Role of Germany in Setting up Unified Patent Court (UPC)
What is Unified Patent Court (UPC)?
The Unified Patent Court (UPC) aims to coalesce the different patent litigation systems functioning across Europe into a single unified court that will oversee all the patent disputes for all the Member states willing to be a part of the UPC system. UPC embodies a single court that will sanction decisions on infringement and validity of the European patent. Under the current system, the European Patent Office (EPO) grants separate patents for the European nations. To assert a patent, individual contentions need to be filed for each member nation. Hence, asserting a patent or seeking revocation of a European patent in every partner nation is burdensome and not cost-effective. Owing to this, inventors choose to enforce patents in selective nations- making patent enforcement concentrated.
The newly introduced Unified Patent Court (UPC) regime makes it possible to launch a collective infringement campaign that will cover all the member states of the UPC system. All the patents filed with the European Patent Office (as EP patents) and as Unitary Patent are covered by UPC. Unitary Patents allow the patentee to obtain patent protection and rights in up to 25 European Union Member States by submitting a single application to the European Patent Office. With this, the UPC eradicates parallel disputes concerning the same patent rights in EU member states. The UPC rulings will be enforceable across all participating member states.
The European Patent Office states that the UPC will be beneficial and will:
● establish a unified and highly efficient forum for patent enforcement (including patent infringement and validity) in Europe.
● end requirement of separate litigation in different countries.
● provide simplified and a common set of laws across the participating members.
Unified Patent Court Agreement (UPC Agreement)
The UPC Agreement is an international agreement between the participating EU member states which governs the inception of the UPC judicial regime. According to the UPC Agreement, for the UPC system to come into action, at least 13 EU countries, including the three countries that had the most European patents in effect in 2012 – Germany, France, and the UK, must pass national legislation ratifying the UPC Agreement. The UPC agreement was brought to notice on 19 February 2013 with the target of introducing the UPC system by 2017. This was a zealous target since the new court system and the concept of Unitary Patent would require appointing and training Unified Patent Court judges as per the UPC guidelines.
Despite the seemingly strict deadline for the enforcement of the UPC, France ratified at an early stage in the process, and the UK also agreed to the ratification before Brexit. The Brexit did not hinder the Unified Patent Court Agreement. However, according to Art. 89(1) of the UPC Agreement, the UPC system could only be launched if Germany would also ratify the UPC Agreement (being one of the three countries that had the most European patents in effect in 2012).
Germany’s Attempt at Ratification
Germany’s maiden attempt at ratification, in March 2017, was followed by the filing of the first constitutional complaint, including an application for a preliminary injunction against the Unified Patent Court Agreement. The German Federal Constitutional Court (FCC) halted the German Federal President from signing the UPC Agreement into law. The wait for the FCC’s decision left the fate of the Unified Patent Court hanging. After 3 years of uncertainty about UPC, on February 13, 2020, the FCC rejected the ratification and ruled it to be null and void. This was because the ratification bill did not fulfill the two-thirds majority requirement for legislative acts that transfer core sovereign rights to international bodies.
Following the FCC’s decision, the German government, in June 2020, introduced the second Unified Patent Court Agreement Approval Act in the Bundestag, lower house of the German federal parliament. The Bundestag passed the Act with a two-thirds majority. Shortly after the Bundestag’s ruling, Bundesrat, the German parliament's upper house also approved the Act. But, this did not conclude the German ratification. Two further constitutional complaints including motions for interim measures brought the Act and the German ratification to a standstill. The complainants contended that the UPC Agreement violates their right to democratic self-determination (Art. 38(1) of the Basic Law for the Federal Republic of Germany (GG) in conjunction with Art. 20(1) and (2) and Art. 79(3) GG), based on the UPC Agreement’s inadequacies relating to, for example, the selection and independence of its judges and (the lack of) procedural safeguards (relating to the democratic legitimacy of the administrative committee and costs).
On June 23, 2021, the FCC dispersed both applications for preliminary injunction based on the inadmissibility of the main constitutional complaints. The basis of rejection was the failure of complainants to provide satisfactory evidence of their fundamental rights being violated. In addition, the complainants argued that the Agreement would result in European Union law being influential over national law. The FCC referred to Art. 20 of the UPC Agreement and based its decision thereon. Art. 20 guarantees compliance with EU law. The complaints were hence dismissed. In contrast to the first decision, the FCC was more thorough and took more time with the current decision. Because of the FCC's decision, the German President will be able to sign the second UPC Agreement Approval Act into law, and will likely enter into force soon. Since the ratification Bill has been approved by the sections of the Government, it is expected that the long wait to completion of the ratification process will end, and the UPC will be in effect shortly.
How Many Countries Have Ratified the Agreement on a Unified Patent Court?
Currently, 25 EU nations have signed the 2013 treaty to establish the UPC. Out of which, 15 European Union countries have ratified. Despite the hurdles, German ratification has faced, and with Brexit, UPC is expected to become functional by 2023. Once the ratification process is complete following Germany’s parliament passing the Bill, the commission in conjunction with the European Patent Office will work towards enforcing UPC and inspire the remaining EU countries to become signatories.
The Court of Appeal, located in Luxembourg, will be responsible for hearing patent disputes. Art. 7(2) UPC Agreement discloses that the central division or the Court of First Instance of the Unified Patent Court will have its seat in Paris and sections in Munich and London. After the Brexit, it has become uncertain where the remaining branches of the Unified Patent Court will be located.