EU patent encounters major set back
Recent developments in the long, drawn-out process of implementing a unified EU patent had led commentators to believe that the end was in sight, with twelve EU member states seeking to invoke the rarely used "enhanced cooperation" procedure to create a unitary patent protection covering the territories of member states who would like to participate. However, this has been met by a major set-back caused by a ruling of the Court of Justice of the European Union (CJEU) on 8 March 2011 which concludes that the envisaged agreement creating a unified patent litigation system for both Community and EU patents is not compatible with EU Treaties.
Under the current European patent regime, once granted by the European Patent Office (EPO), a European patent becomes a bundle of national patent rights covering up to 36 member states of the European Patent Convention (including all the EU member states). Issues relating to the validity or infringement of a European patent must form the subject of litigation in the national courts of different member states. This can lead to divergent judgments from different national courts concerning the same European patent, thus causing uncertainty over the outcome of disputes in different member states.
In order to overcome these difficulties it has been proposed for several years that a new system of EU patents be introduced which would deliver a unified patent granted by the European Patent Office for all parties to the European Patent Convention (which includes all EU member states), in much the same way that the existing Community trade mark system provides a unified system of trade mark protection throughout EU member states.
In December 2009, the EU Competitiveness Council agreed a general approach on a proposal for a draft Regulation on the EU Patent. A draft international agreement was drawn up in 2009 to be entered into between EU member states, the EU and the non-EU member states of the European Patent Convention setting out a regime for a court which would have exclusive jurisdiction with regard to the infringement and validity of existing European patents and future EU patents, to be known as the European and EU Patents Court (EEUPC).
However, talks broke down due largely to disagreements regarding the translation proposals for the EU Patent. The Commission proposed in June 2010 that the EU patent would be examined and granted in one of the existing official languages of the EPO, namely English, French or German. Applicants in the EU who do not use one of these languages would have the option to file applications in any other official language of the EU. The costs for translation into one of the official languages of the EPO would be eligible for compensation.
Spain and Italy do not agree with these language proposals, and argue that there has not been sufficient debate about alternative language options. In December 2010 twelve member states sought to invoke the enhanced cooperation procedure to create a unitary patent protection covering the territories of member states who would like to participate. Member states involved in this initiative are Denmark, Estonia, Finland, France, Germany, Lithuania, Luxembourg, The Netherlands, Poland, Slovenia, Sweden and the UK, with all the other member states bar Italy and Spain giving their informal support. The two dissenting countries would be able to join at a later stage if they wish.
Despite protests from Italy and Spain that negotiations should continue to achieve a consensus-based solution, the European Parliament consented to the use of enhanced cooperation to create unitary patent protection on 14 February 2011. The Competitiveness Council also approved the proposal on 10 March 2011, so that the next step is for the Commission to produce detailed proposals on an EU Patent and dealing with translation arrangements.
However this apparent break-through has met a major stumbling block following a ruling of the CJEU on 8 March 2011 that the draft agreement in relation to the EEUPC is not compatible with EU Treaties. The CJEU is concerned that the EEUPC would usurp the CJEU's authority to answer questions referred by national courts of EU member states on provisions of EU, including the future regulation of the Community patent. The procedure envisaged under the proposed new system would also deprive the CJEU of the opportunity to oblige EU member state to make good damage caused to individuals as a result of breaches of EU law for which it is responsible.
In the face of the CJEU's ruling, it would appear that those countries that wish to progress the creation of a unitary European patent will have to reconsider the proposals for the court system from scratch. The Commission has announced that it will work quickly to find an appropriate way forward for the patent litigation system following the CJEU's opinion. However, this will cause yet further delay and is likely to impact on the recent progress made by the EU using the enhanced cooperation procedure.