European Court of Justice strikes down plan to implement a unified patent litigation system

The European Court of Justice (the Court) issued an opinion recently thwarting the European Commission’s plans to introduce a unified patent litigation system.  The Court concluded that the draft agreement to establish a European and Community Patents Court (the European Patents Court) was not compatible with EU law.  The opinion follows a request by the Commission to review it’s proposal to implement the system.  A copy of the Court’s opinion can be found here.

The intention of the draft agreement was to create a court with jurisdiction to hear litigation relating to any European patent as well as “Community patents” which are currently in the pipeline.  The European Patents Court was intended to create a more efficient European patent litigation system by circumventing the barriers and inefficiencies of issues relating to jurisdiction and language.  The system would have given a patentee the ability to obtain a single decision enforceable across Europe, thereby avoiding the need to initiate proceedings in individual countries.

In its opinion, the Court refused to support the establishment of the European Patents Court on the basis that it would result in a substantial transfer of power from European member states to a new institution that did not form part of the EU.

The Court concluded:

Consequently, the envisaged agreement, by conferring on an international court which is outside the institutional and judicial framework of the European Union an exclusive jurisdiction to hear a significant number of actions brought by individuals in the field of the Community patent and to interpret and apply European Union law in that field, would deprive courts of Member States of their powers in relation to the interpretation and application of European Union law and the Court of its powers to reply, by preliminary ruling, to questions referred by those courts and, consequently, would alter the essential character of the powers which the Treaties [the Treaty on European Union and the Treaty on the Functioning of the European Union] confer on the institutions of the European Union and on the Member States and which are indispensable to the preservation of the very nature of European Union law.

As a result of the opinion, the Commission will now have to look to ways to bring the proposed European Patents Court within the control of the EU.  Whether this will be possible – or desirable – without substantially altering the nature of the proposed court, is fundamental to the question of whether the proposal to adopt a single system for the resolution of patent disputes in Europe can move forward.

The Court’s opinion does not affect the decision of the Competitiveness Council on 10 March to approve the launch of the unitary Community patent system.  The implementation the Community patent system, which will create a single European patent (thereby alleviating the need for inventors to seek patent protection in separate jurisdictions), is distinct from the Commission’s plans to create of the European Patents Court.

About the Author

James Ellsmore
James is a senior associate with King & Wood Mallesons' Intellectual Property team in Sydney. James assists clients to resolve intellectual property disputes, with a particular focus on patents, pharmaceuticals and the life sciences. He has acted for a variety of clients in matters concerning patent infringement and revocation proceedings in the Federal Court of Australia, patent opposition proceedings before the Commissioner of Patents, and matters arising from patent licence and technology agreements. James also has experience in the preparation of commercial, R&D and IP agreements for leading universities, research organisations and pharmaceutical companies. He also advises clients on regulatory issues affecting clients in the industrials, consumer and health sectors.
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