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Further set back to the Unitary Patent Court

Further set back to the Unitary Patent Court

23/03/20

Following the announcement just weeks ago that the UK would no longer be seeking to take part in the UPC, the German Federal Constitutional Court has, in an 86 page long decision (in German), upheld the complaint made to it against the UPC Agreement and its implementing Act. As a result, the Act of Approval for the UPC Agreement in Germany is now considered null and void in what is a second major blow for the UPC within a month.

The UPC is (or was) to be the basis for a truly harmonised patent system across the EU, with a single patent issued by the EPO that would be valid within each of the contracting member states. Litigation is (or was) set to be undertaken centrally in the UPC, and it seems that it is this centralisation of adjudication that has given rise to the issues in Germany.

The complaint was made in respect of three allegations concerning the rights of the German people:

-       The Agreement and Act are unconstitutional because they were not subject to a vote of parliamentary majority;

-       The Act amounts to the transfer of adjudication responsibilities from German jurisprudence to the UPC; and

-       That such a transfer of adjudication responsibilities has to be voted for by a parliamentary majority of least 66% of German parliamentarians.

The court decided that each of the first two allegations are correct, and by consequence, so too the third.  As this decision is made by the German Federal Court, no appeal is possible.

German involvement in bringing the UPC to life is all the more important since, as one of the three largest economies in the EU at the time the agreement was drafted, Germany is one of the key states that must ratify the agreement before the UPC can come into being. Accordingly, there would seem to be just the following remedies to the impasse created by the decision, in that either the UPC agreement and/or the German constitution will needs to be revised. Neither prospect is enticing and it is reasonable to expect such changes to take several years. It remains to be seen whether such fundamental matters will be resolvable.

With similar complaints being upheld in the Hungarian courts, it looks more and more likely that considerable re-drafting of the UPC Agreement will be required with all the inevitable delays that will ensue. It now remains to be seen whether the UPC will go ahead, or if today’s Decision will be the final nail in the coffin for the UPC dream.