As reported here, the complaint in the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) against the legislation required for Germany to ratify the Unified Patent Court (UPC) Agreement succeeded on the ground that it was not passed by the two thirds of the members of the Bundestag required for a transfer of sovereign rights (and therefore infringed the complainant’s right under the Basic Law i.e. the German constitution). Although passed unanimously, it was late in the evening and only a very small proportion of members were present. The BVerfG published on 20 March 2020 its decision of 13 February 2020 (by its Second Senate) in German and a press release in German and in English.
Although the complaint regarding the Bundestag majority was held to be admissible, that was only by the narrowest majority of the Senate’s eight Justices, i.e. five votes to three. The issue on admissibility was whether an individual citizen could claim that his “right to democracy” in the Basic Law was infringed by lack of the required parliamentary majority in the transfer of sovereign rights. One of the concerns of the dissenting Justices was that allowing such claims could, contrary to the other Justices’ intentions, impede European integration.
The Senate held the other parts of the complaint inadmissible, sometimes indicating reasons why it considered the UPC Agreement to be constitutional. In summary:
The complaint did not provide a substantiated explanation of why the procedure for selecting and appointing judges and their legal status violated an individual’s democratic right. Comments made by the Senate included that the appointment of judges by the Administrative Committee required unanimity and there would be a German representative on that Committee, and that the BVerfG had never questioned Germany’s participation in international courts.
The complaint alleged that the procedure for adopting the UPC’s Rules of Procedure (in essence by the Administrative Committee) and for determining the maximum amounts for reimbursable representation costs (that determination being set by the Rules) violated an individual’s democratic right. The Senate noted that it had previously considered that a form of the committee system provided for in an EU trade agreement (i.e. CETA), which did not guarantee member states were represented, could affect the principles of democracy. However, the complaint did not substantiate why something similar would apply to the UPC. Indeed, Germany would participate equally in decisions of the Administrative Committee and those decisions required a majority of three quarters of the votes.
The complaint alleged that the UPC Agreement violated EU law. The Senate held that violation of EU law does not lead to invalidity of a national law (EU law only having priority over national law in terms of application, not validity) and nor does it automatically constitute a violation of the Basic Law.
Another constitutional challenge?
It has been reported that the complainant has indicated that a further constitutional complaint may be filed, saying: “The court did not even rule on the substantive complaints and even hinted at further constitutional deficits of the agreement. It remains to be seen what conclusions the federal government will draw from this decision. If, despite these problems, the German government continues to adhere to the Convention, a new constitutional review by the Constitutional Court will have to be considered, possibly of a complaint from a company.”
The potential grounds for a further complaint are not immediately clear. Even if some of the inadmissible arguments were able to be overcome by the complainant being a company rather than an individual (as the complainant’s remarks suggest), the Senate’s comments (above) on the UPC Agreement’s compliance with the Basic Law do not indicate any obvious problem in that respect. However, the Senate did state (paragraphs 141 and 166) that it did not decide (as it was not necessary) whether the UPC Agreement’s provisions that establish the primacy of EU law violate the Basic Law.
If a new complaint was filed before the UPC system started, this could of course, even if unsuccessful, delay the start.
It remains to be seen whether, following this decision by the BVerfG and the UK government’s announcement that it no longer intends for the UK to participate in the UPC, there is political appetite to continue with the UPC project. The UPC Preparatory Committee stated in its report of the BVerfG’s decision “Despite the fact that the judgement will result in further delay the preparatory work will continue, while the judgement and the way forward is further analysed. It should be acknowledged that all colleagues working for the Preparatory Committee are facing unprecedented challenges with the COVID-19 outbreak but work will move forward using all available resources to keep the momentum.”
If the decision is made to proceed, that will require not only the German legislation enabling ratification of the UPC Agreement to pass through parliament (both the Bundesrat and the Bundestag) with the requisite majorities but also, assuming the UK does not participate, amendment of the UPC Agreement. Both of those procedures could be lengthy. The passage through German parliament is likely to be slow while the COVID-19 pandemic continues, and in 2021 (probably between August and October) there will be the German federal election. Amendment of the UPC Agreement will require agreement by the remaining signatory member states on the location of the section of the UPC’s central division that was to be in London, and other requests for further amendments may be made. In theory, if the German legislation enabling ratification of the current UPC Agreement was passed this year it would be possible for the UPC’s provisional application phase (allowing final preparations such as recruitment of judges) to start with the UK as a participant, as the UK would still be in the Brexit transition period during which EU law still applies. However, it appears much more likely that if the decision is made to proceed that would be without UK participation, and the UPC Agreement would be amended before the German legislation enabling ratification entered parliament; in that case it would have to be passed before the German federal election or there would be even more delays.