UPC – Review and Outlook

For years, the EU and national governments have been working to create the legal framework for a European patent with uniform effect on the territory of the participating Member States and a single European Patent Court, the Unified Patent Court (UPC). But even in 2018 the efforts of the various actors could not be concluded as a brief review of the most important events of the past year shows.

Originally, the UPC was supposed to start in April and from then on perform its tasks as a Europe-wide patent court. But both the British Brexit vote of 23 June 2016 and the resulting follow-up questions as well as the constitutional complaint filed in Germany against the ratification of the UPC agreement of 31 March 2017 have repeatedly delayed this start:

First, the good UPC news of the year: 16 ratifications of the UPC agreement have now been received. 13 ratifications would in principle already be sufficient. Latest, Great Britain ratified the UPC agreement on 26 April 2018, despite the Brexit.

However, it is still unclear how Great Britain can participate in the UPC after leaving the EU. Sam Gyimah, the UK’s IP minister responsible, who confirmed the UK’s ratification of the Unified Patent Court Treaty, announced his resignation at the beginning of December.

In spite of the ratifications already made, the conditions for the patent court to commence work have not yet been met. From the necessary ratifications (Great Britain, France, Germany) Germany has not ratified yet. Although all parliamentary requirements are met in Germany, a constitutional complaint still blocks the German ratification of the treaty (Case No. 2 BvR 739/17). Complainant submits, inter alia, that the transfer of sovereign rights to the extent provided for in the UPC Agreement is incompatible with the principle of democracy enshrined in Article 38 (1) sentence 1 of the Basic Law. The Office of the Federal President then agreed on 4th April 2017, at the request of the Federal Constitutional Court, to a suspension of the ratification procedure pending a decision on the merits.

At the beginning of 2018, a decision by the Federal Constitutional Court was expected by the end of the year (we reported on this here). At present, however, it is not foreseeable when the Federal Constitutional Court will comment on the constitutional complaint.

Where facts are missing, wild speculations sprout: A notified commentary on the UPC agreement by C.H. Beck Verlag leads the complainant to the question: “Would C.H. Beck put the commentary into print and make the associated substantial investments if he had to fear that he would not be able to sell the book later due to a decision of the Federal Constitutional Court against the ratification of the UPC agreement?” However, the Beck Verlag website shows that the commentary in German is currently being published “presumably in March 2019”, while an English e-publication is already available. We therefore believe that it will remain difficult to read the future from the release dates.

But it is not only the outcome of the constitutional complaint that is uncertain: the resulting delay makes it more and more likely that the Brexit will anticipate the launch of the UPC. As things stand at present, the deadline for Great Britain to withdraw from the European Union is 29 March 2019. However, this is leading to further problems, for example against the background that Art. 7 (2) EPC Convention provides for London as the location of a division of the central chamber of the UPC. In the event of withdrawal from the agreement, this provision would have to be amended, which would trigger new discussions. It is often argued that a non-EU member (or more simply a third country) cannot participate in the UPC. As a precaution, Italy has already positioned Milan as a possible alternative. So, 2019 will be more exciting for the UPC than anyone would want it to be.

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