The constitutional complaint against the UPC ratification that was lodged with the Federal Constitutional Court in Germany earlier this year has received a lot of attention over the past few months as it could have the potential to considerably delay the entry into force of the Agreement on a Unified Patent Court (UPCA). Pursuant to Article 89 subsection 1 UPCA it shall not enter into force prior to its ratification by the three Member States in which the highest number of European patents had effect in the year preceding the year of signing the UPCA. These three Member States are France, the United Kingdom and Germany.
The German Federal Constitutional Court has asked the German President (Frank-Walter Steinmeier) as the German head of state not to sign into law the parliamentary Act declaring Germany’s accession to the UPCA (the law of consent) pending the outcome of the constitutional complaint. The use of such an assurance by the Federal President is uncommon but has been made previously in proceedings regarding the accession to the Lisbon Treaty or the European Stability Mechanism.This measure aims to avoid Germany being bound externally by accession to an international treaty but being unable to comply with these obligations internally because the act of accession has been declared unconstitutional. Pursuant to Article 82, subsection 1 of the Basic Law for the Federal Republic of Germany (the ‘Basic Law’ [Grundgesetz]– i.e. the German constitution), the President needs to certify all laws in order for them to become effective. Article 59, subsection 1 of the Basic Law provides that the President concludes international treaties. As a consequence, this means that until the constitutional complaint proceedings are finished –provided that the law of consent hasn’t been declared void by the Constitutional Court and the Federal President certifies the law – the UPCA will not be ratified in Germany.
In the following we intend to outline the approximate length of the proceedings taking into account the different possible scenarios and what this means for the future of the UPC project. On this point the Court itself in a reply to an inquiry about the background of the complaint stated in the summer that ‘a date for the decision is presently not foreseeable’, but before looking into this in more detail we will outline the main legal arguments the complainant is making as to the alleged unconstitutionality of Germany’s accession to the UPCA.
Grounds of the Constitutional Complaint
The Constitutional compliant is based on three main grounds as follows:
1. Non-compliance with European Union Law
Constitutional right asserted: The complainant claims that the UPCA violates Union Law, invoking the so-called “right that is equivalent to fundamental rights” [grundrechtsgleiches Recht – not a fundamental right under the first chapter of the Basic Law but a subjective right of constitutional status] following from Article 38 subsection 1, sentence 1, Article 20, subsection 1 and 2 in conjunction with Article 79 subsection 3 of the Basic Law (referred to as the right to democratic self-determination).
The “right that is equivalent to fundamental rights” protects any German citizen who is eligible to vote in the democratic legitimation he has given to the legislative branch through his electoral vote. It is understood that this act of legitimation implies that the legislative branch itself needs to respect and follow the structural principles of the constitution as defined in Articles 20 and 79 of the Basic Law. Further it implies that the Bundestag must not substantially reduce its own powers and influence, to ensure that the will of the people as expressed through the election is appropriately represented in political decisions. This legitimation thus must not be invalidated by transferring national sovereign powers from the parliament to supranational institutions such as the European Union. According to the case law of the Federal Constitutional Court, however, such a transfer of national sovereign powers may be possible if this takes place in a system that follows the rule of law and, ultimately, does not change the ‘constitutional identity’. Each law of consent, by which sovereign powers are transferred, contains a law application order that can only be granted within the framework of the constitutional order which is in effect.
In the case of the European Union, this means that the German legislative branch must not enact a law that is contrary to Union Law. In the case of accession to an international agreement which is connected with the transfer of sovereign powers, this means that the agreement must abide by the constitutional framework and all other superior rules of law in effect. As a consequence, the Bundestag may only enact the law of consent if the international agreement that is entered into is lawful itself.
Violation against European Union law: The complainant argues that the Unified Patent Court doesn’t comply with the requirements that the Court of Justice of the European Union (CJEU), relying on Article 4 subsection 3 and Article 19 subsection 1 of the Treaty on European Union (TEU) and Article 267 of the Treaty on the Functioning of the European Union (TFEU), has established as regards the creation of an international court within the legal system of the European Union. Neither would it be the case that the UPC is a common court of Member States as is the case for the Benelux Court of Justice. The complainant highlights that the UPC isn’t embedded in the system of the CJEU and national courts and would therefore breach the principles of autonomy of Union law and of the completeness of the system of legal remedies. This would infringe the cooperative relationship between the national courts and the CJEU.
Secondly, it is claimed that the UPCA violates Article 3, subsection 2 TFEU as the Member States would lack the competence to conclude the UPCA. The Complainant argues that due to the considerable scope of law-making by the European Union in the field of intellectual property, the UPCA may affect common rules or alter their scope.
Moreover, the UPCA would violate Article 2 sentence 1 TEU and Articles 47, subsection 2 and 48, subsection 2 of the Charter of Fundamental Rights of the European Union (CFR). This is based on the provisions made in the UPCA as regards the language of proceedings and the lack of translation or interpretation obligations.
Finally, the complainant states that there would be a violation of Articles 2, sentence 1 and 19, subsection 1, sentence 3 TEU and Article 47, subsection 1 CFR due to inadequate legal protection regarding administrative decisions of the European Patent Office at the Unified Patent Court. In particular, the lack of judicial legal protection against the decision of the European Patent Office to reject a patent application is mentioned. The internal review bodies would not be recognized as courts and couldn’t refer questions for preliminary ruling to the CJEU. In the case of a unitary patent this would be problematic because ultimately it is a European patent with a unitary effect accorded by Regulation 1257/12. Union law becomes relevant here as the CJEU must always be able to guarantee its correct and uniform application. Without a judicial remedy against an EPO patent refusal however, the CJEU is deprived of the role it was given by Article 19, subsection 1, sentence 2 TEU.
These complaints address various questions of fundamental European Union law principles and the organization and cooperation of European institutions. Therefore, it is likely that the Federal Constitutional Court will in fact suspend the proceedings and present these questions to the CJEU for a preliminary ruling. Pursuant to Article 267, subsection 3 TFEU there may even be an obligation to bring the matter before the CJEU with the exception of a so-called acte éclairé, e.g. if there is long-standing case law on a matter.
2. Non-compliance with the qualified majority requirement
Constitutional right claimed: The complainant here again refers to his right to democratic self-determination following from Article 38 subsection 1, sentence 1, Article 20, subsection 1 and 2 in conjunction with Article 79 subsection 3 of the Basic Law.
Violation against qualified majority requirements of the Basic Law: According to the complaint, the legislative procedure by which the law of consent was enacted violated the qualified majority requirements as laid out in Article 23, subsection 1, sentence 3 and Article 79, subsections 2 and 3 of the Basic Law. These provisions require a majority of two thirds of the Members of the Bundestag for the enactment of certain EU-related laws or comparable laws that amend or supplement the Basic Law. The law of consent was enacted with only 35 Members of the Bundestag present in the parliamentary session at the time of the vote (two thirds of the Members would have required at least 420 votes). This is not unusual in late-night sessions of the Bundestag and doesn’t as such contravene the effectiveness of the decisions of the Bundestag
Regardless of whether the law of consent actually required a two thirds majority according to the Articles cited by the complainant, this issue is unlikely to ultimately prevent the ratification of the UPCA in Germany as it seems safe to assume that a two thirds majority would be achieved in the newly elected Bundestag as well. However the law would need to be introduced to the floor of the parliament again, further delaying the ultimate ratification of the UPCA.
3. Non-compliance with the rule of law principle as regards an insufficient legal status of the UPC judges and the UPC rules of procedure
Constitutional right claimed: Again, the complainant is referring to the right to democratic self-determination following from Article 38 subsection 1, sentence 1, Article 20, subsection 1 and 2 in conjunction with Article 79 subsection 3 of the Basic Law.
Violation against the rule of law as regards judicial impartiality and judicial independence: The complaint here is directed against the proceedings for selection and appointment of the judges at the UPC and the legal status of the judges. As one of the main features of the rule of law principle, the separation of powers would unambiguously require the independence of judges. According to the complainant this would, amongst other things, be at risk because of the judges’ six year term of office pursuant to Article 4 subsection 1 of the Statute of the UPC.
The complainant further points out that the UPC Advisory Committee makes a binding preliminary selection of the judges that may be appointed by the Administrative Committee. The Advisory Committee however, is made up partially by members of the patent professions (see Article 14 subsection 2 UPCA). Because of this the complainant sees a risk that a judge is involved in proceedings where one of the parties is represented by an attorney who belongs to the Advisory Committee and may have approved the appointment of said judge. This could impair that judge’s impartiality.
Violation against the rule of law as regards the issuing of the rules of procedure and the regulation of reimbursement sums: This concerns the issuing of the rules of procedure of the UPC by the Administrative Committee (Article 41 UPCA). Due to the fact that the rules would be legislation in the material sense because they have an external effect on everyone and regulates a judicial process in the field of civil and administrative procedural law, they would have also needed to be part of the law of consent. The power of the Administrative Committee to enact these rules would present itself as an impermissible blanket authorisation and the rules in any case would be required to be transformed into national law as well.
The same argument is put forward as regards the regulation of the maximum reimbursement sums for the costs of representation, which according to the complainant were set in an arbitrary manner.
The Federal Constitutional Court will now have to decide whether the constitutional complaint will be admitted for decision, pursuant to Article 93a of the Act on the Federal Constitutional Court. A complaint must be admitted if it has general constitutional significance or if it is appropriate to enforce the rights referred to in Article 90, subsection 1 of the Act on the Federal Constitutional Court.
In the present case it was made public that the Court has requested statements by a number of third parties, among them the Federal Government, the German Bar Association (Deutscher Anwaltverein, DAV) and EPLAW (European Patent Lawyers Association). While this alone doesn’t mean that the admittance of the complaint is certain, it shows that the Court takes the complaint seriously and will therefore probably admit it for decision. The deadline for filing comments has recently been extended until 31 December 2017.
In terms of the time schedule it can be expected that the Court will come to a decision regarding admittance at the beginning of 2018. If it is in fact admitted, the progression of the case first of all depends on whether the matter is brought before the CJEU in a preliminary ruling procedure pursuant to Article 267 TFEU.
Should the Constitutional Court refrain from requesting a ruling from the CJEU, a formal decision is not to be expected prior to spring/summer 2018. If on the other hand the matter is brought before the CJEU this will – also in view of the considerable and complex number of Union law issues raised by the complainant – seriously delay the proceedings as a whole. Thus in the event of a referral, a final decision by the Constitutional Court will perhaps only be reached in 2019.