In a binding decision the top EU judges deemed the creation of a Community Patent Court as "not compatible with the provisions of European Union law".
Given the way it has been conceived, the tribunal would indeed have to go beyond EU law and its decisions would not be able to be legally challenged by the EU institutions.
This "would alter the essential character of the powers conferred on the institutions of the European Union and on the member states which are indispensable to the preservation of the very nature of European Union law," reads a press release outlining the opinion of the European Court of Justice (ECJ).
The tribunal was designed to resolve EU patent-related disputes and was a crucial element of plans to create a unified European patent. Controversies regarding the ownership of a patent are currently resolved at national level. This increases costs and affects legal certainty across the EU.
The single tribunal was designed to address these shortcomings but now that the ECJ has issued its binding opinion, it will need to be reviewed.
'Not compatible' with EU rules
The court's decision mirrors an opinion issued by the Advocates General of the ECJ last July, which also deemed that the patent's jurisdictional regime was "not compatible" with EU rules.
Although the Court of Justice's decisions usually follow opinions of the Advocates General, the Commission did not consider that opinion relevant and instead put forward itself in July a proposal to break a long-standing deadlock related to the new EU patent's linguistic regime.
Forced to choose between establishing an English-only regime and a more costly multilingual system, the EU commissioner in charge of the internal market, France's Michel Barnier, proposed to maintain a trilingual regime in which French and German would have the same legal value as English.
His proposal infuriated Spain and Italy, among others, and triggered such a fierce argument that the only solution was to launch an unprecedented "enhanced cooperation" procedure to overcome the remaining stumbling blocks. Barnier thus found himself supporting the first-ever enhanced cooperation process in the field of the internal market, and only second ever to be applied by the EU.
Twelve states backed the initiative and on Thursday (10 March) another 13 countries are expected to officially endorse the launch of enhanced cooperation on the EU patent during a council of EU ministers in charge of competitiveness issues.
Italy and Spain will be left out of this cooperation, which will only focus on agreeing upon the text of regulations on the EU patent and its linguistic regime.
The other pillar of the patent, its jurisdictional side, is not part of this enhanced cooperation. "It's like building a house without foundations," argued one EU diplomat, who did not wish to be named.
Parallel procedures?
Nevertheless, the Commission and the Hungarian EU Presidency rushed to underline that "there is no link" between the ECJ's opinion and enhanced cooperation.
"The creation of unitary patent protection is legally distinct from the creation of the European Patent Court," reads a press release issued by Commissioner Barnier after the Court of Justice had delivered its opinion.
"The opinion of the [ECJ] enables us to resume work related to the creation of a unified patent litigation system, which is one of the main pillars of European patent reform. The enhanced cooperation to be launched at Thursday's Competitiveness Council remains unaffected," said Hungarian Minister Zoltán Cséfalvay, chair of the Competitiveness Council.
However, a Hungarian diplomat acknowledged that "blocking the jurisdictional regime will not legally block moves on the other tracks, but the usefulness of the new system will be seriously affected".
"The consequence of letting out the litigation system will be returning to national courts," he said.
Italy welcomes Court decision
Italy, a long-standing opponent of the proposed patent regime, which it says discriminates against Italian firms, rejoiced after hearing the ECJ's decision. "The authoritative opinion of the court supports Italy's position, which has always favoured waiting for the decision of the judges of Luxembourg before examining other aspects of the EU patent regime," reads a press release issued by the Italian Foreign Ministry.
Italy is not ruling out referring the enhanced cooperation procedure to the Court of Justice in order to assess the compatibility with EU law of applying such an extraordinary mechanism in this delicate field. However, the legal services of the European Commission, the European Parliament and the Council have already ruled that enhanced cooperation is lawful.
Other countries could nevertheless ramp up their scepticism after the ECJ's decision. A British diplomatic source said that London is studying the opinion of the court and is waiting to see how it will be interpreted by the Commission and the Council.
"If this will imply a new transfer of power to the EU court, this will be a big issue," he said. "Whatever happens, any country will be able to withdraw [from enhanced cooperation] at a later stage," he concluded.
Tomorrow (10 March), most EU industry ministers are expected to back enhanced cooperation on EU patent. The European Commission would then need to formulate proposals that would need majority support from the European Parliament and member states.
