The following comment was received from Paul England (Simmons & Simmons, London):
"In probably the most important decision the Court of Justice of the European Union has ever made for patent owners it has this morning dashed hopes of the proposed Unified Patent Litigation System in an Opinion that says this is not compatible with European Union law.
What this means in practice
For European patent holders this means there is currently no end in sight to the current unwieldy system which requires:
• a patent to be granted for every European state for which protection is sought;
• that infringement proceedings are fought in the courts of every state in which infringement occurs; and
• that invalidity proceedings are fought in each country for which revocation of the national patent is sought;
and therefore bringing high costs and inconsistency of decisions for those engaged in patent litigation at a European level.
The only way towards a single system may now be for the Court of Justice itself to decide on patent litigation cases – something which the profession does not want.
More detail on the background to this decision
The proposed Unified Patent Litigation System (UPLS)
In December 2009, the EU Council unanimously agreed on key elements of the proposed UPLS together with the proposal on translation arrangements for a Unitary Patent put forward in early July 2010. The UPLS is the latest initiative to establish a single system in Europe that combined a single, pan-European Unitary Patent with the existing European Patent Convention system that grants so-called European Patents. Despite their name, the latter patents are only effective nationally, and so any patent revocation or infringement related proceedings that occur in Europe must be fought in the courts of the national patent affected, whether they affect more than one European country or not.
The UPLS, as well as introducing a single Unitary Patent covering all EU states, also proposes a single system of European patent courts (the European and EU Patent Court (EEUPC)) in which all European patent disputes can be heard. In essence, the proposal provides that the EU accede to the European Patent Convention (EPC), allowing the European Patent Office to grant Unitary Patents and setting up an EU Patent Court to hear disputes relating both to Unitary Patents and existing European patents. However, before proceeding with this proposed system, the Agreement was referred to the Court of Justice to decide whether the proposed UPLS is compatible with the EU Treaties. This was done using the “Opinion” procedure, provided for by Article 300(6) of the EU Treaty. This special procedure exists to allow the EU’s institutions to seek advice from the Court of Justice about the compatibility of an international agreement with EU law before signing it. Most Member States, the Council, the Commission and the EU Parliament were represented at a hearing on 18 May 2010 before the Court of Justice.
The Opinion, which says that the UPLS is incompatible with the EU Treaty and the Treaty on the Functioning of the European Union means that this proposal is now consigned to history, the latest in a long line of setbacks to proposals for such a system that has been in the planning for nearly 40 years.
This decision is a tremendous blow for those who have worked on the UPLS proposals. These include members of the EU Commission, Senior Judges and leading patents practitioners, including our own Kevin Mooney. Many will view this decision as the Court of Justice seeking to be the judicial body overseeing any single patent litigation system that comes to fruition in Europe. This was the one single issue on which the Commission, industry and the lawyers agreed at an early stage in drafting the proposals to be undesirable. This is because, according to this view, the Court of Justice does not have the necessary expertise in this area of law.
It might be thought that some attempt could be made to amend the proposed UPLS system or to go back to the drawing board completely. But, the essential reasoning for the decision is that the Member States cannot divest to an international body their powers as part of the European Union order over matters that will, inevitably, require the implementation of European Union law. So the reasons are fundamental and appear to rule out any revision of the UPLS or a return to the previously attempted European Patent Litigation Agreement (EPLA) proposal. It seems that alternatives to a system presided over by the Court of Justice have run out. The latter view is supported by a recent advance with the proposed single, pan-EU patent called the Unitary Patent in which, for only the second time in its history, the European Parliament voted for the “enhanced cooperation procedure” to be used to push this through, despite opposition from Italy and Spain on the language regime that is planned to be adopted. Decisions on such a patent would be made by the Court of Justice.Paul's disappointment will be shared by those who worked long and hard to achieve the UPLS, but not by those who have opposed it from the start for a variety of reasons. The constitutional roadblocks on which the proposal foundered were never going to be easy (some say, possible) to overcome, and it may be wondered how much appetite remains among the UPLS's supporters for seeking to navigate a path around them.
There is scant enthusiasm in industry and within the patent profession for a Court of Justice centred system and so support for this enterprise is likely to run out also".
One point on which, it seems to this blogger, all are agreed -- whether pro- or anti-UPLS -- is that there is little or no enthusiasm for any system which places patent law in the hands of the Court of Justice. But this is not the sort of consensus which can be easily converted into fresh proposals.
As ever, readers' opinions are welcomed.