A complaint at the Constitutional Court has brought the ratification process in Germany – and with it the UPC – to a screeching halt. The reasons behind it are shrouded in mystery and in European patent circles speculation is rife.
No comment on the UPC case: the Federal Constitutional Court (Bundesverfassungsgericht) in Karlsruhe.
The Unified Patent Court has suffered many setbacks during the attempts to get it off the ground: the ECJ opinion 1/09, the lawsuits brought against the new court by Spain in Luxembourg and the Brexit vote. It seemed the patent court was always on the point of failure. But even the delay caused by the snap British election in June could not stop it. The UK has now resumed ratification; the final UPC law is set to be passed in September, thus bringing the process to a close.
This would have cleared the way for the UPC to open its doors in early 2018 – one year later than planned, but nevertheless it would be up-and-running. In Germany, everything seemed to be going according to plan: In early June the last of the three UPC laws was passed by both the lower house (Bundestag) and upper house (Bundesrat) and they were ready and waiting to be signed by President Frank-Walter Steinmeier.
Instead, on 12th June Steinmeier suddenly put a stop to the ratification process. The news from Berlin shook the European patent world. Since Germany, like the UK, is one of the Member States that needs to ratify the Protocol on Provisional Application, the start date for the UPC once again seems a long way off.
And even now, the background to the complaint remains obscure. The only thing that is clear is that the Federal Constitutional Court asked Steinmeier not to sign the UPC laws until there was a ruling. On 31st March, a private person of unknown identity filed a constitutional complaint against the national implementation law and even the UPC Agreement itself (ref. 2 BvR 739/17). The latter had only just been passed by the German parliament. In addition, the complainant has applied for a temporary injunction.
However, the problem is the lack of transparency: The Federal Constitutional Court has not revealed any details about the plaintiff or, more significantly, the grounds for the complaint. Speculation in the patent community across Europe has reached fever pitch. For tactical reasons, Germany always wanted to be the last of the three major patent nations to ratify, so as to remain flexible in the face of any demands from smaller nations. Now it seems they will have no choice in the matter.
According to those involved, the steps taken by the Federal Constitutional Court and the President are standard practice in constitutional complaints against international agreements. How quickly Karlsruhe will rule on the complaint is unclear. Although a spokesperson for the court conceded there is a particular sense of urgency, she also insisted the matter is highly complex. Experts estimate Karlsruhe could rule on the urgent motion in four to six months. Technically, this would mean the UPC could still launch in early 2018.
Broß, however, sees things differently. “There is no urgency in this case. Because of Brexit, the Federal Constitutional Court can take its time. The outcome of the negotiations will need to be taken into consideration, because it will affect significant parts of the UPC that are based in London,” says Broß.
Broß, who is not only a constitutional judge but also a former patent judge, believes the EU patent and UPC to be incompatible with the German constitution. “Firstly, the Boards of Appeal at the European Patent Office lack independence. They are not an independent court,” says Broß. “Without the possibility for an ordinary court to review decisions, there is no effective legal protection.” This problem was overlooked, he argues, during the preparation of the German UPC laws.
In June 2016, the European Patent Organisation decided to reform the EPO’s Boards of Appeal but this, claims Broß, is unlikely to change anything. The reforms are already underway but Broß dismisses them as purely cosmetic “so long as the EPA President still holds all the threads”. Under German law, the Boards of Appeal are still not an independent court, argues Broß.
Controversially, there are five more constitutional complaints expressing the same grievance, JUVE has found. These are irrespective of the UPC (2 BvR 2480/10, 2 BvR 421/13, 2 BvR 756/16, 2 BvR 786/16) and the Federal Constitutional Court has announced its intention to rule on one of these cases this year. Interestingly, the rapporteur in these cases, Peter Huber, is also the rapporteur in this latest complaint against the UPC.
A second theory is that the constitutional complaint takes issue with voting behaviour in the Bundestag. German patent experts came to this conclusion because the complaint was filed shortly after the vote on the two main laws in Karlsruhe. The Bundestag passed the UPC laws with a simple majority but there is some debate as to whether a two-thirds majority ought to have been necessary.
Stop Sign Shocks the Patent World.
Since the news hit that the German ratification process has been stopped, patent experts have been trying to keep a level head.
Winfried Tilmann said of the situation, “I don’t see any indications that the Federal Constitutional Court might doubt the constitutionality of the relevant contracts and laws.” And with the way British ratification is plodding along, there is certainly no rush.
Still fighting for the UPC: Winfried Tilmann sees no indications that the UPC Agreement might be unconstitutional.
Konstantin Schallmoser from Preu Bohlig & Partner said, “There is no evidence that the Unified Patent Court is unconstitutional.” The question of constitutionality has been sufficiently discussed by the experts who conceived the court and Rules of Procedure, he argues. Furthermore, the European Court of Justice already commented on this in its rulings in the lawsuits brought by Spain against the EU patent (C-146/13 und C-147/13).
Apart from the reasons for the German constitutional complaint and the possible outcome, it is the name of the plaintiff that interests patent experts the most. The majority are putting their money on the complainant being a lawyer or patent attorney – if for no other reason, because of the complexity of the subject matter. Others suspect it could be an act of revenge from one of the few UPC opponents in Germany.