The EU’s Unified Patent Court and Unitary Patent: still a work in progress!

Whilst it is welcome news that on 29th June 2012 the Council of the European Union finally reached agreement on the seat of the central division of the Unified Patent Court, it should be remembered that the European Parliament also forms part of the two-part legislature of the European Union. The Council represents the governments of the Member States, whereas the European Parliament is directly elected. The ordinary legislative procedure (or codecision) is based on the principle of parity between the two institutions, neither of which can adopt legislation without the agreement of the other.

At paragraph 3 of its Conclusions on 29th June 2012, the Council stated:

“Heads of State or Government of the participating Member States agreed on the solution for the last outstanding issue of the patents package, namely the seat of the Central Division of the Court of First Instance of the Unified Patent Court (UPC). That seat, along with the office of the President of the Court of First Instance, will be located in Paris. The first President of the Court of First Instance should come from the Member State hosting the central division.

Given the highly specialised nature of patent litigation and the need to maintain high quality standards, thematic clusters will be created in two sections of the Central Division, one in London (chemistry, including pharmaceuticals, human necessities), the other in Munich (mechanical engineering).

Concerning actions to be brought to the central division, it was agreed that parties will have the choice to bring an infringement action before the central division if the defendant is domiciled outside the European Union. Furthermore if a revocation action is already pending before the central division the patent holder should have the possibility to bring an infringement action to the central division. There will be no possibility for the defendant to request a transfer of an infringement case from a local division to the central division if the defendant is domiciled within the European Union.

We suggest that Articles 6 to 8 of the Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection to be adopted by the Council and the European Parliament be deleted.”

Articles 6 to 8 of the Regulation define the acts which constitute infringement of a Unitary Patent. Deletion of these Articles from the Regulation is intended to remove the possibility of the Unified Patent Court making referrals on substantive patent law to, and consequential decisions from, the Court of Justice of the European Union (CJEU).

The Council’s suggestion led to the European Parliament postponing a vote on the Regulation and passing the matter back to its Legal Affairs Committee for discussion on Tuesday 10th July. The rapporteurs, tasked with leading the proposals through the legislative procedure, appear far from happy and have mentioned the possibility of legal action by the European Parliament against the Council at the CJEU. Rejection of the proposal by the European Parliament would end the legislative procedure, which would then have to be re-launched by the European Commission (the executive body of the EU).

Concerns have been voiced regarding the proposed agreement on the Unified Patent Court, in particular regarding its structure (with numerous local/regional divisions in addition to the central division), the level of patent/technical experience required for judicial appointment and the bifurcation of validity and infringement proceedings. Furthermore, only 25 of the 27 EU Member States are currently involved in the creation of the Unitary Patent. Italy and Spain, excluded as a result of disagreements regarding the languages into which the Unitary Patent would be translated, have separate appeals pending at the CJEU regarding the legality of their exclusion using the new procedure of “enhanced cooperation”. A CJEU decision in favour of Italy or Spain is likely to be detrimental to the legislative progress of these proposals.

In short, matters are still very much in the air. We will be providing updates as events occur.