Disunion and anti-Europeanism of the European Union with the unitary patent
Tuesday, October 16th, 2012, the Committee on European Affairs of the French National Assembly held a hearing with Gérald SÉDRATI-DINET, voluntary advisor for the April on patent issues, in the presence of members rapporteurs on this project, Ms. Audrey LINKENHELD, Socialist MP of the 2nd district of the North, and Mr. Jacques MYARD, Conservative MP of the fifth district of Yvelines.
Mr. and Mrs. MPs, Mr. the advisor, first of all thank you for inviting me to this hearing on the unitary patent. This is a subject on which I have worked for about ten years at the time when it was called “Community Patent”. I do this as a voluntary advisor for April, which is an association for the promotion and defence of free software. April is concerned with this issue because it would lead to a recognition, de facto, of software patents – identified as the main threat to prevent the use of free software. However, I am not going to speak a lot about software patents today. The subject is wider and since I am before of members of the Committee on European Affairs, I rather suggest to show you how in this project, the European Union is paradoxically revealing some disunion and anti‑Europeanism.
First and obviously, the enhanced cooperation procedure, which was adopted to legislate, is in itself an admission of the failure of a full establishment of a genuine Community instrument. I will refrain from making any assumptions about the legality of this procedure, since – as you know – it is the subject of an appeal before the Court of Justice of the European Union (CJEU) on which the Advocate General, Yves Bot, should deliver his opinion in about one month from today. But I will, following Professor Mathias Lamping of the Max Planck Institute in Munich, note that the use of enhanced cooperation in the framework of the unitary patent raises serious objections as to its compliance with the Treaties. One, it is in tension with the foundations of the mechanism of differentiated integration, violating the principles of loyalty and solidarity. Two, it ignores the protective role of the unanimity requirement in terms of linguistic arrangements. Three, it relates to a matter within the obvious exclusive competences of the Union, for which the solution of enhanced cooperation is not supposed to apply. Four, it has a prejudicial effect to non‑participating Member States, which is directly in conflict with the requirement of opening for the procedure. Finally five, it disrupts the coherence of the internal market, leading to discrimination and distortion of competition. In short, there are strong arguments that could lead the CJEU to declare the project in discussion being invalid. And for reasons related to the very coherence and unity of the EU, that could be undermined by a dangerous precedent if we allowed the abuse of the enhanced cooperation mechanism, mainly to bypass the requirement of unanimity.
Secondly, the legal architecture of the regulation on the unitary patent reveals a waiver of powers by the Union for the benefit of an extra‑EU organisation: the European Patent Office (EPO) in Munich. Entrusting the EPO – whose governance is subject to unanimous critical because of the confusion between the legislative, executive and judiciary which prevails inside the EPO – entrusting the EPO is already questionable. But unlike the previous drafts for a Community patent which already delegated the granting phase of the EPO, the regulation on the unitary patent waives more to the Munich Office. Firstly, it is expected that the EU accedes to the European Patent Convention – EPC. What is the EPC? It is an international agreement governing patent law in Europe. And it is this agreement that established the EPO. The EU does not accede to the EPC, probably because of difficulties in doing so in the context of enhanced cooperation. The result of this – and we will come back to this later – is that the rules of the EPC for granting unitary patents will not be a priori included in EU law. But for now, we are going to stress the fact that this leads to seriously question the legal basis which the regulation is based on. Indeed, the first paragraph of Article 118 of the Treaty on the Functioning of the European Union (TFEU) allows the Union to create a new patent title providing uniform protection. However, the text of the Regulation – ad even its title — is worded in such a way that only the uniform protection is taken into account, but no creation of a new patent is put in place. Instead, the unitary patent would be an ordinary patent from the EPO, as we already know it today, which a “with unitary effect” attribute would merely be grafted onto. Therefore, the proper legal basis is not Article 118 TFEU. But, as claimed by the first Article of the regulation, the legal basis of the unitary patent should be found in Article 142 of the EPC. Indeed, the latter allows a group of Contracting States to conclude a special agreement assigning a unitary patent granted by the EPO for this group of States. Here we sink into a prodigious legal denaturing: how a Community instrument – a regulation – could be viewed as an international agreement? Since the “special agreement” of Article 142 EPC can not be understood otherwise than as a convention. We would like to make a legislative act of the Union to be an instrument of public international law! Moreover, the regulation on the unitary patent is an act of the Union, and not only of its Member States. If they are Contracting States of the EPC, we have seen that in the current project, the Union is not. Article 142 EPC is about Contracting States of the EPC, therefore, an agreement between Member States. But the EU, it cannot use through a regulation the procedure of Article 142 EPC. We could stop here with these simple legal findings, which were confirmed by the academic literature, as they show that the current regulation will in any event be invalidated. But the description of a few remaining ways of bending the rules is worth it!
Third indeed, we can observe that everywhere in the project, there is a aim to carefully avoid the CJEU. It has to be said that the CJEU rocked the boat regarding the previous revision of the agreement establishing a unified patent court, stating that by it “would deprive courts of Member States of their powers in relation to the interpretation and application of European Union law […], consequently, would alter the essential character of the powers which the Treaties 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”. It was already something! But what did the Commission and Member States to respond to this criticism? They kept the same project by simply excluding third countries. That is to say, the signatories to the EPC but that are not members of the EU – such as Switzerland, Norway, Turkey, or Monaco. Another incomplete response in the current version: the addition of a guarantee for a collective accountability of States in cases of breach of EU law by the new unified patent court. Incidentally, the EU as such is no more a party to this agreement. This seems paradoxical given that the CJEU stressed the requirement that such a court falls within the judicial framework of the European Union. But this can, in theory, allows to escape to a new refusal from the CJEU. Because it would not fail to reprimand the fact that the current draft still deprive national courts of their jurisdiction. But that's not all: the regulation on unitary patent makes also a great effort to subtract as many provisions as possible from the overview of the CJEU. Thus, in the continuity of a legal basis tempting to make the impression that the unitary patent is not a patent title of the EU, the rules of substantive patent law – that is: what can be patent or not be patented and with which requirements – these rules are not included in the regulation. They should be sought in the EPC, that is to say, in an international convention which is external to EU law. This allows the decisions of the EPO, as well as judgements of the new unified patent court, to not be reviewed by the CJEU regarding the validity or invalidity of the relevant patents. Here it really annoys us because of the problem of software patents. But here again, the academic literature is unanimous: a patent title of the EU cannot be established, via EU law, without the requirements for this patent to be granted be also included in the same EU law. Yet the Heads of State and Government went even further! The only provisions of substantive patent law included in the regulation were those defining acts of infringement. Well, at the summit of the European Council of June 29th, 2012, it was granted to the British Prime Minister that these provisions should be deleted from the regulation on the unitary patent. Since identical provisions were included in the agreement establishing a unified patent court. The problem is twofold. On the one hand, this agreement being – as we saw it – an agreement between Member States, without the participation of the EU as such, it is not included in EU law. Therefore, the CJEU would not have competence on any issue of patent law. No way to check that decisions from this new specialised patent court are compliant with Union law. On the other hand, the European Council – that is to say, the Heads of State and Government – according to the EU Treaty, “shall provide the Union with the necessary impetus for its development and shall define the general political directions and priorities thereof. It shall not exercise legislative functions”. All of this had eventually the merit to sting MEPs to the quick. Non‑compliance of the text with the Union law had become too obvious and interference of Heads of State and Government was unacceptable. Parliament has decided to postpone the vote on this project. It now remains blocked until the Council resolves itself to find a solution that does not colour outside the lines of legality – at least not too much!
Finally, fourth, after these very legal considerations, it is impossible to not talk about the politics of the unitary patent. Because it reveals the essence of a fundamental problem of the Union – literally engraved in its genetic code. In fact, you are not unaware that this project is old – a dream that can be traced back more than sixty years ago! For over sixty years, a patent in Europe, which would be enforceable throughout the whole Union, is expected. And over sixty years, proposals failed one after the other in a deadlock. Why? Officially, the issue of languages is mainly given as a reason. But we have seen that this problem has been solved – in a way that its legality still requires confirmation – by the use of the enhanced cooperation procedure. Not to mention solutions already in place, such as the London Protocol – Mr. Myard is very well aware of it. The issue of languages is therefore not really an issue any more. Second, it is assumed that previous projects have failed to provide a legal system that meets the expectations of the users of the European patent. Here we must be careful, because who are exactly these users? Holders and applicants for patents, patent offices that granting them and courts where they are enforced. However, it is clear – and the case of the unitary patent is clear proof – that this small world lives in a microcosm where patent law is eventually isolated from all areas of law. And where the very motivations that guided the creation of patent systems are forgotten to keep as the sole objective the increase – not of innovation – but of the number of patents themselves and of their scope . In short, a bubble is created. And like all bubbles, it never ceases to grow… until it bursts! However, there is another reason – this one fundamental – for the failures of previous attempts. It is that a patent is primarily a power – the extraordinary power to exclude competitors – which is granted by the State. That is to say that the State has the power to grant a power – and impressing his seal on the power it has the power to grant. And this feature is one of those essential characteristics underlying the notion of State. Now what do we do with the unitary patent and its illustrious unlucky predecessors? We would like that the States of the Union waive this power which constitutes them to a body that transcends them. We could do it, if we accept the rules of the game. And we have proposed amendments fixing major illegalities that I have just outlined. But for now, we can only note with regret that it is not the will of European governments. What are they doing instead? They are squabbling. One would see a playground. Spanish and Italian urchins are whining that the language of their English, German or French peers is chosen and not theirs? They are sent to the naughty corner! It is feared that the dunces who do not know anything about patents create a mess? They are given academic support and are flanked with judges from other countries who are more serious. The three winners of the language prize – Germany, England and France – are fighting over whether the seat of the Central Division – which suddenly seems so important – of the court – which nevertheless claims to be unified and decentralized – they are fighting over whether this seat will be in their country or in the other ones? They are sent home each with a slice of the cake that is shared between them. The mischievous British is crying he does not want to be watched by the CJEU teacher? He's promised that, even if the rules of procedures of the school should be burned, this will not happen. As for the good German student? His excellence was rewarded by a tailor‑made system. Modeled on what he already knows. Where patents may give rise to penalties – called “injunctions” – even before deciding if these are justified – this is called “bifurcation” with infringement proceedings separated from those on invalidity, the former don't need to to wait for the result of the latter judgement to be pronounced. And, as in Germany, alongside “ordinary” judges, “legal” judges as we conceive a judge in France, there are some “technical” judges. Who are these technical judges? They are engineers who are still provided with a – basic – legal training in patent law. And nothing prevents to choose some EPO members to be judges in this new unified patent court. That is to say that the judges who hear disputes on the unitary patent will be chosen from among the patent microcosm, we have denounced earlier. Without forgetting to give the project to two German rapporteurs for the Parliament, and the linguistic issue to a conciliatory Italian rapporteur. This is the childish game played between Member States on the unitary patent!
After this detour through the playground, I'd become a little more serious to conclude. And it seems to me that after this presentation, a single conclusion can be made: the draft unitary patent in its current state will not pas. Or forced through, but in this case it will have to suffer from such a legal uncertainty that as soon as a patent is granted, it is threatened to collapse. Clearly, we're going into a wall! And so far, we running into a wall as fast as can be! So if it is decided to make a unitary patent, it must be done well! The amendments we propose avoid these pitfalls. However, they only affect the regulation on the unitary patent, since this is the only part of the project which is in co‑decision. With regard to the unified patent court, it is another story. But at a time when patents make headlines, mainly because of software patents that allow the threat of a “thermonuclear war” – quoting Apple's dead boss – it is clear that the example of the patent system in the United States is not the one to follow. The latter is also pushed by economists to be seriously reformed, some even advocate its pure and simple abolition. This is not a far‑fetched proposition: it has already been done to foster the economy of the Netherlands or of Switzerland in the late nineteenth century. What does this mean? It means that Europe can not afford to implement a centralised and specialised court, witnessing the utter failure of the United States' patent system, where the Court of Appeals for the Federal Circuit (CAFC) recently celebrated its thirty years, credited with the responsibility for the explosion in patent litigations and for the extension of the scope of patentability, with costs to the economy in the tens of billions yearly. Again there are solutions. Promoting judicial cooperation and overseeing the jurisdiction by a generalist court, the only way to balance the extraordinary rights conferred by patents with all other areas of law, such as competition law or the fundamental rights and freedoms. I'm ending with these possible solutions, in order to enter into the details with your questions.