German court establishes legal certainty for appeals against EPO decisions
On 8 November 2022, the German Federal Constitutional Court rejected several constitutional complaints, deeming them inadmissible. The complainants challenged decisions from the EPO’s Technical Boards of Appeal and the Enlarged Board of Appeal (cases 2 BvR 2480/10, 2 BvR 561/18, 2 BvR 786/15, 2 BvR 756/16 and 2 BvR 421/13), arguing that they were based on a general and obvious shortcoming in legal protection and violated fundamental procedural rights.
The plaintiffs are a German commercial partnership and several legal entities with registered offices in Germany, other EU member states and third countries. They directly appealed the Technical Boards of Appeal’s decisions – which nullified or revoked certain European patents registered with the EPO for the plaintiffs – as well as the decisions of the Enlarged Board of Appeal that confirmed them.
The plaintiffs claimed a violation of the fair proceedings principle – the right to a hearing before the relevant judicial body and the right to be heard. In particular, they were of the opinion that there were general and obvious shortcomings in the legal protection system within the European Patent Organisation and therefore also with the decisions that they challenged.
The court's ruling
According to the court, the constitutional complaints were inadmissible. In part, the plaintiffs lacked the right to appeal. Plaintiffs domiciled in countries outside of the European Union are not entitled to lodge complaints, because they cannot invoke the fundamental rights of the German Constitution. Moreover, none of the plaintiffs could assert a violation of the right to a hearing or the right to be heard because these rights can only be violated by German court decisions.
Further, the plaintiffs lacked proper subject matter since they were directed against the decisions of the Technical Boards of Appeal and the Enlarged Board of Appeal. According to the court’s established jurisprudence, any direct appeal against measures taken by EU institutions by means of constitutional complaint does not count, as measures of inter-governmental institutions are not acts of official German authority. As an inter-governmental institution, the EPO is therefore only subject to limited control by the court.
However, it is possible to submit legal review measures as a preliminary question. Measures undertaken by supranational institutions are reviewed by the court to the extent that they either form the basis for the actions of German state institutions or impose obligations on them to react. In this regard, German legislators must ensure that effective legal protection is available to those affected by such measures.
A corresponding notification of the court was issued. Nevertheless, the complaint had not been adjusted, which was why the constitutional complaint was inadmissible. If the measures had been made subject to a legal review as a preliminary question, the court would have been required to examine whether the minimum level of protection of fundamental rights required by the German Constitution had been violated.
According to the court, however, the plaintiffs failed to sufficiently substantiate that this minimum level of effective legal protection required by Article 19(4) of the German Constitution had not been met by the EPO’s judicial system, even after its structural reform in 2016. Hence, German constitutional bodies were under no obligation to counteract such situation.
Until the structural reform of 2016, a number of aspects existed that would have jeopardised the independence of the European Patent Organisation’s judicial system, since the EPO’s president was, for instance, authorised to propose disciplinary measures and appoint members of the respective boards. However, these issues were largely remedied with the structural reform, so those shortcomings no longer supported a shortfall in the minimum level of effective legal protection. The Boards of Appeal and the Enlarged Board of Appeal were organised as separate units and are now headed by the chair of the Enlarged Board of Appeal as president, who is independent of the office president and also has the right to propose appointments and disciplinary measures.
To the extent that the complaint was dismissed as inadmissible, the court’s decision is unsurprising. It appears that the complaint was an attempt to proceed against the patents’ nullification or revocation by a smokescreen. However, the decision is of particular relevance for two reasons.
Should a stay of proceedings should be ordered before the EPO’s Boards of Appeal?
First, it is crucial to determine whether there is sufficient legal protection against EPO decisions. To date, such stays have only been ordered with restraint, since plaintiffs' demonstration of the court decision’s relevance was already often insufficient – neither a violation of the German Constitution nor a relevance of a stay of proceedings until the court decision had been demonstrated (EPO Boards of Appeal, 24 January 2019 – T 1473/13). The Boards of Appeal rejected most requests for a stay of proceedings, as no case law of the court has found that an EPO decision would violate the German Constitution (analysis in the decision of the EPO Boards of Appeal, 24 January 2019 – T 1473/13, p 37). Nevertheless, there was still legal uncertainty as to whether a stay would be possible if the submission was substantiated enough.
Now, the question of conformity of legal protection before the EPO has been clarified. Indeed, the decisions of the Boards of Appeal are, in principle, subject to a review by the court. However, this is only the case when the issue is concerned of whether the minimum level of protection of fundamental rights required by the German Constitution has been violated. This goes along with the court’s self-conception not to serve as a super-revision instance (BVerfG, 3 April 1979 – 1 BvR 1460, 1482/78; 27, 169/79, NJW 1979, 1541 (1542); 30 April 1997 – 2 BvR 817/90 et al, NJW 1997, 2163 (2164)).
From a German perspective, the court's decision clearly indicates that there are no concerns regarding the lack of legal protection, which ends the legal limbo. There is no longer a possibility to circumvent the legal protection possibilities provided by the European Patent Convention against EPO decisions. The focus should instead be on demonstrating any incorrectness of the EPO’s decision before the respective Boards of Appeal, rather than trying to achieve a stay of proceedings by invoking the German Constitution.
General principles defined by the court
Second, with the decision, the court took the opportunity to define some general principles for inter-governmental courts, the minimum standards for legal protection and the independence of judicial bodies. The court seems to continue to oblige German legislators to ensure that supranational or inter-governmental courts comply with rule-of-law principles.
Such a detailed decision on these merits was unnecessary, since the complaint was rejected as inadmissible. This indicates that these standards should be established with a view to the Unified Patent Court, which is due to commence its work in June 2023. While the standards to be applied by supranational courts are not as high as the ones relevant to German courts, the decision is likely to be concrete for European unitary patents as well, and thus will be of further fundamental importance.
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