The European Court of Justice (ECJ) has rejected challenges made by Spain to the legitimacy of the EU legislation for the unitary patent.
The European Patent Office (EPO) and 25 participating countries are in the final stages of establishing the European unitary patent and the Unified Patent Court (UPC), the largest change to patent law across Europe in 40 years. It will create a single approach to patent registration and litigation across 25 countries in Europe.
The Unitary Patent Package consists of three elements: the Unitary Patent Regulation (1257/2012/EU) (UP Regulation) and the Regulation on translation arrangements (1260/2012/EU) (Translation Regulation) (together, the 2012 Regulations), and the Agreement on a UPC (UPC Agreement). European patents can be granted in three languages: English, German and French. The Translation Regulation provides for some translations, but only for a transitional period until good machine translations become available.
The 2012 Regulations are instruments of enhanced co-operation between 24 EU member states. The UPC Agreement is an international agreement and although it can only be joined by member states, it is not EU law. The UPC Agreement and the already existing European Patent Convention (EPC) together create an autonomous system of substantive law on validity and infringement of unitary patents and traditional European patents and procedural law for patent litigation at supra-national level.
The European Parliament and the Council of the EU must establish measures for the creation of European intellectual property (IP) rights to provide uniform protection of IP rights throughout the EU and for the setting up of centralised EU-wide authorisation, co-ordination and supervision arrangements (Article 118, Treaty on the Functioning of the European Union) (Article 118).
Following repeated failures to agree a language regime, the European Commission’s proposal for initiating an enhanced co-operation regime for a unitary patent and associated translation regime was accepted by 23 member states and the European Parliament.
Spain and Italy refused to agree to the proposed language regime. In June 2011, Spain and Italy challenged the adoption of the enhanced co-operation regime by filing complaints with the ECJ.
The ECJ rejected Spain and Italy’s legal challenges. In May 2013, Spain appealed, challenging the legality of the 2012 Regulations. Spain argued that:
- The administrative procedure preceding the grant of the unitary patent was not subject to EU judicial review, which undermined the principle of effective judicial protection.
- It was unacceptable that the UP Regulation should incorporate into the EU legal order measures from an international body such as the EPO, which was not subject to EU principles.
- Article 118 was not an adequate legal basis for adopting the UP Regulation because it was not accompanied by measures providing uniform protection of IP rights throughout the EU, nor did it align the laws of the member states for that purpose.
Spain also argued that the Translation Regulation discriminated against languages such as Spanish, and against citizens and companies who cannot understand the three official EPO languages.
The ECJ dismissed the appeal.
The ECJ rejected Spain’s arguments. The UP Regulation was not intended to affect the conditions for granting European patents, which were exclusively governed by the EPC and not by EU law. Also, it did not incorporate the procedure for granting European patents laid down by the EPC into EU law. The UP Regulation merely established the conditions under which a European patent previously granted by the EPO under the EPC may benefit from unitary effect, and provided a definition of that unitary effect.
Article 118 does not necessarily require EU legislature to harmonise all aspects of IP law completely. In practice, the substantive law governing the scope of protection of the unitary patent will predominantly be the UPC Agreement, as it applies in all participating member states whose national law might apply. For issues not covered by the UPC Agreement, the UP Regulation specifies the national law that applies across all participating member states. So, uniform protection is sufficiently guaranteed.
References in the Treaties to the use of languages within the EU do not create a general principle of EU law to the effect that anything that might affect the interests of an EU citizen should be drawn up in his language in all circumstances. A difference in treatment on the grounds of language must be appropriate for attaining the objective pursued and must not go beyond what is necessary.
Here, the stated legitimate objective of the Translation Regulation was the creation of a uniform, cost-effective and simple translation regime for the unitary patent with the aim of enabling access to patent protection, particularly for small and medium-sized enterprises. The existing European patent system created by the EPC was complex and costly for an applicant requiring patent protection in all of the member states, partly due to the need, in order to validate a European patent in a member state, for a translation of that patent in the official language of that member state. The Translation Regulation maintained the necessary balance between the various interests without going beyond what was necessary to achieve the legitimate objective. Also, the translation arrangements did not violate legal certainty.
Now that the last legal obstacle has been removed, the implementation of the Unitary Patent Package can proceed, although a number of practical issues remain outstanding and the necessary ratifications of the UPC Agreement have yet to be completed. 13 ratifications are needed, including the UK, Germany and France; to date Austria, Belgium, Denmark, France, Luxembourg, Malta and Sweden have ratified.
An important aspect of the decision relates to languages and translation issues which have often lead to political deadlock within the EU, and prevented the creation of a unitary patent for decades. Spain’s main objection to the unitary patent system was that Spanish was not one of the official languages.
The decision also expressly confirms that for each unitary patent only one substantive law will apply in all participating member states. This is an advantage over traditional European patents, for which the substantive law differs according to country of registration and enforcement.
After the dismissal of Spain’s appeal, Italy announced that it will join the unitary patent system. Until the outcome of Spain’s challenge to its legality, Italy had said it would participate in the UPC system but not the unitary patent. Whether Spain will join remains to be seen, but the legal arguments for not joining have been rejected.
Case: Kingdom of Spain v Council of the European Union, Case C-146/13 and C-147/13.
First published in the July 2015 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.