The European Unitary Patent / Unified Patent Court

After years of relatively little progress, there appears to be momentum building up behind the two building blocks underlying the European Union’s goal of a unified patent system:

  • the creation of a unitary patent right covering the EU; and
  • the creation of a unified patent court for litigating both “classic” European patents and the (proposed) unitary EU patent.

In this note, we take stock of where we are.

The creation of unitary EU patent protection

In March of this year the EU’s Competitiveness Council1 adopted a decision authorising “enhanced cooperation,” paving the way for all willing Member States to work towards a unitary patent for the EU. This would break the stalemate over, in particular, the language regime of such a patent. As matters currently stand, the only non-participating Member States are Italy and Spain: so any unitary patent for the EU would not extend to those two countries.

On 27 June 2011, the Competitiveness Council agreed to general approaches on two draft Regulations – the first relating to the creation and substance of the unitary patent itself 2, the second to the language arrangements. Accordingly, the essential elements of these legal acts have now been agreed, pending the opinion of the European Parliament.

So, are we nearly there? One potential stumbling block is that on 30 May 2011, Italy and Spain started proceedings at the Court of Justice, challenging the Council’s decision to authorise enhanced cooperation. The proceedings are at an early stage, and it is likely to be many months before the Court of Justice considers the Spanish and Italian complaints.

In the meantime, the Competitiveness Council and the Commission remain optimistic:  

“We are now entering the home straight. Working closely with the European Parliament, the final objective–the creation of unitary patent protection–is within reach....a unitary patent in Europe could be a reality within the next two years.”

(Commissioner Michel Barnier, 27 June 2011).

It is worth noting here that the current proposed Regulation on the unitary patent states it will not apply until the entry into force of the instrument creating a unified patent litigation system and the setting up of such a system. Which brings us to the proposed unified patent court.

The creation of a unified patent court for the EU

A draft agreement on a unified patent court having exclusive jurisdiction in respect of litigation relating to the infringement and validity of both “classic” European patents and the (proposed) unitary EU patent was in effect agreed back in December 2009. The 2009 draft agreement was to be entered into by the EU, its component Member States and certain third party countries to the European Patent Convention.

However, on 8 March 2011, the Court of Justice held the draft agreement, in its (then) current form, was incompatible with the EU treaties. In short, the Court of Justice observed that the envisaged unified patent court would be outside the judicial and institutional framework of the EU, yet would be called upon to interpret and apply provisions of EU law. The concern was the national courts of the Member States would be giving up, on matters within the exclusive jurisdiction of the unified court, the obligation to refer questions on the interpretation and application of EU law to the Court of Justice. The Court also observed that, if the unified patent court was in breach of EU law, the Member States could not be held to account.

The (then) Hungarian Presidency of the EU Council, in May 2011, suggested a solution to the Court of Justice’s concerns. This was quickly followed by the publication, dated 14 June 2011, of a revised draft agreement on a unified patent court. The draft appears to take the path of least resistance in the face of the Court of Justice’s decision:

  1. The participation of third (non-EU) countries has now been excluded, and the EU as an institution itself is no longer a contracting party. Accordingly, the draft agreement now provides for a court common to the contracting Member States such that, it is hoped, it would fall squarely within the judicial framework of the EU.
  2. The main features of the functioning of the court (set-up, language régime, etc) as prescribed in the 2009 draft agreement are maintained.
  3. There is a chapter dedicated to the “Primacy and Interpretation of Union Law” addressing:
    • the recognition of the primacy of EU law and the Member States’ obligation to ensure the unified patent court complies with EU law;
    • the referral of questions of interpretation of EU law to the Court of Justice3; and
    • the accountability of Member States in cases of breaches of EU law by the unified patent court, and their liability for damages resulting from such breaches.  

Summary

The determination of the EU institutions to press on with European patent reform is palpable–the use of enhanced cooperation on the creation of a unitary patent right to the exclusion of (and continued opposition from) Italy and Spain, along with the swift excision of non-EU states from the draft agreement on the unified patent court, are cases in point. Indeed, the (current) Polish Presidency of the EU Council has signalled its determination to push forward the patent reforms, “with a view to reaching overall political agreement by the end of this year.”

Whether or not continued progress will be quite so serene, particularly in the face of the Italian and Spanish challenges to enhanced cooperation, remains to be seen.

We understand the Competitiveness Council is scheduled to discuss progress towards the unified patent court (and the unitary patent) on 29/30 September and 5/6 December 2011.