European Commission answers questions on UPC Agreement

Yesterday, the European Commission released its response to three questions submitted by German MEP Patrick Breyer, regarding the UPC Agreement. The three questions, submitted in May, ask the European Commission to confirm that Germany can no longer ratify the agreement due to the UK’s withdrawal from the EU. Under EU regulations, members can submit a specific number of questions to the European Commission for written answers within six weeks.

Now the commission has answered the questions and rejected the reasoning. In its reponse, the commission confirms that Germany can still ratify the UPC Agreement. This means there is once again the chance that both a Unitary Patent and a Unified Patent Court will enter into force.

So far, 15 member states and the UK have ratified the UPC Agreement. However, the answer confirms that the UK’s withdrawl from the EU as a member state, and its rejection of the UPC Agreement, will not impact the future of a potential UPC. Whether or not Germany will indeed ratify the agreement hinges on a new draft bill and the next decision of the German parliament.

Agree to disagree

Breyer’s questions explored whether the commission can confirm that Germany has no right to ratify the UPC Agreement; if the commission will advise the German government against ratification of the current UPC Agreement; and if the commission would launch an infringement procedure if Germany ratified the UPC Agreement as it currently stands. Previously, Breyer has made clear his opposition to the unitary patent system.

Thierry Breton, current European Commissioner for Internal Markets, put forward the answer on behalf of the European Commission. The full answer can be found here.

Breyer’s questions are based on current EU case law. According to EU case law, under case C-22/70, EU member states must not enter into agreements with so-called third countries that affect EU rules or alter their scope. Since Brexit, the Treaty on the Functioning of the European Union considers the UK a ‘third country’ under Article 216. The EU and UK may still assume joint obligation in some cases of patent litigation. However, Brexit means that other EU member states no longer have this right. Breyer argues this makes a UPC Agreement which involves the UK untenable.

In February 2020, the Foundation for a Free Information Infrastructure (FFII) raised the same issue as Breyer. The FFII argued that, were Germany to ratify the UPC Agreement following Brexit, the ratification could be grounds for another constitutitional complaint before the German Federal Court of Justice.

In a press release at the time, the FFII said, “The ratification of the UPC by Germany would constitute a violation of the AETR case law, which was used during the EPLA negotiations in 2006 to consider a deal with non-EU countries, such as Switzerland.”

Answers pending

But in late February the UK government confirmed that the UK will not participate in the UPC. Following further proceedings due to a constitutional complaint at the German parliament in March, it is still uncertain if Germany and other member states will decide to proceed with the UPC without the UK.

However, if Germany ratifies the UPC Agreement and proceeds with the UPC, and if the UK withdraws its ratification of the UPCA, the issues raised by the FFII and Breyer are not applicable.

On 8 June 2020, Breyer submitted two further questions to the EU Council. However, the commission has not yet released its answers. The questions ask if the council agrees that Germany no longer has the right to ratify the UPC Agreement, and if the council has discussed the future of the UPC Agreement.

Turbulent year

So far, 2020 has been a turbulent year for the future of the UPC. In late February, the UK government declared that, given Brexit, the UK would no longer be an active member of the UPC. In March, the German Federal Constitutional Court found the German UPC legislation unconstitutional. The court cited serious doubts about how the two chambers of parliament passed the UPC legislation.

Then, later in March, the Federal Ministry of Justice and Consumer Protection announced its intention to stick with its plans for European patent reform, including the UPC. In June, the Federal Ministry of Justice submitted a new draft bill on the UPC legislation, where it wants to vote on the bill again. The time frame for submitting opinions is over. The ministry is yet to announce the next stage.

This latest development is once again giving hope to those patent professionals who express a desire to see a UPC system. However, as usual, nothing is certain as far as the UPC is concerned.