Breakthrough in German challenge against UPC

Remember the Unified Patent Court? The project that would introduce a cross-border court system to allow enforcing patents across Europe? If not, that may be because the process has been stalled multiple times in recent years - from the UPC Agreement concluded in 2013 (!), the early days of the ratification process, to Brexit, the UK still committing to the UPC only to later withdraw, and of course: the German constitutional complaints. After the German Federal Constitutional Court ruled the UPC ratification act unconstitutional - on formal grounds, while rejecting the substantive challenges - , Germany ratified essentially the same act with the required majority in late 2020. This did not settle the matter, however: A further challenge was filed, and the ratification process was stopped again. 

Now finally, it seems that the UPC has taken a big hurdle. The German court today dismissed the requests for interim measures against the ratification. It did not dismiss the constitutional complaint on the merits (yet). The reasoning given, however, carries a strong suggestion: The court found that the complaints are not admissible because the complainants did not sufficiently substantiate a violation of their fundamental rights. The court had reached the same conclusion in the first challenge. Apparently, the revised challenges were not enough to sway the court to rule the UPC Agreement unconstitutional again.

Technically, this should enable Germany to conclude the ratification process and to finally push the UPC across the finish line. There are, however, numerous things to sort out now: 

• how to handle the withdrawal of the UK and its potential effect on the structure of the agreements, 
• where to move the part of the Central Division that was meant for London, 
• whether the German decision resolves the concerns around the judicial system at the European Patent Office, which will play a key role also under the UPC. 

And there is one thing the courts just cannot decide: The UPC's acceptance in the industry. One may rightfully wonder whether companies still have a vivid interest in the UPC, whether the wait has just been too long and whether the UPC without the UK remains attractive. Also, the case law in the UPC member states has developed further. Tech companies can rely more on judgments in individual countries to have an effect across Europe than other industries. Not being able to sell standardized products with infringing components in key markets is likely to mean that the component will be replaced entirely, not just in the individual market. Therefore, the pan-European enforcement element of the UPC is not as critical in this sector, but an advantage nonetheless. The field for standard-essential patents has also seen a shift in favour of patent owners recently, fuelled not least by the German courts. Having national court systems available that are not only "tried and tested" but also very attractive on the merits may lead many patent owners to prefer this over the UPC, which may be a "cat in the box" for quite some time. 

So stay tuned, the UPC is always good for a surprise...