CJEU refuses to throw España in the works – part I
For those readers who want to know if there were any surprises in C-146/13, no there weren’t. Advocate-General Bot had issued his opinion (reported here) urging a comprehensive rejection of the Spanish case, and the CJEU has followed the A-G’s advice.
The intervention by a group of academics headed by Alain Strowel (reported here) urging the Court to resist the “dangerous precedent” in which the EU would “abandon its powers in favour of the Member States” has fallen on deaf ears. So too has the criticismof the A-G’s opinion on the basis that it failed to take into account the context of the ongoing debate over the shortcomings in perceived independence of the EPO Boards of Appeal.
The 1stplea: Infringement of the values of the rule of law
For many readers of this blog, this ground was the one promising the most interest. Spain argued that the administrative pre-grant procedure under the European Patent Convention failed to provide a satisfactory system of judicial review, and that it was unacceptable that such a deficient system should be incorporated into the EU legal order.
Spain also argued that the EPO Boards of Appeal and Enlarged Board were not independent from the Office and were not subject to any form of judicial review, given the EPO’s immunity.
The CJEU dismissed the challenge without making any comment on the allegations of lack of judicial independence. The Court held that the administrative procedure for granting patents under the EPC was unchanged by the Regulation under challenge and the Regulation merely established that the granted Patent could have a unitary effect in the participating Member States.
The 2ndplea: Lack of legal basis
Spain’s case on this point was that the first paragraph of Article 118 of the TFEU (one of the fundamental treaties underlying the European Union) was not adequate as a legal basis for the unitary patent system. The relevant paragraph in Article 118 reads:
In the context of the establishment and functioning of the internal market, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish measures for the creation of European intellectual property rights to provide uniform protection of intellectual property rights throughout the Union and for the setting up of centralised Union-wide authorisation, coordination and supervision arrangements.
The Court again agreed with the A-G. It was not necessary for the Regulation to harmonise all aspects of patent law as long as the measures went some way to harmonisation, and the protection was uniform since whatever national law was used to define the effects of the EPUE, that protection was the same in all Member States.
The 3rdplea: Misuse of powers
Spain had submitted that the Parliament and Council misused their powers by establishing an “empty shell” of a Regulation which in fact failed to establish a judicial system capable of ensuring uniform protection throughout the EU.
The Court gave this short shrift stating that for a plea of misuse of powers to succeed, Spain would have had to establish that the EU organs were trying to take measures for reasons other than those for which the power to take those measures was conferred. Spain, said the Court, had not established any factual basis for the plea.
The 4th& 5th pleas: Infringement of Article 291(2) TFEU and/or the principles laid down in the Meroni judgment
These grounds concerned the delegation of certain powers, such as setting renewal fees and other administrative tasks, to the EPO or to a select committee of the Administrative Council.
While the Court agreed that the setting of the level of renewal fees and the share of distribution of those fees constitutes the implementation of a legally binding Union act for the purposes of Article 291(1) TFEU, it held that Spain had failed to show that other criteria required under Article 291 applied, specifically, the requirement that uniform conditions for implementing legally binding Union acts are needed. It is only in those cases that the Commission or Council has powers conferred on it.
In the Meronijudgment the Court had held that the delegation by an EU institution to a private entity of certain discretionary powers was not compatible with the TFEU. However, Meroni did not apply here as it was not the EU institutions which were delegating powers to the EPO but rather the participating Member States to the unitary patent system.
The 6th and 7th pleas: Infringement of the principles of autonomy and uniformity of EU law
Spain contended that the essential character of the powers of the European Union and of its institutions should not be altered by any international treaty. Yet there was no difference in essence, Spain said, between the Agreement on a Unitary Patent Court and the earlier abandoned draft agreement on community patents which the Court had held to be incompatible with EU laws.
Spain also argued that in acceding to the UPC Agreement, the participating Member States were exercising a competence which was now a competence of the European Union, i.e. the exclusive competence to conclude international agreements.
The Court rejected these two arguments as inadmissible, holding that it did not have jurisdiction to rule on the lawfulness of an international agreement concluded by Member States or a measure
adopted by a national authority.
Spain further argued that the timeline for implementing the contested Regulation was defective as it depended on the will of the countries involved. Also, if a Member State were to decide not to ratify the UPC Agreement, the contested regulation would not be applicable to that Member State and the Unified Patent Court would not acquire exclusive jurisdiction over its territory to decide on EPUE cases, with the result that EPUEs would not have unitary effect as regards that Member State.
The Court held that it was permissible for the entry into force of a regulation to be dependent on countries making the necessary legislative and administrative arrangements. As regards countries deciding not to ratify the UPC Agreement, the Court said this was, in effect, a red herring. There were certain limited derogations open to countries, but countries were not able to simply decide arbitrarily that they would not ratify.
On this last point the IPKat notes that the Court took a more measured approach than the A-G. The A-G had argued that based on the principle of “sincere cooperation” Member States were under an obligation to ratify swiftly and without delay, and that they would be in breach of their obligations if they did not push through ratification. Perhaps conscious of the speculation over when and indeed whether some of the bigger Member States might ratify the UPC Agreement the Court has demurred from repeating this finding in its judgment.
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So there you have it. This Kat suspects that the judgment will have convinced few people to change their minds on whether the Unitary Patent project as currently envisaged is a good thing or whether the manner of its implementation was legal.
