New Developments: European Patent With Unitary Effect, EU...

All delegations are strongly opposed to empowering the Commission to adopt delegated acts on the level of renewal fees for European patents with unitary effect, as well as the distribution of renewal fees between the participating Member States (Articles 15(4), 16(4) and 17 of the Commission's proposal). Delegations argued that this proposal represents a significant departure from the content of their request for launching enhanced cooperation since point 38 of the 2009 Council conclusions on an Enhanced patent system in Europe which sets out that a "Select Committee of the Administrative Council of the European Patent Organisation should […] fix both the exact level of the renewal fees and the distribution key for their allocation". One delegation raised some concerns relating to the proposed solution and argued that the tasks entrusted to the Select Committee, including setting the level of the renewal fees and their distribution could also be regulated by implementing acts in accordance with Article 291(2) of the TFEU. The Commission, on the other hand, considers any solution other than the use of delegated acts illegal and insists on the use of the latter instrument for determining the level of renewal fees and their distribution.[...]

Almost all delegations underlined the need to reflect the political link between the creation of unitary patent protection and the unified patent litigation system in the draft Regulations, as set out in their requests for launching the enhanced cooperation. Consequently, they consider it necessary to establish a legal link between application of the regulations on unitary patent protection and the setting up of the unified jurisdiction. Some delegations underlined that the establishment of such a link should not hinder or block progress in either area. The Commission expressed its understanding towards the request to highlight the political link between the projects through appropriate wording in the draft Regulations.[...]

A majority of delegations requested the proper reflection of the criteria for the distribution of renewal fees to the national patent offices as set out in point 37 of the 2009 Council conclusions on an Enhanced patent system in Europe, according to which the "renewal fees would be payable to the European Patent Office, which would retain 50 percent of the renewal fees and distribute the remaining amount among the Member States in accordance with a distribution key to be used for patent related purposes". Moreover, further details needed to be provided to spell out point 39 of the above conclusions, according to which the "distribution key should be fixed taking into account a basket of fair, equitable and relevant criteria such as for instance the level of patent activity and the size of the market. The distribution key should provide compensation for, among other things, having an official language other than one of the official languages of the European Patent Office, for having disproportionately low levels of patent activity and for more recent EPC-membership". One delegation requested the deletion of all provisions on renewal fees and their distribution from the draft Regulation. Several delegations wished to reopen the discussion on the criteria and requested adding a new element, i.e. "an equal amount per participating Member State determined on the basis of an established percentage of the annual renewal fees". A significant number of delegations as well as the Commission were against this proposal, insisting that such direct transfer had not been foreseen in the compromise achieved under the Swedish Presidency. [...]

The EU Presidency has put forward a compromise between the different positions which is conveyed as Annex I to Document 10629/11. Hence, In the light of the Presidency’s conclusions and suggestions contained in the Document, the Council (Competitiveness) due to meet on May 30, 2011, is now invited to reach an agreement on a political orientation concerning the two draft Regulations:

• Annex 1: 2011/0093 (COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL implementing enhanced cooperation in the area of the creation of unitary patent protection
• Annex 2: 2011/0094 (CNS) Proposal for a COUNCIL REGULATION implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements

Moreover, on May 26, 2011, the Presidency also has issued Document 10630/11 titled Creating a Unified Patent Litigation System - Orientation debate. It refers to and conveys as Annex II a non-paper of the Commission Services titled Solutions for a Unified Patent Litigation System - The way Forward after the Opinion 01/09 of the CJEU. The Council (Competitiveness) on May 30, 2011 is now invited to reach agreement on a political orientation to resume negotiations with a view to establish a unified patent litigation system on the basis of the suggested solution and the possible way forward described in the non-paper of the Commission contained in Annex II. The Presidency question to the Competitiveness Council of May 30, 2011, reads as follows :

“Do you agree to resume negotiations on the basis of the suggested solution and the possible way forward as described in the non-paper of the European Commission titled: SOLUTIONS FOR A UNIFIED PATENT LITIGATION SYSTEM – THE WAY FORWARD AFTER THE OPINION 1/09 OF THE CJEU?”

A future patent litigation system should rest on the following pillars:

• A unified patent court set up by Member States;
• Exclusive jurisdiction in respect of civil litigation related to infringement and validity for both the "classical" European patents and the European patents with unitary effect;
• The main features of the EEUPC should be maintained: The unified patent courtshould also maintain the basic features of the EEUPC set out in the Council conclusions of December 2009, including the setting up of the Court with a Court of First instance (with local and central divisions), a Court of Appeal and a Registry, the composition of the panels, the jurisdiction in respect of actions and counterclaims for revocations, the rules on the languages of proceedings and the transitional period; and
• Guarantees to ensure the respect of Union law by the unified patent court, fully situated within the judicial system of the Union: To ensure conformity with the Treaty as set out in the opinion 1/09 of the CJEU, it is necessary to ensure that the unified patent court respects Union law and requests preliminary rulings in accordance with the conditions applicable to national courts. It is also necessary to ensure that sanctions, in the form of infringement proceedings and financial liability, can be imposed. Considering that the unified patent court would be a court set up by Member States only, it would seem possible for the Commission to start infringement proceedings against all Member States jointly in cases where the unified patent court violated Union law. Similarly, in such a case, the rules on financial liability to make good damages caused to individuals as a result of a breach of Union law also seem to be applicable to all Member States jointly.

According to the Document cited, the unified patent court could therefore be set up by an agreement to be concluded between the Member States on the creation of a common jurisdiction. As set out above, on the basis of the opinion of the CJEU, third states may not articipate in this agreement. The work should continue on the basis of the Council conclusions of 7 December 2009 (doc. 17229/09) and the Working document on a revised Presidency text on a draft Agreement on the European and EU Patents Court and Draft Statute of 23 March 2009 (doc. 7928/09). Appropriate changes should be introduced in a new Presidency text and submitted to the Member States for discussion. These would need to include changes related to the contracting parties, the necessary remedies and guarantees to ensure the respect of Union law by the unified patent court. The basic institutional architecture of the unified patent court as foreseen for the EEUPC and agreed by the Council in 2009 (doc. 17229/09) should however be maintained.

In a press release available on the website of the German law firm Bardehle Pagenberg, Mr Jochen Pagenberg provides some rather critical comments concerning the current work on a European patent jurisdiction system, inter alia, as follows:

"[...] The most important question which met with the greatest reservations in the Expert Group is the degree of involvement of the CJEU in the future patent procedure. The EU Commission intends to amend the Draft Agreement by including the rules from Art. 267 et seq. TFEU (Treaty on the Functioning of the European Union, the former Lisbon Treaty) with strict obligations for the judges and sanctions in case of violations of EU law. Such sanctions also include damage claims which can be raised by private parties against Member States and even against the Patent Court itself.

Members of the Expert Group warned against such amendments for several reasons. The most evident result is a considerable delay of the patent infringement proceeding. While the infringement procedure under the Draft Agreement provides for a first instance and a second (and last) instance before the Court of Appeals, a referral of a legal question to the CJEU would double the number of instances. [...]"

The second chamber of the German Parliament ("Bundesrat") recently has issued two non-binding statements on the planned European Patent with unitary effect; see Documents 233/1/11 and 234/1/11. The respective Committee appears to be afraid that the European Patent with unitary effect might not respect some limitations to the patentability of biotechnological inventions imposed by national German law. Moreover, they are suggesting to remove the provision of Article 4 (4) of 2011/0094 (CNS) Proposal for a COUNCIL REGULATION implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements (Annex II to Document 10629/11 as mentioned above) which currently reads:

"In the case of a dispute concerning a claim for damages, the court hearing the dispute shall take into consideration that the alleged infringer may have acted without knowing or having reasonable grounds to know that he was infringing the patent before having been provided with the translation referred to in paragraph 1."

The statement argues that patent protection might be unduly weakened by this provision.

(Photo: (C) 2004 by girolame via Flickr under the terms of a CC license)