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Back in March we noted that, after their previous joint challenge with Italy against the unitary patent system, Spain had filed two further actions, C-146/13 and C-147/13, at the CJEU against the European Parliament and the European Council. No details were available at the time as to the content of these actions. However, over the weekend this all changed with the publication on InfoCuria of the two actions.
Details of the actions and our initial thoughts are below. In the interests of full disclosure I should probably point out that our initial thoughts are ones of confusion: “what Treaty is that?”, “what does that mean?”, “Have you heard of Meroni?” and “Who’ll be the new Doctor?”*
OK, so firstly, the pleas in law and main arguments.
Action C-146/13 is in respect of Council Regulation (EU) No 1257/2012 [implementing enhanced cooperation in the area of the creation of unitary patent protection]. The pleas and arguments are given as:
- Breach of the values of the rule of law in so far as a regulation has been established on the basis of a right granted by the European Patent Office, whose acts are not subject to judicial review.
- Non-existence of an act of the European Union and, in the alternative, lack of a legal basis for Regulation No 1257/2012 in that it does not introduce measures guaranteeing the uniform protection envisaged in Article 118 TFEU [The Treaty on the Functioning of the European Union].
- Misuse of power through the use of enhanced cooperation for purposes other than those provided for in the Treaties.
- Infringement of Article 291(2) TFEU and, in the alternative, misapplication of the Meroni case-law in the regulation of the system for setting renewal fees and for determining the ‘share of distribution’ of those fees.
- Misapplication of the Meroni case-law in the delegation to the European Patent Office of certain administrative tasks relating to the European patent with unitary effect.
- Breach of the principles of autonomy and uniformity in the application of European Union law, as regards the rules governing the entry into force of Regulation No 1257/2012.
Action C-147/13 is in respect of Council Regulation (EU) No 1260/2012 of 17 December 2012 [implementing translation arrangements]. The pleas and arguments are given as:
- Infringement of the principle of non-discrimination by introducing a scheme to the detriment of persons whose mother tongue is not English, French or German, the scheme being disproportionate to the objective pursued.
- Lack of legal basis for Article 4 by regulating translation in the event of a dispute, which does not directly affect the language arrangements for the intellectual property right referred to in the second paragraph of Article 118 TFEU.
- Infringement of the principle of legal certainty.
- Failure to have regard to the case-law in Meroni by delegating the administration of the compensation scheme (Article 5) and the publication of the translations (Article 6(2)) to the European Patent Office.
- Infringement of the principle of the autonomy of European Union law by making the application of the Regulation dependent on the entry into force of the Agreement on a Unified Patent Court.
The Form of the order in each action is interesting and essentially amounts to a Main Request (please annul this regulation in its entirety) and an Auxiliary Request (in the alternative please annul certain specific articles in the regulation).
For Action C-146/13, the Auxiliary Request is to annul:
- Article 9(1) in its entirety [Tasks given to the EPO], and Article 9(2) [Setting up of select committee of Administrative Council of EPO] in the terms set out in the fifth plea in law in support of this action;
- Article 18(2) in its entirety [Entry into force being dependent on UPC Agreement], and all references in Regulation No 1257/2012 to the Unified Patent Court as the judicial regime for the EPUE [European patent with unitary effect] and as the source of law for the EPUE
Note: text in square brackets has been added by IPcopy for your ease of reference.
For Action C-147/13, the Auxiliary Request is to annul:
- Alternatively, annul Articles 4 [Translation in case of dispute], 5 [Compensation scheme], 6(2) [EPO task of publishing translations], and 7(2) [Entry into force being dependent on UPC Agreement] of Council Regulation No 1260/2012 of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements and order the Council to pay the costs.
For those readers, like me, not familiar with the Meroni case-law then this UK Government link helpfully explains the general context of this case-law. Essentially it relates to the delegation of power from a delegating authority to an agency, the delegating authority only being allowed to delegate powers that it possesses itself. In this case the delegating authority is presumably the European Parliament and the Council of the EU and the agency is the EPO.
The Spanish actions therefore seem to comprise general attacks (including such golden oldies as the use of enhanced cooperation to deliver the system and the language scheme discriminating against those who don’t speak English, French or German) and more specific attacks against the use of the EPO to carry out certain administrative tasks within the unitary patent scheme.
Are these actions likely to succeed? Well, to paraphrase another famous Doctor, I would answer: “Dammit, Jim! I’m a patent attorney, not an expert on EU treaty law”. Perhaps, readers who are more familiar with these matters would like to weigh in below in the comments section? Mind you, the attack on the administrative duties given to the EPO seems a bit of a stretch. Surely the EPO is best placed in this whole arrangement to handle those duties rather than another (new) agency? Also, the language attack seems like a bit of a rewarmed argument and, in any case, surely the Member States are free not to participate if they feel discriminated against on this issue?
Mark Richardson 3 June 2013
*Yes, that last one’s a bit off topic but still valid I think.
IPcopy 
Of course the Spannish recourse will succeed! All arguments are exposed since two years ago. Amendments have been proposed to fix issues raised in this recourse, but they have been ignored and rejected.
About Meroni this is simple to understand: when the EU has been empowered by the Treaties for some acts, these acts can been delegated to a non-EU body, under the requirement that such acts from this non-EU body are subject to any control to which they would have been subject if the same acts had been exercised by an EU agency. This would have been fixed by defining the unitary patent as having an autonomous character, meaning that all rules used to grant unitary patents would have been considered as included in EU law.
My first thought on reading this article was: what will Gibus say about this? So it is splendid to have an immediate answer to that. Whether the answer is right, I have no idea. But I will put another question to Gibus. Suppose both Regulations are struck down – where would that leave the Agreement? It is supposed to be an intergovernmental agreement independent of the EU and the Regulations – that the agreement is between 25 of the 27 EU members is just coincidence (!). Clearly there is a case for going ahead with the Court Agreement, even if there is no Unitary Patent. It could still give many of the advantages claimed for the Unitary Patent – faster, cheaper, uniform enforcement procedure, applicable through most of the EU. Maybe we could even bring in non-EU countries as well?
@tim You’re right UPC does not depend on the existence of the unitary patent. Nevertheless UPC is also bound to fall. There many legal arguments against the legality of this agreement. One is its compliance with CJEU Opinion 1/09. Thomas Jaeger (from the Max-Planck Institute)) has clearly demonstrated that UPC has nothing to do with the Benelux Court, which has repeatedly been taken as an example of an international court between Member States by proponents of UPC. I‘ve also shown that, according to Art. 3.2 TFEU and CJEU case C‑370/12, the UPC cannot be concluded by Member States themselves without the EU itself being a party to this agreement.
So the legality of UPC is also without any doubt: if the CJEU examines this agreement, it will be nullify. The problem is that, being an international agreement outside the EU legal order, the CJEU won’t review it… until someone involved in a ruling by the UPC raises an objection. Would Member States be wise, the UPC should not be ratified. Maybe there will be some objection during the ratification process, notably in countries where there is a thorough constitutional review of international agreement (Germany is a good candidate). But for eg. in France, government and their parliamentarian lackeys are eager to get it ratified, whatever its fate.
Therefore the future of the UPC is still quite uncertain. But if UPC manages to pass all hurdles and enter into force, it won’t stay alive very long. This is really a big problem with regard to underlying principles of the patent system, which is based on the trust given by economic players to the right granted by the State (or for this matter, the group of States, or more precisely by the for-profit organisation named EPO). There is really a great legal uncertainty on the UPC, and as far as I can see, patent lawyers are already encouraging their customers to opt-out from UPC jurisdiction.
Finally, how can you say that UPC will be cheaper? Legal fees are still unknown. Plus, I’ve seen many patent lawyers confirming that for the majority of patent cases, the UPC will be more expensive since most patents only need to be enforced in one domestic country. Do you think UPC will be cheaper for the majority of SMEs? Will it be cheaper only for patent holders or also for defenders? Don’t you think there are many reasons to think that UPC could give rise in Europe to patent trolls’ actions, which have demonstrated to generate an economic deadweight loss? And how can you say it will be faster, when any case can give rise to a recourse against the very legality of this fragile agreement? Also, do you really think that the enforcement procedure will be uniform while many aspects of patent law (patents as property objects still subject to national laws, as well as compulsory licenses, and even definitions of direct/indirect infringements and limitations thereof, etc.) are not supposed to be made uniformed by the UPC/Unitary Patent?