Spain takes Parliament and Council to Court over Unitary Patent Package

The battle between David and Goliath is entering the second round. Spain has brought two last minute actions before the Court of Justice (Cases C-146/13 and C-147/13) against Regulations 1257/2012 of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection (OJ 2012, L 361/1) and 1260/2012 on the applicable translation arrangements (OJ 2012, L 361/89). There is no parallel action against the Regulations to be expected from Italy, which already signed the Agreement on a Unified Patent Court.

The pleas in law of the Spanish action are not yet accessible, but the chances of success do look promising. The mutation from an autonomous patent for the European market to the hitherto unknown schizophrenic creature of a “European patent with unitary effect” has left deep scars, and every one of them could be taken up before the Court.

The Achilles' heel of the Regulation remains Article 118 (1) of the TFEU, on which the “European patent with unitary effect” is based. We know next to nothing about the implications of the unitary effect and even less about its legal nature. The unitary patent is built upon a patchwork of international, EU and national law that may barely be clear to the drafters themselves. The latest conjuring trick of the Commission and the Parliament didn’t really change this for the better. By hiding the actual substance of the patent, its scope and its limitations, behind an – admittedly clever – system of legal referrals, the regime has become even more complex. As a result, the CJEU is confronted with a patent which is in fact just an empty shell. This makes the Regulation either invalid for a lack of legal determination or it will force the Court to define the substance of the unitary patent out of the blue. It will however not prevent the Court from exercising its judicial review over the European patent system. The idea of keeping the CJEU out of the game by stripping down the Regulation was doomed to fail from the very beginning.

The fact that the unitary effect is attached to a European patent only as an accessory feature does not only lead to complexity, but also casts doubts on the validity of the protection thereby afforded. Not only is the substance of the unitary patent governed by an international agreement, which is in itself peculiar enough, but also its fate depends on international law, namely the EPC. This turns the primacy of Union law upside down.

Another weakness of the Regulation are the rules on the unitary patent as an object of property. Article 7 of the Regulation entails an indirect discrimination on grounds of nationality which results from the fact that unitary patents applied for by Spanish enterprises will always be governed by a foreign law.

It is also not unlikely that Spain will put its finger on the Court’s greatest treasure, the Internal Market. There will almost necessarily be a distortion of competition between the Member States where the unitary patent is available and those where it is not. The very reasons which are advanced by the Council and the Commission in order to praise the advantages of the unitary patent testify to that. The Spanish will not be satisfied with the crumbs if the Germans and the French get the cake, and rightly so. For them it’s either all or nothing.

All of these issues remain subject to discussion, but one thing is certain: The Spanish actions against the Regulations put the entire project on hold, once again. Whereas “America invents”, Europe has reached the final burnout phase. The least that can be expected from a patent system is to provide some degree of legal certainty for investments in innovation. Considering that average proceedings at the CJEU take about 22 months (the case against enhanced cooperation has been before the Court for almost two years now), certainty cannot be expected soon. It is therefore quite unlikely that the first unitary patent will see the light of day before Putin’s fourth presidential term. That, at least, is pretty sure to come.

For the time being, we will have to wait for the Court’s judgment on the validity of the Council decision of March 2011 authorising enhanced cooperation in the area of unitary patent protection (Cases C-274/11 and C-295/11). Should the CJEU invalidate the decision, the two Regulations implementing enhanced cooperation will lack a legal basis anyway.

This is not the place for fortune telling, but a glance into “history” shouldn’t hurt. How did the fight between David and Goliath end up again?