German ruling in Unified Patent Court case expected early 2020

Justice Peter Huber confirmed the likely timeframe for the eagerly anticipated decision of the Federal Constitutional Court for the first time in an interview with the publication Managing IP.

According to the report, the judge said the case should be decided within the first quarter of next year, although he did not exclude the ruling being issued after this depending on deliberations and the time required for drafting the judgment. He also dismissed suggestions that the ruling has been delayed as a result of Brexit.

The new UPC system, years in the planning but yet to become operational, foresees a Europe-wide court system to ensure that businesses have a streamlined process for litigating European patents through a single court – including new unitary patents.

An international agreement, the UPC Agreement (UPCA), was adopted in 2013 by 24 of the then 27 EU member states, and Italy subsequently joined in 2015. Spain, Poland and Croatia – which accessed to the EU after the UPC Agreement was signed – do not currently participate.

For the new UPC system to take effect, at least 13 EU countries, including the three with the most European patents in effect in 2012 – Germany, France and the UK, must pass national legislation to ratify the UPC Agreement. France and the UK have already completed this process along with 14 other countries, but Germany's ratification process has been held up by an ongoing legal challenge.

It has been unclear, until now, when a judgment would be issued by the Constitutional Court, which is based in Karlsruhe. Details of the basis of the complaint emerged in the summer of 2017. The case was initially listed for 2018 and was then moved to the 2019 list.

Munich-based patent law expert Dr. Michael Schneider of Pinsent Masons, the law firm behind Out-Law, previously explained that there are multiple strands to the complaint raised about Germany's planned ratification of the UPC Agreement. These include concerns that ratification involves the transfer of sovereign rights from Germany's judiciary to another organisation – in this case the transfer of patent litigation powers to the UPC – and that a certain quorum and majority of votes in Germany's parliament has not been achieved to approve that.

Schneider said the complaint has also called into question whether judges of the UPC will be independent in the sense prescribed by the German constitution, and further taken issue with the way that the unitary patent reforms as a whole have been structured and whether this aligns with the constitutional mandate to promote Germany's integration within the EU.

As currently worded, the UPC Agreement envisages participation in the UPC system by EU member states only and so there is uncertainty as to whether the UK will be able to participate in the new patent framework after Brexit. The UK is scheduled to exit the EU on 31 January 2020 at the latest.

Patent law expert Jules Fabre of Pinsent Masons said: "The confirmation from Justice Peter Huber means that there will be no decision from the Karlsruhe court in 2019. That is not really a surprise, but it has potential implications for UK involvement in the UPC regime going forward."

"The chances that the UK will still be in the EU when the judgment is handed down, and thus, if the challenged is dismissed, when the UPC Agreement enters into force – assuming it does, are slimmer than ever. This will make UK participation in the UPC even more challenging, at least from a legal standpoint," he said.

The EU's own in-house policy department for citizens' rights and constitutional affairs recently said that it is not legally impossible for the UK to participate in the UPC system after Brexit. That outcome, it said, would only be possible with "innovative legal solutions", while Fabre said it would further require political will on all sides.