Despite the fact that the COVID-19 crisis is in the epicentre of the media coverage and social media, on the 20th of March, the long-awaited decision of the Federal Constitutional Court of Germany (Bundesverfassunggericht – FCC) on whether the ratification of the Unified Patent Court Agreement (UPCA) by the Bundestag (German Federal Parliament) was constitutional stole the spotlight – at least for a moment.
A piece of basic information
The FCC found that the ratification of the UPCA was not legitimately executed, since the necessary majority of the Parliament did not vote the Act including the UPCA. Therefore, the Act is considered null and void and the complaint made before the Constitutional Court was substantiated. The FCC dismissed all the other grounds but accepted that the Act including the UPC Agreement was unconstitutional due to the lack of the required two thirds for its ratification. The German Constitution requires this supermajority when sovereign rights are conferred to international or supranational organizations. In this occasion, the Unified Patent Court will have exclusive competence to adjudicate on European and Unitary Patent disputes. Therefore, according to the FCC, “without an effective conferral of sovereign powers, each subsequent measure issued by the EU or a supranational organization would lack democratic legitimation”.
On first glance, this development does not seem like a significant set-back. Germany may be the last one to ratify the UPC Agreement and this ratification may be delayed, but it can happen and everything will go into orbit, right?
The Preparatory Committee for the UPC commented rather modestly and with the reassurance that “[d]espite the fact that the judgment will result in further delay the preparatory work will continue”. Of course, theoretically, the Bundestag could simply revote for the ratification of the UPC Agreement, since the mistake was merely procedural. One month has passed from the publication of the decision and during the COVID-19 outbreak, this scenario does not seem to be in sight.
But the delay of Germany’s ratification is not the only problem the EU is facing with regards to the Unitary Patent. Even though the notion of the Unitary Patent that provides stability to the patentee has been welcomed, complaints and concerns have been triggered all around Europe. From the beginning, Italy and Spain had filed actions for annulment of the Unitary Patent Regulation (Regulation (EU) No 1257/2012 of the European Parliament and of the Councilof 17 December 2012)due to the language ‘limitations’ that were considered discriminatory (the official languages are English, French and German). Thus, the Regulation was transformed to an enhanced cooperation procedure, in which all the European Union countries except Spain and Italy participate. In the meantime, Italy had a change of mind and signed the UPCA that was not signed by Spain, Croatia and Poland; the latter decided to take its time and observe the progress of the UPC, having the opportunity to sign the Agreement at a later time.
And don’t get me started on Brexit. This dramatic – to say the least – “divorce” between the UK and the EU is affecting, inter alia, the progress of the Unitary Patent system and the Unified Patent Court’s establishment. The UK ratified the UPCA in 2018, even though the Brexit has been decided via a referendum almost two years before and now the Johnson Government is backing down from the UPCA. It has been confirmed that the UK will not participate in the UP and UPC, since it does not want to take orders from the UPC and especially from the Court of Justice of the European Union that will interpret the UP legislation. On the other hand, the FCC decision made it clear that non-EU countries are excluded from the UPCA; the rulings of an EU-member state court may not be legally binding but they provide a direction, a tendency. The fact that UK was supposed to be one of the “must – sign” countries and that one of the Unified Patent Court’s section was meant to be established in London is just making things a lot more complicated.
And the ultimate question is now arising: Is the dream dead? As mentioned above, the Bundestag can simply hold a new vote and secure the supermajority for the ratification of the UPCA. This does not change the fact that the initial idea and planning have gone to waste. The Unitary Patent was supposed to be the solution to many problems arising under the EPO’s “bundle” of national patents and the fragmentation of the national patent systems; the Unitary Patent and Unified Patent Court system aimed “to the establishment of an internal market within the European Union characterised by the free movement of goods and services and the creation of a system ensuring that competition in the internal market is not distorted”. Instead, there are countries that do not desire to participate (e.g. Spain) and others that reserve the right to enter later (e.g. Poland). Also, two of the three member states that were supposed to be “all-in” the UP system are – best case scenario – hesitant.
Like many other big ideas and decisions in the EU, the one regarding the Unitary Patent and the Unified Patent Court cannot find supporters. The single market and the cooperation between all the EU members will only come to fruition if all the players are ready to play the game. If Poland wants to observe how the game is progressing and Spain refuses to play the game, then the team is not complete and the goal will not be achieved. As for the short-term goals, the advantages of the Unitary Patent and of the Unified Patent Court will only be undermined if not every EU country participates in this vision. Notwithstanding all the uncertainty, one thing is for sure though; the Unitary Patent “thriller” is going to keep us busy for a while.
 Federal Constitutional Court of Germany (Bundesverfassungsgericht), Press Release No. 20/2020 of 20 March 2020, Order of 13 February 2020, <https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/EN/2020/bvg20-020.html>, last accessed on 21/4/2020
Unified Patent Court, News, <https://www.unified-patent-court.org/news/federal-constitutional-court-decision>, last accessed 21/4/2020
Preamble of the Agreement on a Unified Patent Court, https://www.unified-patent-court.org/sites/default/files/upc-agreement.pdf, last accessed 24/4/2020