On Friday, March 20, the German Constitutional Court (Bundesverfassungsgericht) ruled that the nation’s ratification of the Unified Patent Court Agreement is void because the German parliament (Bundestag) did not follow the proper constitutional procedure in ratifying the Agreement. (See here.) Specifically, the Court held that ratification required a two-thirds majority in parliament to approve the corresponding act because the Agreement would materially affect the German constitution. At the time of approval, however, only 35 of the 709 parliamentary members were present and, as such, the act was not approved.
The Unified Patent Court Agreement would create a single pan-European court — the Unified Patent Court (UPC) — that has exclusive jurisdiction to resolve all European patent cases in one common court system rather than litigating patent cases on a nation-by-nation basis across Europe, which is a more arduous process for patent holders. Per the terms of the Agreement, the UPC will enforce its decisions in all contracting member states of the European Union that ratify the Agreement. Additionally, because the Agreement arose from the European Union, it confers jurisdiction relating to European patent rights to the Court of Justice of the European Union. Notably, the German Constitutional Court referred to the UPC as a “supranational public authority” and held that improperly conferring its nation’s judicial functions to supranational system deprives its citizens of certain fundamental rights granted under the German constitution.
The German Constitutional case had been pending since 2017, and its long-awaited ruling comes less than a month after the United Kingdom formally announced its withdrawal from the Agreement because relinquishing sovereignty to UPC would conflict with its ability to establish its own laws after exiting the European Union. The loss of both the United Kingdom and Germany, which are two of the largest European Patent participants, may be a fatal blow to the Agreement.
The German parliament could theoretically rectify its mistake by voting on the Agreement again with a proper quorum. The practical question, though, is whether there is sufficient political capital among German parliamentary members and the other member states for the Agreement to survive. If there is, certain amendments to the Agreement are likely required, such as where to reallocate the United Kingdom’s responsibilities. At best, the developments in the last month are likely to cause further delays to the realization of the UPC.