German challenge to the Unified Patent Court Agreement is upheld on a technicality
The German Government moves towards ratification of the UPC Agreement

The arrival of the Unified Patent Court (UPC) and the Unitary Patent (UP) may have come a step closer following the resolution of a long running court battle in Germany. Following this decision, the German government announced a consultation on the legislation required for Germany to ratify the UPC Agreement which, if passed, could bring the new system into force in 2021.

The German Federal Constitutional Court has largely dismissed the constitutional complaint against the UPC Agreement.  As a result, the UPC Preparatory Committee announced that its work will “move forward using all available resources to keep the momentum”, although the Committee also acknowledged the practical challenges ahead.  The German government announced that it still hopes to move forward with the UPC Agreement before the German elections planned for 2021. That suggestion was warmly welcomed by the EPO, whose president suggested that moving forward with the UPC and UP might help mitigate COVID-19’s effect on the economy. Following these initial positive steps, the German government announced a short consultation period regarding the new legislation required in order to approve the UPC Agreement. Despite all these positive indicators, there is still a high degree of uncertainty regarding what will happen next and the timetable will likely evolve over the next year.

The only reason the complaint was upheld relates to a voting formality in the Bundestag (the German federal parliament) as set out in the Court’s press release.  The Court found many of the substantive challenges to the UPC Agreement to be inadmissible (as set out in section 103 of the full decision). As a result, the German government could now complete ratification of the UPC Agreement by asking the Bundestag to vote again.  However, the steps required in Germany may be delayed due to COVID-19.

Amendments to the Agreement will need to be negotiated by the participating member states.  For example, they need to reallocate the UK’s UPC responsibilities, in particular choosing a state to host the Central Division for life science disputes. The German government’s consultation document suggests these amendments could be made once the new system is up and running. Subject to these amendments, it is possible that the UPC will now come into effect in late 2021 (at the earliest).

UPs would be a new option for the fate of an application granted by the European Patent Office (EPO) following prosecution as at present. The UPC is planned to be a new system for litigating UPs and some conventional EP patents in Europe. A UP would have unitary effect across all participating member states. The UPC would have exclusive jurisdiction over UPs and, eventually, all EPs granted by the EPO, potentially including those already granted (subject to transitional provisions). The UPC’s rulings would be enforceable across all of the participating member states.

We are looking forward to offering clients the chance to obtain UPs using the existing EPO procedure and the opportunity to enforce their patents across Europe using the UPC, if and when the system is up and running.

Regardless of how the UP and UPC project develops, there are no implications for the current European patent system run by the EPO, which is unconnected to the EU.

The UP and UPC will generate a series of new opportunities and risks for parties across Europe, if and when they enter into force, so we look forward to helping all our clients plan for the potential arrival of this new system.