In Kingdom of Spain and Italian Republic v Council of the European Union Joined Cases C-274/11 and C-295/11, the Court of Justice of the European Union (CJEU) has rejected all the legal challenges made by Spain and Italy to the enhanced co-operation for a unitary patent and associated translation regime.

BACKGROUND

In June 2010, the European Commission adopted a proposal for a Council Regulation on the translation arrangements for a unitary patent in Europe (the Regulation). As time passed, it became apparent that no unanimous agreement on the translation arrangements for the legally binding text of published patents could be reached. Pursuant to the request of 12 Member States, the Commission submitted a proposal to the Council for authorising enhanced co-operation, as provided for by the Treaty for the Functioning of the European Union (TFEU), in the area of unitary patent protection. All the Member States, except Spain and Italy, subsequently requested to join the co-operation regime.

The proposal for the authorising decision was adopted by the Council in March 2011. Upon adoption of the authorising decision, Italy and Spain both signalled an intention to launch legal challenges and duly filed complaints against the decision in June 2011.

In December 2012, the Advocate General’s opinion was rendered, endorsing the rejection of the various arguments advanced by Spain and Italy, which claimed that the Council decision was unlawful.

DECISION

After joining the cases, the arguments put forward in support of the two actions boiled down to five grounds, all of which the CJEU dismissed.

In response to the first argument, that the Council lacked competence to establish the enhanced co-operation in question, the CJEU accepted that intellectual property rules are indispensable in maintaining competition in the European Union. The Court held that they do not constitute "competition rules" under the TFEU but instead fall within an area of shared competence.

The second ground, misuse of powers, was undermined by the CJEU’s interpretation of Article 20(2) of the Treaty of the European Union (TEU), which provides that enhanced co-operation can be used where "the objectives of such co-operation cannot be attained within a reasonable period by the Union as a whole". This provision is not restrictive as to the potential causes of discord. Having found that the unitary patent and its language arrangements could not be established by the European Union as a whole within a reasonable period, the CJEU held that the Council’s decision did not constitute circumvention of the requirements of the TFEU or exclusion of non-participating Member States.

The third argument—breach of the condition that the decision authorising enhanced co-operation must be adopted as a last resort—was given significant consideration. The CJEU took into account Article 20(1) of the TEU, which stipulates that the aim of enhanced co-operation is "to further the objectives of the Union, protect its interests and reinforce its integration process". The Court concluded that the Council had cautiously and neutrally examined the relevant aspects and had provided adequate reasons for its decision. There was, therefore, no breach of the condition.

The fourth ground related to accusations of a lack of uniformity that would breach provisions of the TEU and TFEU. The CJEU held that nothing in the contested decision infringed these treaties by prejudicing any competence, right or obligation of Spain or Italy, and that the unitary patent contemplated by the contested decision would confer uniform protection in the territory of all the Member States taking part in the enhanced co-operation.

The final ground, advanced by Spain, was disregard for the judicial system of the European Union, claimed on the basis that the Council authorised the enhanced co-operation without specifying the proposed judicial system. The CJEU held that the only objective of the decision was to authorise the requesting Member States to establish co-operation and that it was for the co-operating Member States to establish the unitary patent system, including stipulating the judicial rules attaching to it.

COMMENT

This may not be the end of the saga, as Spain has launched two new legal challenges against the Regulation. However, given the determinations made by the Advocate General and the CJEU so far, it seems unlikely that the CJEU will adopt a different view on the legality of enhanced co-operation arrangements—and therefore the Regulation—to that expressed in the present judgment.