German challenge to the Unified Patent Court Agreement is upheld on a technicality
The German Federal Constitutional Court has largely dismissed the constitutional complaint against 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, although progress will now be paused while governments address the COVID-19 outbreak.

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. However, 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 will be delayed due to the COVID-19 outbreak and likely further delayed to await updates to the UPC Agreement following the UK’s departure from the EU.

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. Subject to these amendments, it is possible that the UPC will now come into effect in late 2021 (at the earliest), but given the current COVID-19 epidemic we do not expect any news in the near future.

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.