Court of Justice Rejects Unified Patent Litigation Proposal while Member States Seek Progress

On 8 March the Court of Justice of the EU (CJEU) delivered its opinion on a proposal to create a new unified patent litigation system and a new European and Community Patents Court, concluding that such a system would be incompatible with European Law. However this decision was shortly followed by the news that the vast majority of Member States are in favour of a new unitary patent regime and wish to work together to ensure that it happens.

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Court of Justice Rejects Unified Patent Litigation Proposal while Member States Seek Progress

Currently there is no single unitary patent applicable across the whole of Europe, nor is there a mechanism by which patents can be enforced across Europe centrally in one forum. While the European Patent Office provides a centralised system for the grant of patents valid in a number of European countries, those patents nevertheless exist as national rights which must be enforced on a jurisdiction by jurisdiction basis. In disputes which span several countries, a unified patent and a mechanism to enforce patents via a centralised court would offer the prospect of considerable cost savings and remove the risk of inconsistent decisions in different jurisdictions.

The Council of the European Union approached the CJEU in 2009 asking the CJEU to consider the creation of a unified patent litigation system across Europe. The proposals (in the form of a 'draft agreement') include the creation of a unitary patent having equal effect across the European Union which could be granted, transferred, declared invalid, or lapse only in respect of that territorial area. The draft agreement also provides for the creation of a new European and Community Patents Court (the PC) consisting of a Court of First Instance and an Appeal Court. The draft agreement also envisages the creation of a new joint registry.

Court of Justice Not in Favour

The CJEU considered the draft agreement alongside various submissions from a number of Member States and the Treaties underpinning the European Union, and concluded that the draft agreement is not compatible with EU Law.

The CJEU's main objection was that a unified patents court would "deprive courts of Member States of their powers in relation to the interpretation and application of European Union law." This would, in effect, remove national courts of the ability to refer cases to the ECJ, which would in turn "alter the essential characters of the powers conferred on the institutions of the European Union and on the Member States which are indispensable to the preservation of the very nature of European Union law."

The CJEU also objected on the basis that the new system would not provide for any remedy should the PC reach a decision which was in breach of EU law.

Another View

Nevertheless the European Commission's Competitiveness Counsel considered and approved a proposal to authorise "enhanced cooperation", a mechanism by which Member States work closely together to seek to develop new legislation, to seek to create unitary protection for patents on 10 March. Despite opposition from Spain and Italy, who feel that a unitary patent available in only English, French and German as standard would not be in their interests, the vast majority of Member States are keen to press ahead to find a way of making a unitary patent work. Interestingly, the Council minutes indicate that the Council are of the view that enhanced cooperation in the area of the creation of unitary patent protection complies with the Treaties and European Law.

A unitary patent and a centralised enforcement mechanism has always made economic sense, and now the Council's decision demonstrates that there is significant political will to create them. Nevertheless the CJEU's objections to the draft agreement indicate that it will resist any attempts to prevent it from having judicial oversight of any new system. Further, Spain and Italy's objections in relation to the standard languages of such patents and the chequered history of similar proposals suggest there is much work to be done before a unitary patent becomes a reality.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 11/03/2011.