Spain's challenge to the EU patent package: the Curia summary

As most readers of this weblog will now know, the Court of Justice of the European Union has given judgment this week in Cases C-146/13 Spain v Parliament and Council and C-147/13 Spain v Council. Readers who have a deep interest in the legal and constitutional dimensions of the European Union's new patent package will probably have read the rulings already, while those who are not so interested may have ignored them together. Curia's media release, reproduced here, does however offer a useful compromise:

The Court dismisses both of Spain’s actions against the regulations implementing enhanced cooperation in the area of the creation of unitary patent protection 

The current European patent protection system is governed by the European Patent Convention (EPC), an international agreement which is not subject to EU law. That convention provides that, in each of the Contracting States for which it is granted, the European patent is to have the effect of and be subject to the same conditions as a national patent granted by that State.

Through the ‘unitary patent package’ [Regulation 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection, Council Regulation 1260/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements and the Agreement on a Unified Patent Court], the EU legislature sought to confer unitary protection on the European patent and establish a unified court in this area. Under the EPC system, European patents provide, in each of the States which are party to that convention, protection the extent of which is defined by the national law of each State. By contrast, under the European patent with unitary effect (EPUE) system, the national law designated on the basis of Regulation No 1257/2012 will be applied in the territory of all the participating Member States in which that patent has unitary effect, which will guarantee the uniformity of the protection conferred by the patent. The translation arrangements for the EPUE, which are based on the current procedure in the European Patent Office, are designed to achieve the necessary balance between the interests of economic operators and the public interest in terms of the cost of proceedings and the availability of technical information. The official languages of the Office are English, French and German. The EU legislature also considered that it was essential to establish a court having jurisdiction to hear cases concerning the EPUE in order to ensure the proper functioning of that patent, consistency of case-law and hence legal certainty, and cost-effectiveness for patent proprietors.

Spain seeks the annulment of the two regulations forming part of that package, namely the regulation on the creation of unitary patent protection (Case C-146/13) and the regulation governing the applicable translation arrangements (Case C-147/13).

... [T]he Court of Justice dismisses both of Spain’s actions.

Case C-146/13, Regulation 1257/2012

Spain contests (inter alia) the legality, in the light of EU law, of the administrative procedure preceding the grant of a European patent. It argues that that procedure is not subject to judicial review to ensure the correct and uniform application of EU law and the protection of fundamental rights, which undermines the principle of effective judicial protection.

The Court rejects Spain’s argument by pointing out that the regulation is in no way intended to delimit, even partially, the conditions for granting European patents – which are exclusively governed by the EPC – and that it does not incorporate the procedure for granting European patents laid down by the EPC into EU law. Instead, that regulation merely (i) establishes the conditions under which a European patent previously granted by the European Patent Office pursuant to the provisions of the EPC may, at the request of the patent proprietor, benefit from unitary effect and (ii) provides a definition of that unitary effect.

Spain also submits that the first paragraph of Article 118 TFEU (Treaty on the Functioning of the European Union) concerning the uniform protection of intellectual property rights throughout the European Union is not an adequate legal basis for the regulation.

In that regard, the Court points out that unitary patent protection is apt to prevent divergences in terms of patent protection in the participating Member States and, accordingly, provides uniform protection of intellectual property rights in the territory of those States.

Spain also contests the assignment to the participating Member States acting in a select committee of the Administrative Council of the European Patent Organisation of the power to set the level of renewal fees and to determine the share of distribution of those fees.

The Court observes in that regard that, according to the TFEU, it is for the Member States to adopt all measures of national law necessary to implement legally binding Union acts. Moreover, it inevitably falls to the participating Member States, and not to the Commission or the Council, to adopt all the measures necessary for the purposes of carrying out those tasks, given that the EU – unlike its Member States – is not a party to the EPC. The Court adds that the EU legislature did not delegate any implementing powers which are exclusively its own under EU law to the participating Member States or the European Patent Office.

Case C-147/13, Regulation 1260/2012

Concerning the applicable translation arrangements, Spain alleges (inter alia) infringement of the principle of non-discrimination on the ground of language since – in its opinion – the regulation establishes, with respect to the EPUE, a language arrangement which is prejudicial to individuals whose language is not one of the official languages of the European Patent Office. Spain submits that any exception to the principle that the official languages of the European Union have equal status ought to be justified by criteria which are other than purely economic.

The Court acknowledges that the regulation differentiates between the official languages of the EU. However, it emphasises that the regulation has a legitimate objective, namely the creation of a uniform and simple translation regime for the EPUE so as to facilitate access to patent protection, particularly for small and medium-sized enterprises. The complexity and particularly high costs of the current European patent protection system constitute an obstacle to patent protection within the EU and affect adversely the capacity to innovate and compete of European businesses, particularly small and medium-sized enterprises. The Court emphasises that the language arrangements established by the regulation make access to the EPUE and the patent system as a whole easier, less costly and legally more secure. The regulation is also proportionate, as it maintains the necessary balance between the interests of applicants for EPUEs and the interests of other economic operators in regard to access to translations of texts which confer rights, or proceedings involving more than one economic operator, by introducing a number of mechanisms (including a compensation scheme for the reimbursement of translation costs, a transitional period until a high quality machine translation system is available for all the official languages of the EU, and a full translation of the EPUE for operators suspected of infringement in the event of a dispute).

The Court also holds that the second paragraph of Article 118 TFEU constitutes the correct legal basis for the regulation, as that regulation establishes the language arrangements for a European intellectual property right (namely, the EPUE), defined by reference to the EPC.

Further reading on this topic can be found in places.  There are three IPKat posts, with accompanying discussion, here, here and here. Steve Peers' EUI Law Analysis blog offers an excellent piece entitled "Cheerleading or judging? The CJEU upholds the EU's unitary patent package", here, And don't miss Wouter Pors' post on the EPLAW Patent Blog here. or Miguel Montana's post on the Kluwer Patent Blog, here.

Patents and patent litigation in the EU: a multidisciplinary approach

"The EU Patent Package: Multidisciplinary and International Perspectives" is the title of an event jointly organised by the University of Antwerp and the Centre for Intellectual Property Rights (CIR) at the University of Leuven. In the charming venue of the Royal Flemish Academy of Belgium for Science and the Arts (Academy Palace, Hertogsstraat 1, 1000 Brussels). According to the organisers:

The conference starts off with a presentation on the latest developments concerning the implementation of the Patent Package from the perspective of the EPO by Margot Fröhlinger (Principal Director Patent Law and Multilateral Affairs EPO) followed by an update on the progress regarding the Unified Patent Court by Paul van Beukering (Chair of the Preparatory Committee of the Unified Patent Court). These developments will then be examined critically from an economic perspective by Bruno van Pottelsberghe (ULB, former Chief Economist of the EPO), a legal perspective by Matthias Lamping (MPI) and a governance perspective by Ingrid Schneider (University Hamburg).

In the afternoon, the European patent reforms will be reviewed by two high-level international keynote speakers, Rochelle C. Dreyfuss (New York University) and Yoshiyuki Tamura taking into consideration the patent reforms in the US and Japan. Esther van Zimmeren (University of Antwerp) will focus on the international trend to establish specialized IP courts and the lessons to be drawn from other jurisdictions. This session will be followed by another critical feedback session with practitioners with an impressive track record from university, different industry sectors and legal practice: Nicole Antheunis, TTO Université de Liège, Emil Pot, ActoGeniX, David Laliberté, Microsoft, Bart Van den Hazel, GSK and Eric De Gryse, Simont Braun.

Even better news is that there will be ample time for discussion and extensive networking opportunities.

PhD students can register for just 150 euro, while everyone else pays 200 euro (inclusive of lunch and reception).

The organisers ask you to register online by 3 October here.

This blogger would only add that the multidisciplinary approach has much to commend it and he would like to see it extended to disciplines other than law and economics.  The psychology of litigation and dispute resolution would be one worthy topic, as well as the sociology of crowd behaviour in response to patent law challenges -- for example, the establishment of patent pools and the collective aggregation of defensive patents.   Let's go for it!

What business thinks about Europe's patent regime -- and how you can help

Dr Luke McDonagh (Lecturer in Law, Cardiff University) has been doing some valuable research into attitudes which patent owners are starting to develop with regard to the European Union's forthcoming Unified Patent Court (UPC) and Unitary Patent (UP) systems. However, his topic of investigation is by no means exhausted -- and you can help him.  Luke explains as follows:

Exploring Perspectives 

Readers of this weblog may be aware that on 10 July the UK Intellectual Property Office published a report, researched and authored by me,  entitled 'Exploring Perspectives of the Unified Patent Court and Unitary Patent Within the Business and Legal Communities'. The report is accessible here and there's an audio recording of the launch event, kindly hosted by CIPA (the Chartered Institute of Patent Attorneys), here.

The report discusses the views of 28 interviewees -- consisting of representatives from patentee companies, solicitors and patent attorneys -- concerning a range of issues concerning the new UPC/UP system, including the procedural and cost rules for the new court, and the all-important fees issues for the UP.

One particularly interesting issue that came up in the conversations I had with interviewees concerns the all important opt-in/opt-out question. It was noted that while businesses are concerned about the risks of opting-in their entire portfolios -- with the possibility of revocation across all UPC member states a clear worry in their minds -- virtually all businesses are considering opting-in at least some patents in order to test the new system and to avail themselves of centralised enforcement. In this respect, some patentees are considering opting-out their most valuable patents (to avoid the central revocation possibility), while others are focused on identifying and opting-in their 'strongest' patents (to take advantage of centralised enforcement). Few, however, seem willing at this stage to opt-in everything. For this reason, it is likely that for the early part of the UPC's life there will be a two-tier patent system, with cases involving UPs and opted-in European patents (EPs) heard at the UPC, and cases involving opted-out EPs heard in the national courts in line with the current fragmented system. The following question, therefore, arises: how will patents be perceived within this two-tier system? 

From the interview data I collected, it's clear that a small number of interviewees fear that an opted-out patent will be perceived as weak, and thus open to attack by competitors via the national route. By contrast, will an opted-in patent be automatically perceived as being strong i.e. of high quality, and thus less vulnerable?

It is not possible at this stage to answer these questions; yet, the fact that these concerns exist aptly illustrates that the coming into force of the UPC is likely to have (unintended) consequences that are difficult for businesses to predict -- or plan for -- at this stage. If any readers of this weblog have any insights to add on this issue, feel free to post comments to this blog, or alternatively to email me at mcdonaghl@cf.ac.uk.

Do please help Luke if you can!

New EU patent court structure may (not) be OK: Ingve reveals all

I recently received the following information from Dr Ingve Björn Stjerna (Rechtsanwalt and Certified Specialist for Intellectual Property Law in Simmons & Simmons' Düsseldorf office) which is well worth noting.  Ingve writes:

"I have news re the "unitary patent“.

I recently managed to (finally) get access to large parts of document 15856/11 from the Council, an opinion of its Legal Service on the compatibility of the revised court structure with European law after the Opinion of the Full Court in Case C-1/09 (cf. attachment, for your comparison I attach the previously redacted version as well). As you may remember, it is one of the heavily redacted documents (discussed on the IPKat, eg here); it became famous since access to it was repeatedly refused with the incredible reasoning that, otherwise, it might “affect the ratification process in the Member States willing to participate in the envisaged agreement” and “ultimately delay or put into question the entry into force of the envisaged international agreement” [reasons for withholding information in the EU IP context can be bizarre, such as disturbing the judicial serenity of the CJEU, here]. After my first access request and the related confirmatory application were refused in early 2012, upon my renewed access request, the document has now been released to me (with the exception of one large footnote).

The opinion concludes (cf. para. 44) that the new structure should be compatible with EU law – but that it could also well be that it is not. Now we know why the document was locked away so strictly. Whether this will increase the user’s trust in the system remains to be seen [it seems to this blogger that it can't reduce the level of trust in the system, since there's no trust left to reduce ...].

I have published on my website (http://www.stjerna.de/unitary_patent.htm) an article titled “Law-making in camera” on the history of the various attempts to get hold of document 15856/11, in case you should find this topic and the background interesting".

Well done, Ingve, we are all in your debt.  It is sad that we appear to have entered an era of secret law-making, amid spurious reasons for resisting access to documents that affect not merely the operational utility but the very legality of a patent system and court structure that will affect us all.

Italians hold conference on new EU patent regime

Italy has committed itself to the Unified Patent Court, even though it has declined to join the unitary patent system.  What might this mean in practice for the profession in Italy?  Some answers to this question may be obtained from a forthcoming conference at the University of Milan, the details of which can be obtained from Professor Costanza Honorati.

University of Milano-Bicocca

Friday 27 September 2013 – Aula Martini U6-4

The EU Patent System: the European Patent With Unitary Effect And The Unified Patent Court

with the support of:

European Commission Representation in Italy, Italian Ministry of Economic Development

AIPPI (International Association for the Protection of Intellectual Property – Italian Group)

9.00 – Registration of participants

9.15 – Welcome speeches: Prof. Marcello Fontanesi – Rector, University of Milano-Bicocca, Dr. Fabrizio Spada – Director, European Commission Representation, Office in Milan

9.30 – Morning session:

The Substantive Law

Chair: Prof. Dr. Hanns Ullrich (Max-Planck Institute for Intellectual Property and Competition Law, München)

The Long Road from EC Patent to Patent with Unitary Effect: Potentials and Challenges Ahead

Michael König – Head of Unit, Industrial Property, DG Internal Market, EU Commission

La cooperazione rafforzata in materia di brevetti e il controllo della Corte di giustizia UE

(The Enhanced Cooperation on Patents and the Control by the CJEU)

Prof. Fausto Pocar – University of Milan, International Criminal Tribunal for the former Yugoslavia

Natura e contenuto del brevetto con effetto unitario

(The Legal Nature and the Content of the Patent with Unitary Effect)

Prof. Giovanni Guglielmetti – University of Milano-Bicocca

10.30-10.50  Coffee-break

The European Patent with Unitary Effect and the European Patent Office

Prof. Manuel Desantes Real – University of Alicante, Former Vice-President EPO

La concorrenza di discipline di fonte diversa nel brevetto ad effetto unitario

(Concurring Sources of Law in the Legal Regime of the Patent with Unitary Effect)

Prof. Vincenzo Di Cataldo – University of Catania

La collocazione normativa delle disposizioni di diritto sostanziale e la loro interpretazione pregiudiziale

(The Legal Frame for Substantive Law Provisions and their Referral to the ECJ for Preliminary Ruling)

Prof. Giandonato Caggiano – University of Roma Tre

12.00 – Interventions

Dr. Francesco Macchetta – IP Director, Bracco Imaging

14.30 – Afternoon session:                                                                             

The Judicial Frame

Chair: Prof. Riccardo Luzzatto (University of Milan)

The Institutional Framework for the Enforcement of European Patents and European Patents with Unitary Effect: a View from the Hague Conference

Prof. Marta Pertegás – First Secretary, Hague Conference of Private International Law, The Hague

La natura del Tribunale unificato tra tribunale nazionale «comune agli Stati» e tribunale internazionale

(The Unified Patent Court between a National Court “Common to the Member States” and an International Court)

Prof. Roberto Baratta – University of Macerata, Legal Advisor, Permanent Representation of Italy in Brussels

Le Rules of Procedure e i rapporti tra Tribunale unificato e giudice nazionale

(The Rules of Procedure and the Relations between the Unified Patent Court and National Courts)

Dr. Marina Tavassi – President of the IP Specialised Section, Milan Tribunal

15.45-16.10  tea-break

Il diritto applicabile dal Tribunale unificato: diritto UE, diritto internazionale, diritto interno

(The Law Applicable by the Unified Patent Court: EU Law, International Law, National Law)

Prof. Costanza Honorati – University of Milano-Bicocca

La ‘biforcazione’ tra azioni di validità e azioni di contraffazione: ragioni teoriche e problemi applicativi – (‘Bifurcation’ of Revocation and Infringement Actions: Theoretical Reasons and Practical Problems)

Prof. Marco Ricolfi – University of Turin

Il ruolo del patent attorney di fronte al Tribunale unificato

(The Role of Patent Attorneys Before the Unified Patent Court)

Dr. Micaela Modiano – European Patent Attorney

17.30 – Interventions and discussion

Dr. Francesca Ferrari – University of Insubria

Dr. Benedetta Ubertazzi – University of Macerata

Dr. Lidia Sandrini – University of Milan

18.30 –Conference closes

Scientific Coordinator: prof. Costanza Honorati

The Conference will be held in English and in Italian. Simultaneous translation will be provided

More details on the "EU Patents Package"

Laurent Teyssèdre, editor of Le Blog du Droit Européen des Brevets was the first to report more details on the “EU Patents Package”. Here is the portion of the decision of the European Council which is the most interesting for us:

3. Heads of State or Government of the participating Member States agreed on the solution for the last outstanding issue of the patents package, namely the seat of the Central Division of the Court of First Instance of the Unified Patent Court (UPC). That seat, along with the office of the President of the Court of First Instance, will be located in Paris. The first President of the Court of First Instance should come from the Member State hosting the central division.

Given the highly specialised nature of patent litigation and the need to maintain high quality standards, thematic clusters will be created in two sections of the Central Division, one in London (chemistry, including pharmaceuticals, classification C, human necessities,classification A), the other in Munich (mechanical engineering, classification F).

Concerning actions to be brought to the central division, it was agreed that parties will have the choice to bring an infringement action before the central division if the defendant is domiciled outside the European Union. Furthermore if a revocation action is already pending before the central division the patent holder should have the possibility to bring an infringement action to the central division. There will be no possibility for the defendant to request a transfer of an infringement case from a local division to the central division if the defendant is domiciled within the European Union.

We suggest that Articles 6 to 8 of the Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection to be adopted by the Council and the European Parliament be deleted.

I think that it is in particular the last paragraph that will cause a collective sigh of relief in the community. Finally, the constant criticism by the experts in the field (see e.g. Professor Krasser's opinion and Sir Robin Jacob's opinion) has been successful despite of the deplorable lack of transparency (see J. Pagenberg's letter here). While I think that the role of the blogosphere is still small, I think that the great efforts of the AmeriKat Annsley Merelle Ward to keep us infromed might have contributed to this late turn of events. Thanks a lot for this!

Laurent also gives details on the time schedule. The new system shall be up and running on April 1, 2014 ;-)