Reed Smith Client Alerts

Since the early seventies, European countries have pursued the project of creating a Unitary Patent and a Unified Patent Court (UPC). Success seemed within reach in 2013 when the international Agreement on a Unified Patent Court (UPCA) was concluded and subsequently ratified by several states. However, in 2017 the project came to a grinding halt in the biggest contracting state, Germany, when a single patent practitioner filed a complaint against the national law ratifying the UPCA. With a 5:3 majority decision the German Constitutional Court confirmed that the law is void.

Autoren: Anette Gärtner Alexander R. Klett Jonathan Radcliffe Marianne Schaffner

The German ratification law is void

The ratifying act passed the Bundestag (first chamber of Parliament) during the third reading, which took place in the evening. Only around 35 members of Bundestag were present. According to the reasoning, the manner in which the act was passed infringes the complainant in his constitutional rights to democratic representation (arts. 38(1), 20(1) of the Basic Law). That is because the ratifying act transfers jurisdiction for patent infringement and validity cases to a supranational institution (the UPC). Under arts. 23(1) and 79(2) of the Basic Law this would require that two thirds of the members of the Bundestag as well as two thirds of the members of the second chamber of Parliament (the Bundesrat) vote in favour of the act. These requirements clearly were not met. As a result, the Constitutional Court declared the act ratifying the UPCA void.

Implications

Taking a broader view, today’s decision can be seen in the context of a development that has been unfolding for some time. In 2018, the Hungarian Constitutional Court found the Hungarian act ratifying the UPCA unconstitutional. The UK government recently reversed its position on the UPC and stated that the country would not participate in the new patent litigation system. Is the judgment of the German Constitutional Court the final fatal blow to the UPC project? Who is to say? In order to address the issues outlined in the reasoning, the law would have to go through the entire legislative process again, and the strict majority requirements of arts. 23(1) and 79(2) of the Basic Law would need to be met. With less than two years until the next general election, parliamentary time is limited and given the current COVID-19 crisis it seems unlikely that a quick solution can be found. The never-ending story may have come to an end.

 

Client Alert 2020-119