAKING: German constitutional court upholds complaint against UPC Agreement and implementing act

This morning, the German constitutional court issued a 86-page decision in which it upholds the constitutional complaint against the German ratification of the Agreement on a Unified Patent Court [decision here]. According to the Court, the German act by which it was to accede to the UPC Agreement, violates the German populace's democratic rights under Article 38 Basic Law, because it was not passed with the parliamentary majority required by Article 23 Basic Law.

Article 1 of the UPC Agreement provides that "A Unified Patent Court for the settlement of disputes relating to European patents and European patents with unitary effect is hereby established." According to the German constitutional court, this constitutes a transfer of adjudication authorities, which implicates the constitutional rights of the German populace.

Such a transfer of authority requires, by German law, a two-thirds majority in the Bundestag [the German federal parliament]. German constitutional law only recognises international obligations to the extent they are compatible with the national constitution [even in the context of the EU: see the infamous decisions Solange I and Solange II]. This means that the recognition of international adjudicatory authority requires strict constitutional safeguards, which were not met in this case. Thus, the complainant's rights under Article 23 Basic Law were not observed.

A more detailed analysis of the decision's contents will follow soon. [Update: see here for the follow-up post]

Background

As readers will know, the Unitary Patent (UP) and the Unified Patent Court (UPC) are an attempt to finally realize a dream long held by European patent lawyers: true harmonization of the European – not EU – patent system. To this end, the idea is the simultaneous introduction of a Unitary Patent and the establishment of the Unified Patent Court, often jointly referred to as the "Unitary Patent Package".

The UP is created by Regulation 1257/2012 and provides for a European patent, granted with the same set of claims in respect of all participating Member States [Art. 3]. It would provide uniform protection across all participating Member States, with validity also being determined for all of these Member States together. Thus, the Unitary Patent would function much like the European Union trade mark.

In parallel, the participating Member States envision the creation of a transnational court to hear patent disputes in the Agreement on a Unified Patent Court. The UPC would have the jurisdiction to invalidate or uphold patents across all participating Member States, and likewise to grant relief for infringement effective in all those states.

Needless to say, this has been an extraordinarily ambitious project on which much ink was spilled [to get an idea of the breadth of issues the UPC and UP give rise to, see Tilmann & Plassmann's commentary, Katreview here]. In particular, the compatibility of the UPC with EU law was challenged twice before the Court of Justice of the European Union (CJEU) [here and here], and two large Member States – Poland and Spain – have to this date refused to sign the Agreement [here].

It was ultimately decided that the UPC Agreement would enter into force, and so the UPC would open its doors, once thirteen Member States had ratified the Agreement, including the three Member States in which the highest number of European patents had effect in the year preceding signature [Art. 89 UPC Agreement]. Those states are Germany, the UK and France, and this caused some hurdles on the road to the UPC.

The long wait is over (Image credit: Giphy.com)
Challenges to UK and German participation

Brexit posed an obvious obstacle to the UK's continued participation in the UK. There has long been hopeful speculation that, despite leaving the EU, the UK might still join the UPC [here]. However, it recently became clear that the UK will not be joining the UPC as this would require it to respect the primacy of EU law and the overarching jurisdiction of the CJEU in relation to the UPC system [here]. The EU Justice subcommittee has since investigated the wisdom of that decision [here].

But challenges arose also in Germany. In June 2017, it became known that the German constitutional court had asked the German president not to sign off on the implementation of the Unitary Patent Package [here]. It turned out that a German attorney had lodged a complaint with the court alleging that the Unitary Patent Package violated the German constitution [Grundgesetz or "Basic Law" – English version here, Katpost here]. In June 2018, the Hungarian constitutional court, ruling on a similar complaint, held that the Unitary Patent Package in fact violated the Hungarian constitution and therefore could not be ratified [here].

In response to an inquiry, the German constitutional court indicated that the central issues in the complaint were the following [courtesy to Kluwer Patent Blog]:
In terms of substance, plaintiff is essentially asserting a breach of the limits to surrendering sovereignty that are derived from the right to democracy (Art. 38 (1), clause 1, Basic Law). Primarily the following violations are asserted:

• breach of the requirement for a qualified majority arising from Art. 23 (1), sentence 3, in conjunction with Art. 79 (2) Basic Law;
• democratic deficits and deficits in rule of law with regard to the regulatory powers of the organs of the UPC;
• the judges of the UPC are not independent nor do they have democratic legitimacy
• breach of the principle of openness towards European law owing to alleged irreconcilability of the UPC with Union law.
The German constitutional court is a special court within the German legal system that hears cases directly upon application. Its jurisdiction is mostly limited to reviewing the constitutionality of acts of parliament or public policies, though it fulfils a number of other important functions as well [here]. No appeals are possible from a decision by the German constitutional court.
BREAKING: German constitutional court upholds complaint against UPC Agreement and implementing act BREAKING: German constitutional court upholds complaint against UPC Agreement and implementing act Reviewed by Léon Dijkman on Friday, March 20, 2020 Rating: 5

2 comments:

  1. A Nonny Mouse
    That is a real shame, but when we do this we should do it properly - we have the rule of law for a reason

    .... And breathe ....

    Stay safe and well people

    ReplyDelete
  2. 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.

    The FCC made nevertheless 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 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.

    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?

    Techrights and zoobab: FINGERS OFF!! Even by excerpts on Twitter!

    ReplyDelete

All comments must be moderated by a member of the IPKat team before they appear on the blog. Comments will not be allowed if the contravene the IPKat policy that readers' comments should not be obscene or defamatory; they should not consist of ad hominem attacks on members of the blog team or other comment-posters and they should make a constructive contribution to the discussion of the post on which they purport to comment.

It is also the IPKat policy that comments should not be made completely anonymously, and users should use a consistent name or pseudonym (which should not itself be defamatory or obscene, or that of another real person), either in the "identity" field, or at the beginning of the comment. Current practice is to, however, allow a limited number of comments that contravene this policy, provided that the comment has a high degree of relevance and the comment chain does not become too difficult to follow.

Learn more here: http://ipkitten.blogspot.com/p/want-to-complain.html

Powered by Blogger.