European Court of Justice feels competition from EU Patent Court and rules against it

On March 8, 2011 the highest EU Court, the European Court of Justice (ECJ) gave its ruling on the draft EU Patent Court or EEUPC. It does not look good at all, as the court concludes:

“The envisaged agreement creating a unified patent litigation system (currently called ‘European and Community Patents Court’) is not compatible with the provisions of the EU Treaty and the FEU Treaty”.

This is worse than anyone could have thought. It seems that a revival of EPLA is the only reasonable option now to come to some unified patent court system.

Dr. Jochen Pagenberg comments as follows:

The ECJ gives a rather superficial answer to the legal questions involved if one compares it with the well-reasoned but also negative Opinion of the Advocates General last year. The ECJ does not even discuss the questions raised by the AGs and basically tells the future judges of the planned Patent Court that if they do not work under the strict supervision of the ECJ like the national courts of the EU the EU legal order is endangered (since they may misinterpret the EU Treaty,  what a confidence in the legal qualities of the future judges!). In view of the fact that the judges of the Patent Court court would consist of the most experienced patent judges in Europe this lack of trust is very disappointing. On the other hand industry, the patent profession and even the EU Commission would see the involvement of the ECJ which has no patent experience as a blocking stone for the acceptance of such a court system, so that this Opinion could now be the end of the discussion of this project.

The only alternative might be to provide a patent court system similar to the one for the Community trademark, consisting only of national courts bound by common procedural and substantive law under the full supervision of the ECJ. For the reasons mentioned this solution is not attractive.

However since the ECJ emphasizes that it is giving its opinion for the proposed Community Patent planned for alls 27 member states which has in the meantime failed due to the lack of the  necessary unanimity, one must examine in more detail if a patent which only covers 12, 15 or 25 countries under the the discussed enhanced cooperation would not be feasible outside the  EU legal order as the Advocates General had suggested.

Can one adapt the EEUPC to fulfil the conditions of the ECJ?

Regarding possible changes of the draft-Agreement, the arguments of the ECJ regarding a cooperation between itself and the courts of the EU member states must be studied carefully.

The major consequence would be that the judges of the PC must be controlled in their application of EU rules whether they correctly apply EU law and/or ask the ECJ on questions concerning the interpretation of EU law in the same way as the national courts of the EU member states have been controlled so far, also in the field of IP law for which the Community trademark is a good example. So the judges of the PC should not only act at their discretion when they refer questions to the ECJ and in which area of the law, but that there is an obligation for such a referral which again would be controlled by the EU institutions, namely the Commission, the Council and the Parliament ensuring that the PC indeed uses its power properly,. Furthermore there must be a standing to sue of these instances and of private parties harmed by a non-referral to sue the PC for damages.

Such claims can be raised in the present legal order against the member state whose court has violated EU law. For the PC in the form of an international court there would be no responsibility of a member state in the opinion of the ECJ (cf. no. 88 of the Opinion). How these two requirements as contained in nrs 86 to 88 of the Opinion can be complied with needs careful examination. Whether the functioning of the PC would still comply with the expectations of the users might become doubtful, except if the patent court system were given a structure and followed similar or identical procedural rules as the courts applying the Community Trademark Regulation. However, how the conditions of the ECJ as laid down in no. 77 of the Opinion can be fulfilled is difficult to imagine. The ECJ would only regard the court system as compatible

– if the PC is limited to resolve disputes on the interpretation or application of the actual provisions of the international agreement concerned, here the Agreement on the EEUPC.

–           if the the powers of the courts of Member States in relation to the interpretation and application of European Union law are not affected to request a preliminary ruling from the Court of Justice are not affected and the power of the Court to reply.

The second condition is not and cannot be fulfilled, since the PC is intended to replace the national patent courts where a case concerning the European and the “EU patent” is at stake.

The first condition is an even more serious and insurmountable obstacle. The PC will not only interpret and apply the provisions of the EEUPC Agreement but also the future regulation on the EU patent or a similar text as well as other instruments of EU law covering intellectual property. This includes the examination of the validity of an act of the EU, i.e. the grant or refusal of a patent. but also  the application of the FEU Treaty concerning the internal market and competition law, a competence regarded as unacceptable by the ECJ (see nr. 78 of the Opinion). Since those powers of the PC cannot remain with national courts without rendering the PC useless, practitioners do not see, how a court stripped of all these powers will still have a meaningful function.

[More comments to follow soon, IPEG Editorial Board]


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