Whither the EU patent?
This article was originally published in SRA
It's been a big week for watchers of the patent scene, with major (some would say historic) upheavals in prospect on both sides of the Atlantic. Not only is the US patent system poised to shift from a first-to-invent to a first-to-file system, but the EU is forging ahead with fresh plans for a single patent amid great legal and political uncertainty.
While the two initiatives are very different in nature, both are aimed improving the way that patents are filed and litigated. The US patent reform bill system has the backing of industry bodies including PhRMA and BIO, and on 8 March won support in the Senate. There had been some opposition to the move, with a number of senators claiming the first-to-file system would harm US innovation, but this was not enough to stop the bill being passed, which it did by 95 votes to five1.
Over in the EU, a whole new patent system is on the cards, but Italy and Spain have been left isolated in opposition as the other member states have decided to press ahead with the single patent proposal. Moreover, an opinion from the Court of Justice of the EU has thrown plans for a new patents court into disarray2. The drama has been palpable.
The single patent is intended to improve on the current fragmented system whereby European patents issued by the European Patent Office are in reality a bundle of national patents that have to be litigated at member state level. The proposed unitary patent system would be valid throughout the EU and would radically reduce the cost of filing and litigation. It involves three separate proposals – a single patent, the language regime and a patent jurisdiction.
Italy and Spain are all for the single patent in principle, but are vehemently opposed to the proposal in its current form. Their main gripe is with plans for patent applications to be submitted in English, French or German, which they say discriminates against their languages.
Unanimity among all 27 member states is needed for the proposal to go ahead. However, this having proved impossible, the European Commission, the European Parliament and the other 25 member states have decided to proceed under "enhanced co-operation", a rarely used mechanism that allows a "coalition of the willing" to pursue legislative proposals when unanimity cannot be secured.
But the move has served only to increase the two countries' ire. At a council meeting held on 10 March to launch the enhanced co-operation procedure, the Spanish foreign affairs minister, Diego Lopez Garrido, said using such a procedure discriminated against non-participating countries and would bring more legal uncertainty to the proposal. He called on the council to "stop this headlong rush into the void".
He also cited the CJEU's opinion, delivered two days earlier, which said that the related but separate proposal for a patent jurisdiction, based on a new European and EU Patents Court (EEUPC), was incompatible with EU law.
In principle, the single patent could exist without a dedicated patent jurisdiction. However, the Spanish minister said this would be "like having a car without wheels" and urged the council and commission to put the whole thing on hold until the legal questions were resolved. His Italian counterpart was of similar mind, saying the opinion should "lead us to think again about enhanced co-operation".
In the end, though, it was to no avail. A representative of the council's legal service confirmed that talks on the single patent could proceed, because in legal terms it was independent of the jurisdiction question, and the council duly gave the go-ahead.
The commission will now prepare two draft regulations on the patent and the translation arrangements for discussion by the 25 other countries and the parliament; Italy and Spain will be left on the sidelines.
Courting controversy
In the meantime, the CJEU's opinion has dealt a near-fatal blow to the proposal for a pan-European patents court – at least in its current configuration – and the plan will have to go back to the drawing board. The question is, what can be done about it?
Lawyers following the matter believe it will be difficult, if not impossible, to patch up the proposal to take account of the reservations expressed by the CJEU, given that they are fundamental questions of EU law. The CJEU was concerned above all that the proposed patents court would be able to decide on points of EU law but would operate outside the EU legal framework and would not come under the strict supervision of the CJEU, as the national courts do at present.
According to Paul England, a lawyer at Simmons & Simmons, the CJEU is essentially saying that involving any body other than itself and the national courts would require the divestment of powers under EU law, which cannot be allowed3.
That leaves the prospect of developing a whole new framework, perhaps one based on the member states and the CJEU, rather than a mixed EU/European patents court as originally proposed.
Mr England said the opinion "paves the way for a system in which there is a unitary patent with decisions on that patent ultimately being made by the ECJ [now the CJEU – Ed]". German patent lawyer Jochen Pagenberg agreed, saying that one possibility could be a set-up similar to that used for the EU trademark, where the national courts are bound by common procedural and substantial law under the full supervision of the CJEU4.
But there seems to be little enthusiasm among industry and patent lawyers for such a solution, not least because, in their view, the CJEU has insufficient experience in specialist patent matters. Law firm Marks & Clerk said5: "Many industry players would need much more confidence that the CJEU would have significant specialist patent experience before entrusting their disputes, ultimately, to that court."
Whatever happens, finding a solution to this new setback is going to take some time. The patent court proposal clearly had legal loopholes that the CJEU was not going to let pass. The EU institutions and their army of lawyers will now need to come up with something that is much more legally watertight if the single patent system is not to meet a sticky end.
References
1. US Senate adopts patent reform bill, Regulatory Affairs Pharma, 10 March 2011
2. EU to press on with single patent despite setback for court plans, Regulatory Affairs Pharma, 10 March 2011
3. Personal communication, Simmons & Simmons, 8 March 2011
4. Personal communication, Bardehle & Pagenberg, 8 March 2011
5. Marks & Clerk press release, 8 March 2011, www.marks-clerk.com/uk/attorneys/news/newsitem.aspx?item=371
Ian Schofield is a principal analyst for Informa Business Information, the publisher of Regulatory Affairs Pharma.
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