Patents in Europe: Barnier's mess
On March 10th 2011, the Commission and the Council of the European Union rejoiced in a press release about the decision taken in the morning by the Council, to authorize "an enhanced cooperation among Member States for the creation of a unitary patent title". But these fine statements were shattered by the next press conference: questions from a couple of reporters regarding a decision from the Court of Justice of the European Union on the very same subject embarrassed, at the very least, Commissioner Barnier. The deciphering of this Council meeting gives us the opportunity to explain this complex but essential issue in the fight against software patents, in which April is engaged.
English translation by the APRIL translations workgroup: coinpan, echarp, el, Fragilbert, Fred, gibus, laurent, Marianne, Nancy, Nico, odile, satanas_g, stéphanie, SYSY, Temporalior, Thibz, Ypll and anonymous contributors.
An unsettling ending to the press conference
It is almost 2pm, this Thursday 10th of March 2011, when Michel Barnier, European Commissioner for Internal Market and Services, concludes the press conference that followed a meeting of the Council of the European Union. Whereas the conference began with the triumphant announcement of an "historical day for innovation", the Commissioner seems troubled, hesitant, and in a hurry to end a press conference which lasted in all and for all some twenty minutes, with only two reporters to interview the representatives of the Commission and of the Hungarian presidency. Let us see this1…
Following a question from a Hungarian reporter, asking (in French):
Is there any solution that is acceptable to all Member States and also to the Court? Thank you.
Michel Barnier answers :
I'm confident, and I'm determined as well: determined to find a solution which is in everybody's interest. After a very rigorous and very careful examination of the court's ruling, we have to find the best possible solution, which will cover all appeals from the EU. We'll work towards this solution, which will provide a stable framework at a reasonable cost. On the patent itself, the issue that was clearly decided this morning by the Council, the solution that has been accepted by 25 Member States is economically essential and legally solid. Really to think it's acceptable, and when a bit more time has elapsed, it may well be acceptable to all EU Member States.
The Frenchman is acting with caution, to say the least. The take-home message of this speech is that the Commission needs to work out a solution, which means that there is a problem. That being the case, the “historical” nature of the proposal adopted by 25 Member States may be put into question. The Commissioner may well remind that the proposal was “legally solid, economically essential, and politically acceptable”. But his using that phrase no less than four times that day shows that it is just rhetoric, well prepared by some communication counselor —or by himself. In any case, it will take much more to share l Barnier's sham confidence and determination.
Some explanations before the show
First of all, we need to know what the decision taken by the European Council, this morning of March the 11th, 2011, really is.
It is quite simple: the ministers of Member States have simply decided to legislate, not among 27, but among only the 25 participating Member States. This is called enhanced cooperation. This procedure is allowed by the EU Treaties in order to limit risks of blocking, when a consensus cannot be reached among all Member States. Hence, in a usual co-decision procedure, a directive shall be voted by the European Parliament on one side, and by a majority — or the unanimity, depending on the topic — of the ministers of all 27 Member States on the other side. In the enhanced cooperation framework, the directive shall still be voted by the Parliament, but only ministers of the countries participating in the enhanced cooperation shall agree on the text.
So the Council decided to launch an enhanced cooperation. On which subject?
The objective of the present enhanced cooperation is to create a unitary patent and its associated translation arrangements. Well. But how unitary could this patent be, while in Europe, the centralised Patent Office in Munich already grants patents for the whole continent?
Actually, the European Patent Office (EPO) in Munich was created on 1973 to take charge of the patent pre-granting stage. That is, they receive patent applications and examine them. According to the examinations, if the patentability criteria are fulfilled, the EPO grants a European patent. Then, this patent is split into a bundle of national patents, that are valid in each designated country. This procedure avoids patent applicants to go through each national patent office, with risks of divergent views in all the examinations.
But, since a European patent holder has actually a bundle of national patents, she has to pay periodically renewal fees for her patent title to remain valid, this in each country in question, for a maximum period of 20 years. Moreover, if ever a competitor comes up with a product or process that is likely to counterfeit her patent, she has to sue the alleged counterfeiter before courts of each and every country.
It is therefore understandable why the patent granted by the EPO, so far, is not very much unitary. It seems desirable to simplify the procedure, by going to a unique patent office, over the whole lifetime of the patent, and by getting rulings on potential litigations that would be enforceable throughout the whole continent. Still, to set up such a unitary patent, why is the EU not legislating the usual way, but instead is going through enhanced cooperation?
The idea of a unitary patent under a unified jurisdiction is almost as old as the creation of the EPO. Still, all attempts at creating such a system have failed. The last project to date was issued by the European Commission in 2007. Since then, the EU Council has worked on a project defining a unified jurisdiction, having powers with regards to the litigations on the current European patent delivered by the EPO, as well as with the unitary patent to come.
However, to settle a unitary patent, it is required to decide in which language this patent can be accepted. At the EPO, patent applications are accepted in English, German, and French. Next, when the European patent is granted and forks in a bundle of national patents, each country where a national patent is registered asks for a translation into its own language. However, some States endorsed the London Agreement, thus allowing national patents to be valid in another country without the requirement to be translated, provided the patent is written in one of the three official languages of the EPO. The London Agreement is an optional agreement for countries which are members of the Europeen Patent Convention (EPC) — international agreement governing the EPO and defining the rules for granting a European patent from the Munich office. To date, 13 countries have endorsed the London Agreement. For other countries, a translation of the patents is still required.
Likewise, the EU Council and the European Commission proposed in 2009 that the unitary patent should be requested in one of the three official languages of EPO. Nationals from Member States whose official language is neither English, German nor French, should have the opportunity to obtain for free a translation in one of these languages, the financial cost being assumed by the EU, the cost being hopefully reduced as soon as automatic translation software have proven enough reliability.
But some Member States are not satisfied with these language rules. Mainly, Spain and Italy — which by the way did not sign the London Agreement— dispute the fact one can request a unitary patent in German or French, whereas Spanish and Italian, widely used around the world, would be excluded. These two governments would prefer, if absolutely needed, that only English may be available, but not German and French over their own language.
Officially, the Council activities stumbled over this problem, while the Treaty enforces the Council to unanimously legislate about the linguistic regime of the unitary patent. That is why, in December 2010, twelve countries2 ask for usage of the enhanced cooperation procedure in order to go ahead without being stuck by the unanimity requirement for the linguistic regime, which reveals unreachable. They will be joined in February 2011 by 13 other Member States3, leaving only Spain and Italy out of a possible enhanced cooperation.
Enhanced cooperation authorization at full steam
In order to legislate following the enhanced cooperation procedure, it is necessary that the Commission submit this proposition to the Council, after Parliament's authorization. Since November 2010, when the Council established the unanimity about the unitary patent's language rules would be almost impossible to reach and then it should go through the way of the enhanced cooperation, things went really fast.
The first 12 countries have officially asked on December 10th 2010 the Commission to submit a proposal to that effect. The Commission had submitted its proposal four days later, on December 14th 2010. On January 11th 2011, Klaus-Heiner Lehne, the German conservative rapporteur, chairman of the parliamentary committee for Legal Affairs, submitted his report to the European Parliament authorizing this enhanced cooperation. His report was adopted on February 14th 2011 by the European Parliament during a plenary session, without much discussion and with only an opposition by principle from the Green, Communists and Sovereignists groups.
Thus March 10th, 2011 should have been the last formality to launch this enhanced cooperation on the bleeding edge. Yes, but…
The last minute stumbling
But two days before the Council's meeting, crash! The unitary patent's open road hits a brick wall: the Court of Justice of the European Union (CJEU) ruled that the proposed unified jurisdiction is contrary to EU law and even questions the very nature of this legal order. What happened? Why does the CJEU give its opinion on a political project that had been drafted for several decades? And what exactly does this review mean?
In fact, if the linguistic issue is only the top of the disagreement iceberg between Member States, it is far from being the only or main divergence, for anybody who followed the numerous meetings where the Council worked on this topic since 2007. Thus the project of unified jurisdiction raises criticism and concern among some States, which question the feasibility of the project with respect to their own constitution, or, more globally speaking, towards EU treaties. Why? Simply because the project opens the possibility to introduce a special jurisdiction.
Until now, litigations about patents are processed by ordinary courts, in official local languages, by judges with the qualifications required by local law authorities. The unified jurisdiction project upsets this by setting up a European court for patents, made of several national chambers — in countries where many patent litigations occurs — or regional chambers — by grouping countries with little patent litigations — and a central court. In some cases, trials could take place in a foreign language for one of the parties. Judges would be patent experts over all, selected by their law or technical skills — ie : judges could be not magistrates, but engineers.
Facing the doubts expressed by several Member States that such a construction be possible given each State's constitution, the Council decided in 2009 to refer the matter to the CJEU. It was a smart move since on March 8th 2011 the CJEU condemned the project: implementing such a special court would undermine the entire judicial framework of the EU, and with it all the democratic safeguards it provides. In short: The CJEU has prevented the establishment of a judicial monster!
Decoding Michel Barnier's confusion
All set with these few explanations, Commissioner Barnier's troubled speech at the end of the press conference becomes intelligible. The Commission must indeed work on a solution for a unified jurisdiction which will answer CJEU criticisms. Without a unified jurisdiction, the unitary patent would have almost no interest. What is the point of a unique title if, when it has to be used against possible counterfeiters, this has to be done in multiple courts? The only remaining advantage could be translation cost reduction, but it would not bring anything compared to the possible savings already offered by London Agreement.
No, Michel Barnier knows well enough that there has to be a unified court. Otherwise the patent would not have any other future than to fall in History's oblivion, while the Commissioner was boasting that he was the Commissioner who had finally managed to conclude this project after the many failures of his predecessors: Mario Monti, Frits Bolkestein or Charlie McCreevy. But the CJEU opinion is such that the Commissioner has no backup solution to the project that has just failed. Due to this, the French Commissioner will be forced on this Thursday 10th of March 2011 to engage in the perilous duty of delaying the questions regarding the jurisdictional system, while trying not to brake the momentum in the establishment of a unitary patent.
Up to the show: the Council meeting
The whole Council meeting which held before the press conference enrolls in the same pattern. The Commission and the Member States who participate in the enhanced cooperation — i.e. all countries but Spain and Italy — will quickly pass over the jurisdictional issue, by admitting that they will have to work on a solution after CJEU Opinion. Which solution? No one will give any clue! And yet, all will vote the authorization to launch the enhanced cooperation on the unitary patent.
It is not only funny to see how the different protagonists in this meeting address this slack-rope show; it is also full of lessons about what could happen in the next few weeks about patents in Europe. Hence, we selected, in all the speeches, everything dealing with the jurisdictional system and Opinion from the European Court of Justice. In a meeting which last more than 90 minutes, this question was considered during less than 40 minutes. In the following, we will comment on each of these speeches and we will try to give the keys to decipher them. We modified slightly the order in which they appear, so that the narrative interest of our deciphering is preserved.
The rest of the discussion which we haven't retained can be simply summarized: "it is necessary for the EU to adopt a unitary patent; it is important for competitiveness— some ministers going to the point of claiming that employment would improve thanks to such a patent — everyone would have liked this to have been unanimously approved, but so be it if Spain and Italy refuse to agree, it shall still be done and it must be voted on today to move forward towards an enhanced cooperation, without forgetting to thank the successive presidencies of the EU that have led the Council's work". This summary is only slightly simplifying the statements made during this meeting. Those interested can see for themselves on the full video of the Council meeting (1:36:42).
Since Hungary presides to the European Union during this first semester 2011, the master of ceremony is then the Hungarian Prime Minister. Disappointment: he does absolutely not talk of the jurisdictional issue, nor of CJEU Opinion, except when indicating that the Council members are allowed to discuss this point.
Commission: Michel BARNIER, European Commissioner for Internal Market and Services
So Michel Barnier has the honor to evoke the subject first:
Now, I have to say of course that we're not at the end of the road yet. Once we actually take the decision to launch enhanced cooperation today, we'll have to base ourselves on a regulation which the Commission will be submitting on the 30th of March, on the whole of issue of patent. So we have to work on that. And then, separately from that, we're going to have to look at the Court of Justice's ruling and look at the whole issue of jurisdiction. And we will be making proposal on that in parallel, because they are separate and different issues. But we do need to make progress on both in parallel, so that we establish everything that we need to deal with patents in Europe.
His strategy is just as we have deciphered it during the conclusion of the press conference: the Commissioner has no idea of a solution to establish a unified jurisdiction that might comply with the requirements set by the CJEU. He therefore temporizes by promising to work on solving this issue, without giving any hint as to what could such a solution be. For this major obstacle not to disturb the long quiet river— or rather the rapid torrent — leading to the establishment of the unitary patent, he struggles to present the matters as being independent: on the one hand the regulations on the unitary patent system and its linguistic matters, and on the other hand the jurisdictional system. Yet the Frenchman lets a contradiction slip from his discourse: both of these matters are part of a one and only architecture, implying that a unitary patent and a unified court are useless without each other. In short, both aspects of the project would follow parallel paths yet they would meet at some point. To hell with mathematical rigor!
Apples and oranges
Fortunately for Michel Barnier, numerous ministers will support the differentiation between a unitary patent and a unified jurisdiction. This is precisely the Commissioner's intention: to have a vote today from Member States on an enhanced cooperation on the unitary patent, while considering the jurisdiction matter as a completely separate one, which could be settled afterwards.
Germany: Peter HINTZE, Parliamentary State Secretary, Federal Ministry of Economics and Technology
As for the Opinion of the Court of Justice, it does not stand in the way of this decision. It talks about the acceptability of patents and not the process of granting the patents: these are two different issues and they should not be confused. So therefore, we should take the decision today as planned.
If the German representative's speech is clear and does not call forth further analysis, it is not unnecessary to recall Germany was a leading force in the unitary patent case. In the European patent landscape, Germany is without a doubt on pole position: the headquarters for the European Patent Office are in Munich, and Germany is the first country for patent applications as well as for patents granted by the EPO4, an estimated5 50 to 70% of all patent litigations end up before German courts, and the analysis of the unified jurisdiction project, which has just been rejected by the CJEU, was greatly inspired by the German system, in particular as to a distinction between counterfeiting and nullity claims. In short, Germany is strongly in favor of the unitary patent project, if not its initiator, and one understands that its representative in the Council does not linger on a declaration that could put the whole scheme at risk, and that he would rather proceed at all costs.
Belgium: Vincent VAN QUICKENBORNE, Federal Minister for Enterprise and Simplification
The question that we have to look at is what are the reasons to take this decision today? And are there any reason for postponing it? I cannot think of one single reason to postpone this decision, because this is just a mandate to have enhanced cooperation. So we're not actually talking about the content of the unitary patent — that will be adopted later on the proposal from the Commission and the members of the Council who'd be able to take account of all the elements, including potentially certain aspects of the recent opinion from the European Court of Justice. Secondly, the opinion from the Court, let's be honest, is 100% in line with what the Advocate General had said so this is no surprise at all. We've got to find a solution, and the Commissioner has already said that we need to tackle this in a correct and efficient way. But a problem with the process for granting patents is not something that stands in the way of our decision today. Let's not lose the momentum that we built up. As Queen said "don't stop us now". We've got to make progress, we've got to continue to move. Only in that way will we have a credible Europe.
Obviously, the content of the Opinion from the CJEU is the best reason to postpone the Council's decision. Without a unified jurisdiction, the unitary patent has no future, so the representatives within the Council could have very well waited for a new proposal on the jurisdictional part to be presented before moving forward. That is what April had called for from the Members of the European Parliament in Februrary 2011. Unfortunately, this has been unsuccessful. So much for the European Parliament's credibility: it has accepted a project which was challenged only three weeks later, as had forewarned April.
But the Belgian Minister's speech gives us the opportunity to review the opinions released by the Advocates General of CJEU. They assist the CJEU by presenting their independent opinions on legal questions referred to the Court. In August 2010, a leak exposed the opinion of the Advocates General on the topic of the jurisdiction of the unitary patent. This opinion concluded on the incompatibility of the project with the Treaties on four counts. First, it objected that the Court considered it impossible to challenge the EPO's administrative decisions — the grant or the refusal of a patent, as well as the invalidation or the confirmation during the opposition to an already issued patent — in front of an independent court. Secondly, the project was no sufficiently clear with regard to the compliance of EU law by the patent court. Thirdly, the accepted languages when facing the central division of the patent office, only English, German and French, could infringe the right of defense. Finally, the possible remedies to breaches by the patent court to EU law and its non-compliance with its obligation to make a preliminary ruling to the CJEU were deemed insufficient. But each of these criticisms could have been corrected through amendments to the draft. The patent court could have had jurisdiction on appeals to EPO's administrative decisions or an administrative court of the EU, dedicated to patent-related matters and authorized to refer to the CJEU, could have been created. The proposed agreement could have specified all the obligations pertaining to compliance to EU law. The language regime could have been extended to the central division. And the decisions from the patent court could have been subject to referral before the CJEU where the latter could exercise its review powers.
But the final opinion of the CJEU went much further than the Advocates General by forbidding explicitly any special court regarding patents outside of the EU's jurisdictional system. This time, there is no other way out that revising entirely the project's architecture in order to include the unified patent jurisdiction in the legal system consisting of national courts and of the CJEU. Our fan of Queen appears to have missed that point. And during the Belgium presidency of the EU in the second half of 2010, he had spared little efforts to reach a unanimous agreement, before resorting in the end to the idea of an enhanced cooperation.
Ireland: Geraldine BYRNE NASON, Deputy Permanent Representative
Ireland welcomes the fact that the CJEU has delivered its judgement, which of course doesn't directly affect our decision today. We will study that judgment, but at this stage we note that the judgement addresses a number of points which Ireland made in its own submission to the Court. And we look forward to working with the Commission and the colleagues on the jurisdictional issue as we go ahead.
To the Irish representative's credit, it is true that during hearings of the Member States, the European Parliament and the Commission before the CJEU in May 2010, Ireland was among those who believed that the project was not compliant with the EU treaties, and had in particular noted that the proposed agreement was undermining the autonomy and the efficiency of the Union and of Member States' judicial orders. Not to be forgotten either — it may be the explanation to this blind rush — that Ireland is a tax haven for the income provided by patents.
Portugal: Fernando SERRASQUEIRO, State Secretary for Trade, Services and Consumer Protection
We need to move forward, not withstanding the decision on the jurisdictional issue. These are two parallel processes, as Commissioner Barnier said, and we hope that the Commission will come forward as soon as possible with proposals that will allow us to make progress.
There is no special comment to be made on this pithy speech. But that if the projects to set up a unitary patent and a unified jusrisdiction are really parallels — which is mathematically untrue, since it would imply that both projects never met at some point —, since the CJEU has just put an end to the latter, the former should logically also be paused.
Latvia: Juris PŪCE, State Secretary, Ministry of Economics
We have the opinion of the European Court of Justice in our hands. We are still judging it and analysing it. However, I believe the issues of jurisdiction can be reviewed separately. I would like to express my heartfelt thanks to the Presidency for a constructive approach in the discussions to this day and Latvia stands ready to move to concrete proposals and solutions in the upcoming meetings.
Apart from giving us an opportunity to clarify plans for the future of patents in Europe, we must admit that we have a hard time trying to find anything constructive in the meeting we are currently deciphering and in which both propositions and concrete solutions were conspicuous by their absence.
Netherlands: Derk OLDENBURG, Deputy Permanent Representative
It's true that we have to take account of the opinion from the Court of Justice and we need to study it in detail. But that is not a stumbling block to take a decision today; nor is it a stumbling block to making progress on the other questions of award of patents and language. And therefore we are grateful to the Commission for promising to table proposals on these two issues as soon as a possible. I think we have to keep up the momentum and keep going.
There is no need to dwell on this last Dutch speech, totally in line with the Commission.
Let us rather focus on countries which prefer to emphasize that the part on the unified jurisdiction must be rewritten, despite these countries' agreement to launch the enhanced cooperation.
United Kingdom: Baroness WILCOX, Parliamentary Under-Secretary of State for Business, Innovation and Skills
Clearly, an effective patent litigation system will be a crucial part of the overall package to deliver a business-friendly system. We are therefore pleased that the CJEU opinion on the patent court has now been issued. We will analyze it and consider its implications carefully. We look forward to working with colleagues on this issue, and we look forward to the Commission bringing forward the relevant substantive regulations in due course.
The British representative is the first one to make it clear that the jurisdictional issue is part of the overall unitary patent system. This is a first setback to the Commission's intended message. However, by finally giving her approval to the launch of the enhanced cooperation, the Baroness somewhat forgets her own letter to the Commission, requesting the kickoff of the procedure. Indeed, while countries that initiated the cooperation had jointly written to the Commission, the United Kingdom had written a separate one ending with a reservation on UK's participation in this procedure if the CJEU were to concluded to an incompatibility of the envisioned jurisdiction with the Treaties. For the moment being, the United Kingdom isn't yet abandoning the vessel. We shall see later on that its ancestral reluctance to grant more powers to the EU bodies — and namely to the CJEU — may well jeopardize the British agreement on the entire project of the unitary patent.
Greece: Anna DIAMANTOPOULOU, Minister for Education
My final point has to do with the jurisdiction system. Certainly, beyond a unitary patent system, we had set as an objective to set up a single patent jurisdiction system. We have expressed the view that we need a purely Community system, and the Court of Justice in its recent opinion has confirmed our view. We believe now that we need to analyse the Court of Justice's opinion in such a way that would allow us to find a solution according to Treaties. And once again, let me say that the Commission has a very important role to play in this context. The Commission will propose in this area solution and procedures that will help us take the next step.
The Greek representative in this passage confirms our analysis of the CJEU's Opinion: the only way forward would be to include the unitary jurisdiction within the EU jurisdiction. The Greek Minister says about it that it would be a "clear community system". The Commission is thus well aware of what needs to be done!
Note also that, in the same way as Ireland, during the hearings in May 2010 in front of the CJEU, Greece had claimed that it was against the Treaties to entrust patent litigations to a non-EU court. In this same hearing, Greece has also reacted negatively to the fact that some technical experts could be judges within the envisioned patent court, without having the competence required by the Treaties to be magistrate sitting in an EU court.
France: Éric BESSON, Minister for Industry, Energy and [Digital] Economy
We should not give up our efforts. France would like the European Commission to table as soon as possible a draft regulation on European patent with the language system. Obviously, work needs to continue on the jurisdiction system. And the opinion that we got from the European Court of Justice clarifies this situation, which is extremely useful. Nevertheless, the Commission must of course tell us how these ideas can be integrated in our reflection.
The position of France is somewhat tight. Firstly, regarding the linguistic topic, France doesn't make any noise, as it is overly happy that the French language be kept as one of the unitary patent's official language. Then, on the jurisdiction, since the beginning of the negotiations, France has supported unsuccessfully that the CJEU play a role of supreme court for the patent court. The future could in the end prove him right… Thus, the French minister very diplomatically contented himself to remind the Commission that it must get back to work.
Slovenia: Viljem PŠENIČNY, State Secretary, Ministry of Economy
About the opinion by the Court, here I can only say that we are still studying it in Slovenia, because we have only recently received it. We'll have to find certain solutions in light of this opinion as well that will provide good answers to the still remaining issues.
If, in accordance with his own remarks, the Slovene representative had few things to say, he suggested that the CJEU's opinion could provide a frame of answer, not only on the jurisdictional question, but on the other difficulties introduced by the unitary patent. And we will see below that the unified jurisdiction is not alone.
Czech Republic: Martin TLAPA, Deputy Minister for Industry and Trade
The patent system needs to be discussed as a package: we need to take the language regime, the patent litigation system and where the patent will be accepted, as a package. This is not going to be an easy debate. We will have to find additional options. We also have to think of the commitments vis-a-vis automatic translation and we have to bear in mind any discussion that will ensue the Court's opinion. We will have to analyze the Court's opinion. We don't think that it needs to stand in our way. We think that we can still decide on enhanced cooperation, but the litigation system has to cover all litigations including those regarding the European patent. I would like to thank the Hungarian Presidency once again, for presenting this proposal, for raising this item. And I think it's the first step to contain the costs that our companies bear in trying to find patent protection and hopefully it will also help Europe compete in a global innovation-based economy.
Well, now, that things could not be said more clear: everything is connected and we can't decide anything about unitary patent disregarding the reappraisal that the CJEU has just done about the planed jurisdiction. Despite his today favorable vote, the Czech representative has just contradicted the sweetened introduction of the Commission.
Romania: Constantin Claudiu STAFIE, Secretary of State, Ministry of Economy, Trade and Business Environment
After the decision of the Court of Justice, we believe that we also need a point of view of the legal service of the Council on its effects on the enhanced cooperation procedure. The Romanian authority will follow extremely closely these latest developments in the field.
Here, another type of worry becomes clear: what if the CJEU's opinion went so far as to challenge the very procedure of enhanced cooperation on the unitary patent? We don't know if it is a real fear, at the opposite of Commissioner Barnier's clumsily displayed confidence, or if it is a stooge allowing the Legal Service of the Council to avoid shedding any doubt, as we shall see later…
Slovakia: Peter JAVORČÍK, Deputy Permanent Representative
With regards the ruling of the Court, Slovakia has expressed its reservation about participating in the mechanism depending on the ruling of the European Court of Justice. And as very little time has passed since the ruling of the Court has been announced, we haven't had yet sufficient time to evaluate the findings of the Court. And given our reservations in the application on participating in enhanced cooperation, Slovakia will pay great attention to the evaluation provided by the Legal Services of the Council and the Commission of the ruling of the Court. But also, very important will be specific proposals: how to reflect the ruling of the Court in our work, or how to improve the text of the draft agreement or how to amend the European patent convention. We think that the existence of a new European patent applicable to the countries of the enhanced cooperation cannot be efficient without an agreement on a joint jurisdiction system to settle patent disputes. In this situation, we are ready to search for solutions together with the Presidency and the Commission and further Member States, solutions that will be legally strong and at the same time will allow us to create a good unitary patent system in the Union.
Besides the fact that the Slovak representative supports on the one hand the previous questioning of Romania on the feasibility itself of enhanced cooperation with regard to the CJEU's decision — here again seeking the expertise of the Legal Service of the Council — while on the other hand it confirms the interdependence of the unitary patent and the unified jurisdiction, it raises an important point here. Not only is the elaboration of a jurisdiction to be completely reviewed because the CJEU repeated the necessity that this jurisdiction must fall within the European Union's judicial framework. But what about the substantive law that shall apply to the unitary patent? The expression "substantive patent law" covers the criteria, requirements and exceptions for which an innovation can lead to a patent being issued, and the conditions of such a patent granting. So far, the work done by the Council and the European Commission offered a simplistic solution: the EU could join the European Patent Convention (EPC) and would therefore benefit from this Convention's preexisting rules regarding substantive patent law.
However, this solution still has some ambiguities. It implies that the Union would no longer be totally in charge of legislation in this area, since it could not get away from the legislative rules of the European Patent Convention. Yet these rules are far from being perfect. Especially with regard to software patents. If the EPO has been able to grant tens of thousands of software patents, it is because of its questionable interpretation of Article 52 EPC which states that computer programs are not patentatble as such. The EPO has taken advantage of this wording to conclude that it meant that some kinds of software are technical whereas some others are not. The first ones would not be software as such and therefore would be perfectly patentable. Of course, in real life, there is not two different kinds of software. But this drift is worthy in that it highlights that the wording of the EPC must be clarified. That is what the Enlarged Board of Appeal of the EPO — the highest internal pseudo-judiciary body within the EPO — explicitly stated by refusing to rule on the software patentability: "When judiciary-driven legal development meets its limits, it is time for the legislator to take over.".
But if the EU joins the EPC, it is not certain that it can politically decide that software patents should be excluded from the scope of patentability as they are harmful to the internal market's economy. Getting the agreement of the other EPC members during a diplomatic conference would certainly be necessary. And some of these members are not EU Member States: Switzerland, Liechtenstein, Monaco, Turkey, Iceland, Croatia, Norway, Macedonia, San Marino, Albania and Serbia. The CJEU having criticized the unified jurisdiction project for depriving the national courts and the EU of its powers on patent litigations, it is not unreasonable to consider that the same criticism would befall any other similar renunciation of the EU's legislative power.
This is indeed one of the crucial points needing to be solved for the unitary patent regulation.
The highlight of the show
Until now, the speeches came from Member States who want to take part in the enhanced cooperation procedure. But there are still to be heard the ones that opposed it, i.e. Spain and Italy. Let's begin with the latter, and save the best for last...
Italy: Stefano SAGLIA, State Secretary for Economic development
Now we have the Court of Justice ruling: it relates to the jurisdictional system and it's pretty crystal clear. It touches upon an essential part of the establishment of the European patent system. If the system is to be innovative, if it is to bring advantages, it cannot bring in far greater costs because of translation requirements. It cannot mean that businesses are constantly going to have to appeal and put their cases before the courts of 27 courts, in different Member States. Therefore, we certainly believe that the Court of Justice ruling should lead us to think again about the whole issue of enhanced cooperation. We really have to think again about how we should take this file forward. If you take this forward, you will end up with an insoluble problem, and this type of patent will not benefit the European Union. The Court's ruling raises a number of issues which need to be examined very carefully. And it very fundamentally changes the whole scenario set forward by the Commission. The ruling relates to key issues: the way in which the patent functions, its linguistic arrangements and the jurisdictional system. So, please, draw breath, stop doing this, stop before you adopt this decision on enhanced cooperation. You need to look carefully at the possible repercussions of the Court of Justice ruling. As our Spanish colleague has said, we too are not just against enhanced cooperation, but we do reserve the possibility of appealing against this in the Court of Justice. We think it's a matter of defending the values of the European Union. As we said in the joint statement with Spain, in December. If I can read the conclusions of the Court ruling, it talks about the agreement establishing a single system of settlement of disputes on patents. This is now called the European patent court. And the ruling says this is not in line with the provisions of the Treaty.
You know, we have been talking about the single-market and competitiveness today, this decision would kill off competition. The whole point of this, the saving in the system is to allow Member States to go to one single court, and now that is not possible. I think you really have to think again and discuss the whole issue thoroughly.
The Italian representative starts by putting his finger where it hurts: the wallet. Indeed, the main reason cited by the proponents of a unitary patent is to reduce drastically the cost of obtaining a patent in Europe. But the main adjustment variable for such a reduction is indeed the cost of litigation6. It is absolutely not the cost linked to the need for translation, as many States have tried to put forward. Indeed, the linguistic system envisioned doesn't bring anything new compared to the London Agreement that we have described earlier. However, if the unitary patent does not have a unified jurisdiction, it will only have a slight advantage compared to the current system.
Italy's proposition to make a pause to think about a jurisdictional system capable of rendering the unitary patent advantageous is therefore fully justified. And to cap it all, Italy used a scarcely veiled wording to threat to drag the Commission before the European Court of Justice if it continues the work on this issue within the framework of enhanced cooperation. In wanting to rush, the Commission and the Member States have only gained years of litigation!
Spain: Diego LÓPEZ GARRIDO, Secretary of State for the European Union, Ministry of Foreign Affairs and Cooperation
Yet the harshest criticism will come from Spain. While we had to show only excerpts of previous speeches in order to keep only the comments about the CJEU's opinion, we can now look at and examine the whole of the long Spanish diatribe, since all the points it raises are interesting:
Thank you. Well, you will no doubt recall that the last time we met here in the competitiveness council, on this subject, I mentioned the writer Vargas Llosa, who was receiving the Nobel prize for literature that day, up in Sweden: a Spanish writer. I mentioned him on that occasion. I would like to refer to another Spanish writer who won Nobel prize 30 years ago, and that is Gabriel García Márquez. A Spanish speaking writer, anyway. Because since the ruling from the Court of Justice, I think we've seen the chronicle of a death foretold, which is the title of a García Márquez novel . It's the chronicle of a death foretold: the death of the European patent. Because it's going to be based on a non-Community body: the European Patent Office in Munich. It's called the "European" body, but it discriminates against Europeans. It's a patent which is called "European" but it's not really viable, because it doesn't have the jurisdiction settled properly. It's supposed to be European patent, but it's not European because it's based on enhanced cooperation which discriminates against other European countries. So it is a death foretold, a death announced in advance, and it's a death of the patent for Italy, for Spain, and it's been the case for a number of countries already. Because enhanced cooperation should be the last resort and it's not the last resort in this case. Because enhanced cooperation is totally unacceptable under the linguistic regime for the patents. Article 118 of the treaty is perfectly clear on this, because it says very clearly that one should protect industrial rights uniformly. Article 118 says that very clearly. We're talking about discrimination within the internal market. So it's not right to have enhanced cooperation here. It goes against the internal market, which we have all been praising and been enthusiastic about. It's discriminatory because it is against Article 21 of the Charter of Fundamental Rights of European Citizens. And it's wrong because it creates legal uncertainty. This is why we can foretell that this patent will be non viable.
If the Spanish Secretary of State chose to start his speech with literary references, this is neither to demonstrate the breadth of his cultural background, nor to charm the audience of this meeting, who might collapse from boredom because of technical legal jargon and hackneyed phrases. No, this is because these references are the perfect illustration of the primary reason for the Spanish opposition to enhanced cooperation on the unitary patent: the language rules toward which the Commission and Council are going. We can therefore see how subtly Diego López Garrido demonstrates the importance of the Spanish language and its global reach. His choice of a fateful metaphor corresponds to the titles of articles commenting on the decision of the CJEU: April spoke of smashing, others of being torpedoed, of derailing or of killed, sunken, dead and buried patents. In short — if doubts remained at this point in the decoding of the meeting—, despite Commissioner Barnier's speech trying to be reassuring, the CJEU's decision has indeed created an earthquake in the future of the European patent.
Let us come back to the Spanish speech. It concluded this first salvo by stressing the reasons for the Spanish opposition to the linguistic regime: it would be discriminatory. Article 21 of the Charter of Fundamental Rights of the European Union is invoked in that it prohibits discrimination based on language. The second paragraph of article 118 of the Treaty on the Functioning of the European Union is also referred to, as it is the legal basis cited by the Commission to legislate on the unitary patent under the umbrella of enhanced cooperation. Yet this paragraph originally provides that the language of such a patent must be voted unanimously by Council members. The matter had thus clearly moved from the literary field into the legal one. We will see at the end of this speech how it was necessary to invoke those legal arguments.
But now the European Court of Justice has basically signed up to and certified, the death which has been foretold of this discriminatory patent. I think it is a very interesting and illuminating ruling. Basically, the ruling does contradict the Commission's opinion, very clearly, and it contradicts some of the opinions of the members States' governments who have spoken before me. Vincent and others seem to be very happy with this opinion, with this ruling, but the fact is that what was submitted to the Court of Justice really was the opposite: the opinions of the members States concerned, the opinions of the Commission have recently run counter to what is announced in this ruling, I think it is rather odd. All those who were actually against the possibility which has been established by the Court of Justice, all those who were in favor of a jurisdictional system extra-muros from the Union have said they are happy, when in fact the court is actually contradicting what they wanted. It's seems to me a bit of a paradox! But the fact is that the Commission has expressed its opposition to what the Court of Justice has now said.
Forget about diplomatic atmosphere. The Spanish Secretary of State points out the Commission's and Member States' hypocrisy: They have so far welcomed the CJEU decision, yet at the same time they claim that we should not compare apples with oranges, and hence continue to head blindly by running the enhanced cooperation procedure.
They supported the idea of an ad-hoc court outside the normal EU circuit, and that was basically swept aside by the Court of Justice in their ruling in the day before yesterday. That's what they really said in that ruling. I think we have to draw some conclusions from that. And I haven't heard anybody drawing appropriate conclusions from this very important opinion. This opinion said that Spain and Italy and some other countries were absolutely right. The current ruling says that the Commission is wrong and a large number of other countries which wanted to go down this road which is outside the normal circuits of jurisdiction in the European Union, they said that they were wrong! They were hoping that the Court of Justice would have a unified doctrine on this. What the Court of Justice has said is that we shouldn't launch into these dangerous adventuring outside the Treaties, outside the preset courses of the European Union. The Court has said we can't get into these ventures, we have to revert to the Treaties, our principles, our primary law.
The Spanish Secretary of State lists here everything that the Commission needs to respond to the censorship from the CJEU regarding the jurisdictional regime of the unitary patent: such a unitary patent must remain under EU control. All the legal instruments required to do so are already clearly defined in the Lisbon Treaty. Indeed, the latter makes it possible to create within the CJEU a specialized court that would be responsible for patent litigation, which would obviously have to comply with EU law. The CJEU is asking for nothing more than that.
So we really have to ask ourselves some questions. We're going to distribute a number of questions to you, questions which we feel are raised by the whole issue and especially by this recent Court of Justice ruling. Perhaps I can just refer to two of these questions. We pass this round to you. First of all, you have to explain to us how a non-Community body like the Patent Office in Munich can grant a European patent, a European title. If you think that's OK, tell me under what agreement the Patent Office in Munich is going to be able to grant this patent. What kind of agreement is the Commission foreseeing here? What international agreement might this be based on? What is the legal basis for any such international agreement? They would have to be approved in unanimity, I'm sure. The second question is the whole issue of jurisdiction. What's going to happen next? The Commissioner Barnier has told us nothing, absolutely nothing! How's the Commission going to replace the jurisdictional system which has just been declared incompatible with the Treaty? Are you going to give other powers on this subject to the Court of Justice that would run counter to the UK's position? They don't want any new powers to go to these EU institutions. Are you going to do that? Are you going to get this new proposal looked by a group of experts or are you just going to improvise, which is basically what you have been doing the rest of the time on this subject in Council? We really want you to answer these questions.
We have just answered Diego López Garrido's second question: the only possible solution to the problems raised by the CJEU notice is that it itself oversees the European patent jurisdiction. Admittedly, this would not be problem-free. But these new problems would mainly be political problems — i.e. depending of what each Member State is ready to accept— and not legal or democratic problems. Not just a few Member States — the United Kingdom being at the forefront according to the Spanish representative— disapprove of the full involvement of the CJEU in patent disputes. Let us recall that the primary objective of those advocating for this unified court recently declared to be Treaty non-compliant was to create a special court able to validate the judicial doctrines in favor of the patent microcosm. Thus, patent lawyers were outraged upon receiving the CJEU notice."The [CJEU] basically tells the future judges of the planned Patent Court that if they do not work under the strict supervision of the [CJEU] like the national courts of the EU, the EU legal order is endangered (since they may misinterpret the EU Treaty, what a confidence in the legal qualities of the future judges!). In view of the fact that the judges of the Patent Court court would consist of the most experienced patent judges in Europe this lack of trust is very disappointing. On the other hand, industry, the patent profession and even the EU Commission would see the involvement of the [CJEU] which has no patent experience as a blocking stone"7 "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. […] But, with the exception of the CJEU, the one thing we all agree on is that the CJEU should not be the final court of appeal in a centralised system"8 "Many will view this decision as the Court of Justice seeking to be the judicial body overseeing any single patent litigation system that comes to fruition in Europe. This was the one single issue on which the Commission, industry and the lawyers agreed at an early stage in drafting the proposals to be undesirable. This is because, according to this view, the Court of Justice does not have the necessary expertise in this area of law. […] There is scant enthusiasm in industry and within the patent profession for a Court of Justice centred system and so support for this enterprise is likely to run out also".9 Sorry for this display of statements saying roughly the same thing, but it shows to what extent the patent microcosm is hostile to the idea that the CJEU oversees the patent judicial system. And without much exaggeration, this position can be summarized as follows: no, no, no, let us do our business amongst ourselves and the judges who are part of our system!
The first question of the Spanish state secretary concerns a sensitive point that we have already tackled: what about of the EPO's role for future unitary patent? If the CJEU professed for that the unitary patent jurisdictional system do not quit the EU framework, it does not say anything — it was not (yet) asked— about the unitary patents issued by organs external to the UE. The thing is, the unitary patent would be a legal title of the UE. Is it possible to delegate its granting to an entity which is not part of the UE? Is it possible to alternately accept that patents usually granted by the EPO be transformed into unitary patents? The CJEU Advocates General have mentioned these two solutions but, as already seen, have specified that in any case, it should be made sure that these administrative acts could be appealed before independent courts. As mentioned by the Spanish representative, the Commission will have to answer these essential questions.
This is improvisation. Just making things up as you go along, but inevitably means you're weakening the foundations of this proposal. Now some members States have already said that they can give up on this. And in fact the Member States who've said this and the Commission said some Member States might leave the enhanced cooperation. Indeed the UK has spelled that out explicitly. And I wonder what would happen. UK, if you are going to leave the enhanced cooperation: why will you go? Will you or won't you? It'd be very interesting to have some certainty as to the UK's intention, and other countries too. We think they might just upset themselves from the enhanced cooperation at some stage. It's a bit funny to start something up, like enhanced cooperation, already saying that some Member States are going to jump ship, abandon ship pretty soon. This is the kind of uncertainty which we've got ourselves into.
Diego López Garrido is certainly not kind to the Commission. But we must admit that improvisation has indeed seemed to prevail in the discussions that were held at the Council since 2007, even in the hearing before the CJEU. During this hearing, even the Member States supporting that the proposed patent court was perfectly compliant with EU Treaties, have presented confusing arguments, to the point of contradicting each other. We have seen also that the United Kingdom announced it would withdraw from the enhanced cooperation if the CJEU gave a negative opinion. Another interesting point raised is that the European Parliament rapporteur, Klaus-Heiner Lehne, has passed a disposition for the Parliament to accept the enhanced cooperation procedure without prejudice to which are the participating Member States. The Spanish Secretary of State was probably right to believe that the provision was added in view that the UK puts into practice its announcement, showing the way for other countries to leave.
And that was very clear, even before we saw the Court of Justice ruling. We already thought it was absurd, in Spain and Italy, but we think it's even more absurd that you intend to forge ahead when you have the Court of Justice ruling which changes everything. A unitary patent system like this, without jurisdiction, would be like a car without any wheels, you're not going to get anywhere, you're going nowhere in a car without wheels. And it's one thing to talk about the language regime, you're saying, and another thing to talk about jurisdiction. What do you mean? Of course they are linked, of course they are connected: you cannot make progress without having a proper jurisdictional system! And basically the proposal you're putting today has been swept aside, destroyed by the Court of Justice ruling! And so I really think we should stop this headlong rush into the void. I would urge the Commission and the Presidency to stop this now. There are far too many unknowns here. Let us put our heads together and think about it coolly and calmly and look at all the ramifications of this. If you have a European patents which doesn't involve everybody, it cannot go anywhere. And that's the lesson we need to learn from the Court of Justice ruling. On subjects as important as the patent, as important as the language regime, we cannot make progress, and this is why we urge you to postpone this decision, that we really work hard on it, in all the details. We believe the European patent is necessary, but it must be born robust and strong. It should be born almost still-born, moribund, following the Court of Justice ruling.
There is little to be added to this paragraph. It summarizes what we have described so far: a unitary patent without a unified jurisdiction is at best useless. As the CJEU just overturned the considered jurisdiction, it would be wiser to put everything back on the drawing boards, to build on a solid foundation. Therefore persisting to initiate the enhanced cooperation as authorized by the Council's vote today is nothing but a headlong rush.
We really think we have to think very clearly about this. Because we can tell you right away that we are thinking in terms of appealing against this decision by the Court of Justice, and it's clear from what they said the day before yesterday that the Court of Justice has very clear ideas. Thank you.
Like his Italian colleague, the Spanish representative confirms here his intention to file an apeal before the CJEU against the enhanced cooperation procedure. So this explains why, at the very beginning of this long speech, articles of the Lisbon Treaty and of the Charter of Fundamental Rights had been called upon. These are the legal basis on which the action may be based. Clearly, Spain shows here that its threats are serious.
Luxembourg: Jeannot KRECKÉ, Minister for Economic Affairs and Foreign Trade
Following this Spanish diatribe, with many questions and a threatening conclusion, a bit of frivolity would be welcome! As in any good show, the arrival of a clown would save the day. Today, the representative of Luxembourg, Jeannot Krecké, plays this role with dedication:
I understand what what Diego is saying, I understand why he keeps talking about jurisdiction. But everybody around the table know full well that that's not really what we're talking about. What we're really talking about is the linguistic issue. Diego, we've had this in Luxembourg. We know what it's like to be isolated, as knows just about everybody. Sometimes, there's an issue which is very important for your country, either financially or in the way things are done in your country, and you find yourself out on a limb, on your own in council. But here we're in a situation where Spain and Italy wouldn't suffer unduly, except from a point of principle. There not going to have budgetary difficulty, there not going to have difficulty with making administration work if we introduce this patent. So can I appeal to Diego and the Spanish government and the Italian government? Please think again. We're close to the goal, we want everybody on board, we don't want to discriminate against anybody. Luxembourg was the author of this statement to the effect that no company would be discriminated against.Now we have the added problem of jurisdiction. I will be perfectly frank: Luxembourg did not agree with the type of jurisdiction that was proposed. This was not our opinion. But given that we were all walking in the same direction, we did not say that we would oppose it. We want the institutional and jurisdictional framework of the Union to be respected, but we didn't want to be a stumbling block to a common initiative. So Diego, can I ask you and your government, and can I ask Italy, to take on this spirit as well? We've never been as close to the goal. I'm sure we'll find a solution for the jurisdiction. We've always tried to have a single all-encompassing solution. We were not able to do it. We're making progress on two essential points. So let's try to take the extra step, and the last outstanding point will have to be solved as well. A global solution has never possible, and probably will never be possible, so I'm in favour of an approach based on small steps. I'm a small country, let me appeal to you as big countries: you're not going to die, this is not a death foretold of anybody in your country. If we all work together, if we all move together towards something all the business want. That is just one issue of principle. Please try and understand the point of view of the other 25 Member States and try and rally to our position.
First, the Luxembourg Minister sweeps aside all the serious points mentioned by his Spanish colleague. All these would be hot air, and the only Spanish concern is the language problem! But we have seen how the issues raised by Diego López Garrido were crucial to the project's future. But exaggeration is part of a clown's kit, and so we must forgive Jeannot Krecké for this shortcut and this minimization. But it is harder to leave aside the recognition by Luxembourg that it has itself set aside its opposition to the proposed jurisdictional system in order to "walk in the same direction" as everyone. Firstly because it is a lie: during the hearings before the CJEU in May 2010, Luxembourg :— together with Spain, Italy, Ireland, Greece, Lithuania and Cyprus :— has challenged the compliance with the Treaties of the proposed agreement on the patent court. Moreover, since the points that were challenged :— and ultimately condemned by the CJEU :— are structural to the jurisdiction. We are talking about altering the Union's legal order by creating a special court. That is hardly a insignificant point that can be left aside to keep moving with the herd! The matter is indeed that "be respected the EU's institutional and jurisdictional frameworks". At this point, it should be noted that Jeannot Krecké is no stranger to bending the rules. It was under his chairmanship that in March 2005 the Council had adopted a common position legalising software patents. He had done so while infringing the Council's rules of procedure and despite both the obvious lack of a qualified majority of Member States and the requests from several countries to reopen the negotiations. Therefore, the clown costume is perhaps not the one that best suits Jeannot Krecké. Fortunately, the end of his speech reflected a somewhat comic style, while trying to meet Diego López Garrido's literary references.
After this round of the different members States' representatives, it's the turn of the Council Legal Service to intervene:
Council Legal Service: Hubert LEGAL, Legal Adviser to the European Council and Director-General of the Council Legal Service
Thank you Chairman. A number of delegation have referred to the ruling handed down by the Court on the 8th March, [Opinion number] 1/09. I'm not going to go in the detail of that ruling now. I just want to field the questions that were raised by number of the members States: does this ruling affect today's decision on going ahead for enhanced cooperation, and in particular the point made by Romania and Slovakia? Well, the agreement on jurisdiction falls outside the scope of enhanced cooperation, as requested by participating countries, and as proposed by the Commission, and indeed as approved by the European Parliament. In [Opinion] 1/09, the Court's opinion, there are no elements that would call into question that separation, that division. The paragraph 5410 of the ruling says that the draft agreement and the draft legislative measures are closely linked but can be addressed separately so the Court comments on the draft agreements without calling into questions the details of the provisions.
On a legal side, it is indisputable that the agreement on jurisdiction is outside the scope of enhanced cooperation. However, it is a bit excessive to see such a confirmation at the paragraph 54 of the CJEU's opinion. All the CJEU said, is that projects can be singly approached in order to judge their compliance with the Treaties. It is something else than singly approaching them to decide whether if one was rejected, we can continue with the others.
Now, on adopting the regulations for the whole of the Union or as part of enhanced cooperation: in both cases, patent law will be European law, so the Court's reasoning remains the same. The ruling contains no element to suggest that enhanced cooperation would constitute a particular problem as compared to the adoption of a regulation which would apply across the board.
This precision is extremely interesting. Indeed, after the CJEU's opinion and its cataclysmic impacts on the patent microcosm, one of this microcosm's members suggested that since the CJEU had ruled only on the feasibility of a court for a patent covering the whole Union, "one must examine in more detail if a patent which only covers 12, 15 or 25 countries under the the discussed enhanced cooperation would not be feasible outside the EU legal order". This same patent lawyer, president of the European Patent Lawyers Association (EPLAW), wrote in the January 2011 newsletter of the International Association for the Advancement of intellectual Property (AIPPI), that a solution to any dead-lock could be to rehabilitate the draft EPLA (European Patent Litigation Agreement). EPLA was originally an initiative of the EPO to provide a unified jurisdiction between the signatory countries of the EPC. In accordance with the previous hypothesis, EPLA would remain completely outside the EU legal system. But the clarification by the Council's Legal Service has swept this option aside: regardless of whether we look at it within the framework of the Union as a whole or within the framework of enhanced cooperation, the opinion of the ECJ still applies. And it makes it clear that patent litigations lie in the powers of each Member State's courts. They cannot give up that power in favour of a court created by an international agreement. One can also note that on March 21, 2011, at a meeting of the European Parliament's Committee on Legal Affairs, this view of the patent microcosm has been faithfully reproduced by the chairman of this committee, Klaus-Heiner Lehne… This very same man had briskly led the Parliament's approval of enhanced cooperation. By the way, he does not hide in his declaration of financial interests that he acts, in addition to his activities as an elected Member of the European Parliament in Brussels, as a lawyer for the firm Taylor Wessing in Düsseldorf :— a firm specialized in patents!
Third point: in paragraph 7311, the court's opinion says that the competence is to be carried out by the patent court, would normally fall under national jurisdiction. And that suggests that the European patent could be viable in legal terms, and that's what the Court is talking about, even if there were no system of jurisdiction adopted. That doesn't mean to say that a single court is impossible or undesirable. It just draws a distinction between matters relating to enhanced cooperation and matters relating to jurisdiction, as per the Court's ruling.
On a legal aspect, there is no doubt that litigations about unitary patent could be processed before national courts. But, as the Director-General of the Council Legal Service is aware of, it wouldn't really be a desirable solution from a political point of view, as it removes any economic interest to the unitary patent.
By way of conclusion, the draft agreement on the patent would have to be revisited in the light of the ruling, but that doesn't call into question the decision to pursue enhanced cooperation or the adoption of rules and provisions on implementing arrangements. The opinion does exclude some options for dispute settlement but it authorizes other forms of resolution. So it doesn't stand in the way of the adoption of the regulation of the patent.
So there is nothing legally wrong in Hubert Legal's development. But it is so interesting to note that when he expresses himself independently, he argues with much elegance that a unified European patent court may take a different shape to what had been foreseen by the Council and the Commission before the CJEU's intervention forced a big make-over. Indeed, in April 2010, Hubert Legal intervened in a conference organized by the “Centre d’études internationales de la propriété intellectuelle” (CEIPI) and entitled “Towards a European Patent Jurisdiction”. The former judge at the Court of First Instance of the European Communities showcased brilliantly the architecture of the Union's judicial system, with the CJEU as the ultimate guarantor of EU law, with the General Court and the judicial chambers attached to it. He then confirmed that all legal bases exist to create a specialized court for patents, which would actually be a judicial chamber of the Court responsible for first instance appeals regarding patent litigations. Finally, almost like a premonition of the CJEU's opinion, Hubert Legal's speech pointed out how the architecture proposed by the Commission and the Council raised questions. One must read several times this speech. There is in Hubert Legal's delectable legal prose all the required material to rebuild a unified jurisdiction for the unitary patent that is consistent with the Opinion issued by the CJEU.
Before ending the meeting, the main artists — the Commission and the two Member States opposed to the enhanced cooperation, Spain and Italy— gratify us with a last time on stage.
Commission: Michel BARNIER, European Commissioner for Internal Market and Services
I've mentioned two regulations on the 30th of March: the language regime and creation of patent. These are separate from the question of jurisdiction. Together with the Council, I will of course look closely at the Court's opinion on the jurisdiction issue. We will look at the opinion in detail. It's extremely interesting, as you yourself have said, and we will bear it in mind. I'm not just talking only of the opinion of the Advocates General, but also the opinion of the Court itself. We will take due account of this and this will be inputted into our work on the proposal over next few weeks. With the view to getting a common position so that we can make the European patent a reality. So in a few weeks time, we will able to come forward with these proposals and solutions.
We have to welcome here Michel Barnier's presence of mind, unless the evocation of the Advocates General's opinion be just an unconscious improvisation. Indeed, promising to take into account the final CJEU's opinion, the Commissioner only respects the obligations required by Article 218-11 of the Treaty on the Functioning of the European Union: “Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised”. But while also evoking the Advocates General's opinion, that has no binding value, we cannot help envisaging that when the Commission will introduce a new project for a unified court, this one answers as well to the points mentioned by Advocates General. We already spoke about it, one of those essential points was to enable appeals before an independent court of EPO's administrative decisions. So, how not to see in that last statement from Michel Barnier that he is ready to finally let escape the European patent system to the Munich grasp in order to quietly come back in Brussels' realm? With a such strategy, the French Commissioner highly risks not to make friends within the patent microcosm, but for sure, European citizens and companies would come out reassured!
Spain: Diego LÓPEZ GARRIDO, Secretary of State for the European Union, Ministry of Foreign Affairs and Cooperation
Second point: the court/the jurisdiction question. The EPO decisions cannot be appealed before European courts. It says that quite clearly : the Court of Justice said that this philosophy underpinning the Commission proposal :— which is to use the Munich Convention and the bodies of the Munich Convention and the languages of the Munich Convention :— that is not Community. You have to go back to the Treaty. You have to go back and follow the path of the Treaty. You have to go back to the Community dimension, if you want a Community patent. I mean, if you want a different type of patent, OK, but if you want a Community patent, you need to communitarize the system. It is a fallacy to say that it's possible now to approve the language regime because it's got nothing to do with jurisdiction. Well, that might be possible in the legal laboratory context, but in reality, it's just not possible to separate the two. It's not possible to separate those two elements: the unitary patent has a substantive part :— the regulation :— it has a linguistic part and it has a jurisdiction part. And you need to address those questions at the same time, together. That is one of the reasons why we are not making progress, because we are not addressing those questions at the same time.
So our questions for the Commission, in the wake of the ruling on the day before yesterday, haven't been answered. The Commission has not answered my questions. The Commission basically does not have a clue of what's going to be proposed on jurisdiction. The Commission does not have a clue, has no idea whatsoever. So you're rushing ahead, blindly, without knowing where we're going. You know: it's jumping into the void without a parachute. And you can understand why countries are concerned about the jurisdiction issue. This is where we stand: the Commission has not answered the questions we raised. There were no answers.
You talked about the automatic translations. Well, there will be manual translations and then automatic translations later, that's what you said, but that was not the agreement . We said that after a certain period, we would go to automatic translations. But automatic translations are just not viable. Let me make that absolutely clear. I don't want to give you specific examples, they would be amusing, humorous examples of what [would happen] if you were to use Google translator. I mean, it would just be madness. So the question of jurisdiction is inextricably linked to the linguistic issue and to the matter of substance.
And finally, there is also the question of respecting the rule of law. Primary law cannot be surpassed by a majority in Council. I mean we're talking about a substantive constitutional issue, and you have to respect the rule of law and you have to respect the position adopted by the Court. And the Court basically torpedoes the whole concept underpinning this patent. The Court ruling just torpedoes this. So, in order to move forward on this, I would like some answers to my questions: I don't think we can make progress on language until we get some clear answers on from the Commission, and those answers are all the more relevant following the ruling from the Court.
I think the Council should give credibility to European institution. Credibility was mentioned earlier. Credibility for European institutions, and we're not giving them any credibility by launching ahead blindly, and without knowing what is going to happen to the jurisdiction issue. This is something that cannot be separated from the question of language. So, if today you do take a decision on enhanced cooperation, a discriminatory decision, without any idea of how the jurisdiction is going to pan out in terms of jurisdiction. I mean this is foolhardy, because in the future we might end up with a failure. So, I think we need to show common sense, and we need to revisit this decision, and perhaps take some time out to negotiate on the basis of all aspects relating to the unitary patent, not just some of the aspects [but] all aspects relating to the unitary patent. Thank you.
It looks like our friend Diego López Garrido also understood Commissioner Barnier this way. In effect, if we want to take into account the CJEU's and its Advocates Generals' opinions, the solution that is supported by the Spanish Secretary of State is the only conceivable one: the Union patent must fit in all its facets within the Union framework. Out of this path, EU institutions would lose all their credibility.
Italy: Stefano SAGLIA, Secretary of State for Economic Developement
Thank you. Well since the Commissioner referred back to what I said earlier, I would just like to say once again what our request is. We are not saying that you should set this whole project aside. We say we should re-discuss it, and we need a bit of thinking time about it and we should start now. We of course fully endorse what our Spanish colleague has said, what Diego has said: if you go ahead today, we will have to reserve the possibility of going to the Court of Justice and appealing this. It's not a matter of a particular demand, of solving a particular problem, it's a matter of you launching a European patent which will not be viable, will not be competitive, will not make the world more competitive for businesses. They will be deprived of proper legal basis for taking their appeals forward to the courts. And so I wish to re-state that we do intend to appeal any decision you take on enhanced cooperation.
And out of that path, Italy reiterates that the Commission is likely to give birth to a unitary patent that is unable to meet the objectives for which it was created, some of which are laudable. And more importantly, Italy stresses that the Commission could find itself under fire from a legal action before the CJEU!
The press conference
We understand better now the conditions under which Commissioner Barnier arrives at the press conference following the Council meeting that we have just examined in detail. Six countries have indeed supported him in his tightrope exercise trying to minimize the impact of the CJEU's Opinion on the development of enhanced cooperation. But four Member States have made it clear that it was now time for him to get back to his desk, three other Member States have openly contradicted Commissioner Barnier and the two countries not participating in enhanced cooperation have explicitly threatened to attack it before the Court of Justice of the European Union.
Commission: Michel BARNIER, European Commissioner for Internal Market and Services
I would also just add one thing: we have of course been attentive to the Court of Justice ruling on the jurisdiction system of patent. That is one of the parts where we had to progress. We have made progress on two other areas which are independent of the jurisdiction system, as has been confirmed by Zoltán and indeed by the Council's Legal Services. So as of the 30th of March, we will come up with two draft regulations: regulation of the patent, the title, and the language regime. These are the two things we have decided upon under enhanced cooperation today. And separately, independently from that, we will continue work on the jurisdiction system and of course all this situation will be illuminated by the very interesting ruling from the European Court of Justice. And in a few weeks time, I think we will be able to come up with a common position on this with the Council, while respecting the Court of Justice's ruling.
Consequently, before the journalists start asking questions, we won't be surprised of the fear that shows through this introduction to the press conference, when Commissioner Barnier makes his best to never diverge even slightly from the official position he has been holding since the beginning of the Council meeting.
As for the Council meeting, we select in this press conference only the passages telling something about the jurisdictional aspect of the unitary patent and about the cataclysmic Opinion from CJEU. So we won't see the introduction of the Hungarian Presidency which preceded the one from the Commission, the topic of the jursidiction has not been addressed, once again, by the representative of Hungary. The full video of the press conference last for all 22 minutes and 50 seconds..
Journalist from the Swiss News Agency
The first journalist to step in, for the Swiss News Agency, from the outset refer to the offending points: the eventual resort of Spain and Italy and also the obligation to rethink the unitary patent jurisdictional system from top to bottom. With as legitimate concern, the one of a country signatory of the CBE but not belonging to the european Union.
Two questions for the minister and one question for mister Barnier. You have said that the Commission's proposal could move forward, but what have the Italian and Spanish ministers said? Will they appeal to the Court of Justice? Have they said it several times today?12 Mister Barnier, you said at the end, about jurisdiction, if I've understood correctly, by the end of March you will reach proposals, and when it comes to jurisdiction, we will see what happens later. I'm wondering whether the Commission will be trying to find a solution covering all the possible 38 countries for the patent.
Answer of the Hungarian Presidency: Zoltán CSÉFALVAY, Junior Minister for Strategic Affairs, Ministry of National Economy
So this was an open debate and everybody could follow that. But the main reason is I think that litigation and enhanced cooperation are legally two distinct systems and legally two distinct issues. And we had to deal with these issues in that way. So there is one thing, the enhanced cooperation, authorizing the enhanced cooperation, and the second thing is the litigation system. Certainly they have some connections, when all the system is working. But in that case, we should also consider that the Court of Justice expressed its opinion two days ago. So we need time for careful scrutiny and we will do that. Certainly the Member States will do that too. But the most important in that case is that it is two distinct issues, and what we did, what the Council did, was to start the enhanced cooperation.
Interestingly, this is the first time the Hungarian presidency talks about the judicial system and the Opinion of the CJEU. But the questions put to him were absolutely not related to that topic but to the Italian and Spanish opposition and to the possibility that these two countries appeal the enhanced cooperation procedure before the CJEU. The response of the Hungarian Minister adds absolutely nothing to what we have already seen. But it is nevertheless remarkable that he absolutely refuses to confirm the existing threat set by Spain and Italy against the nascent enhanced cooperation.
Answer of the Commission: Michel BARNIER, European Commissioner for Internal Market and Services
My answer is yes. We will work, and we have already worked, in the context of enhanced cooperation, on the three proposals, which I will be putting to the College in the course of March. So when I say later, it's not much later. So after we've done some very precise and some very rigorous work, the Council's and the Commission's Legal Services will work together to come up with a jurisdiction proposal, taking account of the opinion of the European Court of Justice. That is all I can say today. We obviously need to read the ins and outs of the opinion of the Court of Justice. So we'll certainly come up with proposals in the next weeks.
Beyond the embarrassed rhetoric, this conclusion from Commissioner Barnier lets us address one final issue about the unitary patent and its unified jurisdiction: what about third-party countries signatories of the EPC but not belonging to the EU? The question remains open, as shown in this analysis by a Swiss lawyer, specialized in patents: “Even though rejected by a great number of patent professionals, a possible solution could be to increase the influence of the ECJ in the proposed patent judicial system. However, this solution is not perfect as it will certainly delay proceedings and it will be highly questionable whether the countries which are not part of the EU would be willing to submit their cases to the ECJ-jurisdiction. With respect to this, a possibility to reach a compromise remains open. For example, a litigation system that would allow consideration of the different approaches of the EU Member States as well as other states participating in the EPC. One of the more key questions in this regard is the following: Would it be possible to introduce a judicial framework for different appeal proceedings depending on whether the appeal concerns a ruling issued by a regional chamber of an EU Member State or a Non-EU Member State? It is doubtful whether the EU and its Member States would accept such a splitting.”
Several future perspectives
We hope this long deciphering has allowed to have as complete a picture as possible of the various issues raised by the unitary patent. There only remains to recapitulate how Commissioner Barnier could get out of this quagmire by trying to anticipate what will be the proposals that the Commission will present on March 30, as to the unitary patent itself, and then concerning the jurisdictional system which is indispensable to it.
It seems already accepted, because it is part of the recitals13 to the decision taken this March 10th, 2011 by the Council, that the unitary patent will be granted by the European Patent Office (EPO). However, remains unresolved the issue of what will be the substantive patent law laying down the conditions for the granting of a unitary patent. It is far from certain that membership of the European Union to the European Patent Convention (EPC) be possible within the framework of an enhanced cooperation. A possible solution would be that this substantive patent law be defined in a directive voted by the Parliament and the Council. This directive could largely take over the EPC provisions. But in any case, the regulation on the unitary patent will need to clarify some points of the EPC leading to ambiguous interpretations. One obviously thinks about articles excluding in principle software from the scope of patentability. It is up to the European legislator to define the European Union innovation policy. So, to put down in the European Union law the clear prohibition of software patentability would ensure innovation in the IT industry is not hampered by software patents, which economic inefficiency has already been extensively demonstrated14. But beyond that, the European Union must not abandon any possibility of political intervention in the patent field. As we have seen in regard to the jurisdictional system, there is a strong will of the patent microcosm to precisely handle this little world without external interference. It is thus important that the unitary patent regulation does not freeze patent law to the rules and practices established within the EPO, but at any time allow the Union legislator to dictate the imperatives of a policy of innovation democratically deemed as effective. Without it :— and to ape the talking points trotted by Michel Barnier throughout the day :— the unitary patent would be legally an abandonment of competence, politically a disavowal and economically a disaster.
As for the judicial system able to replace the one that the CJEU has farrowed, we have already detailed at length that there is no other solution than to create it within the Union jurisdictional system, that is to say, with ultimate oversight of the CJEU, only able to ensure compliance with EU law. But within this framework, several alternatives are open. We also refer to the speech we have already mentioned of the Director-General of the Council Legal Service, Hubert Legal, in an April 2010 conference. Are detailed in particular how such a system was put in place to handle litigations concerning trademark law and what opportunities, challenges and options for establishing a similar regime to patent law. Anyway, the jurisdictional system should allow, as pointed out by the Advocates General of the ECJ, to challenge administrative acts relating to the granting or refusal of a patent before an independent tribunal within the meaning of Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms.
Of course, next to this desirable outcome, the Commission may bow to pressure from the patent microcosm and offer only cosmetic corrections to its proposed unified jurisdiction. But then, the CJEU opinion would not be respected and no doubt it would surely be referred to condemn such attempts contrary to Union law. The quagmire would be no more than bogging. And we can be confident that Michel Barnier's desire would rather be to get out of it as quickly as possible.
- 1. The videos presented here are taken from the Council's video-on-demand website. They have been translated into English by the translation services of the Council. These translations are not error-free and are obviously not binding. If this prevents us from commenting on the form of the translated message, the meaning of the initial positions is sufficiently preserved in their translation for us to interpret correctly the core of the message.
- 2. Denmark, Germany, Estonia, France, Lithuania, Luxembourg, The Netherlands, Poland, Slovenia, Finland, Sweden and United Kingdom.
- 3. Belgium, Bulgaria, Czech Republic, Ireland, Greece, Cyprus, Latvia, Hungary, Malta, Austria, Portugal, Romania and Slovakia.
- 4. According to data published by the EPO, in 2009 25107 patent applications came from German residents, compared to 8929 from French residents— even if it was the second European country for the number of applications — moreover 11384 patents were granted to German residents, compared to 4031 to French residents— then again the second country in Europe. In addition, one should note that the first country for patent applications residents is the USA, with 32966 applications in 2009, while the number of patents granted to US residents (11352) was comparable to Germany's one. When one considers Japan's total of 19933 applications and 9439 patents registered in 2009, it is not unreasonable to conclude that the EPO mainly benefits to non-European countries — USA and Japan — and to Germany. The rest of Europe only have the leftovers from the European patents cake!
- 5. “Economic Cost-Benefit Analysis of a Unified and Integrated European Patent Litigation System”, European Commission study, Prof. Dietmar Harhoff, Ph.D., February 26th, 2009.
- 6. In this regard, Jochen Pagenberg, president of the European Patent Lawyers Association (EPLAW), criticized in the January 2011 newsletter of the International Association for the Protection of Intellectual Property (AIPPI), the Commission's argument that the system for getting a patent in Europe was ten times more expensive than in the United States, because this remark took only into account the filing costs and not the litigation costs: “combining a system having more affordable filing fees with an unaffordable enforcement system is wasted money”.
- 7. Cf. http://www.ipeg.eu/?p=2394
- 8. Cf. http://www.marks-clerk.com/uk/attorneys/news/newsitem.aspx?item=371
- 9. Cf. http://patlit.blogspot.com/2011/03/upls-dead-and-buried.html.
- 10. 54. As regards the present request, it is worthy of note that the proposal to create a unified judicial system in the field of patents was being studied by the Council when the request was submitted to the Court. The fact that the draft agreement or particular draft legislative measures closely linked to it, such as the proposal for a regulation on the Community patent, do not currently enjoy unanimous support within the Council cannot, by itself, affect the admissibility of this request for an Opinion.
- 11. 73. It must be added that, in accordance with Article 14a of the draft agreement, the PC, in carrying out its tasks, has the duty to interpret and apply European Union law. The draft agreement confers on that court the main part of the jurisdiction ratione materiae held, normally, by the national courts, to hear disputes in the Community patent field and to ensure, in that field, the full application of European Union law and the judicial protection of individual rights under that law.
- 12. Due to a problem on the Council website, the audio stream of the English version of this video changes languages several time. Above is a translation by April and not a transcription of the official translation>
- 13. (7) Enhanced cooperation should aim at creating a unitary patent, providing uniform protection throughout the territories of the participating Member States, which would be granted in respect of all those Member States by the European Patent Office (EPO).
- 14. See, for example, on this subject research from James Bessen.