German government confirms commitment to UPC project in response to request for explanation of its UPC budgets

German government confirms commitment to UPC project in response to request for explanation of its UPC budgets

28 August 2019

As was widely reported earlier this month, the German Federal Government has responded to questions by the FDP (Free Democratic Party) about the Unified Patent Court (UPC).  Much of the reporting inevitably focused on the comments in response to the questions about how Brexit might affect the project. In fact the questions asked in the Bundestag (German parliament), and hence also the answers, focused on Germany’s past and future annual budgets for the UPC. The questions were raised having regard to the fact that the UPC Agreement has not yet been ratified and was stalled because of the complaint in the German constitutional court. The questions included requesting the Government’s opinion on the effect of Brexit. The totality of what was said in response on this topic was (unofficial translation) as follows:

“The question of the exit of the United Kingdom from the European Union (so-called Brexit) and its effects on the European patent reform play an important part in the subsequent implementation process of the Treaty on a Unified Patent Court. The actual and legal effects of an exit must be reviewed in relation to the Treaty and coordinated at European level. Currently, this opinion forming process is not yet complete, not least because significant factors of the likely exit are currently not yet known.”

Of more significance, perhaps, than this relatively bland and non-committal statement was the Federal Government’s affirmation of its commitment to the project, the response stating:

“The Federal Government has always strongly advocated the creation of a unified patent system in Europe as well as the Unified Patent Court. This commitment continues unchanged. Therefore, the Federal Government takes the necessary budgetary precautions to be able to meet the financial obligations resulting from a ratification”.

The full response of the Bundestag is here, and Bristows’ unofficial English translation here.

As will be seen, before addressing the specific questions, the Government explained briefly the unitary patent and UPC system, noting its benefits of simpler and cheaper protection of inventions and a single judicial process for enforcing patents in Europe. The Government said that German innovative industry in particular would benefit (with about 40 per cent of European patents granted by the EPO being to German applicants).

One area of questioning was how the Government justified its 2015 spend of 544,000 euros as a contribution to “running costs” of the UPC when the UPC Agreement had not yet been ratified. The response was, in summary, that expenditure was necessary to ensure the UPC could operate from the start date and that spend by Germany was to support the development of the UPC’s IT system, which was now almost complete.  Another question was why the 2018 and 2019 budgets contained amounts relating to the UPC, to which the response was that when those budgets were adopted they were as expected under the UPC Agreement and the delay to its ratification was not foreseeable. The Government also provided the 2016 and 2017 budgets for the UPC (as the FDP had not seen these). The FDP asked for the Government’s view on what should happen if the constitutional complaint succeeded, to which it responded that it did not comment on hypothetical questions, but resources that had been allocated but were not required were returned to the Federal budget.  

Regarding future budgets, the FDP asked whether the Government should continue to budget for the UPC before ratification and, if ratified, what would be the estimated expenditure. It was in response to this question that the Federal Government confirmed its ongoing commitment to the creation of a unified patent system in Europe and to the UPC.

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