German Constitutional Court declares the vote on the ratification act of the UPC Agreement unconstitutional because of a lack of the required quorum

The UPCA to some extent transfers jurisdiction from the German national courts to the UPC, which cannot be easily retrieved, which is why it was deemed to affect the German Constitution. If the appropriate procedure is not followed for such transfer, the ratification act has no effect according to the majority of the judges.

 However, 3 out of the 8 judges adopted a dissenting opinion in which they also warned that the majority opinion could lead to a significant increase in appeals to the Court, which could be detrimental to the democratic process and the European integration. In their view, formalities should not be the basis for blocking a transfer of jurisdiction.

The Court also ruled – apparently unanimously – that the other complaints are inadmissible. These relate (1) to the fact that judges are not appointed for life but only for 6 year terms (2) the procedure for their appointment and (3) the more substantive complaint that there would be an insufficient justification for interference with the German Constitution and the complaint that the UPCA would be in violation of EU law. Obviously, those complaints could have constituted a much larger problem for the UPC, as the first two would require a revision of the UPCA and the last one, if awarded, could not have been overcome without additional EU legislation.

With regard to the UPC Rules of Procedure the Court states that, different from the issues with regard to for instance CETA (the Comprehensive Economic and Trade Agreement between Canada and the EU), the UPCA provides for a direct influence of the participating member states, because they are represented in the Administrative Committee which has to take decisions by a majority of three quarters.

The Court states that EU law does not impose obligations on the national laws of the member states that could cause such laws to be in violation of the constitution of a member state. A violation of EU law thus is not automatically a violation of the German Constitution, even not under the principle of “European law friendliness” (Europarechtsfreundlichtkeit) in the German Constitution. Thus, compliance with EU law is not a constitutional criterion.

Because the UPC is an independent supranational institution which is separate from the EU institutions, a complaint of violation of the Charter of Fundamental Rights of the European Union doesn’t have to be decided by the Court.

Comment: by the way, this part of the ruling is also very interesting because there has been a long lasting discussion among experts on the nature of the UPC. The German Constitutional Court now quite clearly qualifies it as a supranational court.

The Court recalls that the German Constitution was changed in 1992 to enable the transfer of sovereignty for the achievement of a unified Europe. However, the Constitution in the Court’s view doesn’t require that sovereignty can only be transferred to EU institutions; that is left open, as long as the purpose is served.

The Court also states that the UPC can be regarded as part of the program for the integration of the EU and can be seen as a substitute for EU law. It has a basis in primary EU law and is a functional equivalent for a proper EU institution. It is also closely linked to secondary EU law, such as the Unitary Patent Regulation. In addition, the UPC itself is bound to EU law. It was also promoted by the EU bodies, which also have various roles with regard to the UPC. For instance, the European Commission has to be consulted on changes to the Rules of Procedure. The fact that not all EU member states have joined is not contrary to the integration program; this is rather enforced by the instrument of enhanced cooperation.

However, according to the Court the UPCA does deviate from article 262 of the Treaty on the Functioning of the European Union, which only foresees the transfer of jurisdiction in intellectual property disputes to the Court of Justice of the European Union. This would require the consent of the member states.

Comment: of course, it is clear that the member states who have signed the UPCA have in fact given such consent, especially when they also ratified the agreement. That may not explicitly be the case for the remaining member states, but so far the appeals to the Court of Justice against the closely related Unitary Patent Regulation have failed and there have been no new initiatives against the UPCA. Besides, before getting to this issue, the Constitutional Court already ruled that a violation of EU law anyway doesn’t automatically constitute a violation of the German Constitution.

The Court goes on to say that the transfer of jurisdiction to the UPC does amount to a considerable interference with the German judiciary and therefore with the German Constitution. As a consequence, the ratification act had to be approved by a majority of two thirds of the member parliament. The Court doesn’t say that the interference with the judiciary and the Constitution is unwarranted; it just says that the proper voting procedure hasn’t been followed.

Although it is unfortunate that the ratification act has been declared void, it is good news for the UPC  that the other complaints have been declared inadmissible, which means that we now do have certainty on all issues raised before the German Constitutional Court.