Chronicle of the last act in the agony of the UPC Treaty. A promenade by the Prinz-Max-Palais in Karlsruhe

by | Mar 23, 2020 | Patents

On Friday 20 March, the German Bundesverfassungsgericht, the Federal Constitutional Court, published its Decision of 13 February 2020. This decision states that the Act of Approval to the Agreement on a Unified Patent Court, which conferred sovereign powers on the Unified Patent Court, is void. It was taken by five of the eight members of the Court. Three of the judges issued a dissenting opinion.

The ground to declare that the Act is void was that it had not been approved by the Bundestag with the required two-thirds majority according to the German Constitution. According to the Court, an act of approval to an international treaty that has been adopted in violation thereof cannot provide democratic legitimation for the exercise of public authority by the EU or any other international institution supplementary to or otherwise closely tied to the EU.

The Court explains that the Treaty conferred on the European Patent Court an exclusive competence for an extensive catalogue of disputes in relation to European patents and European patents with unitary effect. This catalogue comprised:

  • primarily actions for patent infringements
  • disputes on the validity of patents
  • certain actions against decisions of the European Patent Office

Such an important cession of sovereignty was adopted unanimously by the Bundestag in the third reading, but only by about 35 members of the Bundestag present. The Court stated that the presence of the required quorum was not determined, nor did the President of the Bundestag declare that a qualified majority had adopted the Act of Approval.

According to the decision, conferring judicial functions while superseding German courts not only affects the fundamental rights guaranteed in the Constitution (The Grundgesetz), given that German courts can no longer ensure the protection of these rights, but also the specific design of the separation of powers. A significant part of the Member States’ jurisdiction over private and administrative legal matters of economic significance is conferred in the Treaty to the exclusive jurisdiction of the Unified Patent Court. Therefore, the structure of the German court system as set out in the Constitution would have been modified and supplemented by another court with its own hierarchy.

The German Court states that in view of the particular importance of the majority requirement for the integrity of the Constitution and the democratic legitimation of interferences with the constitutional order, a law cannot be enacted when it does not achieve this majority. Thus, as the Bundestag did not effectively pass the Act of Approval it is void.

With this decision, it seems that a process that has been obscure since its inception has been definitively closed, with the determined determination of its promoters to move forward with a project despite repeated accusations of lack of democratic legitimacy. Spain had already refused to accept the design of the unitary patent system and of the Unified Patent Court. A system aimed to exclude certain States and to avoid the jurisdiction of the CJEU over the decisions of the envisaged judicial system. Subsequently the Hungarian Constitutional Court declared the Agreement on a Unified Patent Court unconstitutional. The Government of the United Kingdom recently declared that despite having ratified the Treaty, it would not adhere to. The opinion rendered by the German Constitutional Court seems to be the final nail in the coffin of the Treaty.

Ultimately, the law is not only about passing laws. Laws must be in line with the democratic system that the European states have given ourselves. The end does not justify the means if they do not respect democracy, the basis and essence of Europe.

This is a good opportunity perhaps to think about. This is the third time that an attempt to create a unitary patent system in the European Union fails. The first was the proposed Community Patent Convention in the late 1970s and 1980s and the second the proposal for a Community Patent Regulation at the beginning of this millennium. Before making such a drastic change it should be remembered that the European Union has legal mechanisms to start regulating in the field of patents through Directives, as it has been done in relation to biotechnology inventions or the bolar provision. For the time being, European Regulations on inventions seem to be an exclusive field for SPCs.