Impact on IP of an Irish “no” on Lisbon Treaty?

Now the Irish are voting today on the Lisbon Treaty, and some questions arise whether there will be a vote from the heart or from the brains, we took the opportunity to look into the Lisbon Treaty text to see what has been said about intellectual property.

The Treaty of Lisbon amends the Treaty on European Union (TEU) (essentially the Treaty of Maastricht) and the Treaty establishing the European Community (TEC) (essentially the Treaty of Rome), which is renamed the Treaty on the Functioning of the European Union (TFEU).

Its intended to come into force January 1, 2009, unless Ireland votes “no” today, than we are back to square one.

By far the best reading on the proposed Lisbon Treaty is the Report by the UK Parliament (House of Lords), The Treaty of Lisbon: An Impact Assessment

On IP this highly readbale report notes:

  • The Council, acting by unanimity, can confer jurisdiction on the CJEU in disputes relating to the application of acts adopted on the basis of the TFEU which create Union intellectual property rights (Article 262, TFEU). Professor Chalmers told us that this was codification; the Court had been interpreting legislation on intellectual property rights since 1997 (…).
  • Professor Chalmers suggested that the new jurisdiction of the Court could significantly change the profile of its docket (p E128). Martin Howe QC expressed some concern about the need for expertise in the FSJ area in the ECJ. He noted that in the area of intellectual property law for example, an increasing number of judgments were being delivered by ECJ judges without much expertise in that area. (…).
  • Trade Policy is expanded in the new Article 207 TFEU and, in a reflection of current practice, international negotiations on trade in services, intellectual property and foreign direct investment are included in the Community competence. The Treaty, however, makes clear that unanimity will still apply when the Council considers the negotiation and conclusion of agreements on these matters. There is also a new requirement upon the Commission to report to the European Parliament on the progress of negotiations.
  • The Treaty of Lisbon contains some specific provisions on intellectual property (IP). Most significantly it adds a new Article 118 to the TFEU which provides for the creation of EU IP rights under the ordinary legislative procedure.

In § 9.19 – § 9.24 special attention is given to the new article 118:

“9.20. The history of European IP rights is a long and complex one. Currently there exist a number of European (although not necessarily EU) rights. Community trade marks and Community design rights already exist. There is also a system allowing a “basket” of national patents to be acquired through a single application to the European Patent Office in Munich. This system centralizes the process for acquiring patents in several European countries but does not provide a single European patent. This is a crucial difference when a patent is challenged as each national patent can be challenged individually before the relevant national court. It has been argued for some time that a Community patent with a single or coordinated point of redress would be beneficial to the Single Market but this has yet to be achieved. This report does not look in detail at these issues but simply at what impact the Treaty of Lisbon might have on them.

9.21 Witnesses have argued that although the new Article 118 provides a specific mandate for the creation of IP rights, it is simply restating the existing situation. Legislation on Community trade marks and design rights was created under Article 308 of the TEC. Professor Chalmers stated that “This is another area where there is codification. Since 1997, there has been legislation on intellectual property rights and the court has interpreted those. It did that under a single market jurisdiction” (Q S29). In addition, Article 229A of the current TEC states that the EU will have the power to “confer jurisdiction, to the extent that it shall determine, on the Court of Justice in disputes relating to the application of acts adopted on the basis of this Treaty which create Community industrial property rights”.

9.22 Malcolm Harbour MEP suggested that the inclusion of this new article was
more significant than simply a recasting of existing powers. It was a “major step forward” as “over the next 12 months we may actually see a rather more focused political priority given to this crucial piece of legislation” (Q B8). Kevin Mooney of Simmons & Simmons noted that the creation of a Community patent had already been made a priority in the Lisbon Agenda (…) but this had not resulted in a draft regulation for a Community patent being agreed.

9.23 One aspect of the new Article 118 is that it would move measures to create IP rights into ordinary legislative procedure, whereas Article 308 of the TEC required unanimity. Although at face value this would appear to be a potentially significant alteration of powers, Kevin Mooney argued that in practice it would have no effect in the context of the proposed Community patent. The issue on which previous Community patent negotiations have failed is language arrange­ments, i.e. which claims of the Community patent need to be translated into which official languages and the legal effect of such translations. Article 118 would keep these arrangements subject to unanimity. Mr Mooney went on to say that even if language arrangements were subject to QMV, in practice unanimity would still be required on these issues (…).

To conclude:

9.24 The new Article 118 of the TFEU is a restatement of existing powers. Although the Treaty of Lisbon would not confer addition IP powers on the EU, it marks a statement of political intent and a commitment to achieving the Community patent. The move to QMV, in itself, is not significant.

Here is a summary:

1. The jurisdiction of the European Court of Justice is expanded to all the activities of the Union with the express exception of common foreign and security policy. This enables the EU to set up specialized courts, with the agreement of Parliament in patent law and other fields of IP. Expansion of the Court’s powers into the field of intellectual property rights has to be agreed unanimously.

2. A new legal basis has been introduced for intellectual property rights (art. 118 TFEU)

For those more interested in reading the actual text of the Treaty in respect of IP, here are the proposed changes:

A. a new art. 97a:

“In the context of the establishment and functioning of the internal market, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish measures for the creation of European intellectual property rights to provide uniform protection of intellectual property rights throughout the Union and for the setting up of centralized Union-wide authorization, coordination and supervision arrangements.

The Council, acting in accordance with a special legislative procedure, shall by means of regulations establish language arrangements for the European intellectual property rights. The Council shall act unanimously after consulting the European Parliament.”

B. An Article 188 C shall be inserted, replacing Article 133:

1. The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalization, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action.

2. The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall adopt the measures defining the framework for implementing the common commercial policy.

3. Where agreements with one or more third countries or international organizations need to be negotiated and concluded, Article 188 N shall apply, subject to the special provisions of this Article. The Commission shall make recommendations to the Council, which shall authorize it to open the necessary negotiations. The Council and the Commission shall be responsible for ensuring that the agreements negotiated are compatible with internal Union policies and rules. The Commission shall conduct these negotiations in consultation with a special committee appointed by the Council to assist the Commission in this task and within the framework of such directives as the Council may issue to it. The Commission shall report regularly to the special committee and to the European Parliament on the progress of negotiations.

4. For the negotiation and conclusion of the agreements referred to in paragraph 3, the Council shall act by a qualified majority. For the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property, as well as foreign direct investment, the Council shall act unanimously where such agreements include provisions for which unanimity is required for the adoption of internal rules.

5. (…)

6. The exercise of the competences conferred by this Article in the field of the common commercial policy shall not affect the delimitation of competences between the Union and the Member States, and shall not lead to harmonization of legislative or regulatory provisions of the Member States insofar as the Treaties exclude such harmonization”.

C. In Article 229a, the words ‘the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament,’ shall be replaced by ‘the Council, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament,’ and the words ‘Community industrial property rights’ shall be replaced by ‘European intellectual property rights’. The last sentence shall be replaced by the following: “These provisions shall enter into force after their approval by the Member States in accordance with their respective constitutional requirements”.

So no fun stuff, and in summary no major changes for IP other than that it opens the legislative possibility for a Community Patent. Whether that will ever come, remains to be seen. First hurdle, the Lisbon Treaty to pass the Irish people’s vote. Then, when accepted, we still face major political hurdles. After all, this is Europe!