Germany’s UPC privileges and immunities legislation progresses

Germany’s UPC privileges and immunities legislation progresses

06 April 2017

Although, as reported here, the laws authorising Germany to ratify the Unified Patent Court (UPC) Agreement and to amend the national patent law have been approved by the Bundestag (parliament) and the Bundesrat (Federal Council), the draft law (bill 18/11238) to enable Germany to ratify the UPC’s Protocol on Privileges and Immunities (PPI) is at an earlier stage.  As reported here, the bill is passing through the Bundestag’s ‘simplified procedure’.  Therefore, the Bundestag did not debate it in its first reading on 10 March 2017 but simply referred it to the Committee for Legal and Consumer Affairs.  The second and third (final readings) were scheduled for 23 March, but were postponed because the Bundesrat issued a ‘statement’ on the bill, which the government had to address before the bill could continue its progress through the Bundestag. (Such a statement, under Article 76(2) of the German Constitution, is not uncommon.)  The government gave its response on 29 March, and this was published yesterday by the Bundestag (together with the Bundesrat’s statement) here.  The bill’s second and third readings are now expected to be in the Bundestag’s next sitting (24-28 April). 
 
The PPI will give legal personality to the UPC and provide the Court and its judges, Registrar and other staff with the various privileges and immunities. One section of the Court’s central division will be in Munich, and four local divisions will also be in Germany.  The Bundesrat’s statement concerned the privileges and immunities relating to the taxation of the salaries of the judges, Registar and other staff (Articles 8 and 9 of the PPI), in particular the fact that the judges’ salaries were not only exempt from national taxation but were not ‘progressive’, i.e. any other income would be taxed as if it were the only income. The Bundesrat requested that tax concessions in international organisations’ agreements and protocols will be limited to what was strictly necessary.  In its response, the government stated that it had argued for such a progression when negotiating the PPI but the majority of the other states did not agree.  It noted that pensions were not exempt from national taxation, and also that the PPI’s fourth recital stated that the UPC’s privileges and immunities did not create any precedent for other international organisations’ protocols.
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