EU Patent: Advocates General Suggesting To 'Rise The Bar'...

"ii) Administrative proceedings

68. Secondly, one should check whether it would not have been necessary to include in the competences of the future PC a section on administrative proceedings. These proceedings concern in particular appeals against the EPO filed by companies making unsuccessful applications for the granting of patents, as well as appeals filed by third parties unsuccessfully opposing the granting of a patent.

69. We should recall that Community patents will be granted by the EPO according to the applicable rules under the EPC for the granting of European patents. The hearing before the Court showed how this administrative technique may be classified in two different ways:

• The theory of delegation: according to the Parliament and the Council, administrative powers will be delegated to the EPO by the European Union; the EPO will grant Community patents instead of and in the place of a European Union agency.
• The theory of transformation: according to the Commission, the EPO will not act on behalf of the European Union and will actually only grant a European patent pursuant to the EPC; this European patent will only be transformed in the Union’s legal system, to become a Community patent, automatically, solely through the effect of the Community patent regulation.

70. For the purpose of this opinion, it is neither necessary nor advisable to determine which of these two theories carries conviction. Whatever the legal classification of the method of granting of future Community patents (theory of delegation or theory of transformation), it does not pose a problem from the point of view of actual judicial protection5 or the correct and uniform application of Union law.

71. In fact, the decisions of the EPO concerning patents can only currently be reviewed by the internal chambers of appeal created within the EPO, excluding any judicial appeal before an external court. There is no possibility of the European Court of Justice ensuring the correct and uniform application of Union law to proceedings taking place before the chambers of appeal of the EPO6. On this important point, the legal situation concerning Community patents is therefore fundamentally different from that concerning Community trade marks.

72. The European Union should not either delegate powers to an international body or transform into its legal system acts issued by an international body without ensuring that effective judicial control exists, exercised by an independent court that is required to observe Union law and is authorized to refer a preliminary question to the Court of Justice for a ruling, where appropriate.

73. These requirements can certainly be satisfied in different ways. A possible extension of the competences of the future PC to include administrative proceedings against decisions of the EPO is just one of the options that may be contemplated. Another option that may be contemplated is the creation of an administrative patent court which should be authorized, unequivocally, to refer to the European Court of Justice for a ruling on a preliminary question. Under the principle of institutional balance, it is not up to the Court to indicate which of these different options should be given preference, within the scope of this opinion.

74. However, according to the information available to the Court within the scope of this opinion, administrative proceedings against decisions of the EPO are not dealt with by any of the different measures currently being studied with regard to patents. Administrative proceedings do not appear to play a role either in the draft agreement setting up the EC or within the scope of the European Union’s accession to the EPC.

75. Under these conditions, it should be noted that, in its current state, the draft agreement, read in the light of all the measures contemplated with regard to patents, does not satisfy the requirement of effective judicial control over the granting of patents or the desire for a correct and uniform application of Union law."

Hence, the Document summarises that the creation of the PC as an international court does not conflict with the objections of principle drawn from the provisions of the treaties on the European Union judicial system. However, the decisions of the European Patent Office (EPO) on patents may form the subject of an effective judicial appeal before an independent court within whose scope a correct and uniform application of Union law will be assured.

Moreover, even within the scope of the PC as planned there are problem with regard to guarantees for observance of European Union law: The Advocates-General consider that the guarantees contained in the draft agreement with a view to ensuring the full application and observance of the pre-eminence of Union law by the PC are not sufficient. Given that Union law and the case law of the Union courts will only be compulsory for the future PC through the agreement contemplated, the provisions thereof must be totally lacking in any ambiguity with regard to the scope of the PC’s obligation to observe Union law. In their view, that is not the case with the current state of the draft agreement.

Finally, also the language regime envisaged by the EU Council for the Patents Court is challenged by the Advocates General:

"120. However, when an action is filed before the local or regional division of the PC Court of First Instance where an infringement or threat of an infringement has occurred or is likely to occur, the linguistic system depends on the country or countries in which the division of the PC Court of First Instance in question is established. In this case, it may therefore happen that a company is assigned to a division of the PC Court of First Instance situated outside its country or its region of origin and, consequently, in a language other than that to which the company is accustomed. Such a situation will only occur when the company in question has exercised commercial activities abroad. It may therefore seem lawful for it then to have to sustain the risk of being summoned in law in the country or region where it has carried out business, and in the language applicable in that country or region.

121. The situation is clearly more delicate, however, when the country where a company must be assigned does not participate in any local or regional division of the PC Court of First Instance. In such a case, the dispute would be brought before the central division of the PC Court of First Instance, and the language of the proceedings would be that of the patent, namely German, English or French. Consequently, a company may be summoned in law in a language in whose choice neither its country of origin nor the country where it carries out its commercial activities has participated. In the absence of any provision in the draft agreement allowing the central division to depart from the rule of the language of the patent or allowing the defendant to obtain translations of procedural documents, this linguistic system appears to be unacceptable with regard to observance of the rights of defence.

122. Within these limits, the Advocates-General consider that the linguistic system faced by the central division of the PC may affect the rights of defence."

The final conclusion of the Advocates General then reads as follows:

"123. In the light of all the foregoing considerations, the Advocates-General consider that the agreement contemplated is, in its current state, incompatible with the treaties. The reasons for this incompatibility can be summarized as follows:

• The guarantees contained in the draft agreement with a view to ensuring the full application and observance of the pre-eminence of Union law by the PC are insufficient [...].

• The remedies available in the event of the PC’s infringement of Union law and in the event of non-observance of its obligation to effect a preliminary reference pursuant to article 48 paragraph 1 of the draft agreement are insufficient [...].

• The linguistic system faced by the central division of the PC may affect the rights of defence [...].

• The draft agreement, read in the light of all the measures contemplated concerning patents, does not satisfy the requirement of ensuring effective judicial control and a correct and uniform application of Union law in administrative proceedings concerning the granting of Community patents [...]."

In many cases, the final decision of the Court of Justice of the European Union closely resembles the Opinion of the Advocate(s) General - however, the Chamber ist not legally bound by the present Document. Hence, theoretically there is some room for a big surprise, i.e. seeing the Chamber finally rubber-stamping the proposal as presented by the EU Council without any objections.

However, in view of the many points objected to by the Advocates General, such scenario looks quite unlikely.

If the Court should eventually follow the line of the Advocates General, there will be a big challenge to amend the papers on file in a way such that there is no further basis for any objections.

I guess that attempting to re-draft the proposal will be most painful with regard to two aspects:

• First, amending the EPC in a way that the Boards of Appeal in general, and the Enlarged Board of Appeal, in particular, do not any longer see the blue sky over their heads. What appears to be requested by the Advocates General is that some sort of EU Court, perhaps the Court of Justice of the European Union, should have the last word in patent granting matters. This would, for example, mean that the Court of Justice of the EU might, in some future, decide on the patentability of computer-implemented inventions (provided that there is any applicable law on EU level).
• Second, the language issue is still unresolved, and the Spanish Government probably will utilise the concerns now expressed by the Advocates General in order to strenghen their vigorous fight for the wide-scale inclusion of the Spanish language in as much Official proceedings as possible.

I don't think the EU Patent is dead yet but maybe the Court of Justice of the European Union will implement a 'rising the bar' initiative of their own, effectively killing the political compromise as hitherto on file.

(Photo: Wikipedia Commons)