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Tuesday, 8 April 2008

Commission tackles Austrian patent protectionism


The IPKat has just noticed, rather late in the day, that the European Commission has brought an action against Austria for not allowing patent lawyers outside Austria to represent their clients before the Austrian patent office.

right: the IPKat's shy and retiring distant Austrian relation, the Eurasian Lynx


The case (C-564/07) was brought on 21 December 2007, but the UK-IPO has only just notified that interested parties have until 11 April 2008 to comment.

The Commission's case against Austria goes like this (in the usual Eurospeak):

"Form of order sought

declare that the Republic of Austria has infringed its obligations under Article 49 EC, by

requiring all patent lawyers lawfully established in another Member State [IPKat comment: Germany in particular, one suspects] wishing to provide services temporarily in Austria to first enrol in the special Austrian registers, insofar as registration is conditional on taking out professional liability insurance,

making patent lawyers lawfully established in another Member State wishing to provide services temporarily [IPKat comment: why only temporarily? Why not also permanently?] in Austria subject to disciplinary supervision by the Austrian authorities, even as regards sanctions for conduct other than the serious breach of professional duties,

making any provision of service by a patent lawyer lawfully established in another Member State wishing to provide services temporarily in Austria conditional on taking out professional liability insurance,

requiring patent lawyers lawfully established in another Member State temporarily wishing to provide services temporarily in Austria to instruct a locally registered domestic lawyer or to appoint a person residing in Austria as process agent.

order Austria to pay the costs.

Pleas in law and main arguments

According to consistent case-law of the Court of Justice, Article 49 EC requires not only the elimination of any kind of discrimination on the grounds of nationality against a service provider established in another Member State, but also the removal of all restrictions - even if they apply uniformly to domestic service providers and service providers who are nationals of other Member States - which are liable to prohibit, impede or render less attractive the activities of service providers established in another Member State in which they legally provide equivalent services.

According to the Commission, the Austrian legal provisions regarding patent lawyers represent a restriction on the freedom to provide services within the meaning of Article 49 EC, by requiring patent lawyers lawfully established in another Member State wishing to provide services temporarily in Austria to take out professional liability insurance, to enrol in the Austrian register, to submit to the disciplinary supervision of the Austrian Patent Lawyers Association and, if they wish to represent clients, to instruct a locally registered domestic lawyer.

Those requirements are liable to impede the temporary provision of services in Austria by a patent lawyer lawfully established in another Member State, or at least to render the provision of such services less attractive. That is to say that compliance with the legal provisions of both the Member State of establishment and the Member State in which the service is provided places an additional financial burden on the service provider, since he has to familiarise himself with the provisions applicable in the Member State in which the service is provided; in addition, he is subject to two regulatory systems, without the Member State in which the service is provided taking into consideration the rules to which he is already subject in the Member State of origin. Moreover, the rules in issue are also likely to discourage consumers from enlisting the services of a service provider established in another Member State, as this generates additional costs that are not incurred if the service provider is Austrian.

National provisions that prohibit, impede or render less attractive the exercise of the fundamental freedoms guaranteed by the Treaty are compatible with the Treaty only if, first, they are justified by imperative requirements in the public interest, second, they are applied without discrimination, third, they are suitable for achieving the objective which they pursue, and, fourth, they do not go beyond what is strictly necessary to attain that objective. The recognition of interests as imperative requirements in the public interest is limited to those interests that are not already protected by provisions to which the service provider is subject in his Member State of establishment.

The Commission is of the view that the restrictions in dispute are not allowed as a derogation expressly provided for by the Treaty or justified, in accordance with the case-law of the Court of Justice, by overriding reasons relating to the public interest. The requirements in question to which patent lawyers established in other Member States are subject go beyond that which is necessary to achieve the objectives of consumer protection and the proper conduct of proceedings."

1 comment:

Matthew said...

A general comment.

This whole area of temporary service provision, especially professional services (and B2B), is set to appear more and more before the ECJ in the coming years. Two main reasons. First, the state of EU services law is relatively unsettled, growing and complex. Second, the recent liberalising EU legislation is unlikely to clear things up, at least substantively. Both direct actions and referrals will feature, as the Commission sees this as a priority for the Lisbon Strategy etc.

As for IP, the intangible, awkward nature of most services and the shift toward service provision as the dominant economic activity (and growingly, as a source of 'value added'), means there are interesting times ahead. IP and services could end up being well-suited to each other, especially trade marks.

Regarding the IPKat comment as to 'why only temporarily? Why not also permanently?', my initial thought is it reflects one of the distinctions between Article 49 and Article 43 EC Treaty respectively.

Matthew

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