We have previously reported on proposals for a EU patent package, comprising a single patent with effect in all participating EU countries (the "Unitary Patent"), and a single unified patent court to hear patent disputes (the "UPC"). We look at recent developments in relation to these proposals, and the outlook for 2013 and beyond.
EU Parliament Adoption of Legislative Measures
On 11 December 2012, the European Parliament gave approval to three separate aspects of the EU patent package (having proposed certain amendments to the drafts):
- A proposed Regulation creating the Unitary Patent (the "Regulation")
- A proposed Regulation on Translation Arrangements with respect to the Unitary Patent
- A resolution setting out the basic framework for the UPC (but without consideration of the detailed draft provisions on the UPC which are set out in a draft international agreement (the "Agreement") to be entered into by participating EU Member States, but not the EU itself)
Subsequently, on 17 December 2012, the European Council adopted the two regulations relating to the Unitary Patent (noting that the Agreement will be concluded outside the EU institutional framework).
Controversial Replacement of Articles 6 to 8
Article 118 TFEU provides that the EU Parliament and Council shall provide uniform protection for IP rights throughout the EU. Articles 6 to 8 of the Regulation (dealing with patent infringement) purportedly ensured a legal basis for the Regulation as an instrument of EU law, by ensuring this uniform protection. Following the European Council's agreement that Articles 6 to 8 should be deleted and moved to the Agreement, there were concerns that Article 118 could no longer be relied upon as the legal basis for the Regulation.
A new Article 5 was therefore introduced to replace Articles 6 to 8 (and so to support the legal base for the Regulation). Article 5 makes indirect reference to infringement, providing that the Unitary Patent confers the right to prevent acts prohibited by national law. The relevant national law for a Unitary Patent is decided at the time of filing the patent application, and is, in order:
- the participating Member State where the applicant has his residence or principal place of business; or
- the participating Member State where the applicant has a place of business; or
- the state where the EPO has its headquarters, i.e. Germany.
Article 5 has raised new concerns. Firstly, that Article 5 could result in discrimination based on location or nationality, because many aspects of patent infringement have not been harmonized between Member States. In some areas, such as Bolar exemptions or whether a doctrine of equivalence applies, significant differences remain. So for example, in each case a German resident and UK resident company would be subject to different treatment, even in cases before the same division of the UPC.
Secondly, it has been claimed that Article 5 does not overcome the concern that questions of patent infringement will be referred to the European Court of Justice (CJEU). The EU Parliament rapporteur on the Regulation has stated that "he is confident, having spoken to legal experts, that the new proposal reinstates the possibility of making an appeal to the EU Court of Justice in the case of patent infringements".
Spanish & Italian Objections
Another outstanding issue is whether the EU Council validly authorised use of the enhanced cooperation procedure for the development of the EU patent package.
On 11 December 2012, Advocate General Bot gave his opinion that the CJEU should dismiss the actions. He found that the Council had to assess, on the basis of numerous elements, whether to authorize use of enhanced cooperation. The CJEU was confined to reviewing whether, in the exercise of its freedom of choice the Council had made a manifest error, misused its powers, or manifestly exceeded the bounds of its discretion. It had not done so. He also noted the distinction between (i) authorizing use of enhanced cooperation, and (ii) acts that are subsequently adopted using that framework. The case here only dealt with the former, and Bot's opinion did not therefore extend to acts adopted using enhanced cooperation.
The CJEU will now have to rule on the case, and could, of course, choose not to adopt AG Bot's opinion. Further, the path may lay open for a separate challenge to one of the acts adopted within the enhanced cooperation framework.
What Happens Next?
The Regulation (together with the Regulation on Translation Arrangements) and the Agreement will enter into force on the later of:
- 1 January 2014;
- four months after 13 Member States have ratified the Agreement (including the three Member States in which the highest number of European patents were in force in the year before signature – i.e. Germany, France & the UK); or
- four months after the relevant amendments to the EU regulation on the recognition and enforcement of judgments (to ensure that the UPC has exclusive jurisdiction with respect to Unitary Patents).
The EU Council has indicated that the Agreement will be signed by participating Member States in the first semester of 2013 (the Agreement itself provides that it will be open for signature from 18 February 2013). This will be followed by the ratification process. The Regulation provides that "it is of paramount importance that the participating Member States ratify the Agreement…and take the necessary steps for the Court to become operational as soon as possible".
Ongoing Objections / Concerns
Unsurprisingly, many concerns are still being voiced in relation to the proposals. It remains to be seen whether, and if so when, the UPC will enter into force. Even if it is signed, will the requisite number of Member States ratify the Agreement? For example, in the UK, the Chartered Institute of Patent Attorneys has asked the Government should work to further improve the proposed system before ratifying the Agreement, while Poland has recently indicated that they won't ratify at all. Many will recollect the Community Patent Convention, versions of which were signed in 1975, and again in 1989. However, neither agreement entered into force as they were not ratified by the requisite number of states.
For more information on the Unitary Patent project, see our website at http://www.theunitarypatent.com.