Friday, 1 July 2011

Rising from the ashes of the ECJ ruling: the Unified Patent Court

PatLit thanks Professor Steve Peers (right, University of Essex) for preparing this hugely helpful note on the draft agreement on the Unified Patent Court which has so exercised us all of late. He writes:
"The draft treaty on a unified patent court follows the steer given by the Commission's non-paper on this issue, discussed by Member States' ministers in May. The suggestion then was to respond to the Court of Justice's negative opinion on the draft treaty creating a court with jurisdiction over EU patents and European patents alike by amending that draft treaty as follows: (a) only EU Member States would be parties, ie not the EU itself and not any non-Member States; and (b) making specific adjustments to reflect the Court of Justice's concern that the patent court should be subject to the same controls as regards EU law as the national courts of Member States. Otherwise the substance of that treaty would remain basically the same, in particular as regards the patent court's exclusive jurisdiction over key aspects of patent litigation, and the basic structure of the patent court (several first instance divisions, a centralised appeal division).

The outgoing Hungarian presidency of the EU Council has therefore drawn up a revised draft treaty which follows these precepts, but adds a few additional suggested changes. It has also suggested a revision of the draft Statute of the Court to match.

The presidency did not list the changes which it made to the draft treaty as existed in 2009, and therefore did not explain those changes either. The following is a list of the changes as far as I can discern them (leaving aside some consequential amendments), with some comments on their implications:

(a) the name of the court is now the 'Unified Patent Court'; 
(b) the EU is not to become a contracting party, and neither are any non-Member States -- although the first recital in the preamble still refers to the EEA (ie including Norway, Iceland and Liechtenstein) for some unknown reason;
(c) recitals 3, 4, 7 and 9-14 in the preamble are new. Note that recital 14 (the last one), as suggested by the non-paper, invites the two Member States (Spain and Italy) who are not taking part in enhanced cooperation as regards the EU's unitary patent to sign up to this treaty, as regards litigation over European patents only; 
(d) the old recital 3 (now 5) in the preamble is amended to refer to jurisdiction over revocation; 
(e) the old recital 4 in the preamble, which invited all EPC states to sign the treaty, has been dropped; 
(f) a new second para in Article 1 explains the patent court's role in the judicial system of the EU; 
(g) some amendments to the definitions in Article 2 were necessary to take account of the changes in contracting parties, also the nature of the EU (now unitary) patent project;
(h) in Article 3 there is no longer a reference to compulsory licences - this issue has been dropped from the unitary patent project and left to national law, as confirmed by recital 9a in the preamble to the agreed text of the unitary patent regulation; 
(i) in Article 9 and throughout, the 'Mixed Committee' is now renamed the 'Administrative Committee'; 
(j) a new Chapter IIIA - Articles 14a to 14d - concerns the role of EU law - and deals with in turn i) the primacy of EU law (new Article 14a); ii) preliminary rulings to the Court of Justice from the patent court on EU law issues (Article 14b) - this was Article 37 in the 2009 version, and remains unchanged apart from being 'gussied up'; iii) damages liability for Member States if the patent court gets EU law wrong, as the Court of Justice insisted upon (new Article 14c); and iv) liability for Member States pursuant to the EU law infringement procedure, again if the patent court gets EU law wrong, as the Court of Justice insisted upon (new Article 14d). It should be noted that the Court of Justice would not have jurisdiction to interpret the patent court treaty itself - it would have done in the 2009 version, by virtue of the EU being party to the treaty creating the patent court; 
(k) the old Chapter IIIA becomes Chapter IIIB - now Articles 14e to 14k; 
(l) the EU Commission loses a role drawing up the patent court's rules of procedure (Article 22(2)) - in fact the Commission already drew up draft rules of procedure, which presumably will not just be thrown in the bin; 
(m) there is a new clause on languages (Article 31(3)), designed it seems to boost defendants' rights - this is perhaps a response to concerns expressed in the *Advocates-Generals' opinion* on the draft patent court treaty on this issue; 
(n) as regards decisions on the validity of a patent, the cross-references to the EU Regulation have been removed (Article 38a(2) and (4)); 
(o) the EU no longer has a role in the budget committee (Article 57a); 
(p) the Commission is no longer involved in the advisory committee (Article 57b); 
(q) accession is now open to any Member State of the EU, rather than any signatory of the EPC (Article 58a); 
(r) there is a new clause allowing for simplified revision (Article 58d(1)) - the previous paras 1 and 3 have been dropped. Oddly there is no longer any reference to amending the treaty by the usual means of treaty amendment; 
(s) the treaty now is more clear about its entry into force (Article 59) - it will enter into force when a (so far unspecified) number of Member States have ratified - including the 3 Member States with the biggest number of European patents - this basically follows Article 6(1) of the London Agreement on EPC patent translation - that agreement named the minimum number of parties as 8. In contrast the draft EPLA referred to ratification by only one of the three states with the biggest number of patents, plus an unspecified minimum number of states. This draft raises the prospect that the treaty will not need to be ratified by all of the EU Member States (or even all of them participating in the unitary patent) to enter into force. This is crucial because, in the agreed text of the unitary patent regulation, the unitary patent cannot be operational until the patent litigation treaty enters into force -- and because there were, of course, problems in the past ratifying the two earlier attempts at a Community patent convention (1976 and 1989) among all EEC Member States".
NOTE: since posting this, Steve has written to suggest that it might be useful for readers to have a link to the 2009 version of the patent litigation treaty, ie the draft which the ECJ rejected and to which he referred: it's here.


Gibus said...

Does anybody have an explanation about why EU isn't a contracting party anymore?

Steve Peers said...

Good question. The Commission's non-paper only states that the EU would not be a party (p. 8) without explaining why.

I suppose one possible answer is that there would be (and could be) no third States or bodies signing up to the treaty, and the EU usually only becomes a party to international treaties to which third States or bodies, not just EU Member States, are parties. But in practice it has become party to a treaty alongside its Member States, but no-one else - I can think of only one example, the 'European schools convention' (see the recent CJEU judgment in Case C-106/09 Miles). Article 218 TFEU, the clause on the negotiation of international agreements by the EU, refers only to the EU entering into agreements with third States and bodies, although it does not expressly rule out the EU entering into agreements with its Member States alone.

A more cynical explanation is that using a purely intergovernmental route will circumvent some of the possible hurdles if the EU were a party to the treaty concerned. The European Commission will have no formal role (it would otherwise have to propose that the EU sign and conclude the treaty concerned, after receiving a mandate from the Council to negotiate on behalf of the EU), neither will the European Parliament (it would otherwise have had the power of consent). Since the EU Council will not sign or conclude the agreement on behalf of the EU, therefore Spain and Italy cannot bring an annulment action against it, although I suppose they could instead sue the other Member States (pursuant to Article 259 TFEU) for signing it (so could the Commission, pursuant to Article 258 TFEU). Anyway, if their annulment actions against the Council's authorization of enhanced cooperation are successful, that will finish off the litigation treaty anyway. Also the Court of Justice could not be asked for its opinion on whether the draft treaty is compatible with EU law (as was the case with Opinion 1/2009) - that jurisdiction only applies if the EU is planning to be a party to the draft treaty concerned.

Finally, without the EU as a party it might be easier to justify the argument that the treaty will apply without all 27 Member States (or all 25 Member States participating in enhanced cooperation) signing it, or at least ratifying it. I think that is a crucial point if the draft treaty (and therefore the overall EU/unitary patent project) is to have any prospect of success - given that the 1976 and 1989 Community patent Conventions foundered due to lack of ratifications by all Member States, and the EPC London Agreement would not be in force (and probably never be in force) if all EU Member States had had to ratify it.

Anonymous said...

The EU cannot sign the EPC, because disputes related to the EPC have to be heard in front of the International Court of Justice, a court only accessible to United Nations states, which the EU is not, even if some diplomats wants the EU to be recognised as a UN "country":

Steve Peers said...

The question is not whether the EU can sign up to the EPC, but whether it would or could sign up to a separate treaty, the draft treaty creating a 'Unified Patent Court'. That draft treaty does not contain any provision for dispute settlement before the International Court of Justice, so the issue you mention does not arise.