This week has been a mixed bag for the development of a single patent granting and enforcement system in Europe. Whilst the proposal for a Unitary Patent was given the go-ahead yesterday by the Council to proceed under the enhanced cooperation procedure (with 25 out of 27 EU countries in support), the proposed European and EU Patent Court system (the so-called "EEUPC") was dealt a blow on 8 March as the Court of Justice (CJEU) pronounced the Draft Agreement incompatible with the EU treaties.

The CJEU decision:

  • On 8 March 2011, the Court of Justice (CJEU) gave its opinion on the "Draft Agreement on the European and Community Patents Court" (Opinion 01/09)
  • The Draft Agreement contains proposals to establish the EEUPC to hear patent disputes regarding both existing European Patents and the proposed Unitary Patent. The court system proposed would cover the EU member states, as well as non-EU countries who are party to the European Patent Convention (EPC) such as Turkey and Switzerland.
  • The Draft Agreement proposed a centralised court system with exclusive jurisdiction to rule in cases concerning the infringement and validity of patents and SPCs, as well as other patent related matters such as licensing disputes. It provides for a Court of first instance (with a central division and local and regional divisions in the different Member States) and an Appeal Court.
  • The CJEU concluded that the transfer of jurisdiction to a court "outside the institutional and legal framework of the EU" would not be compatible with the EU treaties. This is because the extra-EU agreement governing the proposed court would deprive the national courts of member states and also the CJEU itself (by preliminary rulings sought by national courts) of their powers to apply EU law. This would alter the nature of the powers conferred on the EU institutions.
  • It seems to have been significant that the Draft Agreement did not limit the jurisdiction of the proposed court strictly to patent law deriving from the EPC, but proposed it should also be able to decide cases involving EU legislation such as the Biotech Directive and the IP Enforcement Directive.

Council decision on the Unitary Patent:

  • Yesterday, the Competitiveness Council approved the use of the enhanced cooperation procedure to proceed with the Unitary Patent despite strong opposition from Italy and Spain. The Unitary Patent would be a single patent covering 25 out of 27 EU member states (excluding Italy and Spain).
  • Spain and Italy objected to the proposal for an EU-wide patent because of language issues. The Unitary Patent will use the three language system of the EPO (English, French, German) with patents being valid in all 25 countries when granted in any one of the three languages, provided the claims are translated into all three. The Commission is due to present draft Regulations covering the language regime and the title and procedure for the Unitary Patent on 30 March 2011.

What does this mean for businesses?

The Council decision gives the political go-ahead for the Unitary Patent. Once in place this will enable businesses to obtain a patent covering most of the EU more simply and cheaply than at present.

Why is a single patent for the EU important?

The Unitary Patent will operate under a much simplified language regime and should lead to greater legal certainty across member states.

When will Unitary Patents start to be granted?

The Council decision is just the start of the legislatory process. There are still several years of negotiations ahead on the exact draft of the legislation which will give life to the Unitary Patent. Also, the Unitary Patent may face legal challenges as both Spain and Italy have indicated that they will challenge yesterday's decision by the Council.

Will Spain & Italy come round to the proposal for a Unitary Patent?

It remains possible for Spain and Italy to change their positions throughout the legislative process. Ultimately, if they do not join in, then companies who wish to file patents in Spain and/or Italy will need to apply for Spanish and Italian national patents or IT/ES designated EP patents in addition to a Unitary Patent.

What litigation system will be used for the Unitary Patent?

It remains to be seen what form of litigation system the Commission will propose to go with the Unitary Patent. The CJEU has made it clear that a system as envisaged in the Draft Agreement will not be acceptable. However, without a multi-jurisdictional litigation system designed to avoid the commercial uncertainty and conflicting decisions which can arise at present because of the variations in courts across the EU, it is unlikely that the Unitary Patent will provide the significant benefits it aims for.

One possibility is that the national courts could be used as in the Community Trade Mark system with the CJEU giving references on unclear points of EU law. We expect that this would not be received positively by the member states, industry or practitioners.

The Commission has announced its intention to find an appropriate way forward for the patent litigation system following the CJEU's opinion.

In view of the CJEU's objections to the extra-territorial nature of the Draft Agreement, it seems unlikely that the court system proposed for the Unitary Patent will also be applicable to EP bundle patents relating to the non-EU EPC contracting states.

The future

For those desiring a truly unified European patent system, this week's developments bring mixed fortunes. The future, particularly as regards the litigation system, remains unclear. However, the one certainty is that the present system will be here for some time yet, which gives inventors and industry (and even perhaps potential infringers) an opportunity to think again about what sort of patent court is needed in Europe.