Unified Patent Court

UPC dream gets closer after German court rejects constitutional complaints

The wait is almost over. The German Constitutional Court has rejected two applications for an interim injunction against the German UPC laws. Now Germany, and two remaining member states, have a clear road ahead to ratify the UPC. Europe is one step closer to welcoming a unified patent court system.

9 July 2021 by Amy Sandys

UPC, constitutional complaints Today, the German Constitutional Court has paved the way for the final ratification stage of the Unified Patent Court project. A long time in the making, the news is being met with relief by those who have been involved in its development from the beginning ©Vladimirs Koskins/ADOBE STOCK

Today, the German Constitutional Court rejected applications filed by plaintiffs for an interim injunction against the ratification of the Unified Patent Court (case IDs: 2 BvR 2216/20 and 2 BvR 2217/20). Previously, they had twice halted the court’s progression to the ratification stage. Now the way is clear for Germany to ratify the UPC.

One plaintiff is Düsseldorf lawyer Ingve Stjerna, who has twice put the brakes on the UPC with his constitutional claim. Now, however, he admits defeat.

Stjerna says, “After the decision, also the main proceedings on the UPC Agreement are likely to be unsuccessful. The conclusion of the German UPCA ratification, which can now be expected shortly, will cause a binding effect under international law which cannot easily be removed. This also limits the possibilities of further legal action against the agreement itself.”

On the other hand, Kevin Mooney, partner at Simmons & Simmons and a key figure in the Unified Patent Court project, says, “This is very good news. The court has rejected the applications for provisional measures on the grounds that the two complaints are not admissible. This means that it has removed the shadow of a constitutional problem.”

UPC, constitutional complaint

Alexander Ramsay

Paving the way for UPC

According to today’s ruling, the complainants had not sufficiently substantiated the possibility of a violation of their fundamental rights. In all probability, the court will not hear the merits of the case. The decision paves the way for the German government to ratify the UPC.

Under the German system, the next step is for the federal president to sign the law. A spokesperson confirmed to JUVE Patent, “For the federal president, this means that he can now enter into the constitutional review of the law and execute it.”

“When this will be cannot be said at this stage,” they say.

Speaking exclusively to JUVE Patent, Alexander Ramsay, head of the UPC Preparatory Committee, says, “Given today’s news, we expect Germany to ratify the protocol on provisional application in early autumn. The tasks that the council needs to handle during the provisional application phase should then take at least eight months to complete.”

“If everything runs smoothly, we can expect a functioning UPC late in 2022, or possibly early 2023,” he adds.

Ratification run

Germany must now ratify the protocol to the UPCA creating the Provisional Application Period. “However,” says Mooney, “for the protocol to come into effect and the timetable for the court opening to begin two further ratifications of the protocol are required. There must be pressure on the other member states to avoid further delay.”

Ramsay says, “If Germany and the two additional member states ratify the protocol, this would trigger the provisional application. Then the UPC can launch into its pilot phase.”

UPC appetite returns

In 2020, results of a JUVE Patent survey on industry feeling towards the UPC suggested that thoughts of patent lawyers and patent attorneys were drifting away from the UPC. The survey showed many patent firms were turning to ‘business as usual’ for their planned litigation in Europe.

As such, given all the hurdles the project has had to overcome, appetite for the UPC had waned among patent professionals.

However, it is likely that the latest developments will put a spring back in the step of the UPC optimists. Alexander Ramsay says, “The delay to the ratification process has meant putting things on hold, both physically and mentally. A lot of member states have been watching and waiting for the German outcome. This latest ruling should have a positive impact on the momentum behind, and appetite for, the UPC.”

Willem Hoyng

Willem Hoyng, founding member and partner at boutique IP firm Hoyng ROKH Monegier, says, “Optimists believe that Germany will now ratify soon and that the Provisional Application Period will begin towards the end of the year. ”

“We hope to see the court opening for business on 1 January 2023.”

Pilot phase incoming

Ramsay explains, “Once the member states finalise their ratification, we can start the ball rolling. We have planned in detail what needs to be done and prepared for many possible hurdles. If necessary, we can extend the pilot phase by a month or two.”

For the UPC, a ‘pilot phase’ involves finalising the recruitment of its judges. This is no mean feat, given that between 200 and 250 judges from all across Europe are competing for 50 to 100 judicial roles.

The coronavirus pandemic and their dispersal across the continent means the selection process is all the more complex for the UPC’s Administrative Council, which decides the final list.

The bodies involved in the development and implementation of the UPC also must elect a president and related presidium. Of course, senior UPC figures will sufficiently train all elected officials before the UPC’s launch. Social security systems, contracts and infrastructure such as IT systems need to be checked and finalised; the council must also decide on its final court locations.

But Ramsay is confident that eight months is sufficient time for the UPC’s administrative bodies to complete their preparations. “No doubt finalising the hiring and recruitment processes will present us with a logistical challenge,” he says.

Step closer for Milan

Italian patent firms also welcome today’s news. Italy’s patent professional have long advocated for Milan as the successor seat of the pharmaceutical division. Before the UK rejected the UPC as part of Brexit, London was the specialist court’s previous destination.

Vittorio Cerulli Irelli, UPC

Vittorio Cerulli Irelli

Vittorio Cerulli Irelli, partner at Trevisan & Cuonzo, says, “The clarity eventually brought by the German Constitutional Court is certainly welcome.”

“In the same vein, it would be appropriate to address the remaining outstanding points, and in particular what to do with the London division, avoiding interim solutions that might be prone to additional challenges.”

According to sources within the Italian government, Italy is willing to support its bid for having Milan hosting the central pharma division. Irelli says, “The Italian and German undersecretaries for foreign affairs recently held a meeting in Berlin.”

“We understand that the UPC was one of the topics in the agenda. This bid is consistent with the increasing efforts and investments the government is putting in the Italian judicial system.”

He says, “Having the central pharma division in Milan might indeed have beneficial spill-over effects on the Italian litigation system as a whole.”

The long goodbye

However, one member state which is certainly off the UPC’s Christmas card list is the UK. The turmoil of 2020 began with a surprise announcement from the UK government. It declared that, given what at the time was an imminent Brexit, the country will rescind its ratification of the UPC.

At the time, a press office for the UK Cabinet Office confirmed to JUVE Patent, “Participating in [the UPC] is inconsistent with our aims of becoming an independent self-governing nation.”

While the UPC is not an EU body, the links between the institutions remain strong. The government’s rejection of the project was perhaps unsurprising given that the CJEU is the supracourt to which the UPC is answerable. Still, the UPC signatories met the news with disdain.

Willem Hoyng says, “It is of course unfortunate that the UK decided to stay out. This is especially true for the UK industry, and for the capable UK judges who are unable to participate in building the case law of the court. As an observer, it seems the decisions was unfortunately totally based on emotion.”

Now the UK can only look on as the UPC ball once again begins to roll. (Co-author: Christina Schulze)