There have been calls for many years to revise the European patents system to make it cheaper to obtain patent protection across jurisdictions, easier to litigate pan-European issues and to avoid inconsistent outcomes in different countries. The proposals for reform therefore aim to create a European Patent with unitary effect across all participating member states (as opposed to the current bundle of national rights) and a unitary European Patent Court to hear all infringement and revocation cases concerning European patents.

The proposals met a major stumbling block in March 2011 when the Court of Justice of the European Union ("CJEU") ruled that the then draft agreement was incompatible with EU treaties because the proposed European Patents Court would usurp the CJEU's authority to answer questions referred by national courts of EU member states on provisions of EU law, including the future regulation of the European patent. The envisaged procedure would also deprive the CJEU of the opportunity to oblige EU member states to make good damage caused to individuals as a result of breaches of EU law for which it is responsible.

Under the Polish presidency of the EU, there were various amendments made to the proposals and a significant push to resolve the issues raised by the CJEU ruling. However, the major break-through expected at the Competitiveness Council in December 2011 did not materialise.

The latest proposal envisages 3 types of division of the European Patents Court: a Central Division to hear revocation actions and applications for declarations of non-infringement and Local and Regional Divisions to hear infringement disputes. There will be no jurisdiction over issues relating to ownership and inventor remuneration. The Central Division will hear disputes in the language of the patent (ie English, French or German) whereas the Regional and Local Courts will hear disputes in the language of the country where the Court is established.

It is also proposed that parties will have to apply specifically for "discovery" by showing that the other party is likely to have documents that are significant to live issues in the dispute. As a consequence, a "saisie" will rarely be needed. However, if a saisie is still required in order to commence an action, the presumption will be that this should be done on notice. The parties will have the right to examine a witness, subject to the Court's control.

One of the final sticking points in the proposed arrangements was the location of the Central Division. This was resolved on 29 June 2012 when the European Council agreed that the Central Division of the Court of First Instance should be located in Paris, with specialist divisions located in London (chemistry, pharmaceuticals and life sciences) and Munich (mechanical engineering).

The other controversy surrounding the agreement was the legal definition of the effects of a Unitary Patent as set out in Articles 6-8 (Article 6 defines what constitutes a direct infringement to a Unitary Patent, article 7 defines what constitutes an indirect infringement to a Unitary Patent and article 8 defines limitations to rights conferred by a Unitary Patent). As the Regulation would be subject to CJEU jurisdiction, these articles would give increased jurisdiction over patent matters to the CJEU. The Council therefore decided in June to remove these articles from the proposal.

However, this agreement still needed to be approved by the European Parliament and the vote scheduled for 4 July 2012 was postponed amidst strong disapproval from European Parliament rapporteurs. The European Parliament Legal Service had advised that the removal of Articles 6-8 would render the agreements incompatible with the requirements of the Treaty on the Functioning of the EU and hence liable to be struck down at a later stage.

This has therefore meant yet another delay while the issue is given more consideration. A draft of the Agreement was published on 28 September 2012, which incorporates the agreed location of the Central Division and currently also includes the controversial Articles 6 and 8. The new Agreement was debated by the European Parliament on 10-11 October 2012. A further draft was published on 12 October 2012, which in addition to some procedural issues, extends the competence of the Court to Supplementary Protection Certificates ("SPCs") and provides for the exhaustion of rights conferred by an EU patent. The Court of Justice of the European Union has also heard Spain and Italy's arguments as to why the use of the "enhanced procedure" to press ahead with the Unitary patent system without their agreement breaches EU law.

Despite these complications, the overall aims of the Unitary Patent remain desirable and the Cypriot Presidency would like to reach an agreement before the end of the year. We wait to see if this can eventually be achieved.