Spain's challenge to unitary patent reforms defeated before EU's highest court

Out-Law News | 06 May 2015 | 11:41 am | 3 min. read

The EU's highest court has dismissed two legal challenges brought by Spain against plans to create a new system of unitary patent protection for participating EU countries.

The Court of Justice of the EU (CJEU) considered Spain's challenge against a legal framework, backed by almost all other EU countries, which will make it possible for businesses to obtain near-EU-wide patent protection for their inventions through a single patent application to the European Patent Office (EPO) and without having to validate the patent in each of the individual countries in which they wish to have patent protection.

Spain had raised a number of complaints about the legal framework that will underpin the unitary patent reforms. It claimed, amongst other things, that the translation requirements of the new regime are discriminatory, arguing that it is prejudicial to individuals whose language is not English, French or German to require unitary patent applications to be filed in one of those languages and yet not require their subsequent translation into other EU languages.

The CJEU ruled, though, that the language translation requirements are "appropriate and proportionate" to the "legitimate objective" being pursued, which is to help businesses to obtain Europe-wide patent protection in a way that is cost effective. The objective of the language regime for the new system is the creation of a uniform, simple and less costly translation regime. Under the current system, European patents need to be translated after grant into the language of each EU country in which businesses wish the patent to apply, which can add considerable cost for those validating in multiple territories.

Under the unitary patent regime SMEs as well as individuals and not-for-profit applicants required to translate their unitary patent applications will be able to claim compensation for the costs involved. There are also plans to use a "high quality machine translation system … for all the official languages of the European Union" in future.

"The European patent protection system … can be described as complex and particularly costly for an applicant who seeks to obtain protection for his invention through the issue of a patent covering the territory of all the [EU] member states," the CJEU said. "Such complexity and costs, which are due to … the requirement that the holder of a European patent issued by the EPO must, in order to validate that patent on the territory of a member state, submit a translation of that patent in the official language of that member state, constitute an obstacle to patent protection within the European Union."

"Further, there can be no doubt that the rules under the current patent protection system … affect adversely the capacity to innovate and compete of European businesses, particularly small and medium-sized enterprises, which are unable to develop new technologies protected by patents covering the whole of the European Union unless they pursue complex and costly procedures, whereas the language arrangements established by [the new unitary patent language translation rules] are capable of making access to [the European patent with unitary effect] and the patent system as a whole easier, less costly and legally more secure," it said.

Spain also looked to the CJEU to annul the regulation which governs the creation of the unitary patent package, arguing among other things that it lacked legal basis. However, those complaints were also rejected by the CJEU.

Intellectual property law expert Victoria Bentley of Pinsent Masons, the law firm behind Out-Law.com, said: "We have been waiting with interest to hear the CJEU’s decision in respect of Spain’s challenges to the legality of the new unitary patent package. The decisions are significant, even if not surprising, as they mark an end to what was the last definite obstacle to progress in implementing the new patent system. Provided that at least 13 member states, including France, Germany and the UK, ratify the Unified Patent Court Agreement, the unitary patent and Unified Patent Court (UPC) should now proceed."

Bentley said the unitary patent regime will impact on businesses' "patent strategies" and said that "decisions that are right for one business will not be right for others".

"For anyone who holds patents, or who works in an industry where patents may be asserted against them, there are decisions to be made from an early stage," Bentley said. "Those who apply for patents will need to consider the relative advantages and disadvantages of having European patents, unitary patents, or national patents – or a mixture of these."

"During an initial ‘transition period’ of at least seven years, it will be possible to bring a claim in respect of a European patent, as opposed to a new unitary patent, in divisions of the new UPC as well as before national courts. During this period, a holder of a traditional European patent also has the option to ‘opt out’ that patent from the jurisdiction of the UPC, unless UPC proceedings have been commenced," she said. “After that interim period, the UPC will have exclusive jurisdiction for any European patents, unless already opted out, as well as for unitary patents, which are incapable of being opted out at any stage."

"There remain uncertainties about the new system but with the CJEU’s decision in respect of Spain’s challenges we have more certainty that the new unitary patent system will proceed. When the new system is operational, decisions made early on will affect businesses filing, licensing and enforcement strategies for years to come," Bentley said.