In a decision in Joined cases C-274/11 and C-295/11 Spain and Italy v Council, published today, the Court of Justice of the European Union (CJEU) has dismissed Spain and Italy's objections to the use of enhanced procedure to introduce a pan-European unitary patent right.

Business impact

  • The impact of the dismissal of the objections today is somewhat lessened by the knowledge that Spain has submitted further challenges to the unitary patent legislation.  However, since the basis upon which these further challenges have been made have not yet been published, it remains to be seen whether they are likely to succeed.
  • Perhaps more significantly, there are several obstacles in the way of establishing the Unified Patent Court (UPC) which will handle disputes relating to the new unitary patent, and without which the unitary patent measures which are now in force, cannot come into effect.  These are detailed below. Indeed, the newly established UPC preparatory committee has indicated that the UPC will not be ready before 2015 at the earliest. 

Key points on today's CJEU decision

  • Background to the objections dismissed today When Spain and Italy did not agree with the proposals to establish a unitary patent in Europe (primarily on the basis of language arrangements which did not include Spanish or Italian in the principal languages to be used in the new system)  the other member states moved to pass the legislation using the enhanced cooperation procedure (established by the Lisbon Treaty) which allows for measures to be passed and implemented in states that are in agreement, leaving out those that do not.  Spain and Italy both objected to the use of this procedure in submissions to the CJEU.
  • Content of the objections and the CJEU's response
    • The CJEU observed that since the competence to adopt language arrangements for new intellectual property rights was closely bound-up with the creation of these new rights, the former would fall within the competence of the EU as the competence to create new rights did under the Treaty on the Functioning of the EU (TFEU). These competences are part of the functioning of the internal market and thus also come within the ambit of competences shared between the EU and Member States. The non-exclusiveness of those competences means that the Council is competent to authorise enhanced cooperation in this area. 
    • Spain and Italy had claimed that by authorising the use of enhanced cooperation procedure the requirements of unanimity under the TFEU had been circumvented. The CJEU held that the procedure could be used and did not exclude Spain or Italy. The Court stressed that nothing forbids the Member States to establish between themselves enhanced cooperation within the ambit of those competences of the EU that must, in accordance with the Treaties, be exercised unanimously. The "unanimity" need only be among the states taking part in the measure.
    • Spain and Italy also referred to the TFEU's statement that enhanced cooperation should only be used ‘as a last resort, when it has established that the objectives of such cooperation cannot be attained within a reasonable period by the EU as a whole.’ The CJEU held that this was aimed at encouraging consensus in the majority of cases but that in this case the Council had shown that the condition of "last resort" had been met (including a multi-staged legislative process that began in 2000, which incorporate consideration of many different language arrangements, none of which were found to be capable of unanimous support). 
    • Arguments based on claims that the new system, covering only 25 of the 27 member states, would not be advantageous over the current EPC based arrangements, in terms of uniformity and thus in terms of integration, also failed. 
    • Today's decision of the CJEU therefore brings these objections of Italy and Spain to the use of the enhanced cooperation procedure to an end. However another challenge has been filed by Spain (see below). 

Spain's second legal challenge to the unitary patent  

Following the AG's negative opinion in December (see our IP ebulletin, 11 December 2012) and before today's decision, Spain brought two further legal challenges to the unitary patent package before the CJEU, thought to be in relation to the two EU Regulations establishing the unitary patent (Regulation 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection and Regulation 1260/2012 on the translation arrangements applicable to unitary patent protection).  The details of these challenges are not yet publicly available.

Unified Patent Court developments

Since our IP ebulletin on the changes to the European patent system, the Unified Patent Court Agreement (UPCA) has been signed by 25 of the 27 Member States, including Italy which still had its complaint to the CJEU pending at that point (19 February 2013). Spain and Poland have not signed, although it is possible for these states to accede to the Agreement at a later date.  Poland is adopting a 'wait and see' approach over concerns over the effect of the UCPA on its economy and Spain is not participating since it objects to the language regime.

Signature does not equate to ratification however.  Along with other requirements set out below, at least 13 signatory states (including the UK, Germany and France) will have to ratify the Agreement before it can come into effect. Ireland has announced that the measure will need to have been approved by referendum, planned for later this year, before it could ratify.

The legislation establishing the unitary patent right although in force, cannot come into effect until the Unitary Patent Court is established, which in turn requires the UPCA to be in force.

The UPCA will come into force on the latest of the following events:

  • 1 January 2014;
  • First day of the fourth month after 13 Member States have ratified the UPCA (including UK, Germany and France);
  • First day of the fourth month after the date of entry into force of the amendments to Regulation (EU) No 1215/2012 (on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) concerning its relationship with the UPCA.

Unified Patent Court Preparatory Committee

Following on from the signing of the UPCA, a UPC Preparatory Committee has been set up to deal with the technical details involved in establishing the UPC, including the Rules of Procedure of the UPC.

One of its first tasks will be to fix a roadmap for the early establishment and coming into operation of the UPC. The UPC Preparatory Committee indicated that early 2015 was in its view a realistic target date for the entry into operation of the UPC.

The Preparatory Committee has given priority to consulting with stakeholders on the Rules of Procedure of the UPC, the latest draft of which (14th draft) was published on 31 January 2013.  In addition, the Preparatory Committee has identified the following areas of work:  

  • Legal framework
  • Financial aspects
  • IT
  • Facilities
  • Human resources and training 

The next meeting of the Preparatory Committee is intended for the end of May or early June, at which it is intended for the roadmap to be established for the preparatory work and the composition and planning of the project teams.