25. marts 2020

The Unified Patent Court faces even further delays

The Unified Patent Court faces further delays as the verdict from Germany is in: The Act of Approval to the Agreement on a Unified Patent Court is void.

Update 30 March 2020

Thursday 26 of March the German Government released a statement saying that they intend keep working towards getting a unified patent in Europe.

See the Minister of Justice and Consumer protection (Bundesministerium der Justiz und für Verbraucherschutz) Christine Lambrecht’s statement here.

Verdict 20 March 2020

On Friday the 20th of March the German Federal Constitutional Court issued a verdict on a constitutional complaint against Germany’s participation in the Unified Patent Court (UPC). The complaint had delayed Germanys ratification of the UPC agreement for about two years, and now the delays will be even longer.

This means that the validation system, where EU countries are validated one by one, and patents must be litigated separately in each country will continue, and that is not likely to change in the next 2-3 years.

The consequence of the German decision that most patentees will experience is that the cost reduction that was announced in relation to the unitary patent will be postponed and will only be realized if and when the UPC enters into force. The anticipated benefits for the plaintiff under the UPC are likewise postponed.

Today, national courts handle infringement and validity issues relating to European Patents. So, to invalidate a European patent, a third party would have to go into litigation in each of the countries he wishes to invalidate said patent in. This can be quite expensive with national lawyer costs, translation costs, etc. The outcome of these national trials may not be the same in each country, so patent protection could end up being quite different from country to country. With the UPC infringements and validity issues would be handled centrally and have effect in all participating states. However, one often mentioned potential drawback of the UPC system, is that the patent proprietors will face the risk of losing patent protection in all countries in one strike. So for now, no decisions about which type of European patent protection would be best for a pending application is needed, as it is business as usual.

We in Chas Hude therefore recommend that patent proprietors continue maintaining their patent portfolio according to the present system and don’t expect any major changes in the near future.

For more details about the UPC, the complaint and the verdict, please see below.

The Background

Since the 1970s the EPC member states have discussed the possibility of a patent that, unlike the current European Patent (EP), would be enforceable centrally instead of in each individual member state. This would include one renewal fee, uniform protection in all countries, and a single court (The Unified Patent Court) to settle patent disputes for all member states.

In 2012-2013 things really took off and the work towards a Unitary Patent and a Unified Patent Court started. The Unitary Patent would have effect in all participating states and centrally enforceable in all participating states via a central court – The Unified Patent Court (UPC). Until 2016 everything was on track for the Unitary Patent and the UPC. The only thing left was for the UK and Germany to sign the ratification of the UPC Agreement (13 of the 25 states and the UK, Germany and France were required to sign).

But then on June 23, 2016, the United Kingdom had a referendum on whether to stay in the EU or to leave the EU. And as we all know, the UK has since left the EU and is in a transition period until 31 December 2020. Initially the word on the patent-street was that the UK wanted to stay in the UPC and the ratification was signed in April 2018. However, just last week the UK Government said, that the UK would no longer participate in the UPC.

In the meantime, in June 2017 a complaint was filed with the German Constitutional Court (Bundesverfassungsgericht) stating that Germany signing the UPC Agreement was unconstitutional, thus delaying Germany’s ratification. The UPC bill had at that time been approved in both chambers of the German Parliament (The Bundestag and the Bundesrat) and all that was left, was for the German Federal president Frank-Walter Steinmeier to sign the bill. Because of the complaint he decided not to sign the bill until a verdict was ready, and the German ratification was immediately halted.

For more details on the steps leading up to the filing of the German complaint click here.

The Complaint

The Act of Approval to the Agreement on a Unified Patent Court (“The Act of Approval”) in Germany had the purpose to establish allow Germany’s ratification of the Agreement on the UPC. The Act of Approval was accepted in the Bundestag.

The German lawyer Ingve Sterjna filed the complaint in 2017 arguing that The Act of Approval was a violation of German Basic Law, as it was passed with an insufficient quorum. A two-thirds majority is required for substantial changes to German law and only 35 members out of 709 members of the Bundestag were present during voting. Further, it was also not determined whether the required quorum was present, which is wasn’t and the President of the Bundestag did not declare that the Act of Approval had been accepted by a qualified majority.  

The Verdict

The German Federal Constitutional Court (Bundesverfassungsgericht) on Friday 20 march posted a press release stating they have upheld the complaint and the Act of Approval is thus void. The creation of the UPC would confer sovereign powers to the court and would mean substantive changes to the German Constitution.

They state that the requirement for a qualified majority was not met, as only 35 members (out of 709) of the Bundestag were present and that The Act of Approval to the Agreement on a Unified Patent Court is void. The other complaints were deemed inadmissible. There is always the chance that the German Parliament will vote on the Act of Approval again, this time with a qualified majority, but for now the creation of the UPC is on hold. But with the decision the road to Germany’s ratification has been clarified and there should be no new surprises

Although the future of the UPC already was bleak due to Brexit and the UK government announcing that it would no longer be a part of the UPC, this really is another blow and will at best lead to even further delays. Even if the Bundestag decides to vote again, the new delays will be significant.

Heike Ross

Heike Ross

​Partner, European Patent Attorney 

T: +45 33 19 34 62​
M: +45 27 74 34 62
E: hro@chashude.com