1. Common historic roots
The territorial effects of patent law and the political fragmentation of Europe led to requests for and ideas on the simplification of patent granting procedures in Europe as early as at the beginning of the 20th century. France was the first to propose an International Agreement pour la création d’un Bureau Central des Brevets d’Invention on 15 November 1920. It was signed by eight countries, which were later joined by three more. However, this Agreement, which was never signed by Germany and the United Kingdom, never entered into force.
After World War II, it was again France which in 1945 brought up the European idea and in 1947 signed together with the three Benelux countries the Agreement on the International Patent Institute in The Hague (Institut International des Brevets (IIB)), which entered into force on 10 June 1949 and was open for accession to all member states of the Paris Union established in 1883 by the Paris Convention for the Protection of Industrial Property (PCPIP), which is the very basis of international patent law. It was revised in 1961, and the revised version entered into force in 1971. The main task of the IIB was to provide for novelty searches for the patent offices of the member states. In 1978, the IIB was incorporated into the European Patent Office as its Hague branch, and ceased to exist as an independent international organization.
In 1949, the French Senator Longchambon submitted a plan for the establishment of a European Patent Office to the Consultative Assembly of the Council of Europe (harmonization of private law). Based on the examination of novelty and patentability, the Office was to issue ‘European Inventor’s Certificates’, which would subsequently be transmitted to national offices. After examination of further protection requirements, national patent offices were to grant patents. The Council of Ministers thereafter decided that a committee of experts should be appointed to deal with patent issues of the Council of Europe. As a consequence of these activities, in 1953, the Council of Europe adopted the European Convention relating to the Formalities required for Patent Application and, in 1954, the European Convention on International Classification of Patents.
A first genuine step towards the establishment of a European patent was achieved by the Convention on the Unification of Certain Points of Substantive Law on Patents for Inventions (Strasbourg Convention), which was concluded in the framework of the Council of Europe in 1963. The first draft for this Convention was submitted in 1955, and the 1963 Convention finally entered into force in 1980. Its main result was to harmonize patent laws across Europe. Eventually, this led to the unification of patentability requirements and, thus, laid the basis for further European developments.
In the European Union developments began immediately after the entering into force of the Treaty of Rome on 1 January 1958. The Commission of the newly established European Economic Community (EEC) at once realized that, due to their territorial effects, national patents would constitute an obstacle for the free movements of goods in the Common Market. A working group established by the Member States as early as 1960 put forward principles for a European, ie Community, patent, which was to be established as an autonomous and unified patent, ie not as a bundle of national patents. In 1962 the first and in 1965 the second draft Convention was submitted. Due to the inability to agree on whether the Convention should be open only to the then six EEC Members or also to other states, the work, which had lasted until 1969, came to a halt.
In 1969, France again revived the development and submitted a proposal for two Conventions. According to the first Convention, which was open to all European states, a European Patent Office was to be established, which would grant a ‘bundle of European patents’. The second Convention, which would be open only to Member States of the EEC, would build upon the first Convention and would grant a European patent for the Common Market.
Between May 1969 and June 1972, 22 European states met at a governmental conference in Luxembourg. The conference ended with the Munich Diplomatic Conference of 1973. Here, the 1972 Draft of the first Convention, namely the Convention on the Grant of European Patents—European Patent Convention (EPC) was discussed, and on 5 October 1973 the EPC was signed by Austria, Belgium, Denmark, France, the Federal Republic of Germany, Greece, Ireland, Italy, Liechtenstein, Luxembourg, Monaco, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. It entered into force on 7 July 1977, after the tenth instrument of ratification was deposited. An initial marginal revision (amendment of Art 63(2) by lit b) in 1991 was followed by a substantial revision of the EPC in 2000. At present (2010), the following 37 states are parties to the EPC: Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, former Yugoslav Republic of Macedonia, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, Sweden, Switzerland, Turkey and the United Kingdom. Moreover, extension agreements exist between the European Patent Organisation and Bosnia and Herzegovina, Montenegro and Serbia.
In 1969, the EU Council of Ministers adopted a decision to begin work on the second Convention, in parallel to the work of the Luxembourg Governmental Conference. An expert group ‘Community patent’ composed of representatives of the EU Member States, which later became a Working Group of the Council of Ministers, drafted the second Convention based on the 1965 Draft, adapting it to reflect the results of the Luxembourg Conference. The final draft was ready in December 1973 and was presented and signed in Luxembourg at a further conference on 15 December 1975 (Convention for the European Patent for the Common Market, Community Patent Convention (CPC)). Since one EU Member State did not ratify the CPC, it never entered into force. According to the principles underlying both the EPC and the CPC 1975, if even a single EU Member State was designated in the application, an applicant could only be granted a Community patent (Art 3 CPC). Article 142(1) EPC from the outset set forth the possibility that ‘any group of Contracting States, which has provided by a special agreement that a European patent granted for those States has a unitary character throughout their territories, may provide that a European patent may only be granted jointly in respect of all those states’. Where any group of contracting states—from the very beginning that group was meant to be the EU Member States—has availed itself of that authorization, the provisions of Arts 143 ff shall apply, which provide for special departments of the EPO competent for performing tasks as assigned to the EPO by the Community Patent Convention.
To overcome the unsatisfactory situation which they faced on account of the CPC not having entered into force, the EU Member States undertook a second attempt and signed, after a third Luxembourg Conference had taken place on 15 December 1989, a complex Agreement Relating to Community Patents, consisting of the CPC with Implementing Regulations, the Protocol on the Settlement of Litigation Concerning the Infringement and Validity of Community Patents, the Protocol on Privileges and Immunities of the Common Appeal Court, the Protocol on the Statute of the Common Appeal Court, the Protocol on Possible Changes of Requirements for Entry into Force of the Agreement Relating to Community Patents and the Common Statement (Declaration) of the Governments of the EU Member States. The important changes in this treaty were, on the one hand, the possibility of choosing between a European and a Community patent even where an EU Member State was designated in the application, and on the other hand, the potential to re-negotiate the Agreement at a later conference with the option to let it enter into force without participation of all EU Member States. While this Agreement also never entered into force, it did, however, have an impact on the national legislation of Member States in the area of patents. As a result of the Common Statement of the Governments of the EC Member States, which contained a Resolution on Prior Use or Prior Possession, as well as a Resolution on the Grant of Compulsory Licences on Community Patents, and, finally, a Declaration on the Approximation of National Patent Laws, the respective rules were, eventually, transformed into national laws.
The European Commission relaunched consultations on the Community patent with the publication of its green paper on the Community Patent and the patents system in Europe (COM (97) 314). Since then, it has submitted a number of proposals—based however on Art 352 TFEU/ 308 EC—for a Regulation of the Council on the Community Patent: the first on 1 August 2000 (COM(2000) 412 final), the latest on 13 April 2011 (COM (2011) 215/13) based on the Council Decision of 10 March 2011 authorizing enhanced cooperation in the area of the creation of unitary patent protection (2011/167/EU). According to Art 1 of this decision, 25 EU Member States, ie all except Italy and Spain, were authorized under Art 329(1) TFEU to establish enhanced cooperation between themselves in the area of the creation of unitary patent protection by applying the relevant provisions of the treaties.
2. Subject matter and purpose of European patents
The European Patent Convention of 1973 is a treaty under public international law outside the legal framework of the Union. According to its Preamble, the EPC constitutes a special agreement within the meaning of Art 19 of the PCPIP. It was established with the desire to strengthen cooperation between the states of Europe, ie also between non-Member States of the Union, in respect of the protection of inventions, by a single procedure for the grant of patents and by the establishment of certain standard rules governing patents so granted. With the EPC, the European Patent Organisation (Organisation), with its headquarters in Munich and a branch in The Hague, was established. The Organisation disposes of administrative and financial independence. Its task is to grant European patents. This task is carried out by the European Patent Office (EPO), supervised by the Administrative Council (Art 4). Since the revision of the EPC in 2000, a conference of ministers of the contracting states has existed which is responsible for patent matters and which shall meet at least every five years to discuss issues pertaining to the Organisation and to the European patent system (Art 4a).
In each of the contracting states for which they are granted by the EPO European patents have the effect of and are subject to the same conditions as a national patent granted by that state, unless the EPC provides otherwise (Art 2 (2), Art 64(1)). For instance, the EPC sets forth the grounds for the revocation of European patents (Art 138), the standards for determining the extent of protection (Art 69), the term of protection (Art 63) and some minimum rights (Art 64(2) and Art 67). A European patent, thus, is a ‘bundle of European patents with the effect of national patents’ (Friedrich-Karl Beier).
With the adoption of the EPC a cohesive system for granting European patents was established, which consists of an examination on filing and, as to formal requirements, drawing of the European search report and publication of the European patent application as well as substantive examination of the patentability requirements of novelty, inventive activity, industrial applicability and sufficient disclosure. The EPC contains specific provisions in these regards as well as in regard to the subject matter eligible for patent protection. After completion of the substantive examination, the Examining Division either issues the patent or rejects the application. In the first case, any person may file opposition with the Opposition Division within the prescribed time limits. Opponents will typically claim that the subject matter of the opposed patent is not patentable. The Opposition Division can uphold or revoke the opposed patent in its entirety or in part. The opposition proceedings before the EPO are the only possibility for centrally revoking a European patent after it has been granted. The decisions of the Opposition Division can be appealed against to the Boards of Appeal of the EPO, which enjoy a quasi-judicial status. Finally, the Board of Appeal can refer, either of its own motion or upon request of a party, any question to the Enlarged Board of Appeal in order to ensure uniform application of the law, or if a point of law of fundamental importance arises, if it considers that a decision is required for any of the above-mentioned purposes. The President of the EPO may refer a point of law to the Enlarged Board of Appeal where two Boards of Appeal (according to the decision of 12 May 2010, G 03/08, meaning also the same Board in a different composition) have given different decisions on that question. Since the 2000 Revision of the EPC entered into force in December 2007, any party to appeal proceedings adversely affected by the decision of the Board may file a petition for review of the decision by the Enlarged Board of Appeal in case of serious violations of procedural rights, as specifically defined in Art 112a EPC.
Disputes concerning infringements of European patents are decided according to national laws (Art 64(3) EPC) by national courts of the contracting states. Actions for nullification or counterclaims objecting to the validity of a European patent are also to be filed with the competent national courts, which, however, are bound by the EPC provisions (Art 138).
The lack of a centralized European patent judiciary has long since been viewed as a major problem and a disadvantage of the EPC System. In view of the ever-increasing number of the parties to the EPC, the problem has certainly become aggravated. Since the 1999 International Paris Governmental Conference of the EPC Contracting States, a working party on litigation has been preparing a European Patent Litigation Agreement (EPLA). The draft prepared so far proposes the establishment of a European Patent Court, competent to decide on actions concerning actual or imminent infringement, actions for declaratory judgment, actions for nullification and actions for compensation based on preliminary protection of published European patent applications. Under the EPLA System, the same court should decide in the same proceedings on validity and infringement. Because of a controversy with the European Commission concerning the foreign competence of EU Member States (to conclude international agreements) and due to the parallel activities of the Commission on the Community patent judiciary, no agreement has been reached on EPLA as of yet. Despite the considerable deficiencies of the System, the EPC has proven itself in practice and has turned out to be a real success. This is reflected in the number of contracting states, which have in the meantime acceded to the EPC, as well as in particular in the number of patent applications. The latter went up from some 181,000 in 2004 to over 200,000 in 2009.
3. Subject matter and purpose of the Community patent
The Community Patent Convention of 1975, the Agreement of 1989 and also the drafts for an EU Regulation so far submitted by the European Commission and the Council built upon the EPC in a complex manner. The EPO as the patent granting authority will be conceptually integrated in the system and will remain responsible for the entire patent-granting procedure. As a matter of concept, one can describe the construction as a kind of ‘continuation relationship’ (Fortsetzungszusammenhang—Friedrich-Karl Beier). However, the two instruments are aimed at achieving two different economic and regulatory goals. Whereas the primary purpose of the EPC is to simplify, rationalize and centralize the patent granting proceedings, the CPC and its somewhat watered down EU successors clearly pursue Union integration as a primary objective, albeit with a decreasing tendency as a result of the numerous blows which the Community patent project has been dealt over the years. This becomes particularly apparent in view of the 2011 draft, which explicitly declares: ‘This Regulation shall be without prejudice to the right of Member States to grant national patents and should not replace Member States’ laws on patents. Patent applicants should remain free to obtain either a national patent, a European patent with unitary effect, a European patent taking effect in one or more of the Contracting States to the EPC or a European patent with unitary effect validated in addition in one or more other Contracting States to the EPC which are not among the participating Member States’ (recital 22 of the Proposal for a Regulation of the European Parliament and of the Council implementing enhanced cooperation in the area of the creation of unitary patent protection of 13 April 2011 (COM (2011) 215/3)). It would appear from this that the European law maker has abandoned the idea of a complete integrative effect of the EU patent as originally envisaged in the Preamble of the CPC 1975, namely: ‘… to establish attainment of the objectives of the Treaty establishing the European Economic Community and in particular to the elimination within the Community of the distortion of competition which may result from the territorial aspect of national protection rights’. According to the Preamble to the CPC, the creation of a Community patent system was seen as essential for the attainment of the objectives of the Treaty of Rome and was thus linked with the Union legal order. The Preamble also made it clear that the Convention was a treaty under Art 142 EPC. Likewise, Art 1(2) of the April 2011 draft also emphasizes that the Regulation constitutes a special agreement under Art 142 EPC. However, contrary to the Community patent of the CPC and the EU patent of the earlier drafts, which would have been a European patent designating the EU as the territory of protection under Arts 3 and 79 EPC and granted by the EPO, the European patent ‘with unitary effect’ granted by the EPO according to the 2011 draft shall be granted for participating Member States only. It shall be granted with an identical scope of protection in respect of all participating Member States, have unitary character, provide uniform protection and have equal effect in all participating Member States. A European patent ‘with unitary effect’, in principle, may only be limited, transferred, revoked or lapse in respect of all the participating Member States (Arts 3 and 5). The 2011 Draft also contains provisions on specific tasks which the participating Member States shall give the EPO under Art 143 EPC as regards the administration of requests for unitary effect by proprietors of European Patents, the publication of translations or the collection and administration of renewal fees (Art 12).
Despite all setbacks, the CPC has had a lasting impact on substantive patent law in the EU Member States since the respective provisions have been transformed into national patent laws. This impact concerns in particular the anchoring of the prohibition of indirect (contributory) infringement of the invention (Art 30), the exclusion of acts done for experimental purposes relating to the subject matter of the patented invention (Art 11(1)(b)), the principle of EU-wide exhaustion of patents if the patented product was put on the market in the EU by the proprietor of the patent or with his consent (Art 33), the right based on prior use (Art 28) and, finally, the rules concerning compulsory licences (Arts 46–48). The CPC experienced great resistance from industry as well as some Member States for its delegation of revocation and infringement proceedings to national courts (Arts 68–70). The April 2011 draft of the EU Regulation now contains all substantive patent law rules of the CPC, enriched by amendments based on more recent developments of European law at the Union level. In particular, rules which the EU adopted in various directives have been taken into account.
However, in one important aspect, the current EU draft legislation does not follow the original CPC approach: The EU Draft Regulation on the European patent does not contain any rules in respect of civil litigation as regards the infringement and validity of Community (EU) patents. In March 2009, the Working Party on Intellectual Property (Patents) of the EU Council submitted a Draft Agreement on the European and Community Patents Court and Draft Statute (Doc 7928/09, PI23COUR29, of 23 March 2009), which is to be open to accession by any contracting state to the EPC.
According to this draft the European and Community Patents Court shall have exclusive jurisdiction in respect of validity as well as infringement not only as regards Community (EU) patents, but also for patents granted by the EPO under the EPC. The Court shall comprise a Court of First Instance, a Court of Appeal and a Registry. As regards the Court of First Instance, it should comprise a central division as well as local and regional divisions in the contracting states to the Agreement. The European Court of Justice (the Court of the European Union) shall ensure the principle of primacy of EU law and its uniform interpretation.
All panels of the local and regional divisions of the Court of First Instance are to have a multinational composition and shall comprise an additional technical judge in case of a counterclaim for revocation or, in the case of an action for infringement, when requested by one of the parties. Likewise, any panel of the Court of Appeal shall sit in a multinational composition of three legally qualified and two technically qualified judges. As regards the matter of language(s), proceedings before any local or regional division are in general to be conducted in the language(s) of the Member State(s) or contracting state(s) hosting the division. Contracting states may, however, designate one or more of the official languages of the European Patent Office as the language of proceedings of the local or regional division they host. The language of proceedings of the central division shall be the language of the patent. The language of proceedings of the Court of Appeal shall be the language of the proceedings at the First Instance. In general, the Draft Agreement can be characterized as a very complex and all-encompassing legal instrument setting forth, inter alia, rules on eligibility, status and appointment of judges; the applicable substantive law, including rules on direct and indirect infringement, limitation of the effects of the European patent and prior user rights; jurisdiction and effects of decisions; organization and procedural provisions; proceedings before the Court, including means of evidence, burden and reversal of the burden of proof; and powers of the court.
In its Opinion 1/09 of 8 March 2011, however, the Court of the European Union (Full Court) found the envisaged agreement creating a unified patent litigation system (currently called the ‘European and Community Patents Court’) ‘not compatible with the provisions of the EU Treaty and the FEU Treaty.’ The ECJ, first, observed that the Patents Court (PC) was outside the institutional and judicial framework of the EU. It was not part of the judicial system provided for in Art 19(1) TEU, but an organization with a distinct personality under international law. This notwithstanding, the PC, in carrying out its tasks, had the duty to interpret and apply EU law. Consequently, as according to Art 15 of the draft agreement the PC was to be vested with exclusive jurisdiction in respect of a significant number of actions brought by individuals in the field of patents (concerning, in particular, actions for actual or alleged infringements of patents; counterclaims concerning licences; actions for declaration of non-infringement; actions for provisional and protective measures; actions or counterclaims for revocation of patents; actions for damages or compensation derived from the provisional protection conferred by a published patent application; actions relating to the use of the invention before the granting of the patent or to the right based on prior use of the patent; actions for the grant or revocation of compulsory licences in respect of Community patents; and actions for compensation for licenses) and had to interpret and apply not only the provisions of that agreement but also the future regulation on the Community patent and other instruments of the EU law, national courts and tribunals would be deprived of the power to request preliminary rulings from the ECJ in the field of patents. Thus, in the field of its exclusive jurisdiction, the PC would be the sole court able to communicate with the ECJ by means of a reference for a preliminary ruling concerning the interpretation and application of the EU law. Member States, according to the ECJ, cannot confer the jurisdiction to resolve the mentioned disputes on a court created by an international agreement which would deprive national courts of their task, as ‘ordinary’ courts within the EU legal order, to implement EU law and, thereby, deprive them of the power or obligation provided for in Art 267 TFEU to refer questions for a preliminary ruling in the field concerned (paras 72-85 of the Opinion). Finally, the ECJ found the Draft Agreement incompatible with Articles 258 and 260 TFEU since in those instances that a decision of the PC were to be in breach of EU law, that decision could not be the subject of infringement proceedings nor could it give rise to any financial liability on the part of one or more Member States (paras 86-88 of the Opinion).
The entry into force of the Lisbon Treaty on 1 December 2009 has resulted in a change of the legal basis for the proposal for the Regulation on the Community patent (now European patent with unitary effect): Under Art 118 first sub-paragraph TFEU, measures for the creation of European intellectual property rights are to be established by the European Parliament and the Council acting under the ordinary legislative procedure, and the second sub-paragraph of Art 118 TFEU sets forth that the language arrangements for European intellectual property rights are to be established under a special legislative procedure by the Council acting unanimously after consulting the European Parliament. On 4 December 2009, the Council adopted Conclusions on the Enhanced patent system in Europe (Council Doc 17229/09), according to which (§ 36), the EU Patent Regulation should be accompanied by a separate regulation which was to govern the translation arrangements for the EU patent adopted by the Council with unanimity in accordance with the second sub-paragraph of Art 118 TFEU. Both regulations were to come into force at the same time.
Based on the Council Decision of 10 March 2011 (2011/167/EU), the Commission on 13 April 2011 published a Proposal for a Council Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements (COM(2011) 216/3). According to this proposal, the EU patent specification published by the EPO in accordance with Art 14(6) EPC (ie in one of the three official languages of the EPC, with translations of the claims into the other two official languages) are to be the authentic text and no further translation will be required (Art 3(1)). Only in case of a dispute relating to an EU patent shall the patentee provide at the request and the choice of an alleged infringer a full translation of the patent into an official language of the Member State in which either the alleged infringement took place or in which the alleged infringer is domiciled. In such cases the competent court in the European Union can in the course of legal proceedings also request the patent proprietor to provide a full translation of the patent into the language of the proceedings of the court. In either case the translation costs are to be borne by the patentee. In a case where a claim for damages is at issue, the court shall take into consideration that the alleged infringer may have acted without knowing or having reasonable grounds to know that he was infringing the patent before having been provided with the translation (Art 4). It should be added that during a transitional period starting on the date of the application of the Regulation and ending either on the date on which, based on objective evaluation of the availability of high quality machine translation of patent applications and specifications into all official languages of the Union, the Commission proposes its termination, or after twelve years from the date of application of the regulation, at latest, the request for unitary effect of a European patent, where the language of the proceedings is French or German, shall be submitted with a full translation of the specification into English; or where the language of the proceedings is English, with a full translation of the specification into any official language of the participating Member States that is an official language of the Union. These translations shall be published by the EPO and shall not have any legal effect but serve information purposes only (Art 6).
The fact that seemingly three parallel patent systems should be accepted within the internal market of the Union may be interpreted as a final renunciation of the idea of integration based on a Community patent and a clear attempt to use Community (EU) patents primarily as a means for cost reduction, improvement of the quality of patents, as well as for improving cooperation between national patent offices and the EPO.
Friedrich-Karl Beier, in Friedrich-Karl Beier, Kurt Haertel and Gerhard Schricker, Europäisches Patentübereinkommen (1st installment 1984); Joseph Straus, The Present State of the Patent System in the European Union (1997); Gerald Paterson, The European Patent System: The Law and Practice of the European Patent Convention (2001); Georg Benkard, Europäisches Patentübereinkommen (2002); Margarete Singer and Dieter Stauder (eds), European Patent Convention (3rd edn, 2003); Eda Kranakis, Patents and Power, European Patent-System Integration in the Context of Globalization (2007) Technology and Culture, 689; Rainer Schulte, Patentgesetz mit Europäischem Patentübereinkommen (8th edn, 2008); Tobias Bremi, The European Patent Convention and Proceedings before the European Patent Office (EPC 2000) (2008); Rudolf Kraßer, Patentrecht (2009); Margarete Singer and Dieter Stauder (eds), Europäisches Patentübereinkommen (5th edn, 2010).