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UPC – Comment : German Federal Constitutional Court (BVerfG) declares German law to ratify the UPCA void

20 Mar 2020

German Federal Constitutional Court (BVerfG) declares German law to ratify the UPC-Agreement void, by Philipp Rastemborski, Meissner Bolte Partnerschaft mbB

Today, the Federal Constitutional Court (docket no. 2 BvR 739/17), declared the German law on approval of the agreement on the establishment of a Unified Patent Court (“UPC Agreement”) to be in conflict with the German Constitution (Grundgesetz “GG”). The law is therefore null and void.

In essence, the court bases its decision on the fact that the Federal Republic of Germany, by agreeing to the Unified Patent Court, refers essential sovereign rights, namely in the field of judiciary, to a newly created institution based on European and international law. In order to preserve the right of democratic self-determination of the German citizens, Article 23 I GG in conjunction with Article 79 II GG require a majority vote of two thirds of the members of the Bundestag for such severe legal measures. Since the Bundestag had passed the law by simple majority, it had to be declared null and void.

Please see the official press release of the BVerfG for details of the Court’s reasoning here.

The European patent law scene has awaited the decision of the BVerfG with suspense. After all, the ratification of the UPC agreement was the last serious hurdle to take for the Unified Patent Court to come into force.

In the event of a positive decision, the Federal Republic of Germany would have been able to ratify the EPC Agreement in a timely manner and the Unified Patent Court could have been operational likely by the end of 2020. At the same time, Regulation (EU) No. 1257/2012 on the creation of the European Patent with Unitary Effect would have come into force, which, for the first time, would have provided users with unitary patent protection in a substantial part of the European Common Market.

With today’s decision, the start of the Unified Patent Court is a long way off, again. Hopes for a strong Unified Patent Court, for which companies and practitioners have been preparing for years, were already stalled at the end of February when the UK, one of the world’s most important patent court locations, announced that it would no longer participate in the Unified Patent Court system after Brexit.

Whether the Unified Patent Court and the European Patent with Unitary Effect will start at all, is now at limbo. Of course, the shortcomings in the German legislative process appear to be curable. What is more, the BVerfG appears to consider the legal basis for the creation of the Unified Court in EU law to be viable. However, it will not only be necessary to convince the majority of the German parliamentarians to endorse this major European project. Moreover, the UPC agreement, an international treaty, will require adjustments after the UK’s departure. If the remaining participating Member States are willing to amend the treaty and establish the Court, regardless, is difficult to foresee.