RECAP & UPDATE: the Unitary Patent System and Unified Patent Court

Central Division seat decision may be delayed until 2012, but JURI will vote on the unitary patent provisions today

In the U.S. we have a television channel called C-SPAN -- Cable-Satellite Public Affairs Network. C-SPAN covers our federal government proceedings, debates, sessions and other public affairs programming. If you want to watch a House or Senate debate, tune into C-SPAN. Comedian Seth Myers during the White House Correspondents Dinner this Spring joked that "C-Span is the official network of wide shots of empty chairs. C-Span is one unpaid electric bill away from becoming a radio station." Funny because it seems true. However, at least there is a channel that allows US citizens to know what is going on in their political system. The AmeriKat wished there was a European version of C-SPAN, what with interim periods of TV blackouts, radio silence and suspiciously positive press conferences that plagued events two weeks ago in Brussels regarding the proposed unitary patent system and unified patent court.

Minister Mikolaj Dowgielewicz

Last Friday, Poland’s European affairs minister Mikolaj Dowgielewicz stated that it would be unlikely that the proposed unified patent court agreement would be agreed before the end of the year. As reported by Bloomberg, Mr Dowgielewicz stated that

“Essentially the whole package is negotiated, it's final. Nevertheless, due to the resistance to compromise of one or two member states, we will not decide this year on the seat of the court… This is an issue where we have just hit the wall”. 

Again, it seems that the hitch in the proposed patent package's happy conclusion has nothing to do with the substantive provisions of the Proposed Regulation, but in the location of the Central Division.  The AmeriKat may be feeling incredibly cynical/hopeful but she remains unconvinced that the only outstanding issue between all the Member States is the location of the Central Division and not the drafting of the substantive provisions (see eg earlier posts here, here, here and here).  

Background

Readers will be well aware of the long background of the proposed European unitary patent and unified patent court system that was intended to create a single, streamlined, user-friendly and cost-effective patent system for all of Europe avoiding the need for patentees to separately enforce a patent in all of the European states. In 2009, discussions between EU Member States led to proposals for the European and Community Patent Court (ECPC) which instigated concerns by some Member States, including Ireland, Spain and Italy who questioned whether the proposed unified patent court was compliant under the EC Treaty. 

European Court of Justice

Under Article 218(11) of the Treaty the European Council requested the opinion of the Court of Justice (CJEU), which delivered its Opinion (1/09) on 8 March 2011. The Court held that the draft agreement was incompatible with the EU treaties because it would deprive Member States' national courts of the power to refer questions of EU law to the CJEU for preliminary ruling under Article 267 TFEU and, if a decision of the unified patent court were to be in breach of EU law, it could not be subject to infringement proceedings by the Commission nor could it give rise to financial liability on behalf of EU Member States. 

Now with guidance from the Court and the Polish Presidency's term ticking down to the end of 2011, a sudden wave of momentum, by way of drafts and re-drafts of the Draft Agreement on the patent court and Proposed Regulation dealing with the creation of the unitary patent and the unified patent courts started circulating. Almost as soon as those drafts saw the light of day, concerns regarding the substantive provisions in the Regulation, as well as the location of the seat of the Central Division and Appeals Court for the proposed court system began to fly. Following October's unanimous resolution of the Intellectual Property Judges Association against the inclusion of Articles 6 to 8 in the Regulation, the interest, debate and fevered discussion across the European patent profession in the unified patent system began in earnest. Prodded into action by a certain QC, the AmeriKat herself began to investigate what was actually going on in Brussels regarding the substantive law and seat of the unified patent court. With very little information being disseminated from official channels, save for the odd draft or press release, the AmeriKat struggled to keep clear what exactly was going on in Brussels regarding the proposed system -- dubbed by EU politicians as the “patent package consisting of unitary patent protection, the unified court and translation arrangements.  

Articles 6 to 8 of the Regulation and other problems

Following the circulation of several versions of the Draft Agreement and Proposed Regulation during the Summer and early Fall of 2011, on 21 November the EU’s Parliament’s Legal Affairs Committee, otherwise known by its French acronym “JURI”, held a debate which included a debate on the proposed patent proposals and Articles 6 to 8 of the Proposed Regulation. Articles 6 to 8 set out the substantive law on patent infringement as it deals with direct infringement, indirect infringement and limitations to infringement ( previous proposed amendments here and here). Because the provisions set out in Article 6 to 8 are not just in the Draft Agreement but in the Regulation, it has the effect of making substantive patent law part of EU legal order. As such, patent cases involving the new unitary patent would be susceptible to the preliminary ruling jurisdiction of the Court of Justice of the European Union (CEU/ECJ), while old European patents would not. The consequential delays, uncertainty and substantive patent law being interpreted by an unspecialized judiciary would in fact defeat the system that the unitary patent system was intended to create; the proposals therefore caused considerable concern across the European patent profession. 

Ms. Cecilia Wikstrom

Although it was the concern over Articles 6 to 8 that lead the warpath other important concerns regarding the substantive provisions in the Proposed Regulation and the Draft Agreement were raised by several organizations and parties. These concerns expressed by patent experts such as the Intellectual Property Judges Association's unanimous resolution, Professor Krasser’s opinion, Professor Sir Robin Jacob's opinion (here) and the arguments of Dr Jochen Pagenberg of EPLAW, were picked up by Ms Cecilia Wikstrom, MEP from Sweden, who raised these concerns during the debate. However, her articulated concerns were met with a very firm brush-off from Mr Bernard Rapkay, the Legal Affairs Committee Rapporteur for the unitary patent protection portion of the proposed patent package, who dubbed these expert’s views, including some of Europe’s patent judges views, as views of only “some experts” and with “interests at play.” It was argued, namely by the Commission’s legal service, that Articles 6 to 8 were necessarily to be included into the Regulation in order to allow a legal basis under Article 118. 

However, many lawyers argue that the adoption of the Regulation is perfectly possible without inclusion of Articles 6 to 8 in the Regulation, but the Commission’s reasoning to the contrary has not been forthcoming. It seemed that, via Mr Rapkay and Mr Kalus-Heiner Lehne, rapporteur for the agreement on the unified patent court and the chair of the Legal Affair’s Committee, the two main political groups of the European Parliament, the EPP and the S&D, were positioning themselves to keep Articles 6 to 8 in the Regulation and “not to tinker with the structure too much.”

The redacted elements were bad, but
maybe not this bad....

Interestingly, a document dated 11 July 2011 has recently come to light from the Luxembourg delegation to the Polish Presidency.  The document entitled" Creating a unified patent litigation system - Note from the Luxembourg delegation  " sets out concerns that the draft agreements creating a unified patent system are not compliant with EU law and still not compliant with the decision of the CJEU, despite the EU no longer being a signatory.  Questions raised by the Luxembourg delegation (and now home of the Appeals Court) included:

"Under these circumstances, even if there were no exclusive EU competence, is it legally possible for EU Member States to set up an international court between themselves, to apply EU law (primary law, Charter of Fundamental Rights, secondary legislation) without the EU being involved in the conclusion of the agreement setting it up?"  

It seems that, despite protestations from some factions of JURI, there were more concerns regarding the proposed patent package form other Member States than one would have been lead to believe from the various press conferences and releases.  At a Competitiveness Council meeting on 29 September 2011, the Legal Service was asked about the compatibility with the CJEU Opinion.  A written note of advice dated 29 October 2011 from the Council's Legal Service was compiled (see here), however, much of the operative parts of the document has been redacted as it "contains legal advice protected under Article 4(2) of Regulation 1049/2001."  The AmeriKat and IPKat meow in unison "transparency" (see previous posts here and in-depth report on these documents by IPKat friend Axel Horns here who discusses what the EU may be hiding).     

The problem with “untelevised debates” and the unified patent court 

A press release issued by the European Parliament after the debate on 1 December 2011 entitled “Done deal on the EU patent” took many observers by surprise and confirmed the position that the rapporteurs were pushing to finalize the package as quickly and with as few changes as possible.  The press release stated that the Legal Affairs Committee and the Polish presidency’s negotiators struck a political agreement on the three proposals that form the “EU patent package”. The next day, on Friday, a Memo and Agenda for the Competitiveness Council’s meeting that was to take place the following Monday was published. The Agenda stated that on the morning of Monday, 5 December 2011 policy debates on the proposals for creating unitary patent protection and applicable translation arrangements would be debated (as legislative deliberations), as well as the draft agreement on the Unified Patent Court and draft statute would take place. According to the press release, the Competitiveness Council had reached informal political agreement on the draft texts of the unitary patent protection and translation arrangements in June with the Parliament. The Polish Presidency would also present for agreement issues relating to the patent court including the seat of the Central Division and Appeals Court.

Polish Deputy Prime Minister
Mr Waldemar Pawlack

However, when one tuned into the Competitiveness Council’s scheduled debates, a blank screen or debates about other European issues were presented. It later transpired that the Council’s Agenda had been updated to delete the legislative deliberations and the debates on the unified patent court were to be held in camera (i.e. without cameras). Later that afternoon, a press conference of the Competitiveness Council was held which had Mr Waldemar Pawlack, Deputy Prime Minister and Minister of Economy for Poland, stating that an agreement on the patent package had been reached and would be “adopted by Council and commission in first reading”. This was despite him also saying there were “a number of outstanding issues still pertaining to the unified patent court and unitary patent protection” that required agreement. Of course, without any further information, it was impossible to understand what had and had not been agreed. A further debate was to be held on the patent package, including the unified patent court, later that afternoon –- but again it was not televised. Some commentators at the time suggested that debates on the unified patent court were not televised because, given that the EU was no longer a signatory, the agreement was in effect an international agreement and thus did not need to be televised as EU business. However, further discussion on this point suggested that there was no legitimate reason why these debates could not have been televised: that it was merely convenient in order to allow Member States to put their position forward in respect of hosting the seats of the Unified Patent Court.

The two countries who are to thank for the slow-down
in the patent reform legislation? (Photograph: Xinhua/
Luo Huanhuan)

Later that night, a further press conference was held. Mr Pawlak again announced that the Competitiveness Council had reached an agreement regarding the substantive issues which basically adopted a compromised position presented by the Polish presidency. The only thing outstanding was the location of the Central Division. According to the press conference the two unnamed Member States had refused to agree to the entire package over a dispute as to the location of the seat of the Central Division. It later became clear that the three countries up for discussion to host the Central Divisions was France (Paris), as proposed by the Polish Presidency, Germany (Munich) and the United Kingdom (London). It was obvious to many commentators, given the comments of the French Commissioner Barnier in the late night press conference (references to those countries being the first defend the single market), that the two countries that intervened were Germany and the U.K. The Polish Presidency’s website later confirmed that the Court of Appeal would be housed in Luxembourg, with Lisbon and Ljubljana hosting the seats for the mediation and arbitration centers. Although the identity of the Member States was not certain, what was clear was that their intervention bought the Member States and the patent profession some breathing room to try and resolve other concerns about the proposed patent package, including who was to receive the Central Division.

A press release published in the early hours of the following morning (Tuesday, 6 December 2011) stated that, although “further work is still needed”, the Polish Presidency’s compromise on the substantive provisions had been “broadly accepted”. The AmeriKat at the time, and even now, had doubts that the only issue of contention between the Member States was the location of the Central Division. However, the early morning press release stated that a provisional agreement on the substantive provisions had been achieved between the Council and the Parliament as well as the Commission (“the Trilogue”), although the AmerIKat heard at the time that the Council had not agreed the substantive provisions.

What’s next? 

The European Parliament

Following two very busy days in Brussels on 5 and 6 of December 2011, the AmeriKat kept her ear to the ground to figure out what had really happened in Brussels.  It was evident from the conversations she had with various sources from Member States that even those in the meetings were unclear exactly what had transpired.  What was clear that the "interventions" by the two Member States had the desired effect in slowing down the legislative speed at which the proposals were hurtling towards signature.  It was because of these "one to two member states", according to Mr Dowgielewicz, that the final agreement will not see realization until perhaps next year.  The final agreement, the AmeriKat assumes, given the various press releases, refers to the patent package of three elements - unified patent court, unitary patent protection and translation requirements -  which are to be approved together.

Although there is reported political agreement from the Trilogue on the substantive provisions, there has to first be a vote by JURI which is due to take place today from 10:00 to 12:30 with the Council due to reach agreement on 22 December (although this may now be unlikely) before a plenary vote by MEPs in February 2012.  The vote for tomorrow is listed as follows:

• 18.0 (JURI/7/05848) Enhanced cooperation in the area of the creation of unitary patent protection 
• 19.0 (JURI/7/05847) Enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements 
• 20.0 (JURI/7/06168) Jurisdictional system for patent disputes

The AmeriKat's idea of slowing things down...

The AmeriKat understands that Ms Wikstrom and the Liberal Committee will be voting against the inclusion of Articles 6 to 8 (assuming the vote is split up in elements and not voted as a whole package) but given that the EPP and S&D possess 15 of the 25 votes in the Legal Affairs Committee and given that the Trilogue has reached political agreement on the substantive provisions -- including Articles 6 to 8 -- the odds are not good. Despite this, the AmeriKat knows that IP professional bodies are not giving up the fight be it for the fight for the seat of the Central Division and/or the substantive provisions.  Indeed, Ms. Wikstrom acknowledged that people could still influence the process by talking to their national ministers regarding Articles 6 to 8.  The AmeriKat has recently received in her in-tray two further press releases -- one from EPLaw (here) and one from FICPI (here)  --continuing to campaign to a rethinking of the proposed patent packages, addressing particular concerns with the proposed texts and urging European politicians to slow down the legislative rush.  The closing sentences of EPLaw's press release says:

"This rush is totally inappropriate after so much time and so much effort devoted to what was promised to become the most efficient litigation system in Europe. Even worse: the deficiencies of the current proposal are so fundamental that the system is bound to fail. Industry cannot afford a failing system as the only means for the protection of their greatest assets. After 40 years of work it is surely worth taking a few more months to get it right and avoid disaster."

"Quite", purrs the AmeriKat.  However, as President of the EPO Benoît Battistelli said in his blog post, even if it is unlikely that there will be a conclusion on the patent package under the Polish Presidency, it is likely that the incoming Danish presidency will be quick to pick up the baton.  Hopefully when they do, it will be with fresh eyes and the luxury of addressing these issues at the start and not at the end of their term. 

A chronology of posts

• Welcome to London, Home of the Unified Patent Court (3 November 2011)- here
• Unified Patent Court requires more scrutiny, says European Scrutiny Committee - here
• A "done deal on EU patent", what is going on with Unified Patent Court (2 December 2011) - here
• Update:  Seat of future Unified Patent Court set to be agreed on Monday (2 December 2011) - here
• Are EU ministers driving us towards a European patent disaster? (UPDATE) (5 December 2011) - here 
• Live Update: Competitiveness Council has "reached an agreement on the patent package" (5 December 2011) - here
• Update: Latest draft of Proposed Regulation on unitary patent protection and other news (UPDATED) (5 December 2011)- here
• LIVE UPDATE: Delayed agreement on unified patent due to reservations on location of Central Division (5 December 2011)- here
• UPDATE: “Further work is still needed” Council says after debate on EU patent package (6 December 2011) - here 
• Will the German exchequer be laughing to the bank courtesy of Article 10 of the proposed Regulation on unitary patent protection? (UPDATED) (6 December 2011) - here
• UPDATE: Luxembourg to get Appeals Court, Brussels I and the Unified Patent Court, and more news (UPDATED) (6 December 2011) - here