The dream of a single European patent may die next month – and everyone is in denial about it

German Constitutional Court is much more dangerous than people think


Updated It has been years in the making and Europe’s largest law firms are smacking their lips in anticipation but the long-held dream of a single European patent system may die next month – and everyone appears to be in denial.

“It would be realistic to expect the UPC to be operational in early 2021,” said the head of the Unified Patent Court (UPC) Preparatory Committee, Alexander Ramsay, in November. That confident prediction came just one week after the lead judge in a case against the UPC at German’s Constitutional Court said he expected the court to finally decide it in the first quarter of this year.

Similar confidence abounds in the intellectual property world; large law firms already have plans to handle what they believe will be a sudden influx of clients from smaller specialist patent law firms because, with a single patent stretching across Europe, it will be that much more important to make sure you get issued one, and defend it.

Industry journals continue to be convinced that the German court process is little more than an annoyance; a delay that is holding back the unified patent’s introduction rather than an existential threat.

And yet. And yet. The reality is that the complaint, filed by lawyer Ingve Stjerna, isn’t frivolous, or wrong-headed. In fact, there’s a very good chance that he is absolutely correct. And if the German court does ultimately reject his case it may have to go to some trouble to explain its way around his legal arguments for the UPC’s unconstitutionality.

Confidence that the case will ultimately be dismissed appears to stem from the fact that so many people are in support of a single European patent. There is a sense that the courts are bound to figure out a way to approve it, regardless of, well, the law. And, since it is the German Constitutional Court, what it says, goes. There is no other body above it.

Problems and lack of resolution

The problem with this collective dismissal of the case against the UPC is that it hasn’t led to changes that could resolve some of the problems that the complaint highlights.

Key among them is the European Patent Office (EPO) which under its former president Benoit Battistelli became more of a fiefdom than an international organization. Battistelli single-handedly undermined the independence of the EPO’s Boards of Appeal entirely out of service to his own ego. One of the four key arguments in the constitutional complaint against the UPC, which is the EPO’s flagship policy, is that it lacks sufficient autonomy.

Many had hoped that after Battistelli finally left his successor would fix the problems and get the EPO back on track but António Campinos has failed to carry out several obvious fixes, including getting rid of disliked managers, and yielding some of the power that Battistelli clawed out for himself back to its Administrative Council, staff, and Boards of Appeal.

The EPO has instead maintained its focus on getting more patents approved, faster – seemingly in an effort to compete head on with the Japanese and American patent systems. It has also failed to tackle its cultural and organizational problems. If the patent industry had taken the UPC constitutional complaint more seriously and pushed for reform, it could well have produced sufficient momentum to drive real change. But no.

“The EPO is in tatters,” we were told by Christian Liedtke, a German patent lawyer who lives and work in the US and with whom we had an extensive conversation about the UPC complaint. “The Boards of Appeal is ashamed of what’s going on,” he stated. He agrees that the EPO is still suffering from the same legitimacy questions that Stjerna put in his complaint.

Nerd time

It’s worth noting that Liedtke worked alongside Stjerna for a while in the same office and when we asked, summed him up as “a bit of a nerd.” But, he agreed that “his arguments have merit.”

The other elephant in the room is Brexit. The German Constitutional Court judge Peter Huber gave the interview saying it will finally be decided early this year and created a bit of a stir when he called claims that the decision has taken so long because of Brexit “bullshit.” Which, many pointed out, was not particularly judge-like.

But are they bullshit? It’s been two-and-a-half years since the Unified Patent Court (UPC) was put on hold when the German’s Constitutional Court received the complaint and told the country’s president not to sign legislation approving it. A decision was initially expected some time last year but – as with Brexit – time drifted.

The complaint argues that Brexit undermines the whole UPC because the UK was one of three compulsory signatories to the court; the others being France and Germany. Because those three countries generate the bulk of Europe’s patents, it was decided that without all of them on board, the UPC was never going to be effective.

Does that change with Brexit? Not really. On top of that, the UPC was specifically designed to be only accessible to members of the European Union. And Liedtke offers some intriguing background to that…

“Back in 2011, the CJEU (European Court of Justice) weighed in on a draft agreement about the UPC and said that it violated EU law in various regards – and that prompted changes that led to it being restricted to member states only.”

So legal concerns over the UPC’s legitimacy from Europe’s highest court is what originally led to the member-state restriction. But now, with the UK planning to leave, in November last year the European Parliament’s Committee on Legal Affairs published a report [PDF] arguing the complete opposite: that it might be possible for non-EU members to sign up to the UPC.

Ugh. Brexit

In one of many Brexit nonsensical statements, the UK government has declared it still believes it can be a part of the UPC and even continue to hold one of its three main courts in London, even though it will no longer be in the European Union.

That court is likely to be moved to mainland Europe but that still leaves the main issue: can a non-EU country be a part of a European unified patent system? If the answer is no, the entire thing needs to be redesigned because the UK was a compulsory signatory. If the answer is yes, then where and how do you draw the line? Can Japan join the UPC? Can the United States?

“I can’t wait to see the creative approach taken,” Liedtke notes. Incidentally, he also believes that ultimately the German court will find a way to approve UPC, despite the case against it, in large part because it acts conservatively.

The status quo already assumes the UPC is a done deal. Although, it’s worth noting that if the UPC is rejected, nothing bad will happen; things will simply continue on as they always have.

However, even if the German court complaint is dismissed, the Brexit issue makes it extremely unlikely that the UPC will be up and running by 2021, as one of main proponents appears to believe.

The third of four arguments against the UPC is that the vote in the German Parliament approving it was not valid: this is a quorum thing, and is probably the least consequential argument. Even if the court found it to be the case, the Parliament could presumably reconvene and vote on it again in the necessary numbers.

But then we hit the fourth argument, one we had previously attached to the Brexit issue but which Liedtke assures us “goes far beyond the UK angle,” that there is a “breach of the principle of openness towards European law owing to alleged irreconcilability of the UPC with Union law.’”

The biggest problem?

We asked Liedtke to explain what other factors that includes and we immediately hit another of the peculiarities of this case – and one that may explain why it isn’t being taken seriously enough: the actual complaint is still not available to read, despite being lodged in 2017.

That Brexit in action: UK signs pact to let Euro court judge its patents

READ MORE

That’s right, a complaint to the German Constitutional Court that may up-end years of work and an entire Europe-wide patent regime remains entirely confidential. Liedtke tells us he had seen a copy but he doesn’t want to share it, or go into contents too deeply because – he tells us – he might get the people he got it from into trouble.

And if you think that’s mad, you haven’t heard the half of it: one patent law expert was actually sued for providing details of the complaint – by Ingve Stjerna, the man who filed the complaint in the first place. He cited copyright.

It’s not clear how many people have actually seen or read the complaint itself. It is certainly being shared surreptitiously in patent lawyer circles but not to the extent that those with copies are willing to share it with a reporter. And so maybe the reason everyone is confident that this long delay in the Unified Patent Court’s approval is just a formality is because, amazingly, not that many people actually know how shaky the UPC’s legal foundation is. Somehow all this makes sense to patent lawyers. ®

Updated to add

This article was revised after publication to clarify it is a matter of public record that Ingve Stjerna submitted the complaint. The filing is also listed on his website, here:

Constitutional complaint against the ratification of the Agreement on a Unified Patent Court in Germany (German Federal Constitutional Court, docket no. 2 BvR 739/17)

"I hope that will succeed," he also told German law news publisher JUVE in 2017 regarding the filing.


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