German constitutional court rules against adoption of UPC, and UK government confirms intention not to participate, but hope remains

At the end of March, the German constitutional court upheld a complaint that the German ratification of the Agreement on a Unified Patent Court (UPC Agreement) was unconstitutional. All is not lost, however, as the German government has indicated that it intends to pursue the project in the future.

In 2017, a complaint was filed by a German attorney on the basis that: (1) the ratification of the Agreement was in breach of the German constitution, (2) there is a democratic deficit inherent in the structure of the UPC, (3) the UPC judges lack independence, and (4) the UPC Agreement is irreconcilable with EU law.

The German constitutional court issued its decision on 20 March 2020.  It dismissed the second, third and fourth elements of the complaint, on the grounds that they were inadmissible. However, it held that the ratification of the UPC Agreement was in contravention of the German Basic Law.  Although the bill ratifying the UPC Agreement was adopted unanimously by the German federal parliament, only 38 delegates were present for the vote (out of 709). As a result, this did not provide the two-thirds majority required under the German Basic Law in relation to a decision involving a transfer of sovereignty.  

The decision is a significant setback, as it further delays the introduction of the UPC and Unitary European Patent. It does, however, leave the door open for the adoption of the UPC in the future, provided that it is passed by the necessary majority. In a reaction to the decision the German Minister of Justice and Consumer Protection, Christine Lambrecht, promised to continue to work towards a single European patent and a European Patent Court and to examine the possibility of remedying the lack of form before the end of the current legislative period (which ends in 2021).

Due to the UK’s exit from the EU, and the British government’s decision not to try and pursue participation in the UPC (which was recently confirmed in a letter from the IP Minister to the House of Lords), it is unlikely that the UPC Agreement will come before the German parliament again in its current form.

Without the involvement of the UK, the Unitary Patent and UPC are a less attractive proposition. However, provided that there remains sufficient goodwill towards the project amongst the remaining participating states, the UPC Agreement could be renegotiated so that it does not depend on the involvement of the UK. There may even be an opportunity to address some of the issues that have been flagged in relation to the current Agreement and to widen its scope to allow participation by non-EU states.   

Supporters of the unitary patent and UPC should therefore not entirely despair, but a further delay of at least several years looks likely.