Tuesday 18 November 2014

Whatever it takes: the Advocate-General’s opinion on the EU’s unitary patent

Steve Peers

Today’s two opinions (see here and here) on the legality of the EU rules on the unitary patent would, if followed by the Court of Justice, finally make way for the EU’s patent plans to bear fruit. However, this would be at the cost of compromising some established principles of the EU legal order.


The European Union (and previously, the European Community) have struggled for decades to agree on patent rules. Treaties between Member States on patents were signed in 1976 and 1989, but never came into force. A proposed EU Regulation was agreed in principle in 2003, but the deal was regarded as unworkable because of its translation requirements.

The Treaty of Lisbon, in force 2009, then created a specific legal base for the adoption of EU intellectual property rules (Article 118 TFEU). It provides for the main rules to be adopted by the ordinary legislative procedure (qualified majority voting in Council, joint power for the European Parliament). However, the languages rules, which apply to translations of the patent (or patent claims), must still be agreed by unanimity.

Discussions on a proposed EU patent were revived starting in 2008, and the rules on the patent were agreed by the time that the Treaty of Lisbon entered into force, except for the languages issue. Due to a deadlock on that point, most Member States eventually agreed to trigger the process of ‘enhanced cooperation’, ie adopting EU legislation that applied to some Member States, but not others.

The enhanced cooperation process is different from the specific opt-outs that some Member States have as regards EU economic and monetary union and justice and home affairs law. The relevant Treaty rules set out a two-step procedure. First, enhanced cooperation must be authorised by the Council (by a qualified majority vote of all Member States): this requires also a request by a group of Member States, a proposal by the Commission, and the consent of the European Parliament (EP). Secondly, the legislation to implement enhanced cooperation must then be adopted using whichever EU procedure would usually apply, with the exception that only the Member States participating in enhanced cooperation get to vote.

This process was applied first of all in 2010, to authorise a group of Member States to adopt EU rules on choice of law in divorce. That case was not controversial. Since the authorisation of enhanced cooperation as regards patents in 2011, the process has been used once more to date, to authorise a group of Member States to adopt a financial transaction tax. The UK challenged the latter decision, but the CJEU rejected its challenge this spring, essentially on the grounds that the UK was only challenging the legality of the substance of the planned tax. But that issue cannot not be raised, as long as the participating Member States have not yet adopted the EU law implementing enhanced cooperation as regards the tax (see the earlier discussion on this blog). Those Member States still haven’t adopted such a law; when and if they do, a second challenge by the UK is likely.  

Similarly, the EU patent legislation has been challenged at both steps of the enhanced cooperation procedure. The initial authorisation of enhanced cooperation regarding patents was challenged by both Spain and Italy, each of which objected to the languages rules in the planned legislation, which provided for the key translations to be in English, French and German only. They lost this initial legal challenge in 2013, when the CJEU ruled that the conditions for authorisation of enhanced cooperation were satisfied.

In the meantime, the participating Member States adopted two Regulations implementing enhanced cooperation in this area at the end of 2012: one of them concerns the substantive rules governing a ‘unitary patent’, while the other governs the language rules.  Spain (this time without Italy) challenged these measures in turn; those two challenges are the subject of today’s opinion.

The EU legislation on this issue is closely linked to two international treaties. First of all, the European Patent Convention, agreed in 1973, which binds all EU Member States and a number of non-Member States as well. That treaty sets up a legal framework for registering a patent in a number of European countries, by means of an application to the European Patent Office which it sets up. This results in a ‘European patent’, but the legal title concerned is not genuinely uniform, but depends on the national law of each of the countries where the patent is registered. The point of the EU legislation is to create a form of European patent that will have uniform existence in all of the participating Member States, also reducing the costs of translation that would otherwise apply.

The second treaty concerned is a treaty among Member States creating a Unified Patent Court, in order to reduce the costs of litigation concerning European patents and the planned unitary patent. (Although the CJEU had objected to aspects of these plans in its Opinion 1/09, Member States believe that they have addressed the Court’s concerns). That treaty will come into force once thirteen Member States, including France, Germany and the UK, have ratified it. So far five Member States have, including France (UK ratification is imminent). The application of the EU’s unitary patent law is dependent upon this treaty coming into force, and the unitary patents will only be valid in Member States which have ratified the treaty (all Member States except Spain, Poland and Croatia have signed it; all Member States except Spain, Italy and Croatia participate in the Regulations).

The opinion

Spain’s legal arguments against the two EU Regulations differ somewhat. As regards the main Regulation, Spain argues that it is invalid because it creates a unitary patent dependent upon the acts of the European Patent Office, whose acts are not subject to judicial review. Secondly, the Regulation does not create ‘uniform protection’ within the meaning of Article 118 TFEU. Thirdly, there is a ‘misuse of power’, ie enhanced cooperation has been used for a purpose other than the Treaties allow for. Next, the Regulation breaches the rules concerning the conferral of implementing power upon the Commission, because it gives power to the Member States to decide on issues such as renewal fees.

As regards the languages Regulation, Spain argues that the special status of the French, English and German languages is discriminatory. Also, it argues that there is no legal power for the EU to regulate language issues in the event of a dispute, as the Regulation does, and that the Regulation violates the principle of legal certainty.

In both cases, Spain argues that the rules on adopting implementing measures are invalid, since powers to implement EU law have been granted to a non-EU body, the European Patent Office. Also, it argues that making the application of the Regulations dependent upon the ratification of the treaty creating the unified patent court breaches the principle of the autonomy of EU law.

The opinion of Advocate-General Bot rejects all of these arguments. In his view, the main Regulation does create ‘uniform protection’, since it gives unitary status to a European patent that would otherwise be dependent upon different national laws. While the Regulation does refer back to national law, it does so as a form of (in effect) mutual recognition, ensuring that the national law governing each unitary patent governs the validity of that patent in other participating Member States. He does not believe that the argument regarding judicial review of the European Patent Office has merit.

Next, he argues that the EU legislature could confer power on issues such as renewal fees back to the Member States, rather than the Commission, since there was no need for uniform rules at EU level (which is when the Treaty requires implementing powers to be conferred upon the Commission) in this case.

As for the autonomy of EU law, he argues that the CJEU cannot review the validity of the treaty creating a unified patent court. It does not violate the autonomy of EU law to make the implementation of the Regulations dependent upon the entry into force of that Treaty, given the close link between the judicial system for patent protection and the patent system as a whole. Indeed, he suggests that the ‘principle of sincere cooperation’ set out in the Treaties requires Member States to ratify the treaty creating the separate court, in order to ensure that the unitary patent is effective. 

The translation rules are also acceptable. While it is discriminatory to confine translations to three languages only, it is not disproportionate in light of the need to ensure the cost-effectiveness of the patent. Finally, the Advocate-General argues that the principle of legal certainty is satisfied, since only one language version is authentic. 


In principle, this case is important because it raises questions about the substantive grounds governing the implementation of enhanced cooperation. However, in practice only the argument relating to discrimination touches upon those substantive issues. And furthermore, in this case the discrimination argument doesn’t concern the nature of enhanced cooperation as such: the languages argument could equally be made against an EU legal measure which applies to all Member States, but which allows for the use of a limited number of languages only. Indeed, such an argument was made (unsuccessfully) against the translation regime of the EU trademark (the Kik judgment), which differs from the EU patent because it puts Spanish and Italian on an equal footing with the other three languages.  It looks as if we might have to wait for the legal challenge to the future financial transaction tax before the substantive rules on enhanced cooperation are interpreted by the CJEU.

But while the opinion doesn’t have much to say about enhanced cooperation as such, it has a lot to say about other forms of unorthodox law-making by the EU institutions. While the details and the substantive rules are of course different, it’s clear that on this front, there’s a lot in common between the EU’s unitary patent rules and the recent developments regarding economic and monetary union. Admittedly, in the former case, the EU is trying to kick-start a major harmonisation project for the umpteenth time, whereas in the latter case, it is trying to save the flagship of European integration from sinking. But in both cases, it is resorting extensively to treaties outside the legal order, such as the treaty approved by the CJEU in its Pringle judgment, as well as differentiated integration within it. Equally, it is creating new rules for the EU institutions (such as the powers for the European Central Bank being challenged in the pending Gauweiler case), including the deferral of power to Member States or international bodies (approved here by the Advocate-General, in spite of the Kadi precedent in which the CJEU frowned on decisions being made for the EU by a committee of the UN Security Council).

As with economic and monetary union, EU patent law will therefore (if the Court follows the opinion) be established and survive in a sui generis environment, in which many of the usual rules which govern the EU legal order do not apply.  Time will tell whether these two areas of law remain the exception in this respect, or begin to become the rule.

Barnard & Peers: chapter 5

1 comment:

  1. As regards the fourth and fifth plea in case C-146/13 on Article 291 (2) TFEU and Meroni, I am not sure about the reasoning of AG Bot.

    As you note, according to the AG no uniform rules as regards renewal fees are required, which is why Article 291 (2) TFEU does not apply. However, according to the AG the system does provide uniform protection. In a number of other areas uniform protection or validity is created by giving EU agencies certifying and authorising powers. The fees payable to those agencies are normally determined by the Commission, as was the case in the first ruling of the Court on the demarcation line between Articles 290 and 291 TFEU (C-427/12): fees payable to ECHA under the biocidal regulation are determined in an implementing act. Now the AG seems to suggest that no uniform conditions are required because they are already uniform in the legislative act which the Member States must execute mechanically (thus under Article 291 (1) TFEU (cf. para 126 'Le législateur de l’Union ne laisse ainsi aucune marge d’appréciation aux États membres participants à cet égard.') However, the Articles invoked by the AG (11, 12, 13) do seem to leave some scope, after all why else would the regulation say (art. 9 (2)) 'Decisions of the Select Committee shall be taken with due regard for the position of the Commission and in accordance with the rules laid down in Article 35(2) of the EPC.'

    The AG found that the ruling of the Court in 270/12 did not need to be applied, but it could have been, since the Court in that case found that the legislator could empower other bodies (such as the select committee?) than those foreseen in articles 290 and 291 TFEU to adopt executive type acts.

    Whether Meroni could be applied to international organisations is another question. At least in its opinion 1/76 (para. 16) the COurt seems to have hinted at this by using the same kind of language as that used in Meroni.