THE CURRENT PROPOSALS

Discussions about the Community Patent were again relaunched in 2007 by the European Union. The Treaty on the Functioning of the European Union makes specific provision at Article 118 for separate legislation for the creation of uniform European-wide intellectual property rights and separately for language arrangements for the European intellectual property rights. Also, pursuant to the Treaty on the Functioning of the European Union (TFEU), the European Community no longer exists, so any successor to the Community Patent is likely to be called the European Union Patent (EUP).

According to the most recent draft Agreement on the European and Community Patents Court and Draft Statute, prepared as a Council working document and dated 23 March 2009, the European and EU Patents Court would consist of local, regional and central divisions of a Court of First Instance, a unified Court of Appeal and a Registry (the Court). Regional divisions can be set up on the agreement of two or more Member States. At the local and regional levels, the panel can sit with three legally qualified judges, unless the parties ask for a technically qualified judge. At least one judge to sit on the panel of three judges (which will typically sit to hear cases) would be appointed from a central pool of experienced practitioners; however, parties can have their cases heard by a single judge. At the central division, two legally qualified judges will sit with a technically qualified judge.

The Court of Appeal, which will hear appeals on law and fact, will consist of multinational panels of five judges, two technically qualified and three legally qualified. Appeal on points of law only from the Court of Appeal shall be to the Court of Justice of the European Union (CJEU). The draft Agreement also foresees the setting up of a patents mediation and arbitration centre.

The CJEU’s jurisdiction will be split, with the central division hearing revocation cases (where no infringement case is currently ongoing before the other divisions) and the regional and local courts hearing infringement actions (including declarations for non-infringement) and counterclaims for revocation. The language of proceedings before the local and regional divisions can be the languages of the state where those local and regional divisions reside. The language of the central division will be the language that the patent is granted in (currently one of the European Patent Office (EPO) languages).

Where a counterclaim for revocation of the EUP is lodged, the CJEU will be able to decide between: (i) hearing the case, with a technically qualified pool judge assigned to the case; (ii) hearing or staying the infringement action and referring the revocation to the central division; or (iii) referring the entire case to the central division. Where an action for revocation is ongoing in the central division, an action for infringement can be brought before a local or regional division and the CJEU will have the discretion to hear the case or refer it to the central division along the lines set out above. Currently, the draft Agreement foresees written, interim and oral stages to the proceedings. The interim hearing will be to explore the possibility of settlement. The CJEU has the discretion to dispense with oral proceedings. The means of evidence before the Court include the opinions of experts, witness evidence (oral and written), comparative tests and experiments, as well as disclosure and inspection. The CJEU will also be able to appoint independent technical experts. Legal costs will be decided on the usual “loser pays” basis, however the CJEU will be able to make other more equitable costs awards where the situation dictates that this would be fairer.

LEGAL OPINIONS OF THE CJEU

The European Union envisages that the CJEU would be established by the conclusion of an international agreement involving the European Union, its member states and other states of the EPC. The Council has referred the question on whether such an agreement is compatible with the EU Treaties to the CJEU. The opinion of the full CJEU is likely to appear before the end of 2010.

On 2 July 2010, the Advocates-General of the CJEU released their preliminary opinion on the legality of the proposed EUP. They stated that the draft Agreement did not guarantee the full application and observance of the pre-eminence of European Union law, did not provide for sufficient protection of litigants if the CJEU itself had failed to observe European Union law, the language regime did not protect sufficiently against discrimination of litigators from certain member states, and did not allow for effective control of the EPO’s administrative functions in respect of the granting of the EUP. However, the general legislative framework for creating the EUP was approved.

THE THREE LANGUAGE PROPOSAL

As of July 2010, the Council proposed that an applicant would be able to file its patent application in any language. An EUP would then be granted in one of the EPO languages and the applicant would then have to file translations of the claims in the other two EPO languages. Translation of the full specification would only be required when the patent is litigated in an EU language of the choice of the alleged infringer. The patentee would also have to file a patent translated into the language of the proceedings at the CJEU. In order to stimulate research, the commission foresees that high quality machine translations of the specification of EUPs would be made available to the general public, free and on demand. A number of Member States consider these proposals to be unworkable.

LIKELY FUTURE STEPS

It is not clear if the full CJEU will follow the opinion of the Advocates-General. Much of European business is behind the current proposals as they understand that the EUP will reduce the cost and complexity of patent litigation in the European Union and therefore there is considerable commercial momentum behind the current plans. However, the translation issues ensure that political barriers remain.

The next EU meeting to discuss the EUP proposals is on 30 September 2010. It seems that significant work will have to take place at this meeting to ensure that the EUP becomes a reality.