14 March 2011

Options Available After Knockdown of Unitary European Patent Court by March 8 CJEU Opinion

[CJEU President Vasilios Skouris]
On 8 March the Court of Justice of the European Union (CJEU) handed down its long-awaited opinion on the compatibility of the "Draft Agreement on the European and Community Patents Court" [Doc. 7928/09], which basically expresses the Commission's 2007 vision to replace the EU-independent European Patent Litigation Agreement (EPLA) and implement an EU controlled patent litigation system called European and EU Patent Court (EEUPC).

As reported here and elsewhere (see below blog citations), the Judges broadly rejected the Draft Agreement for two essential reasons, as expressed e.g. in §§79, 88, 89 of the opinion:
  1. The envisaged (unitary) court would take the place of national courts and tribunals in the field of patent lititigation/validity and thus deprive those courts of the power to request preliminary rulings from the CJEU in that field; 
  2. The unitary patent court would have the duty to interpret and apply EU law, while a breach of EU law could not be the subject of infringement proceedings nor could it give rise to any financial liability on the part of one or more Member States.
Surprisingly, the CJEU did not consider the objections as raised in the Advocates General's preliminary Statement of Position (see also here) but went far beyond those observations by more severe objection. This is somewhat disappointing especially since an opinion on the AG's objections to the language regime could have provided some clarification for the parallel Unitary Patent project, that has received green light by the EU Commission on March 11.

So, what options are available now.

Between the two poles of a CJEU-independent patent system and a closer integration of the Unitary Court into the EU's legal order, the PatLit and Bright Spark blogs are, like many others, not in favour of the latter option, since "everyone involved [i.e. industry, patent profession and even the EU Commission, as noted on the ipeg blog] is absolutely convinced that the system should not allow the ECJ itself to become involved in substantive patent law"; "the Court of Justice does not have the necessary expertise". Especially, "the patent world does not want the same court system that was established for community trademarks", as added on the Kluwer blog.

This dilemma between the CJEU's and industry's requirments, however, does not appear to be a good basis for drafting alternative solutions that circumvent the CJEU's objections.

On a similar line, Jochen Pagenberg, current EPLAW President, suggests to carefully examine, "whether the envisaged unitary patent covering only 25 EU member states under enhanced cooperation cannot be subject to a Court System outside the EU legal order", as suggested by the Advocates General, which would effectively be a revival of EPLA. For good reasons, Mr Pagenberg has some sympathy for EPLA, as e.g. expressed in an article in the January 2011 edition of AIPPI e-news, where he presented EPLA as an alternative in case of deadlock:
If the Court, on the other hand, approves the view of the AGs on the independence of an international court system like EPLA, this could proceed on the basis of a second “coalition of the willing” for the litigation system, so that the work on EPLA could continue. If the best and most flexible solution is adopted, one can expect that soon a greater number of countries will join. Countries which have so far opposed EPLA will have to reconsider whether they prefer to stay outside a common litigation system.
Former epi President and CEIPI course coordinator Walter Holzer pessimistically asks "whether it will ever be possible to establish a unified patent litigation system compatible with the law of the European Union that also satisfies the interests of patent holders, possible defenders, and practitioners". Even though not being the perfect solution, he nevertheless suggests to "increase the influence of the ECJ in the proposed patent judicial system".

However, Mr Holzer doubts, on the one hand side, whether EPC member states not being part of the EU (e.g. Switzerland) would be willing to submit their cases to the ECJ-jurisdiction and, on the other hand side, whether the EU would accept a judicial framework for different appeal proceedings depending on whether the appeal comes from an EU member state or a non-EU member state.

Complementary, Munich based Patent Attorney Axel Horns reminds us on his IPJur blog that the EU Council had once planned to set up a Patent Court for EU Member States only, which could still work under the supreme role of the CJEU. The consequence would be that such a court could also have competence with regard to conventional EP bundle patents as granted by the EPO, of course within the EU territory only.

As opposed to those expert observations, the official statements of the EU Commission (here) and the EPO (here) tried to to deemphasise the relevance of the CJEU's opinion and repeatedly stresses that "The enhanced cooperation [to implement the 25/27 unitary patent] remains unaffected":
The Commission will analyse the concerns raised by the CJEU very carefully and will work with the Presidency of the Council and the Member States to find as quickly as possible the best solutions in the interest of the patent system and its users. [press release]
Apparently, the EU Commission does not appear to intend considering the respective wishes of industry. Its position that enhanced cooperation is independent of the EEUPC is certainly correct - however, on a mere formal legal level. The main target of the Commission's enhanced cooperation efforts, namely to obtain significantly cheaper and more efficient (nearly) EU-wide patent protection especially for SME's, will now only partly met, since a Unified Patent does not make much sense without providing EU-wide effective infringement and validity actions.

Since we now most likely will get (if at all) a Unitary Patent Court years after the Unitary Patent, I fear that its acceptance by the users will not be overwhelming, for two simple reasons:
  • it may remain unclear for years where and before which court a Unitary Patent could be enforced or invalidated; 
  • a cheaper patent may not be worth so much if costs of post-grant actions remain as high as they are now and right holders have to fear costs of parallel validity actions in a number of countries.