The UK has ratified – UPC ante portas? All Eyes on Germany’s Constitutional Court

Following a period of silence about the UPC, the UK has now ratified the UPC Agreement. The fate of the UPC is now in the hands of the German Constitutional Court as they decide whether the German Act on ratification of the UPC agreement is in line with the German Constitution. 

Ratification by Germany

Ratification proceedings in Germany have been – and remain – mysterious. All legislative steps for ratification have been completed. Indeed, the President of Germany is in principle obliged to take the necessary steps to publish the Ratification Act and allow submission of the instrument of ratification in Luxembourg. Yet just a phone call from the President of the Constitutional Court to the President of Germany was all it took to halt the process until the Constitutional Court renders its decision on a constitutional complaint against the Ratification Act. Following standard procedure, the Constitutional Court would have had to decide on a motion for preliminary halt of the ratification process (filed along with the complaint). Instead, what we are seeing here is a tacit understanding between two presidents to give the Constitutional Court as much time as it needs for a decision on the merits. 

This complaint, along with many comments from various sides, is currently on the desk of a three-judge panel entitled to - unanimously - dismiss constitutional complaints as obviously unfounded. Rumor has it that the panel will render its decision this summer or early autumn. Given that the President of the Constitutional Court had asked the President of Germany to halt ratification on the grounds that the complaint was not obviously unfounded, it is doubtful that the court itself (especially though only the three-judge panel) will now dismiss the complaint stating that it actually is obviously unfounded. Rather, it is expected that the three judge panel will assign the complaint to the competent 2nd Senate with its presiding Judge Huber for decision. The hearing could take place anytime, but the word (again, rumor) is that a hearing will take place late 2018 or early 2019.

This schedule brings German ratification of the UPC Agreement (if at all) close to Brexit day (i.e. March 29, 2019). Even in the event of a decision by November 2018, it remains doubtful that Germany's instrument of ratification would arrive in Luxembourg prior to January 2019. The result would be a start of the UPC (under the UPC Agreement four months after the last needed ratification) after Brexit day. 

But would this be with or without the UK?

Provisional Application Phase

A Provisional Application Phase is intended to precede the UPC’s opening its doors. In this period of time judges will be hired, equipment purchased, and the sunrise period will allow an early opt-out.

Separate ratifications are under way and it is not entirely clear which of the member states of the agreement still need to ratify, and which have already ratified the respective protocol. The Protocol to the Agreement on a Unified Patent Court on provisional application (PPA) will however be speedily ratified once it is clear that Germany will also ratify.

Consequences for the UK

If German ratification takes place so late that the start of the UPC falls after Brexit day, there is little chance that the Exit Agreement under Art. 50 of the EU-Treaty will address all aspects of a non-EU state becoming a member to the UPC. 

Some think that a start of the Provisional Application Phase before Brexit day might change the picture. However, the present author fails to see how a provisional application could be implemented in the event that no actual application is expected. There should not be any provisional application before Germany has ratified.

Nor do the Brexit transitional provisions, to which the EU and the UK might accede, offer much hope to the British supporters of the UPC. These transitional provisions cannot change the fact that the UK is leaving on Brexit day, and simply stipulate the rules the EU would continue to apply. Thus, not being a member of the EU, the UK cannot become a member to the UPC agreement. Hence, even if there are transitional provisions and if they cover the participation of the UK to the UPC, they can only help if the start of the UPC is before Brexit day. 

Finally, it seems that both Brussels as well as London have other problems to deal with. It appears unlikely that the Exit agreement (with or without transitional provisions) will contain anything regarding the UPC Agreement, if the fate of this Agreement is in limbo. What is more: a draft of the Exit agreement needs to be finalized by September 2018 to allow ratification of the Exit agreement by the EU members states before Brexit day.

If anything can ensure participation of the UK, it is speedy ratification by Germany. This can be achieved by the three-judge panel dismissing the constitutional complaint as obviously unfounded. The ratification of the UPC Agreement by the UK might induce the Constitutional Court to speed up. Another – far fetched – possibility is that the President of Germany finds it unbearable that a law (i.e. the Ratification Act of German Parliament) is not put into effect for more than a year - not due to a decision of the Constitutional Court, but due to a phone call. As a result he might effect ratification by Germany despite the pending complaint.

If Germany ratifies before the exit agreement is sent to the parliaments of EU member states for ratification EU and UK could negotiate the status of the UK in the system in the context of the exit agreement. There is little hope, however.

Overall Result

Britain's recent ratification is important because it increases the pressure on German Constitutional Court to decide on the constitutional complaint. But with the German Constitutional Court likely deciding only in late 2018, hopes for UK participation dwindle.

As to the project itself: it’s now up to the German Constitutional Court to decide whether it flies or not. If the Constitutional Court decides in favor of the UPC, the court will start half a year after the decision. If it decides against, the project is likely dead.