Constitutional complaints challenging the European Patent Office's system of appeal inadmissible

Press Release No. 4/2023 of 12 January 2023

Order of 8 November 2022
2 BvR 2480/10, 2 BvR 561/18, 2 BvR 786/15, 2 BvR 756/16, 2 BvR 421/13

EPO

In an order published today, the Second Senate of the Federal Constitutional Court dismissed as inadmissible several constitutional complaints that challenge decisions of the Technical Boards of Appeal and the Enlarged Board of Appeal of the European Patent Office. The complainants - a German partnership and several legal entities domiciled in Germany, in Member States of the European Union and in third countries - essentially assert that the challenged decisions are based on general and manifest deficiencies in the available legal protection and violate procedural fundamental rights.

The constitutional complaints are inadmissible. The complainants domiciled in third countries are not entitled to invoke the fundamental rights laid down in the Basic Law (Grundgesetz - GG). In addition, the right to one's lawful judge and the right to be heard can only be violated by German courts. Insofar as the constitutional complaints directly challenge decisions of the Technical Boards of Appeal and the Enlarged Board of Appeal, they are inadmissible as the Federal Constitutional Court only reviews the acts of supranational organisations to the extent that they provide the basis for measures taken by German authorities or trigger obligations incumbent upon German constitutional organs. Furthermore, the complainants do not sufficiently substantiate their assertion that - even after the structural reform of 2016 - the European Patent Organisation's system of appeal is structured in a way that fails to provide the minimum standard of effective legal protection required under the Basic Law.

Facts of the case:

The European Patent Office (EPO) is an organ of the European Patent Organisation (EPOrg). Both have been established by the European Patent Convention (EPC), the provisions of which are supplemented by the Implementing Regulations to the Convention on the Grant of European Patents (Implementing Regulations). Recourse against decisions of the European Patent Office is available through the Boards of Appeal and the Enlarged Board of Appeal. Both of these have their own separate Rules of Procedure.

In 2016, the Administrative Council of the European Patent Organisation approved a comprehensive reform package aimed at restructuring the appeal system of the European Patent Organisation. As a result, the Boards of Appeal and the Enlarged Board of Appeal were grouped into a separate organisational unit - the Boards of Appeal Unit - and were no longer integrated into the European Patent Office as Directorate-General 3. The Boards of Appeal Unit was granted organisational autonomy and is now headed by the President of the Boards of Appeal. The holder of this office - who also serves as the Chair of the Enlarged Board of Appeal - is independent from the President of the European Patent Office and is accountable only to the Administrative Council. He or she is appointed by the Administrative Council on a joint proposal by the President of the European Patent Office and the newly-established Boards of Appeal Committee. In carrying out his or her duties, the President of the Boards of Appeal enjoys independence within the parameters set out by the European Patent Convention.

The complainants are a German partnership and several legal entities domiciled in Germany, other Member States of the European Union and third countries. Their constitutional complaints directly challenge decisions issued by the Technical Boards of Appeal that cancelled or revoked existing European patents from which they had benefited, as well as the decisions issued by the Enlarged Board of Appeal reviewing and confirming those decisions. Some of the complainants also challenged other decisions issued by the Technical Boards of Appeal and the Enlarged Board of Appeal by way of filing objections on grounds of possible judicial bias.

The complainants essentially assert a violation of the principle of a fair trial (Art. 2(1) in conjunction with Art. 20(3) GG), the right to one's lawful judge (Art. 101(1) second sentence GG) and the right to be heard (Art. 103(1) GG). They contend that the system of appeal within the European Patent Organisation - and, by extension, the challenged decisions themselves - suffer from general and manifest shortcomings.

Key considerations of the Senate:

The constitutional complaints are inadmissible.

I. Insofar as the complainants are domiciled in third countries, their constitutional complaints are inadmissible from the outset as they cannot invoke fundamental rights of the Basic Law (Art. 19(3) GG).

II. Nor can they, or any of the other complainants, assert a violation of the right to one's lawful judge (Art. 101(1) second sentence GG) or the right to be heard (Art. 103(1) GG), because their complaints are not directed at violations of these procedural fundamental rights by German courts.

1. It is true that the objective procedural principles contained in Art. 101(1) second sentence GG and Art. 103(1) GG afford protection to anyone who is a party or is directly affected by court proceedings. In principle, this protection also extends to foreign legal entities, irrespective of Art. 19(3) GG.

However, these procedural fundamental rights only apply to the German judicial system within the meaning of Arts. 92 ff. GG. These rights are not binding on international or supranational organisations, their courts and tribunals. The manner in which proceedings are conducted before such bodies cannot, therefore, be reviewed against the standards of Art. 101(1) and Art. 103(1) GG.

2. Based on these considerations, the Technical Boards of Appeal and the Enlarged Board of Appeal are from the outset incapable of violating the Basic Law's provisions guaranteeing the right to one's lawful judge and the right to be heard.

III. Insofar as they directly challenge decisions of the Technical Boards of Appeal and the Enlarged Board of Appeal, the constitutional complaints of the remaining complainants lack an admissible subject matter.

1. a) According to the established case-law of the Federal Constitutional Court, acts of institutions, bodies, offices and agencies of the European Union cannot be directly challenged by means of a constitutional complaint. However, they may be reviewed by the Federal Constitutional Court - as a preliminary question - if the claim can be made that such acts exceed the scope of the European Union's integration agenda (Integrationsprogramm), that they affect the minimum standard of fundamental rights protection that the legislator is obliged to guarantee also with regard to the European Union, and that German constitutional organs are required to take steps against such acts due to their responsibility with regard to European integration (Integrationsverantwortung). Though developed with regard to Art. 23 GG and in respect of the European Union, these standards also apply to the acts of supranational organisations under Art. 24(1) GG.

b) Acts of supranational organisations under Art. 24(1) GG are not, therefore, acts of a public authority that may be challenged by means of a constitutional complaint pursuant to Art. 93(1) no. 4a GG and § 90(1) of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz - BVerfGG). However, the Federal Constitutional Court's review may consider the domestic act approving the transfer of sovereign powers and also whether the organs of the supranational organisation subsequently violated the minimum standard of fundamental rights protection required by the Basic Law. The Federal Constitutional Court may also consider whether German constitutional organs properly fulfilled their duty to ensure these minimum standards. Acts that do not meet these minimum standards are inapplicable in Germany.

2. Against this backdrop, the constitutional complaints are inadmissible insofar as they directly challenge the decisions of the Technical Boards of Appeal or the Enlarged Board of Appeal. Despite having been notified of this issue, the complainants did not adjust their constitutional complaints to assert instead that the Federal Government and the Bundestag had violated the duty incumbent upon them to ensure that the Basic Law's minimum requirements for effective legal protection are upheld within the context of the European Patent Office's appeal system.

IV. Furthermore, the complainants that were entitled to lodge constitutional complaints did not sufficiently substantiate their claim that the appeal system within the European Patent Organisation fails to provide the minimum standard of effective legal protection required under Art. 19(4) GG and that German constitutional organs are therefore currently obliged to take steps in response.

1. a) Art. 24(1) GG opens the domestic legal order, allowing laws from other sources to become directly effective and applicable within the state's sphere of control, without requiring any act of implementation or enforcement. When the legislator transfers sovereign powers to a supranational organisation, it simultaneously enables the (fundamental) rights of its citizens to be restricted.

Against this background, the legislator may only transfer sovereign powers to a supranational organisation if that organisation provides rule-of-law guarantees regarding the adequate protection of fundamental rights. German constitutional organs are obliged, within the scope of their competences, to ensure that these guarantees are permanently upheld.

b) As acts of German authorities, integration laws (Integrationsgesetze) transferring sovereign powers under Art. 24(1) GG are bound by the Basic Law's fundamental rights and must generally ensure that the essence (Wesensgehalt) of these fundamental rights is protected (Art. 19(2) GG), also when public authority is exercised by supranational organisations. This requirement is applicable not only to the (initial) transfer of sovereign powers to a supranational organisation, but also to the organisation's subsequent implementation of its European integration agenda. In this respect, fundamental rights give rise to duties of protection that require German constitutional organs not only to monitor how the European integration agenda is implemented in each particular case, but also to take appropriate remedial action in the event that the essence of fundamental rights is affected.

c) When transferring judicial competences to supranational organisations under Art. 24(1) GG, the legislator deciding on European integration matters is therefore obliged, in view of Art. 19(4) GG, to ensure that effective legal protection is available to persons affected by the acts of the supranational organisation in question.

The right to effective legal protection arising from Art. 19(4) GG and the duty to provide access to justice arising from Art. 2(1) in conjunction with Art. 20(3) GG guarantee a minimum standard of effective legal protection, which must still be ensured when sovereign powers are transferred to supranational organisations. Thus, access to a judicial decision on the merits of a case may not under any circumstances be prevented, rendered practically impossible or made unreasonably difficult in a manner that cannot be justified by factual reasons. Individuals are constitutionally entitled to have access to justice in line with these requirements.

The legal protection afforded by a supranational organisation only satisfies these requirements if the organisation provides for legal recourse against its own acts of public authority, if the review is carried out by an independent adjudicating body with sufficient jurisdiction, if the adjudicating body reaches its decisions on the basis of appropriate proceedings in which the right to be heard is ensured, if these decisions impose effective sanctions for violations of rights, if appropriate means of challenge and defence are provided, and if possibilities are granted to freely choose competent legal counsel. These minimum requirements arise from the common constitutional traditions of the Member States, from the European Convention on Human Rights and from the Charter of Fundamental Rights. Whether these common European minimum standards have been met and whether effective legal protection is available in a particular case must be determined by assessing the overall situation.

2. Against this backdrop, the remaining complainants have not sufficiently substantiated their claim that - even after the structural reform of 2016 - the Technical Boards of Appeal and the Enlarged Board of Appeal fail to provide the minimum standard of effective legal protection within the meaning of Art. 19(2) and (4) GG.

a) To the extent that the complainants object to the institutional positioning of the Boards of Appeal and the Enlarged Board of Appeal within the European Patent Organisation's system of appeal and the associated shortcomings in terms of the professional and personal independence of the members, there are some arguments why the minimum standard of effective legal protection required by the Basic Law was not met prior to the structural reform of 2016. These shortcomings have been largely rectified by the 2016 structural reform, however.

aa) In principle, Art. 23 EPC guarantees the independence of the members of the Technical Boards of Appeal and the Enlarged Board of Appeal, reinforcing this independence with further provisions. For example, the members may generally not be removed from office during their five-year term (Art. 23(1) first sentence EPC). Also, they are not bound in their decisions by any instructions and are subject only to the European Patent Convention (Art. 23(3) EPC).

Prior to the 2016 structural reform, this independence was threatened by a number of different aspects. For example, the person responsible for the Boards of Appeal - the Vice-President of Directorate-General 3 - combined both executive and judicial roles, on the one hand serving as the Chair of the Boards of Appeal Presidium and the Enlarged Board of Appeal, and on the other hand being part of the European Patent Office's administration. This person was moreover obliged to support the President of the European Patent Office and was subject to the President's instructions. In turn, the President had the power to propose disciplinary measures against members of the Boards of Appeal and the Enlarged Board of Appeal. Furthermore, the members of the Boards of Appeal and the Enlarged Board of Appeal were appointed by the Administrative Council of the European Patent Organisation for a five-year period on the proposal of the President of the European Patent Office. Five-year terms of office are at the lower end of what is usual to ensure independence, including at international courts. Another problematic aspect was the involvement of the President of the European Patent Office in the reappointment of members of the Boards of Appeal.

The structural reform that came into force on 1 July 2016 separated the administrative and judicial tasks, granting a high degree of institutional autonomy to the judicial functions performed by the Boards of Appeal. As a result, the aforementioned shortcomings - which are not dealt with by the complainants in any detail - were essentially rectified, at least to the extent that, based on an assessment of the overall situation, the framework no longer falls short of the minimum standard.

Since the structural reform, the Boards of Appeal have no longer been part of Directorate-General 3 of the European Patent Office, nor has any Vice-President been appointed to simultaneously act as the Chair of the Enlarged Board of Appeal. The Boards of Appeal and the associated registries and support services are now grouped together into a separate organisational unit - the Boards of Appeal Unit - under the direction of the President of the Boards of Appeal (Rule 12a(1) first sentence of the 2016 Implementing Regulations). The President of the Boards of Appeal is independent of the President of the European Patent Office and is solely accountable to the Administrative Council of the European Patent Organisation (Rule 12a of the 2016 Implementing Regulations). The Chair of the Enlarged Board of Appeal now acts as President of the Boards of Appeal (Rule 12a(1) second sentence of the 2016 Implementing Regulations).

As part of the structural reform, the President of the European Patent Office delegated other functions and powers concerning the Boards of Appeal Unit and its staff to the President of the Boards of Appeal. The latter now also has the right to propose the members and Chairpersons of the Boards of Appeal and the members of the Enlarged Board of Appeal for appointment, and the right to be consulted on their reappointment. Furthermore, the President of the Boards of Appeal is responsible for the administrative supervision of the Unit and has the right to propose disciplinary measures in respect of the members and Chairpersons of the Boards of Appeal and the members of the Enlarged Board of Appeal (Rule 12a(2) first sentence of the 2016 Implementing Regulations).

b) Insofar as they contend that effective legal protection was lacking due to a failure to properly grant the right to be heard and a failure to guarantee the right to a fair trial, the constitutional complaints of the complainants are not substantiated. Without any further explanation, the complainants simply invoke the constitutional requirements that apply to the German judicial system, failing to recognise that when judicial competences are transferred to international organisations, the essence of Art. 19(4) GG does not guarantee an entirely identical standard of effective legal protection, but only guarantees a minimum standard. The complainants have not demonstrated any failure to uphold this minimum standard, nor is it otherwise apparent.

Art. 24(1) EPC prohibits members of the Enlarged Board of Appeal from taking part in a case if they already participated in the decision under appeal at an earlier stage. The Convention does not, it is true, provide for the complete organisational separation of the Boards of Appeal and the Enlarged Board of Appeal. But given the confidence in the independence of the appointed judges, this is not necessary.

The same applies to the obligations of the Boards of Appeal and the Enlarged Board of Appeal to provide notification. Art. 113(1) EPC explicitly provides that decisions of the EPO may only be based on grounds on which the parties concerned have had an opportunity to present their comments. Review proceedings conducted in accordance with Art. 112a EPC - a provision introduced in the year 2000 - are frequently concerned with violations of the right to be heard, and the Enlarged Board of Appeal has built up detailed case-law in this area.

As far as the minutes of oral proceedings and the requirements they must satisfy are concerned, it is unclear whether and to what extent they are protected under Art. 19(4) GG. So far, the complainants have not put forward any argument.

Art. 15(9) of the Rules of Procedure of the Boards of Appeal requires that decisions be issued in a timely manner, no later than three months after the oral proceedings. If the relevant Board is unable to comply with this time limit, a new date can be set. The Board is thus afforded discretion in terms of when the decision is despatched.This, too, does not violateArt. 19(2) and (4) GG.

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