For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Wednesday, 27 March 2013

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?

21 comments:

Anonymous said...

The Philistines lost in Israel, but subsequently succeeded everywhere else?

Mike O'Keeffe said...

Don Quixote rides again...
The fundamental question is whether the EU patent system moves to a restricted palette of operating languages or must proceed in all languages. Doing the latter entails enourmous expense for the patentee, hence the low number of EP filings to date. Restriction should logically have gone to English only, as most (75-80%) are currently filed in English anyway. In any event, the courts in each country will have the last say.

Anonymous said...

That doing the latter is expensive to the patentee is not in and of itself a reason not to do it.

A patent monopoly is a powerful and valuable right. Those of us who make our living from procuring such a right should not lose sight of the fact that there are sound moral and commercial reasons why the process should impose onerous obligations on those who wish such a monopoly, and not give them out for the asking.

And I for one think it is quite proper that one of those onerous obligations ought to be that the patentee is at least obliged to define his monopoly in a language understanded of those to whom it is addressed.

MaxDrei said...

Anon at 12:19 contemplates: "a language understanded of those to whom it is addressed".

Based on my experience with clints from all over Asia, mainland Europe and The America, that can only be Globish (the global form of English). Take any innovative corporation on the mainland of Europe. Which engineer or scientist in that corporation is unable to function in Globish? They can't even begin to study the relevant technical literature to qualify as an engineer or scientist if they can't read English.

The real issue is "Face" and national pride, not communications between engineers, scientists and patent practitioners. When Spanish (and not English) is the language with the fastest growing number of native speakers, why are French and German, but not Spanish, privileged on the European patents front?

Anonymous said...

The pain from Spain goes ‘gainst ev’ryone’s grain
(Its bolt it’s shot it, its bolt it’s shot it)
Unity Patent goes against its grain
(It says it’s not its desire allotted)
And what does it hope to gain
On p’rade to rain?
And thereby become the bane
Drive all insane?
We’ve pain from Spain, just ‘cos it seeks in vain
(to prevent banish of language Spanish)
While EU standards preserving to feign

Anonymous said...

Anonymous at 12.19:

I don' agree with you. Actually, stronger terms enter the mind.

'obliged to define his monopoly in a language understanded of those to whom it is addressed'

If you work in the patent field, you know full well that the third party to whom a patent claim is addressed does not usually understand it, even if it is in his own language.

It's legal training that makes you understand a patent claim, combined with technical insight, not language skills.

Your argument, while nice in theory and emotionally charged, is in practice besides the point

Anonymous said...

The idea of keeping the ECJ out of the game by stripping down the Regulation was doomed to fail from the very beginning.

And yet, the IPKat was a stalwart supporter of that idea.

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.

Not any greater than the current distortion between Member States.

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.

Certain? I wouldn't be so sure. We'll see what happens when the fat lady sings.

Quite frankly, I don't see this as a David vs. Goliath battle, but rather, as some other commenters have already pointed out, as a quixotic endeavour. With the difference that whereas Don Quixote was motivated by his idealism, the motivation behind the stubborn obstructionism of successive Spanish governments in this matter has more to do with more down-to-Earth vested interests of a handful of local firms which do up to 80% of their turnover from EP validations.

A Spaniard myself, I nevertheless will be glad to see the Spanish government come out of this with a bloody nose. Instead of spending so many resources in this battle, I'd rather see my government do something more to promote local science and industry.

Anonymous said...

When Spanish (and not English) is the language with the fastest growing number of native speakers, why are French and German, but not Spanish, privileged on the European patents front?

Because of the European Patent Convention. What is striking is that the Spanish government didn't even bother to try to get Spanish included in Art. 14(1) EPC during its latest revision. I would have thought that it would have had better chances of success with such an initiative than with its current rearguard action.

It would also have a better chance of success if there were more EP filings in Spanish...

Finally, speaking of numbers of native speakers, it's worth noting that the second language by number of native speakers within the member states of the EPO is not English, French, Spanish or Italian, but Turkish!

Anonymous said...

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?

The fight between David and Goliath doesn't belong to history but to myth. Real-life Davids have more often than not been crushed...

Wouter Pors, Bird & Bird said...

I fail to see why this would put the entire project on hold. The only step required for the system to go live is the ratification of the UPC Agreement. That is in the hands of the participating countries, who are currently working on the implementation.
Actually, once it has come this far, it would not be a good idea to let those investments go to waste.
Calling the present system "schizophrenic" reflects more on the author than on the system and saying that we know next to nothing about its implications and legal nature is downright misleading.
The challenge before us is to make this system work for industry and to the benefit of innovation.

It would serve the Max Planck Institute better to devote its scientific resources to that challenge.

Phantom of the Opera said...

I did not know that Ms. Merkel was a singer. ;-)

Anonymous said...

MaxDrei said...

When Spanish (and not English) is the language with the fastest growing number of native speakers, why are French and German, but not Spanish, privileged on the European patents front?


Epo patent applications per country of residence:

US 35000
DE 27000
...
FR 9900
CH 6600
...
GB 4700
...
ES 1500
MX 64
CL 30
AR 20




Gibus said...

"What should be born in mind is that both the unitary patent regulation and the UPC agreement won’t survive a review by the CJEU of their mere legality. There is no doubt any more. As soon as Gandalf has the opportunity to be involved, his powers will kill the unitary patent package."

"It should be noted that any government that would bring such an action in invalidity before the CJEU, not only would act in its own interests, but would actually protect any firm and individual from any EU Member State. Therefore any such action should be supported by every citizen and company."

This is what I've written last month. Therefore

THANK YOU SPAIN!

(and thx Matthias for this post, if haven't missed something, this is the first one as a Kat, great news!)

Anonymous said...

@Gibus

"...both the unitary patent regulation and the UPC agreement won’t survive a review by the CJEU of their mere legality. There is no doubt any more."

Can you please explain why there is no doubt?

Patented Robot said...

While I believe that the two Regulations on the unitary patent will be rejected by the CJEU, I do not see how the Agreement, which can survive without the unitary patent, can be stopped by anyone.

Is it possible to bring the Agreement before the CJEU?

If yes, is there a deadline?

Anonymous said...

Last time Spain challenged the use of enhanced cooperation, they did not raised the use of automated translations, which is discriminatory for people not speaking french, english, or german.

Let's hope they will challenge that one this time, but I already doubt so.

Patented Robot said...

The language issue has been carefully avoided by the opinion of AG Bot in the cases pending before the CJEU.

I am quite confident that the next decision of the CJEU will not be so "blind" on that issue.

Does anyone know when that decision will be issued?

Ron said...

Two of the assumptions that underlie the new system are that it is always possible to make exact and unambiguous translations between languages, and that automated translations will become possible.

Never mind automated translations, translations made by humans can be bad enough! Some years ago I was involved in an action for infringement of a German-language EP patent, where a considerable amount of time and effort was spent on arguing whether the proper translation of the german word "ein" was the number "one" or the indefinite article "a". An out-of-court settlement rendered the question moot.

That this sort of problem is not unique can be seen from various articles and letters in the pages of CIPA, and, mutatis mutandis, will be just as relevant in the future.

See for example CIPA:
June 1977 pp 422-424 (Patent Gobbledygook";
October 1977 pp 41-210 "Patent Suicide By Translation";
February 1978 pp 209-210 "Patent Suicide By Translation: What Can Be Done?";
April 1979 Pages 324,325 "Canada's Language Problems";
March 1997, pp 183-191 "Translations-Costs & Compromise"; May 1997 pp 374-377: July 1997 pp 542-545.

Anonymous said...

I am Spanish and I think that the best option should be anly English. Why French and German, due to EPC? France and Germany want to maintain their "power" but they do not allow anyone else to get "power", it is not very fair. In addition, they can make use of the languages to make it more difficult for people with other mother tongue, and they do it! In oral proceedings before the opposition division, a German company many times speaks in German in spite of English being the language of the proceedings, but at the same time they say that they do not need any translation if the other party speaks in English. Is this fair? I think that this is klegal, ok, but tn this case German companies uses advantage rules in the game.

Anonymous said...

Dear Spanish anonymous,

Don't you think that your arguments still apply if a single tongue (say English) is chosen ?

Anonymous said...

Don't loose the point about that... Spain and Italy complains about EC patent regulations are not to get EC patents in Italian nor Spanish, but to terminate with the trilingual FR-DE-EN system which has been proven to be totally unreliable and adopt English as the sole language.

IMHO, It seems quite reasonable...

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