German constitutional court decides that the Act of Approval to the Agreement on a Unified Patent Court is void – The end or the start for the European patent court ?
Do you wonder what today’s German constitutional court decision means for the future of the new common European Patent Court and the future common European patent? Does the decision even bring some hope for this project?
Currently, a European patent application splits after grant into a bundle of 38 national patent titles. Each of those 38 national patent titles of the European patent must be litigated separately in the relevant country leading to high costs, diverging decisions and frustration for the patent owners suing pan European infringers country per country. The new European patent package prepared already in 2011 foresees finally a new single court for a central litigation of European patent infringement, the so called Unified Patent Court, and a common European patent title covering most of the countries of the European Union, the so called Unitary Patent. The Unified Patent Court needs ratification of its member states. The German Act of Approval to the Agreement on a Unified Patent Court is the German ratification of the Unified Patent Court without which the Unified Patent Court and the Unitary Patent cannot become operative. A constitutional complaint was filed against this ratification act 2017 putting the project on ice since then.
What does the decision say?
The German constitutional court published today its decision in the constitutional complaint against the Act of Approval to the Agreement on a Unified Patent Court. The constitutional complaint was held valid, because the Act was not approved by a two-third majority of the German parliament (Bundestag) and by a two-third majority of the German senate (Bundesrat) as foreseen in the German constitution. In consequence, the ratification act was declared void.
What gives still hope that this court will ever become reality?
On the first view, the decision sounds rather negative. However, the complainant objected not only the parliamentary ratification process, but considered also some of the content of the European patent package as unconstitutional, in particular the nomination process of the judges of the Unified Patent Court. However, all objections against the content of the European patent package were dismissed as non-admissible. In consequence, this means that the content of the Act itself was not considered as unconstitutional, but just its parliamentary approval. This means that the German government just needs to re-iterate the parliamentary ratification process with the necessary two-third majority. Considering that the Act needs no changes and most parties in the German parliament stand behind this Act, it could be ratified rather quickly. On the other side with the ongoing Coronavirus crisis, patent matters will understandably not have the first priority in the German parliament and it is not sure, when the German ratification can be completed.
When can we expect the Court becoming operative? Why does everything depend on the Brexit now?
This was however not the last obstacle for the European patent package to tackle. The Unified Patent Court and the Unitary Patent require the ratification of at least 13 member states including at least Germany, United Kingdom and France to become operative. 16 Member states have ratified including France and UK. However, what happens after the UK as an essential party of the constituting act of the court will have left the European Union? There are two scenarios. First, the UK stays a member state of the Unified patent court which seems rather unlikely according to recent voices in the new English government. Second, the UK will not participate in the future court. Both scenarios require probably a small amendment in the constituting act of the Unified Patent Court whose ratification process in all member states could mean again a delay of years for this project. A small hope for realising the Court rather quickly would be, if the German ratification will be finished before the transitional period of the Brexit ends. In this case, the Unified Patent Court and the Unitary Patent can become operative and then, the UK can decide at the end of the transitional period to stay or leave the project. The transitional period ends on 31 December 2020, if it is not postponed which is currently discussed due to the Coronavirus crisis. Only the future will tell us, when or if the Unified Patent Court and the Unitary Patent finally becomes operative.
What would be the impact of the Unified Patent Court becoming operative on European Patent owners?
The Unified Patent Court becoming operative would bring two major advantages for owners of European patents.
For all European patent applications which will be granted after the Unified Patent Court becoming operative, the owners have the option to get one single patent title for all EU member states having ratified the Unified Patent Court (currently 16 EU member states). This would allow to increase the territorial scope of protection of the European patent at reduced costs and at a reduced administrative effort.
All future Unitary Patents and all European patents will be litigated in all member states having ratified the European patent package at only one court, the Unified Patent Court. This reduces the costs and effort for suing pan European infringers significantly.
Calysta is prepared for the start of the Unified Patent Court, whenever it will happen. Of course, we will keep you updated.
Link to the English press release of the German constitutional court: https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/EN/2020/bvg20-020.html
Link to the full decision of the German constitutional court (only in German):