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In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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EU Patent - A summary of the Proposed Scheme

The draft scheme for a EU patent can be summarised as follows:

An EU Patent

The European Union to become a Member State of the EPC

An EU Patent Court

A new "Community Patent" will be created as a new intellectual property right within the EU (for present purposes we will call it an "EU Patent") 

The EU will join the European Patent Convention (EPC), and by virtue of this accession the EPO will be able to grant EU patents.

This contrasts with the present European Patent, which is a bundle of national patents separately validated in different states.

The various agreements envisaged a new European and EU Patent Court (EEUPC) to be created as an international lawcourt with a court of first instance (local, regional and central) and
a court of appeal and certain obligations to refer points of Community Law to the European Court of Justice (ECJ) for a preliminary ruling.  The ECJ is not satisfied with this arrangement. 

The EPO will be the body responsible for granting EU patents under the provisions of the EPC.  Its decisions will be open to the sole review of the EPO Boards of Appeal and Enlarged Board of Appeal.  This is the mechanism in place today with the EPC.   

The EEUPC as proposed was to have exclusive jurisdiction over patent litigation, including infringement and validity.  The court of first instance was to have the ability to refer questions of interpretation of Community Law to the ECJ and the court of appeal was to be under obligation to do so.  But the ECJ has ruled that the exclusive nature of the court's jurisdiction deprives national courts of their power to decide on such matters and to refer such matters to the ECJ.  This is deemed incompatible with the EU Treaty.

A further hurdle is the question of what will be the official  language of the EU patent.  The draft agreement proposes the use of the three languages currently used at the EPO (English, German and French) as the official languages of the EU patent.  There will be no need to translate the EU patent into any other official language of the EU.  Certain countries (notably, Italy and Spain) disagree with the proposed linguistic arrangement, arguing it would undermine the EU internal market by unduly damaging certain small and medium enterprises for the advantage of others.  Their counter-proposal is to adopt English as the only official language of the EU patent.  There is a proposal to reimburse the initial translation costs for those companies whose language is not English, German and French.  This goes further than the present partial subsidy scheme and might succeed as a compromise.

Our comments

The ECJ decision to send the proposal for the EEUPC back to the drawing board is most disappointing, particularly given that there is precedent for a court established by inter-government agreement that has exclusive jurisdiction over IP matters.  The precedent is the Benelux Court that has jurisdiction over trade marks and designs.  The ECJ did not feel bound by this precedent, simply saying the Benelux Court has "certain mechanisms" to ensure that national courts (of Belgium, The Netherlands and Luxembourg) are not deprived of their powers under the Treaty.  Those mechanisms will now have to be scrutinized to see if they offer a way forward for another draft proposal.

It is hard to predict at this stage if, in what format and when the EU Patent will become a reality.  Be it a pan-EU patent or a partial-EU patent (extending only to those states that sign up), its advantages to the applicant, especially foreign applicants interested in the European market, could be significant.  One of the advantages is reduced post-grant translation costs, which are in any case falling as the London Agreement gains momentum (see cover page).   What is fundamentally needed is a uniform litigation system to reduce litigation costs and give more legal certainty.