UPC: will the German decision force changes that are coming anyway?
There is hardly any other decision of the German Federal Constitutional Court (FCC) that has been awaited as eagerly outside Germany—or even outside Europe—as the decision of the 2nd Senate of the FCC in case 2 BvR 739/17 on the complaint against the Act on the ratification of the Agreement on a Unified Patent Court (UPCA), published on 20 March 2020.
The emphasis of most comments lies on the result of the case: the Act has been declared null and void because it had not been approved by the two-thirds majority of the members of the German parliament (Bundestag) considered necessary by the FCC.
The following will analyse the significance of the FCC’s reasoning for the future of the UPC system.
Rationale and meaning
Many IP commentators seem to regard the deficiency in the ratification process (lack of a two-thirds majority) as a minor formality issue which could easily be cured, thus not deserving any detailed attention.
However, from the perspective of German constitutional law it is a landmark decision. It concerns the quite delicate issue of how, and to what extent, Germany’s constitutional structure can be changed in the course of international cooperation, particularly for the purpose of European integration.
The FCC was faced with the question as to whether the conferral of sovereign powers on the UPC, which is possible pursuant to article 23(1), 2nd sentence, of the German Constitution (Grundgesetz [GG]), changed or supplemented the German Constitution in substance. If so, article 23(1), 3rd sentence of the GG in conjunction with article 79(2) GG requires the two-thirds majority at stake.
The contentious point within the FCC was whether an obligation in an international treaty exposing German citizens to acts of an international authority can be the basis of a constitutional complaint by an individual before the act conferring the competence has entered into force.
The majority of five to three judges said yes, taking the position that any conferral of judicial functions on an international court modified the allocation of jurisdiction to the courts as foreseen in the GG and, in this respect, constituted an amendment of the German Constitution in substantive terms.
In this context, the FCC accepted the claim of a citizen for having the formal aspects of conferral reviewed, arguing that competences conferred on another entity under international law were usually “lost” and could not easily be regained by the legislator.
According to the majority of the judges of the FCC, the legal basis of this approach is the democratic principle laid down in article 38 GG allowing a citizen to claim that sovereign rights are conferred only in the ways provided for by the German Constitution.
Only a formal issue?
Notably, besides the mentioned formal issue, the case involved three further attacks:
