The Court of Justice of the European Union (CJEU) has dealt a serious blow to proposals intended to establish a Unified Patent Litigation System in Europe, ruling that such a system is incompatible with EU law.
Currently, a single patent application can be filed in the European Patent Office (EPO), designating all states that have acceded to the European Patent Convention. The application is then examined and granted by the EPO. However, once the patent is granted it must be validated in each designated country in which patent protection is desired, effectively becoming a bundle of national patents, and often requiring costly translations. In addition to the costs of validation, apart from a nine month opposition period immediately after grant, all litigation takes place at the national level. This means that a potential infringer may have to be pursued through the courts of several countries, or an invalid patent will have to be attacked in the courts of all the countries in which it has been validated. This results in a lengthy and expensive litigation process with no guarantee of consistent rulings between courts in different jurisdictions.
Over the past 30 years, there have been ongoing negotiations aimed at establishing a single, unified patent system in Europe, under which a single patent would cover all states and there would be a single forum for litigation.
A number of EU Member States, including the UK, have supported proposals for a unified system, and this appeared to come a step closer when the European Parliament voted in its favour.
In order to enforce the proposed European patent, it was planned that a Unified Patent Litigation System (UPLS) be set up. The UPLS would be outside the institutional and judicial framework of the EU, and would establish a European and EU Patent Court (EEUPC) with the exclusive ability to hear and rule on infringement, validity and other proceedings arising in Member States of the EU (as well as non-EU countries that are parties to the European Patent Convention, such as Switzerland) regarding existing and new European patents.
However, the CJEU has now ruled that the UPLS is incompatible with EU law, effectively stopping the proposed patent litigation system in its tracks.
In making its decision, the CJEU considered how the ability to make laws would be devolved through the new system, and the consequences of this. The proposed structure of the UPLS requires that Member States transfer their ability to hear actions and interpret EU law in the field of community patent law to the EEUPC. Hence, the Member States would be deprived of their powers in relation to the interpretation and application of certain aspects of EU law, with no ability to appeal decisions of the EEUPC to the CJEU. Hence, the CJEU concluded that such a court was not compatible with EU law, as it would remove the ability of the Member States to request a ruling from the CJEU.
It is possible that this problem could be resolved by making the CJEU the judicial body in charge of patent litigation in Europe. However, this is a generally unpopular idea as the CJEU is not a specialised patent court.
Whilst this ruling effectively kills off current proposals for the UPLS, it does not necessarily signal the end of efforts towards the parallel objective of a unified European patent granting system. Indeed, the Competitiveness Council of the EU has recently approved the use of the so-called "enhanced cooperation procedure" to take forward the proposed unitary EU patent. This would enable progress to be made, despite the opposition by two EU Member States, namely Italy and Spain. Patents granted under this system would cover all Member States except those that do not participate in the system, ie at present 25 of the 27 countries of the EU, the exceptions being Italy and Spain. It remains to be seen whether Italy and/or Spain will mount a legal challenge to the proposed regime, but in any event there is still a lengthy period ahead before the unitary EU patent becomes a reality.
23 March 2011