European Patent Package

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At the European Council meeting of June 28 - 29, the heads of government of the European Union reached agreement on what should be the last main issue delaying adoption of a “European Patent Package”.

It will be recalled that in 1975, soon after the European Patent Convention was signed, a further treaty, the Community Patent Convention, was also signed to create a unitary patent for the then European Community as an alternative to the bundle of patents resulting from the European Patent Convention. However, neither the Community Patent Convention, nor later proposals having the same objective have come into effect. There have been two main problems: one that of the language or languages to be used for the unitary patent; the other how to provide an efficient system for litigation of European patents. As outlined below, the European Council agreement addresses the second of these.

As to the language issue, two years ago, the European Commission proposed that, subject to some transitional provisions and other safeguards, the language requirements should be the same as for the European Patent, namely that the claims should be in English, French and German and the specification in English, French or German. Italy and Spain demurred. The remaining twenty-five EU members then sought and obtained permission to use a procedure for “enhanced cooperation” to implement a patent package excluding Italy and Spain. Italy and Spain have challenged this in court, but it is not expected that the challenge will succeed.

The “parent package” that now en route to adoption has three components:

1) a proposed EU regulation creating a unitary patent for the 25 cooperating EU countries;
2) a proposed EU regulation on the language to be used for the unitary patent; and
3) a separate treaty establishing a new European patent court system that will ultimately apply not only to the new unitary patent but also to all patents issued by the European Patent Office for countries that are members of the European Union.

It was the June 29 agreement on the latter that has opened the door to likely adoption of the entire package, although details of all three could change as they pass through the legislative steps required for final adoption.

In essence, the EU regulation on a unitary patent will provide that for patents prosecuted through the European Patent Office, in addition to the possibility of designating individual countries for protection, it will, at the applicant’s option, be possible to designate a unitary EU patent covering all of the 25 participating countries. The regulation will set out the substantive law provisions as to what constitutes infringement, possible defenses to infringement actions and the property aspects of such a patent. These are, however, essentially the same as those of the 1975 Community Patent Convention, which for the most part are already part of the national law in EU member countries.

The regulation on translation provides that the language requirements will, as noted above eventually be the same as the requirements of the European Patent Office, with a subsidy for applicants from EU member countries for which English, French or German are not a national language and who file applications in one of their own national languages. It is expected that machine translations will eventually avoid the need for human translation and the costs associated therewith. For a transitional period, of a maximum 12 years, those European patents that are to have unitary effect and are granted in French or German will need to be translated into English. The ones granted in English will need to be translated to another official language of the EU. These translations will be required until high-quality machine translation becomes available to ensure the accessibility of patent information.

The final instrument is the litigation treaty on which agreement has just been reached. This will ultimately become the only means for enforcing any patent granted by the EPO in a participating country. There will, however be a transition period during which applicants will be able to specify that they do not wish the new scheme to apply to the patent in question and that litigation on that patent continues to be before the national courts.

Under the new patent court structure, there will be a court of first instance and a patent appeals court. Although the appeals court will sit in Luxembourg, it will not be part of the European Court of Justice (ECJ). The court of first instance will have national/regional divisions and, following the June 29 decision, a three-branch central division. The country/regional divisions will be created on the basis of countries or groups of countries handling at least 50 patent infringement cases per year and will have jurisdiction over patent infringement and the ability to decide counterclaims in infringement actions challenging the validity of the patents in suit. Other challenges to validity will have to be brought before the central division. . Country/regional divisions will have the option of transferring any issues relating to validity to the central division.

As noted above, it has now been decided that the central division will have three branches. The official seat and location of the registry will be Paris and the first president of the court will be French. However, in view of the need for specialized expertise in some areas of technology, two branches will be created, one in London dealing with chemistry, including pharmaceuticals, inventions classified in IPC classification C, human necessities, and those in classification A, the other branch in Munich will deal with actions relating to mechanical engineering, classification F.

The June 29 agreement also provides that for actions to be brought to the central division, parties will have the choice to bring an infringement action before the central division if the defendant is domiciled outside the European Union. Furthermore if a revocation action is already pending before the central division, the patent holder will have the possibility to bring an infringement action to the central division. There will be no possibility for the defendant to request a transfer of an infringement case from a local division to the central division if the defendant is domiciled within the European Union.

The European Council also recommended deletion of provisions in the patent package that would give the ECJ jurisdiction over questions of substantive patent law. These provisions have been widely criticized by patent professionals in many countries who fear that the ECJ will have insufficient contact with patent cases to appreciate the nuances of cases that might be brought before it.

The two regulations will now be considered by the European Parliament and what is in effect a committee of the Council of the EU comprised of the ministers responsible or intellectual protection policy of the member countries prior to adoption. The treaty on litigation will be submitted to a diplomatic conference. It is hoped that the entire package will be adopted this year with a view to the package coming into effect next year.