Giving its Opinion on a reference by the Council of Europe, the Court of Justice of the European Union (ECJ) has declared the current proposals put forward for the creation of a unified patent litigation system (UPLS) across Europe (involving a single court system for all European patents that would also have exclusive jurisdiction over any future Community patent) are incompatible with European Union law.
The ECJ said that the current proposed litigation system "would alter the essential character of the powers conferred on the institutions of the EU and on the member states which are indispensable to the preservation of the very nature of the European Union law". The proposals would rob the member state courts of part of their role in the judicial administration and their ability to refer issues to the ECJ. The ECJ regarded itself as the only body with ultimate authority to adjudicate in matters of EU law of which patent law was one.
The Council of the European Union today authorised the use of "enhanced cooperation"on the creation of a unitary patent as only Spain and Italy had not agreed with the other 25 Member States to proceed with plans for a Community-wide patent. The Commission will now need to submit legislative proposals to establish the Community patent and the language regime.
- Since the ECJ is not a body that most industry players, IP judges or other IP professionals or even the Commission foresaw as a satisfactory tribunal for the adjudication of patent disputes, the ECJ's Opinion would appear to sound the death-knell of any further attempts to produce a coherent pan-European patent litigation system.
- However, the indications are that the EPO and Commission will continue to look to find a resolution to pan-European patent litigation of European and Community patents.
- The EPO announced on the day of the Opinion (8 March 2011) that it welcomed the views of the ECJ as the points raised "provide important clarification for the further development of the project". The Commission has said it will analyse the Opinion very carefully with a view to identifying appropriate solutions so that a way can be found to move the litigation solution forward.
- As the current proposals allowed reference to the ECJ on matters of interpretation of EU law (although not patent law) the position taken by the ECJ appears to mean that any future solution will need to allow the ECJ to play a role as a referential court in patent matters as well as other EU law issues, something that many had wanted to avoid.
- Despite the fact that there would currently be no litigation system to enable its enforcement, the EPO's view is that this should not prevent progress on the Community patent. It sees the unitary patent as "a project which is independent from the EEUPC [UPLS] Agreement" and "supports the approach of the European Commission to continue the process relating to the enhanced cooperation on unitary patent protection".
- The Commission was persuaded that a simplification of the patent litigation process would benefit industry and commerce within Europe and make the EU a more attractive market to investors. Whether this was in fact the case is a matter for debate, since many industry parties felt satisfied with the system as it currently stands, seeing the benefit in being able to select one of two key jurisdictions in which to fight their battles and use this as a trigger for settlement elsewhere.
The ECJ's Opinion will not have come as a surprise to many after the combined Advocates General Opinion delivered in July 2010, which came to much the same conclusion.
In brief, the current arrangements for litigating patents in Europe have come under some criticism over the years since although the application process and opposition procedures for "European" patents are centralised (via the European Patent Office), once granted, the patent becomes what is colloquially referred to as "a bundle of national patents" depending on the European Patent Convention territories designated by the applicant. Thus when infringement arises, even if more than one patent territory is involved, the patentee is obliged to litigate under each territorial patent right separately, even though the invention claimed by the patent is ostensibly the same in every case.
The proposals to redress this situation are simple enough in principle: (i) a single Europe-wide patent right: the Community patent, sometimes referred to as the "unitary patent"; (ii) a single court to hear matters relating to the infringement and validity of both European and Community patents (as set out in the UPLS).
The ECJ's Opinion was given in response to a request by the Council of Europe, in order to obtain an independent view on the legality of the proposals for the UPLS in advance of any the detailed consultation of it by the European Parliament.
The UPLS provided that the proposed European and Community Patents Court (ECPC) would have exclusive jurisdiction over all patent law issues, without any provision for reference to the ECJ. The proposals did, however, retain a role for the ECJ, albeit a limited one. When a question of interpretation of the EC Treaty or the validity and interpretation of acts of the institutions of the European Community were raised before the Court of First Instance of the ECPC, these would be referred to the ECJ for a decision on the question, suggested the proposals, and this decision would have been binding on the Court of First Instance and the Court of Appeal of the ECPC.
The role of the ECJ had been limited under the UPLS in response to concerns that it was not an appropriate forum in which to determine questions of substantive patent law. Such concerns stem, in part, from the ECJ's track record on references relating to trade mark matters.
Reasoning of the ECJ
The proposed limitation of its role was not acceptable to the ECJ, which rejected the exclusive jurisdiction given to the ECPC on patent law, even though national courts were given jurisdiction in actions related to a Community or European patent which did not come within the exclusive jurisdiction of the ECPC. To follow the UPLS's proposals "would alter the essential character of the powers conferred on the institutions of the EU and on the member states which are indispensable to the preservation of the very nature of the European Union law" said the ECJ. The proposals would rob the member state courts of their role and ability to refer issues to the ECJ and the ECJ regarded itself as the only body with ultimate authority to adjudicate in matters of EU law of which patent law was one.
Further if a decision of the ECPC were to be in breach of European Union law, that decision could not be the subject of infringement proceedings nor could it give rise to any financial liability on the part of one or more Member States. Thus there would be no adequate remedy if a decision of the ECPC was in breach of EU law.
The envisaged agreement, by conferring on an international court which is outside the institutional and judicial framework of the European Union, an exclusive jurisdiction to hear a significant number of actions brought by individuals in the field of the Community patent and to interpret and apply EU law in that field, would deprive courts of Member States of their powers in relation to the interpretation and application of EU law and the ECJ of its powers to reply, by preliminary ruling, to questions referred by those courts and, consequently, would alter the essential character of the powers which the Treaties confer on the institutions of the European Union and on the Member States and which are indispensable to the preservation of the very nature of European Union law.