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State of Progress - September 2013

Date: 9 September 2013

Spain and Italy filed complaints with the Court of Justice of the European Union (CJEU cases C-272/11 and C-295/11 respectively), objecting to the scheme on various grounds including misuse of Council powers and detriment to the internal market and distortion of competition. The CJEU rejected these complaints on 16 April 2013.

 

Challenges to the Regulations

 

Spain has filed two new complaints, which are pending under cases C-146/13 and C-147/13.  Spain complains that the Council is misusing its powers, that there is no explicit legal basis for the Regulation, and that it does not guarantee uniform patent protection across the EU, as called for by the Lisbon Treaty (Article 118 which calls for "measures for the creation of European intellectual property rights to provide uniform throughout the Union").  These particular complaints would seem to overlap significantly with Spain's earlier complaints already dismissed by the CJEU. Other grounds in the new Spanish complaint are more specific and include a breach of the "values of the rule of law" on the basis that the EPO grants the unitary patent, but the EPO is not subject to any judicial review.  More specifically, Spain complains of a "misapplication of the Meroni case law" in the delegation of administrative tasks to the EPO, including the setting and distributing of renewal fees.  This refers to joined Cases 9 and 10/56 Meroni v. ECSC High Authority [1957/58] ECR133, which established certain principles by which European agencies may be entrusted with exercise of specific powers.  According to Meroni, financial arrangements can be entrusted to independent agencies, but only subject to conditions determined by the delegating authority and subject to its supervision.  Spain is objecting that the system for setting renewal fees and for determining the share of distribution of those fees is not subject to these conditions and the necessary supervision.  Finally, Spain objects to the rules governing the entry into force of the Regulation, and in particular how the Regulations are dependent on the entry into force of the agreement, which is an inter-government agreement that excludes Spain (and indeed Poland) and is not an EU Regulation.

 

A decision in Spain's favour on the application of Meroni could have wider repercussions on other European agencies.  It is essential to the proper functioning of the EU that institutional tasks are delegated to a wide variety of agencies.  For example, the European Medicines Agency (EMEA) provides scientific opinions relating to the authorisation of pharmaceutical products, and the Commission typically rubber-stamps the recommendations of EMEA.  It would introduce a very cumbersome extra level of responsibility if the CJEU were to require that the Commission involve itself directly in the supervision of decisions of all its agencies.

 

Ratification

 

As of September 2013, only Austria has formally ratified (it deposited its instrument of ratification on 8 August 2013).  A minimum of 13 states must ratify before the system can begin, including Germany, France and the UK.  This is not expected until 2015.

 

The Brussels Spanner

 

A potential spanner in the works is the need to amend the "Brussels Regulation" on Jurisdiction (Regulation (EU) 1215/2012[1]).  UPC Agreement cannot come into force until this regulation has been amended to accommodate it.  But this may not be a straightforward matter and will require another vote by the European Parliament and the Council.  (Ironically it was amended for other reasons just days after the Parliament voted through the Unitary Patent).  Moreover, it may give Spain a new ground for objection, because, according to Case C‑370/12Thomas Pringle v Government of Ireland, 27 Nov. 2012, it is a consequence of Art. 3.2 TFEU that "Member States are prohibited from concluding an agreement between themselves which might affect common rules or alter their scope."

 

The UPC Agreement comes into force on the first day of the fourth month after all these requirements are met. 

 

The Maltese Spanner

 

Even after it all comes into place, another possible spanner in the works is the "Maltese problem".  Malta (an EU country) is a relative a late-comer to the EPC, having joined on 1 March 2007.  So European patents that issue on applications filed before 1 March 2007 will not extend to Malta - i.e. will not extend to the whole of the EU.  Protection cannot be extended to Malta and there is no provision whereby such a patent can have unitary effect.  The Maltese problem has extended to Croatia, which joined the EPC on 1 January 2008 and is now an EU country.  European patent applications filed before 2008 do not designate Croatia (and only a handful will have been extended to Croatia as a former extension state).  A large proportion of European patents currently being granted date back to before 2008, and this is likely to be the case when the Unitary patent comes into effect.

 

Preparations

 

A preparatory committee has been established and key tasks in the timeline are:

 

  • Finalizing the Rules of Procedure of the Court
  • Financial provisions including setting of the court fees
  • Facilities in Luxembourg and
  • Development of the necessary IT systems.

 

​This critical but unenviable last task has been assigned to the UK.

The Rules Committee has published its 15th draft Rules of Procedure of the Unified Patents Court and is due to conclude its work and finalize the rules in July 2014.

 

Local and Regional Divisions

 

Various states are in discussions to form regional courts:

 

  • England & Wales, France, Belgium, Italy and the Netherlands are expected to have their own Local Divisions (one each). 
  • Germany is planning to have four local divisions. 
  • Sweden, Finland, Denmark and the Baltic states are planning a Regional Division. 
  • Bulgaria, Rumania, Greece, Cyprus and Slovenia are planning a Regional Division. 
  • Malta and Luxembourg are planning to have no local or regional division, leaving jurisdiction with the Central Division. 
  • Ireland and Portugal would prefer to participate in a Regional Division (to share costs) but no clear plan has yet emerged. 
  • Scotland has expressed eagerness to have its own Local Division.

 

Opt Out

 

There is provision for a proprietor of or an applicant for a European patent to opt out from the jurisdiction of the Court in relation to European patents (not Unitary patents).  This option applies to a European patent applied for prior to the end of the transitional period. The opt-out is to be notified to the Registry of the Unified Patent Court, located in Luxembourg. There will be a Court fee for opting out.  This is attracting criticism, as many applicants feel aggrieved at the need to pay a fee to stay in the existing court system, which is the system they signed up for when applying for a European patent.  The opposing pressure from the preparatory committee will be that opt-out fees may be the only initial source of income for the Court.

 

Many companies large and small are keeping a close eye on the timetable, particularly with a view to:

 

  • Opting out promptly before a competitor applies to revoke; and
  • Applying to revoke centrally before a competitor has time to opt out.

 

Opting out is not possible if an action has already been brought before the Unified Court (UPC Agreement Article 83(3)), and there is a loop-hole in the Agreement, because the opt-out does not take effect until it is registered (Article 83(3) last sentence), which inevitably involves an administrative delay.  Thus, if a third party can apply to revoke a patent centrally before the proprietor's opt-out is entered on the Court Register, that is tough luck on the proprietor.  The Rules Committee does not believe it has the power to plug this gap.  It cannot, for example, delay the date of effect of a revocation action nor bring forward the date of effect of an opt-out.  Both are enshrined in the Agreement.

 

SPCs

 

There are many other curious anomalies and no doubt more will emerge.  One that is being debated in the blogs is that Article 33(1) of the Agreement seems to create the exclusive competence for actions concerning the infringement and validity of supplementary protection certificates, regardless on whether the certificate is based on a Unitary Patent or the national validation of a European patent. Thus, in the case of a national patent as basis for the certificate, national courts would continue to be competent for litigation concerning the patent, whereas the UPC would be competent for litigation concerning the certificate. This can hardly have been intended.

 

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[1] Regulation (EU) 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters




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