On 13 February we published the news that the Unified Patent Court ("UPC") would be given an exemption in the severance of ties with the European Union post-Brexit. It is now possible that the exemption will be irrelevant, as a challenge to the constitutionality of legislation allowing Germany to devolve judicial function to the UPC is set to hold up the ratification of the Court by the member states.
Among others, the UK and Germany must both ratify the UPC in order for it to formally come into existence. With its Brexit exception, the UK will do so. At the moment, Germany can't.
The challenge is to be heard in the Bundesverfassungsgericht, Germany's federal constitutional court, and although it has said that the case will be heard this year, it has not given any more specific information as to the date of the hearing or, more importantly, the ruling. As Germany is the largest patent litigation centre in Europe, it is unlikely that the UPC could survive its non-participation.
Worryingly for the UK, even if Germany does get judicial permission to ratify the UPC, but does not do so until after the hard-stop Brexit date (29 March 2019), the UK may be excluded from participation in the Court by virtue of not being an EU member state on the date of inception. The uncertainty caused by this legal challenge is particularly unsatisfactory because the UPC consultation process began in 2012, and by early 2015 the project had entered its final phase of planning (even having picked out its hearing centre locations).
The late challenge not only risks the UK's participation in the UPC, but also costing the EU and member states millions of pounds and euros in wasted spending.
If you have any questions on the above, please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or email@example.com: EU/International, News