The Unified Patent Court will fall largely out of EU control. The EU risks becoming a mere registration office of what the member states will have decided on their own, write four authors representing the CRIDES research centre.
Alain Strowel, Fernand De Visscher, Vincent Cassiers and Luc Desaunettes work for the Centre de recherche CRIDES (UCLouvain, Belgium).
Is European integration being deconstructed? Is the Internal Market threatened as regards innovation?
These are the risks of a confidential but essential project for our common future: the Unified Patent Court Agreement (UPCA). Hence the pivotal importance of the debates on the ratification of the UPCA taking place in December in the German Bundestag.
This project is misnamed: it is not “just” a court system but a part of the “Patent package” aimed at creating a new type of patent, the European patent with unitary effect in the EU (so-called “unitary patent”).
Describing it as a “European Union patent” is artificial. On the contrary, the “unitary” patent will be created outside the EU, by an international treaty concluded between the member states alone and on their own.
While the initial idea was to design an EU patent regime within the EU framework (art. 118 TFUE), with the Court of Justice of the EU (CJEU) as the last instance for interpreting the rules, the project completely mutated when the essential patent rules (the scope of the patent protection and the exceptions or limitations) were moved to an international treaty between the member states only.
As a consequence, the EU institutions have no say on those rules: CJEU is not competent for interpreting these rules; neither will the European Parliament (together with the Council) amend them.
Regulation 1257/2012 creates only a link with EU law but does not define these substantial aspects of patent law.
If this “method” works today, nothing would prevent member states from imposing their decisions to the European Parliament and from bypassing the CJEU by using the same trick, i.e. replacing EU rules with international treaties, in other matters (environment protection for instance).
Will the EU become a mere registration office of what the member states will have decided on their own?
The EU democratic process and integration are thus directly challenged by the UPCA precedent in the innovation policy by the fact that UPCA leaves essential rules of patent law in the hands of the participating members states only: the scope of protection (the patent infringement) and the limitations or exceptions.
If the UPCA system is put in place, there will be in practice no possibility for the EU legislator (European Parliament in particular) to define the substantive patent rules regarding Unitary patents and European patents (for instance favouring green innovations, adapting patent rules for software or medicines).
The matter will remain in the ambit of the sole member states signatories of the UPCA (and not all EU member states will ratify it).
The legal regime of an essential cornerstone of an innovation-focused EU policy will definitively fall largely out of EU control, although the correct delimitation of the patent exclusivity is essential for economic growth, sound competition, good quality jobs and the internal market.
Moreover, the complexity of the situation post-UPCA will be increased by the availability of national patents regulated by non-harmonized national laws.
The functioning of the internal market will be affected as innovators and competitors will face different legal situations depending on the country where they want to operate and on the type of patent – Unitary, European or national – relied on. Detrimentally for the EU economy and its integration.
Furthermore, because of its complexity and costs (it must become financially self-supporting), the UPC is seen by many as fit for multinationals but jeopardizing the position of SMEs in research and innovation, contrary to the official mantra around the UPCA project.
SMEs are the real innovators and they create jobs within the EU. It is for instance thanks to the German SME BioNTech that the giant pharmaceutical company Pfizer could recently announce the new vaccine against COVID-19.
These risks have motivated more than thirty European academics and practitioners to alert once more the decision-makers in Germany and beyond. Their motion calls for a pause in the ratification process. Revisiting alternative solutions will allow Europeans to hold a democratic, up-dated and thoughtful debate about patent and innovation policy.