The first step towards European patent harmonisation took place at the diplomatic conference held in Munich in 1973, where more than 20 European states met to discuss the introduction of a centralised European patent granting procedure. The conference concluded with the signing of the European Patent Convention (EPC) by 16 states. This was a good start towards a European patent system. The convention came into operation four years later, on 7 October 1977, and gave rise to the European Patent Organisation (EPO), which is currently made up of 36 states. Despite its flaws, the EPO must be regarded as a success.
An initiative, also originating in the 1970s, aimed to create a Community Patent. The Luxembourg Conference on the Community Patent led to the signing of the Convention for the European Patent for the common market (CPC) on 15 December 1975 by the nine member states that made up the European Economic Community at that time. However, the CPC never came into force as it was not ratified by enough countries. On 15 December 1989 there was an attempt to revive the project, but again it failed. Twelve states signed the agreement, but only seven ratified it.
It was not until August 2000 that the European Commission proposed a council regulation on the Community Patent. A political agreement on the general approach was reached, but there was no agreement on the details, in particular the language aspect. The Community Patent was thus abandoned in 2003-04. Any legislative initiative in the direction of a Community Patent seemed thus poised to fail. These efforts were not entirely fruitless, however. Without the Commission’s initiative, the London Agreement on translation costs would not have happened.
A second parallel initiative, from 1999-2005, originated from the Paris Intergovernmental Conference on 25 June 1999. Contracting states of the EPO set up a working party on litigation, which was mandated to present “a draft text for an optional protocol to the European Patent Convention which would commit its signatory states to an integrated judicial system, including uniform rules of procedure and a common appeal court”. The latest version of the European Patent Law Agreement (EPLA) is dated 14 December 2005. Although many of the underlying principles were agreed, no consensus was found on the details. The interplay between the EPLA and the Commission’s exclusive legislative competencies in this field caused problems.
In 2007 the Commission addressed the issue and suggested an integrated approach, combining features of both initiatives. It proposed a Unified Patent Litigation System (UPLS) and a Community Patent informed by the “operational conclusions” of its spring 2006 stakeholder consultation.
On 4 December 2009 the Competitiveness Council supported this with a unanimous decision on the general focus of a single Community Patent and a unified Patent Court. Together, they ultimately make it less costly for businesses – especially targeting small and medium-sized enterprises – to protect innovative technology while making litigation more accessible and predictable. This agreement is, however, conditional on the opinion of the European Court of Justice (ECJ) about the compatibility of the envisaged agreement with the EC Treaty, in accordance with Article 300 (6) EC. If the ECJ’s opinion is positive, the next step would be for the European Parliament to take a stance on the proposal.
A European patent judiciary would be structured as follows: infringement actions (including possible counterclaims for revocation) will be brought before a local or regional division, and invalidity actions before the central division. There will be a single, unified Court of Appeal. The role of the ECJ will be to provide consistent interpretation and application of EC law.
One of the remaining sensitive issues is that of the language used in the proceedings. The language of proceedings of the central division should be the language of the patent. However, the language before the Court of Appeal should be the same as that in first instance, which can be any language of the EU. Whether this will be considered acceptable for the EU ministers and European MPs is far from certain.
Other obstacles to the creation of the UPLS are likely to be: recruiting highly qualified judges across member states while avoiding political nominations; the reaching of a consensus on the rules of procedure of the UPLS; the reaction of non-EU states to the UPLS, especially in respect of the interpretation of law by the ECJ and the location of the Court of Appeal. The most important challenge that the UPLS will face is to be sufficiently cost-efficient, reliable and predictable so as to gain the trust of industry, particularly the biopharma, high-tech and telecoms sectors.
The road towards the UPLS is still full of pitfalls and the Commission is well aware of this. It sees the UPLS being in place at the earliest in 2018, after which there will still be a transitional period of five years, during which proceedings for infringement or for revocation of a European patent may still be initiated before the national courts.
Benoît Strowel is head of the European IP practice at Howrey