What we know about the status of the Unitary Patent and Unified Patent Court project in mid September 2017

We would like to inform our members on the status and time schedule for the Unitary Patent and the Unified Patent Court system to start working.

For the new system to start, it is necessary that the Unified Patent Court Agreement is ratified by at least 13 countries, amongst them France, UK and Germany. So far, 14 countries, amongst them France, but not yet UK and Germany, have ratified the UPCA.

In his message in June 27, 2017 the Chairman of the Preparatory Committee explained why the start of the new system is currently further delayed (https://www.unified-patent-court.org/news/message-chairman-alexander-ramsay-june-2017): first due to problems with the ratification process in Germany and secondly due to not enough ratifications or declarations of applicability of the Protocol on Provisional Application of certain parts of the UPCA.

Ratification of the UPCA in the UK is progressing and it can be expected that the UK will finalize all ratification steps by the end of 2017. However, the ratification process in Germany has been suspended due to a complaint filed in April 2017 with the German Constitutional Court by an individual lawyer.

The German Constitutional Court has not yet decided whether it will accept/hear the case, but has made the President of Germany aware of the pending case, who then decided for the time being not to pursue the last steps necessary for Germany's ratification of the UPCA. It is generally very difficult to predict when the German Constitutional Court will decide whether to accept the case and, if it accepts the case, when a decision on the merits can be expected.

Recently, the German Constitutional Court invited certain institutions in Germany to submit written comments with a deadline of 31 October 2017. It is therefore unlikely that any decision by the German Constitutional Court on the acceptance of the case will be issued in 2017.

We know that the complaint is based on 4 grounds. The first allegation is that the voting on the UPC legislation in the German Parliament (Bundestag) did not have the allegedly necessary quorum and majority. The German parliament assumed that a simple majority of the members of parliament would be sufficient. The complaint argues that a two thirds majority of all members of Parliament was necessary because the UPC-legislation falls into a certain category of legislation according to the German constitution as it includes a transfer of some sovereign rights to an international body. Should the Constitutional Court find this reason to be successful, and in view of the general election in Germany in late September 2017, Germany would need to start a new ratification process for the UPC agreement from scratch, which could take at least another 5-8 months.

The second allegation of the complaint asserts that the organs and institutional decision-making processes of the UPC do not comply with the requirements of the German constitution regarding observing principles of democracy and constitutional legality. Similarly, a third allegation concerns an alleged lack of independence and democratic legitimacy of the envisaged UPC judges. The fourth allegation of the complaint is that there is an incompatibility of the UPC Agreement with EU law. If the German Constitutional Court has any doubts on that point, despite the decisions already issued by the CJEU on the challenges by Spain and Italy against an earlier version of the UPCA and the UP system, the Constitutional Court would need to refer corresponding questions to the CJEU, which would mean a further delay of at least 15-24 months. In that scenario, the UP/UPC-system could likely only start around 2020.

The Protocol on Provisional Application of the UPC Agreement, which regulates that certain institutional and financial provisions of the UPCA will come into force before the UPC can become operational, also needs to be ratified or declared applicable by at least 13 UPCA member countries, amongst them again France, Germany and UK. So far, that Protocol has only been ratified or declared applicable by 10 countries, amongst them UK and France. Thus, also on that Protocol, two other countries beside Germany, which is expected to ratify that Protocol together with the UPCA itself, are required to act before the provisional phase-in of the UP/UPC system could practically start.

Thus, based on what we know at the moment in mid September 2017, a very optimistic assumption could lead to a starting date of the UP/UPC system within the first half of 2018, whereas a less optimistic scenario would expect the new system to come into force only in 2020 or even later, should any Court decision make it necessary to substantially change the UPC agreement and require a new round of ratifications.

The epi will continue to watch the developments and will publish updates once more information is confirmed, in particular on progress of the ratification process of the UPC Agreement that will also make applicable the two EU Regulations on the Unitary Patent.