I. INTRODUCTION
In December 2012, the European Parliament endorsed a decision by the European Council to authorize the establishment of enhanced cooperation in the area of the creation of a patent with unitary effect.Footnote 1 Since then, the international patent community has been on the edge of its proverbial seat, waiting to see whether the proposal becomes a reality.Footnote 2 If it does, it will be a significant event in both the long and rich history of patent law, and in the equally rich and understudied history of attempts to create a system for unitary European patent protection.Footnote 3
Indeed, it is remarkable to consider that more than 50 years ago, in 1959, the creation of such a system was already considered an ‘old and vexing problem’.Footnote 4 It is a problem that was reportedly first tackled in revolutionary France,Footnote 5 though confining ourselves to more peaceful times,Footnote 6 its origins can be said to lie in two initiatives from the 1940s: those of the Benelux countries and France to create the International Patent Institute in The Hague, and those of Denmark, Finland, Norway and Sweden to create a Nordic patent. Nonetheless, and despite the importance of those efforts, the focus in this article will be on three other post-war European patent initiatives of more direct and enduring relevance. The first is of the Council of Europe, beginning in 1949 and ending with the Strasbourg Patent Convention of 1963 (SPC).Footnote 7 The second is of the EEC States, beginning in 1959 and ending with the Community Patent Convention of 1975 (CPC) and Luxembourg Agreement of 1989.Footnote 8 And the third is of the EPC intergovernmental conferences, beginning in 1969 and ending with the European Patent Convention of 1973 (EPC).Footnote 9 In considering these initiatives my aim will be to answer three main questions. First, what drove them? Second, what issues ‘vexed’ them? And third, how were those issues resolved and with what ultimate effect? The aim of doing so is to fill a gap in the European patent literature, as well as contribute to current European patent debates by considering variants of the ‘three classic’ harmonization issues recently posed by Jan Smits and William BullFootnote 10 in respect of the current unitary patent proposal for its immediate precursors: the reasons for legal convergence; the form such convergence ought to take; and the extent to which specific harmonizing measures can be expected to promote such convergence and otherwise satisfy the reasons for pursuing it. The concluding section will relate this discussion to the current unitary patent package.
II. DRIVERS OF POST-WAR EUROPEAN PATENT INITIATIVES
Identifying the subjective motivations of lawmakers is always a difficult task, not least because of the unreliability of their own statements in that regard. Nonetheless, a study of post-war patent initiatives reveals them to have had four principal and closely related drivers.
The first was the cost and inefficiency of maintaining national patent systems, particularly in the aftermath of the Second World War and in the relatively confined geographical area of the Common Market. For European states, national patent systems required the duplication of patent office expertise and infrastructure at a time when patent applications were becoming increasingly numerous and complex in nature; and for inventors and patentees they required the navigation of substantively different systems, laws and languages to secure protection even within the same confined geographical space. As Guillaume Finniss, President of the International Patent Institute and one of the principal architects of the European patent system, remarked in 1964,
[i]t is out of the question, once it becomes possible for everyone to go from one State to the other end of another member of the Common Market, perhaps in less than an hour, to maintain the need for 6 patents in order to obtain protection in 6 countries, one of whose territories is as small as that of Luxembourg.Footnote 11
The second motivation was the impediment which national patents posed to trade and competition—and therefore, it was said, to European business and innovation—by virtue of their ability to be used to impede the free movement of goods and services across territorial borders, and the establishment of cross-border networks of distribution and mass production.Footnote 12 In combination with the increasingly international nature of economic life, this lent a sense of inevitability to the European patent project in the late 1950s and early 1960s.Footnote 13 According to Finniss, for example, so ‘closely linked with international economic life’ were industrial property rights that it was ‘impossible to imagine even for a moment’, in the early 1960s, ‘that they could be governed, in the relations between nations, other than by [international] agreements’.Footnote 14
The third motivation was the intellectual and academic interest in supranational patent systems which existed after the War,Footnote 15 and the challenge of using industrial property rights as a means of pursuing a ‘United Europe’.Footnote 16 That European political integration might be furthered by administrative arrangements such as sharing patent office resources was very much in keeping with the thinking of the time; the establishment of the European Organisation for Nuclear Research (CERN) and EURATOM being two examples of the use of scientific and technical cooperation by European states in the 1950s as a catalyst for post-War ‘functional federation’.Footnote 17 It also had a precursor in German history, by which Finniss himself was clearly influenced. Hence his description of post-war European patent initiatives as focused on ‘the possibility of providing … federal level … industrial property title-deeds’ similar to those which had been created in the Zollverein, with positive effects for German federalism.Footnote 18
And finally, the fourth motivation was the existence of competing patent initiatives, and the fear they created within and among European states of being left behind politically, technologically and economically, ‘like the less gifted child’, as Swedish patent official Frederik Neumeyer expressed it to the European Free Trade Association (EFTA) States in 1961.Footnote 19
Hence it is suggested that post-war European patent initiatives were driven by a combination of economic, political, intellectual and psychological motivations, including some—such as the promotion of political federation—unrelated to patent law itself. For the original EEC Six, it was the first three of the motives above which drove their early work from 1959, with a particular emphasis on Single Market policies.Footnote 20 After 1964, however, when disagreements caused their work to be suspended, it was the fear on the part of France in particular of becoming dependent on US patent examining authorities under the Patent Cooperation Treaty (PCT),Footnote 21 and dominated by foreign (including German) patents and industry, which led to the EEC Six taking up their project again, and implementing the plan which ultimately led to both the European and Community Patent Conventions. So too for the Council of Europe and non-EEC EPC States, a central driver of whose work—at least, in its latter stages—was their fear of being sidelined by the EEC States' pursuit of a Common Market patent.
III. THE CENTRAL VEXATIONS OF POST-WAR PATENT INITIATIVES AND HOW THEY WERE ADDRESSED
Post-war European patent initiatives were vexed by a wide range of issues: substantive, procedural, institutional, political, and constitutional in nature. They included, for example: how to proceed given the substantive variations in national laws, procedures and traditions which existed at the time;Footnote 22 what substantive law to support in the context of those differences and a growing volume and complexity of technical information (‘prior art’);Footnote 23 by what procedural and institutional means to support a supranational patent system, including what role and location to assign supranational courts and offices, and what official languages and translation requirements to adopt; how open to make the supranational system to non-founding states; and, for the EEC Six specifically, how far to integrate it within the European Economic Community.
A. The Council of Europe and the Strasbourg Patent Convention (SPC) Initiative
The question of how to proceed occupied the first decade of work undertaken by the Council of Europe from 1949 on a European patent system. During that period, the Council's Committee of Experts on Patents considered variants on three main proposals.Footnote 24 The first was for a unitary patent coexisting with national patents.Footnote 25 The second was for a system for granting ‘bundles’ of national patents, supported by a central (European) patent authority.Footnote 26 And the third was for a convention requiring the voluntary unification of substantive aspects of national patent law. Thus, the only models not considered seriously during this period were ones aimed at replacing national laws; it having early been accepted that differences in national legal techniques and traditions would make that approach infeasible.
It was, of course, the third of the above models which the Council ultimately decided to pursue in 1959, and realized four years later with the Strasbourg Patent Convention of 1963 (SPC). Open only to Council of Europe members invited to join by its Committee of Ministers,Footnote 27 the SPC committed Member States to unifying their laws on patentability and the role of patent claims. Politically and legally it was an impressive achievement. It was the product of extensive comparative and analytical work over a 14-year period and avoided those aspects of substantive law which its drafters considered to be based in the economic and political fabric of states, focusing instead on aspects the unification of which would support the establishment of a European procedure for granting national, if not European, patents.Footnote 28 Spurred on by the EEC Six's announcement in 1959 of their goal of achieving an autonomous European patent system and unitary patent—something which it had at that point failed to achieve after ten years of intensive discussion—over the next three years the Council of Europe completed its convention quickly and, in doing so, established the substantive basis for all subsequent European patent initiatives. Of especial importance were its rigorous novelty standard for patentable inventions,Footnote 29 its expansive conception of protectable subject matter (which included chemical, medicinal and other products traditionally excluded from patentability by European states),Footnote 30 and its entrenchment of a central role for formal statements by patentees regarding their invention (‘patent claims’) in determining the scope of patent monopolies.Footnote 31
Through these provisions, the SPC represented a first concrete step on the path to a European patent system, taken by an institution which, while still relatively young, had already acquired considerable political credibility and law-making experience, including in the patent field.Footnote 32 Nonetheless, its Convention left several significant gaps, including the procedure for obtaining patents, the content, ownership and duration of patents, and the appropriate restrictions on their exploitation. As the Council of Europe had itself recognized, these were all matters on which European states disagreed, and the unification of which was likely to cause substantial controversy.
B. The EEC States' Community Patent Convention (CPC) Initiative: prior to 1959
Less intimidated by national disagreement over patent matters than the Council of Europe were the EEC Six,Footnote 33 whose comparative homogeneity and commitment to realizing the goals of the Treaty of Rome all but ensured a more ambitious agenda than that of the Council.Footnote 34 Following a proposal from the European Commission in 1959,Footnote 35 the sights of the EEC Six were, from the outset, set on an autonomous supranational patent system, including supranational administrative and judicial institutions and unitary patent grants.Footnote 36
Nonetheless, it is important not to overstate the ambitiousness of the EEC Six's project, nor the extent of their legal and political alignment. For example, in 1959 they continued to grant different types of patents: in all but Germany and the Netherlands registration of patents was all that was required, without novelty or patentability examination, and applications were not subject to opposition proceedings.Footnote 37 In addition, even the EEC Six recognized that any supranational system would need to co-exist with national systems, for a transitional period at least, notwithstanding the range of difficulties which such co-existence would create.Footnote 38 Finally, the EEC Six never intended their system to be truly autonomous, but rather anticipated from the outset that there would be an important, if not exclusive, role for national law and courts concerning such matters of conflict as entitlement, infringement and compulsory licensing.Footnote 39
Each of these issues was enormously controversial for reasons that went to the heart of the CPC project.Footnote 40 For example, the distinction between registration and examination systems was based in different ‘natural rights’ and ‘public interest’ patent philosophies.Footnote 41 Similarly, the issues of entitlement and licensing raised questions of property, employment and contract law, all of which were strongly associated with national sovereignty, and regarded as lying outside the patent field.Footnote 42 They also raised issues of access to the future CPC, including whether nationals of non-EEC states would be entitled to apply for and own a unitary patent and, if they were to be so entitled, whether importation of a patented product into the Common Market would satisfy unitary patent working requirements.
Closely related to access and working was the question of the CPC's membership, and the community and values which the Convention would seek to represent. That question arose because of the absence of any clear mandate for the creation of a unitary patent in the Treaty of Rome, and the acceptance of the Commission and EEC States that it would therefore require a special agreement under Article 15 of the Paris Convention.Footnote 43 Hence the possibility of a system that would serve a wider international community than the EEC, and have a correspondingly open membership policy.Footnote 44 Hence also the importance of the normative question of what the CPC's purpose ought to be: to support European integration, whether economic, political or administrative, or to facilitate global patent standards and the abolition of patent territoriality? The answer would affect all aspects of the EEC Six's initiative, from how to pursue their goal (and whom to involve in its pursuitFootnote 45), to what substantive law to support, and what degree of integration to seek with the EEC.Footnote 46
As noted above, the issue of membership was closely related to that of access to the CPC patent for nationals of non-EEC states.Footnote 47 Both were matters of especial controversy within and outside the Common Market, particularly following de Gaulle's veto of the UK's bid for Community membership in 1963.Footnote 48 They were also the focus of much US criticism of the EEC initiative following reports that the Convention would be open to all Paris Union states on a full or partial association basis, but that nationals of non-member states might be denied access to the CPC so as not to discourage applications for membership, nor permit European industry to be dominated by foreign patentees.Footnote 49 The news that US nationals might be barred from obtaining the unitary patent provoked a flurry of disgruntled commentary in the early 1960s, politicizing the EEC Six's project internationally. Many argued that to deny access to foreign applicants would infringe the national treatment provision of the Paris Convention and, by requiring the indefinite retention of national EEC patent systems, defeat the project's economic and other objectives.Footnote 50
C. The EEC's Community Patent Convention (CPC) and European Patent Convention (EPC) Initiatives: from 1969
In 1964, disagreement among the EEC Six on the issues of controversy described above caused work on the CPC to cease. When that work was recommenced in 1969, following a call by French foreign minister Michel Debré in 1968, it was in a very different legal and political climate.Footnote 51 Above all, the impasse over access had been resolved by the PCT initiativeFootnote 52 and a decision, originating with the EFTA States, to pursue two European Conventions instead of one: an inclusive system for granting bundles of national patents in a wide collection of European countries, ie, the system later established by the EPC, and a unitary patent for the exclusive benefit of EEC States to begin (for those States) where the EPC left off.Footnote 53 Spurred on by progress on the PCT, and by the French fear of becoming marginalized in an emerging international patent community which favoured examination systems and overwhelmed by patent applications from US nationals,Footnote 54 work on the EPC commenced alongside the resumption of work on the CPC as an initiative of 17 European States: the EEC Six, the EFTA Seven, Greece, Ireland, Spain and Turkey.
1. The European Patent Convention (EPC) initiative: 1969 to 1973
We have seen that the Strasbourg Convention established the substantive basis of a European patent system in its provision for unified laws on patentability and the role of patent claims. Of the issues that remained, those of greatest relevance for the EPC patent-granting project were ownership, the patent grant, and the procedure for obtaining bundles of (European) national patents.
By 1969, when the first EPC intergovernmental conference took place, a consensus on the last of these issues was already emerging among European states. Reflecting on the one hand the international community's portrayal of registration patents as ‘worthless’ products of ‘less developed’ countries which lacked the resources and technical expertise required for novelty searching and patent examination, and on the other hand the enormous and increasing burden which rigorous examination of all patent applications represented,Footnote 55 that consensus was for a system of deferred examination. In substance, deferred examination represented a compromise between the registration and examination systems of EEC States which would also have the further and important practical advantage of relieving the burden of the European Patent Office (EPO) in its early life, and variants of which had then recently been tested, with positive result, in the two important European patent jurisdictions of Germany and the Netherlands.Footnote 56
The issues of entitlement and the patent grant were more difficult. The Council of Europe had already established a general principle of strong patent grants, and the EEC States were committed to building on that principle in order to ensure that European patents would be good currency in the arena of international trade. The EPC States followed their lead by defining patentability expansively, and adopting the so-called ‘maximal approach’ to harmonization, whereby the validity of the European patent in each designated state would be governed by the Convention rather than national law.Footnote 57 An important reason why there was support for this approach—as for the Council of Europe's support for expansive patentability previously—was the freedom which European states were expected to have to offset its effects by means of national provisions on post-grant matters, including infringement and compulsory licensing.Footnote 58 Among other things, this explains the EPC States' early consideration of whether Article 8(3) of the SPC—that ‘[t]he extent of the protection conferred by the patent shall be determined by the terms of the claims’ (interpreted having regard to the description and drawings)—ought to be omitted from the EPC, given that ‘the general aims of the Convention’ were unconcerned with patents after grant. The Working Party decided that the provision ought to be included, ‘since an applicant can only draw up his claims for a European patent application if he knows exactly what the principles for their interpretation are’.Footnote 59 The result was EPC Article 69, mirroring SPC Article 8, supplemented by the Protocol, which was included by the EPC as ‘a declaration of intent’ that national courts interpret European patents by means of an approach falling ‘somewhere between the ‘‘liberal’’ concept formulated by the German courts and the ‘‘restrictive’’ concept applied in the United Kingdom’.Footnote 60
The EPC States also considered harmonizing patent entitlement under the EPC, but decided against doing so for two reasons. The first was their view that it would be ‘impossible to standardise the laws on ownership of inventions for all the European States which may become Contracting parties to the Convention,’ and equally impossible for the EPO ‘to determine which national laws would be applicable in each case’ and ‘apply twenty or so different national laws according to each individual case’.Footnote 61 And the second, reflecting their circumscribed view of the boundaries of substantive patent law, was that it would be inappropriate, as a matter of principle, to have ‘disputes traditionally falling within the sphere of property law … dealt with by authorities other than national civil courts’.Footnote 62 Entitlement was consequently left for determination by national courts applying national law.Footnote 63
2. The EEC States' Community Patent Convention (CPC) Initiative: 1969 to 1975
With the Council of Europe and EPC states having resolved the issues of patentability standards, validity/revocability, entitlement, and the process for obtaining a European patent, the role of patent claims in defining patent scope, and the method of interpreting claims, there remained a few gaps to be filled by the EEC States after 1973. Those of primary importance concerned infringement, including the rights conferred by the patent and the so-called economic provisions—the restrictions on the permissible exploitation of patents—and the relationship between the CPC and the EEC itself.
(a) Infringement
With respect to infringement, the EPC had provided that the rights conferred by a European patent should be the same as those conferred by national law in respect of national patents, consistent with the nature of European patents as bundles of national patents, and that infringement should ‘be dealt with by national law’.Footnote 64 An exception concerned European patents for processes, which the Convention provided would protect the products directly obtained by the process, in addition to the process itself.Footnote 65 This provision was inserted following a Swiss proposal of 1973Footnote 66 reflecting the provisions of the then draft CPC. It was explained at the time with reference to the inability to define certain chemical products independently of the process for their manufacture. According to the proposal, if the protection for such products was to be effective notwithstanding this, it would need to extend beyond the manufacturing process itself to ‘the products directly obtained’ from that process, and to be supported by a reversal of the burden of proving infringement in the case of new materials, in respect of every designated State. In the event, only the first part of this argument was accepted by the drafters; the second constituting ‘too great an inroad into the national law of the Contracting States’.Footnote 67 It continued to be supported by the EEC States, however, and is therefore reflected in the CPC, subject to a further provision that ‘in the adduction of proof to the contrary, the legitimate interests of the defendant in protecting his manufacturing and business secrets shall be taken into account’.Footnote 68
Infringement having been left to national law under the EPC, the EEC States confined themselves to defining the rights comprised in the Community patent,Footnote 69 and otherwise followed the EPC's approach by leaving infringement to the ‘national law relating to infringement of a national patent in the Contracting State where the court hearing the action is located, in so far as the private international law of that state does not require application of the national law of another contracting state’,Footnote 70 with detailed provisions for determining the jurisdiction of national courts.Footnote 71 The CPC also clarified that ‘national courts dealing with actions relating to patents had no jurisdiction to decide whether or not a patent was valid’,Footnote 72 and were consequently required, when dealing with a Community patent, to treat it as such.Footnote 73 Finally, the Convention provided for a stay of proceedings by a national court where its decision depended upon a Community patent's validity and an opposition, limitation or revocation action was on foot before the EPO;Footnote 74 further requiring that in any case in which such a stay had been ordered by a court with jurisdiction to determine the extent of a Community patent's protection, the EPO should ‘express an opinion’ on that issue of patent scope in the event of it deciding to maintain the patent.Footnote 75 Such an opinion could also be sought by the national court on its own motion or at the request of one of the parties in an infringement action.Footnote 76 Through these and other provisions, the CPC was integrated with both national and EPC law by means of a system which involved the vertical and horizontal bifurcation of validity and infringement (law and proceedings), and a non-binding preliminary referral procedure between national courts and the EPO.Footnote 77
(b) Economic provisions
On the economic provisions, the EEC States' original acceptance that licensing ought not to be regulated by European patent law persisted, with four important competition-based exceptions. The first was to provide for licences of right with respect to Community patents.Footnote 78 The second was to confirm the permissibility of exclusive or non-exclusive licences covering the whole or part of the territories in which the Community patent was effective, albeit on the understanding that they would be subject to ‘national or Community cartel law’.Footnote 79 The third was with respect to exhaustion: territorial licenses within the Common Market would not be binding on third parties, such that a licensor's sale of a patented product would exhaust the patent in respect of that product for the entire Community ‘unless there are grounds which, under Community law, would justify the extension to such acts of the rights conferred by the patent’.Footnote 80 And the fourth concerned compulsory licences. According to the EEC States, compulsory licences—including ‘official licences and any right to use patented inventions in the public interest‘Footnote 81—would be a matter for national law, but their effect confined to the granting state's territory.Footnote 82 In addition, and without prejudice to compulsory licences granted ‘in the public interest’, the mere failure to work a Community or national patent locally would not be a valid basis for a compulsory licence. This was in contrast to a failure to work the patent within the Common Market more generally, and to produce the product covered by the patent in sufficient quantity to satisfy the needs of the State in which it was manufactured, which (it was accepted) would justify such a grant.Footnote 83 The extension of this provision to national patents was especially controversial, raising as it did the relationship between the socio-economic needs of EEC States on the one hand and the free movement and other values of the EEC on the other.Footnote 84 Hence the following concern expressed by the Italian delegation in 1975:Footnote 85
The Italian delegation stated that whereas Italy had always sought in industrial property matters to maintain a balance between the three aspects of production, public interest and rewarding the inventor, the Community Patent Convention seemed primarily concerned with the interests of the inventor and with problems of competition, to the extent of ignoring the production aspect. Thus Article 79 [Article 82] in combination with Article 47 took account of the market aspects of the problem but not of the production aspect nor of the social problems involved for Italy. For these reasons the Italian delegation continued to advocate the deletion of Article 79 [Article 82].
The tension reflected here between Community and state interests runs through both the economic provisions of the CPC, and their discussion at the Conference at which the Convention was eventually signed. Historically understood as a mechanism for supporting local industry by encouraging the innovation or importation of new technologies, in the Community context in which ‘local’ meant ‘within the Community’, the territorial nature and effect of national patent rights needed to be balanced against the requirements of the Single Market.Footnote 86 That task was left by the Treaties to the Court of Justice, which responded in the 1960s and 1970s by defining Community competence with respect to patent and other intellectual property rights by drawing a distinction between the existence of such rights, over which the Community was said to lack jurisdiction, and the exercise of such rights, for which it was regarded as responsible. According to the Court applying this distinction, derogations from the fundamental freedoms for the purpose of protecting industrial and commercial property needed to be interpreted restrictively, and thus to be confined to such derogations as the Court decided were ‘justified for the purpose of safeguarding rights which constitute the specific subject matter of such property’.Footnote 87 Its reasoning begged the question, however, what was the specific subject matter of a patent the safeguarding of which would justify derogations from the fundamental freedoms of the Community? According to the Court, in a feat of circuitous reasoning which conflated patent and competition law, and drawing inspiration from the then draft CPC, it was not the exclusive right to prevent third parties from doing the acts reserved to the patent owner in respect of the patented invention by the patent law of the granting state within the territory of that state, as logic might have suggested. Instead, the specific subject matter of a patent was the exclusive right to prevent third parties from the ‘use [of] an invention with a view to manufacturing industrial products and putting them into circulation for the first time, either directly or by the grant of licences to third parties’.Footnote 88 In this way, the subject matter of a patent was redefined to achieve a compromise between the rights of patentees under national patent law, and the rights of competitors under the Treaties;Footnote 89 in much the same way as the CJEU did (and has done recently) in other intellectual property fields.Footnote 90 Given that redefinition, the opposition of the Italian delegation to the restriction of states' rights regarding local working requirements as prioritizing competition to the detriment of national industry was unlikely to attract widespread support.
Nonetheless, the EEC States' rejection of the Italian concerns regarding the compulsory licensing provisions of the CPC ought not to be taken as indicating that there was a more general resolution of the tension between Community and state interests. For one, the restrictions on the permissible grant of compulsory licences for lack or insufficiency of exploitation did not apply to licences granted ‘in the public interest’;Footnote 91 a phrase which the French delegation understood broadly, ‘as including licences issued in the interests of public health, in the interests of the economy or in the interests of national defence’.Footnote 92 In addition, the CPC permitted States to exclude the operation of the compulsory licensing provisions for a maximum period of 15 years.Footnote 93 On the other hand, the CPC provided for ‘common rules on the granting of compulsory licences in respect of Community patents’,Footnote 94 which the Commission was adamant would not prejudice the free movement of goods.Footnote 95 And so, too, while the CPC guaranteed a patentee's right to enforce a territorial restriction on a patent licence, the reason (as explained by the UK and German delegations) ‘was only … to clarify the consequences as regards patent law … in accordance with [Article 43(1)]’;Footnote 96 the implication being that competition law might still undermine the restriction's legality.
(c) Exploitation
Having dealt with exploitation in the manner described above, there remained to be considered the institutional and procedural relationship between the Community patent system and the EEC, including the location of its supporting institutions and its official languages and translation requirements.
The EPC had required the establishment of a European patent office for the purpose of granting its European (bundles of national) patents, with Munich and The Hague as its chosen locations: Munich on account of the German Patent Office's examination experience and facilities, and The Hague as the home of the International Patent Institute—which, it was agreed, ought to be subsumed as a branch of the EPO. As a patent-granting system,Footnote 97 the EPC had not required a European patent court,Footnote 98 and as a system intended to benefit a wider collection of states than those within the EEC, its independence of the Common Market was a given, as was its need for different language and translation provisions.Footnote 99 Thus—and in contrast to the CPC—the EPC did not require that claims be translated into an official language of each Contracting State,Footnote 100 but did permit a Contracting State to require that a specification or application be translated, and to accept as authentic a translation which was more restrictive than the official (German, English and French language) versions.Footnote 101
In contrast to the EPC, and notwithstanding its conclusion outside the Treaty of Rome, the CPC was intimately connected to the European Economic Community. The main evidence of this connection, aside from its history, was its membership, its provision for preliminary references to the Court of Justice,Footnote 102 and its economic clauses entrenching the EEC's competition policies.Footnote 103 However, and notwithstanding this, the drafters of the CPC were also concerned to integrate their system fully into the EPC system so as to make use of the European patent institutions and infrastructure which already existed, and to strengthen the currency of the European patent system in the globalizing economy. Thus, Community patents were to begin life as European (EPC) patents granted on the basis of the EPC, and to be administered by offices within the EPO.
D. Conclusion
The central challenge for European patent reformers after 1949 was to create a supranational patent system without harming local interests and industry.Footnote 104 For the Council of Europe the answer lay in a convention requiring the voluntary unification of aspects of substantive patent law. For the EPC framers it lay in a harmonized system for granting bundles of national patents requiring neither substantive legal reform nor a European patent litigation system. And for the EEC States it lay in a federal patent system: a system which would co-exist with national patent systems, and otherwise preserve national interests via the retention of domestic infringement and exploitation law and jurisdiction, territorial licensing, and the right to grant state-based compulsory licences.
In retrospect, it seems too easy to say that the Council of Europe and EPC States proceeded more sensibly than the EEC States; both the SPC and EPC having come into force and surpassed reasonable expectations, in contrast to the CPC, which has languished by the wayside. But the question remains, why exactly did the CPC fail?
One answer of course is that it required ratification by each of the EEC States, of which in 1975 there were nine, including some for which ratification required a national referendum or overwhelming parliamentary majority.Footnote 105 A second answer, however, may be that it was not perceived to offer enough of substance beyond that which the SPC and EPC already offered to justify the fragmentation and uncertainty which its adoption would have entailed. To be precise, and as summarized by Iain Baillie at the time,Footnote 106 the CPC offered a single patent for the EEC countries, a single renewal fee and revocation proceeding, a uniform definition of the rights conferred by Community patent law and uniform economic provisions for national and Community patents. Against these benefits had to be weighed its risks and likely costs to industry, including: (a) increased expense to patentees, regardless of the degree of protection required for their inventions; (b) indivisible patent grants; (c) all or nothing patent protection—patents being revocable throughout the Community by a single opposition or nullity procedure, but potentially requiring separate litigation in each EEC State to prevent infringement; and (d) a ‘Wagnerian complexity’ to negotiate, as a result of the system's integration into national, EPC and EEC legal systems.Footnote 107 Put differently, and in terms of the four motivations of post-war European patent initiatives identified above, it was not clear that the CPC would reduce the costs and inefficiencies of existing patent systems, particularly given the existence of the PCT and EPC, nor, once the principle of exhaustion had been recognized for national patent systems especially, that it would facilitate integration beyond the level of those systems, the Treaties and the SPC.Footnote 108 Absent assured economic and political benefits, there remained only the intellectual and psychological motivations to spur the EEC States into giving effect to the CPC. Neither proved sufficient. On the contrary, fear of being marginalized or left behind in the supranational patent race gave way to an ambivalence regarding the effects which the CPC might have on local economies, particularly for those EEC States without strong export industries.Footnote 109 As one commentator reporting on European patent professionals' views had remarked in the early 1960s, while the CPC would support ‘the free flow principle’ within the Common Market, ‘the flow would not be uniform in origin.’Footnote 110 Among other things, this raised the possibility that the CPC might harm rather than promote political integration by exacerbating existing disparities in the technological development of EEC States, and encouraging divisive industrial and regulatory practices, such as establishing business subsidiaries and granting compulsory licenses in respect of patents originating in other parts of the Community.Footnote 111
A third and closely related reason that the CPC can be said to have failed were the concerns regarding its litigation arrangements. Principal among those concerns were the scope which the CPC left for forum shopping between national courts, and its bifurcation of infringement and validity proceedings. These issues were the reason for the CPC Resolution on the litigation of Community patents,Footnote 112 which committed the EEC States, even before the Convention had been ratified, to commencing ‘the necessary work to provide a solution to the [problems] of dealing effectively with actions relating to Community patents [and] arising from a separation of jurisdiction in respect of infringement and validity of Community patents’.Footnote 113 According to the Protocol, such work ‘should be concluded before any litigation on Community patents takes place and at the latest within 10 years from the date of signing of the Convention’.’ For Denmark, the UK and Ireland, fulfilling the Protocol was a precondition of ratifying the CPC. That fulfilment came with the conclusion of the 1989 Agreement and its system of Community patent courts, under which validity and infringement could be heard together by any national court having the status of a Community court, with appeals to a Common Appeal Court and thereafter to the European Court of Justice.Footnote 114
By the time of the Luxembourg Agreement, the political context of the European patent problem had altered significantly as a result (among other things) of the adoption of the Single European Act in 1985. As is well known, that Act set 31 December 1992 as the final date for completing the internal market by means of more than 300 specific measures, including the entry into force of the CPC for a majority, if not all, EC Member States. In fact, it had already been suggested that ratification by a majority of States ought to be accepted as sufficient to bring the CPC into effect, primarily on account of the constitutional obstacles which Ireland and Denmark in particular faced.Footnote 115 Thus it was that 12 ratifications by EEC Members (being also EPC Contracting States) were required for the 1989 Agreement to enter into force.Footnote 116 Even this set the bar too high, however, with the result that the Agreement shared the fate of the 1975 Convention in never being implemented; the reason this time being less the constitutional obstacles of ratifying states than the continued ambivalence regarding its benefits. For example, industry remained unenthusiastic about the prospect of indivisible protection within the Community and, having experienced a decade under the EPC, unconvinced of the desirability of further harmonization initiatives. Added to this was a new concern over the prospect of national courts revoking patents for the entire Community, and of the ever growing costs to inventors and patentees of complying with the CPC's translation requirements.Footnote 117
IV. CONCLUDING REMARKS: THE UNITARY EUROPEAN PATENT INITIATIVE IN THE LIGHT OF POST-WAR EUROPEAN PATENT INITIATIVES
Attempting to draw lessons from history for legal reformers can be a hazardous task. Nonetheless, the history of patent law harmonization initiatives is sufficiently rich and understudied to require it, particularly given recent developments in the European patent field. As noted in the Introduction, 50 years after the signing of the SPC the pursuit of a unitary European patent persists, with the European Parliament in December 2012 having endorsed a decision by the European Council to authorize the establishment of enhanced cooperation in the area of the creation of unitary patent protection for a ‘coalition of willing’ EU Member States.Footnote 118 Against this background two immediate questions arise. The first is what lessons can be derived from post-war European patent initiatives for current patent law reformers? And the second is what can be said, in the light of those lessons and initiatives more generally, of the current unitary patent package?
A. Lessons Suggested by Post-War European Patent Initiatives
Perhaps the most obvious lesson suggested by post-war patent initiatives is that any system which requires ratification at national level will depend for its success on the extent to which it is perceived to promote the interests of its ratifying states, whatever integrationist and other European motivations its creators may have had. A second is that supranational law-making in the patent field is an invariably incremental process; the reason being the commitment of European reformers to building on what exists, notwithstanding the risks of inefficiency, complexity and path dependence which this method creates. And finally, in addition to being a legal and political exercise, such law-making is also a matter of formal competence; a point underlined by the following remarks of Finniss in the early 1960s.
This work [on a Community Patent Convention] has no formal basis in the text of the Treaty of Rome. Its future prospects and present status rest therefore on considerations of fact and depend on the development of the Economic Community, the failure or stagnation of which gives it a purely academic character. If, on the other hand, the Community grows and expands, as it seems it must do, the day will come, without doubt, when the objectives will appear, in spite of their breadth, excessively modest. Only the future will tell.Footnote 119
We have long passed the days of seeking a solution to the European patent problem entirely by means of international agreements, and the EU could hardly be said to have failed or stagnated. Indeed, not only does the creation of a European patent now have a formal basis in the text of the EU Treaties, it would seem to be required by that text.Footnote 120 But, 50 years after the commencement of their project, can the EEC Six's aims be described as excessively modest? A comparison of the current unitary European patent package with the CPC and 1989 Agreement suggests that they cannot.
B. The Unitary Patent Initiative from an Historical Perspective
If it takes effect, the unitary European patent system will establish the necessary legal framework for the creation and enforcement of unitary patent protection in the territories of participating EU States. In particular, it will permit the voluntary conversion of European (EPC) patents into unitary patents having ‘equal effect’ and providing ‘uniform protection’ throughout the territories of those States,Footnote 121 and establish (for the same subset of EU territories) a Unified Patent Court with local, regional and central divisions, having exclusive jurisdiction in respect of all European (including EPC) patent rights.Footnote 122
According to Regulation (EU) 1257/2012, this framework will reduce the cost and inefficiency of requiring separate national patents within the EU, foster innovation and the competitiveness of European business overseas, and support the establishment and functioning of the internal market.Footnote 123 It will do so by creating for Europe (and the EU) a third type of patent to supplement domestic and European (EPC) patents,Footnote 124 and giving effect to the central features of the CPC and 1989 Agreement, including their definition of patent rights and exceptions,Footnote 125 their provisions on exhaustion and licensing,Footnote 126 their accommodation of bifurcation,Footnote 127 their preservation of EU competition principlesFootnote 128 and national jurisprudence on patent infringement,Footnote 129 and their incorporation of the CJEU preliminary referral mechanism.Footnote 130 On the other hand, it will limit the role and jurisdiction of the CJEU in accordance with that referral mechanism,Footnote 131 create a new ‘European’ patent community different from both the EU and EPC patent communities and, further increasing the system's complexity, limit the effect of each unitary patent to those participating states which had ratified the UPC Agreement at the time the patent was registered.Footnote 132 In addition, and explaining these latter features and the system's constitutional basis in the enhanced cooperation provisions of the EU Treaties,Footnote 133 it will entrench English, French and German as its three official languages, following the lead of the EPC and CPC, while also (and in contrast to those Conventions) relieving patentees of any obligation to furnish additional translations of patents other than at the request of a defendant in patent infringement proceedings.Footnote 134
What is to be made of this in light of the history above? Above all, that the form of legal convergence which the current unitary patent proposal envisages remains largely that of the CPC, and is purportedly driven by some, but not all, of the same objectives.Footnote 135 Nor are we at the point of being able to rely exclusively on EU instruments to create a unitary patent; individual state ratification of the UPC Agreement being necessary. The result is a reminder of how little legal and political progress has been made in this field in the last 50 years notwithstanding the EU's formal competence in intellectual property under TFEU Article 118,Footnote 136 and of the continued importance of state interests for the current initiative.
The latter in particular requires engagement with the net benefits of the system for EU Member States. If its benefits seem uncertain, there are likely four central and related reasons. The first is the complexity of the system, created by its constitutional basis,Footnote 137 European patent reformers' continued commitment to building on (and retaining) what exists, and the widespread concern in patent and political spheres to limit the substantive provisions of the Regulations so as to constrain the CJEU's substantive jurisdiction in the patent field.Footnote 138 The second is the omission of any role for national courts, which, even noting the widespread dissatisfaction over divergent national decision-making under the EPC, the provision for local divisions of the Unified Patent Court, and the retention of national jurisprudence regarding patent infringement, may make the package too ambitious for some countries.Footnote 139 The third is the scepticism which exists regarding the quality of EU law-making in intellectual property generally, and the uncertainty regarding the CJEU's future role under the Regulations and UPC Agreement.Footnote 140 And the fourth is the concern regarding its economic benefits, and the continued tendency of EU Member States to put their own interests above those of the ‘Community’. That concern and tendency are well captured by the following remarks of Lord Justice Kitchin, one of England's most senior patent judges, in 2012:
[In the UK] we now have a system which serves businesses and disputes of all sizes. It has specialist judges and gives businesses what they want: a relatively quick decision – indeed generally quicker than any other EU jurisdiction. It also generates a huge amount of business for the UK. The Rolls Building has been opened with a fanfare of publicity promoting London as a world leading centre for state of the art international dispute resolution. Patent litigation is an integral part of the work done there. It has been estimated that the annual spend on patent litigation and advisory services in the UK is at least £100m. I think this is very conservative and the true figure is probably an order of magnitude greater. So I strongly believe this is not a system we should be rushing to dismantle unless we are confident we are replacing it with something better.Footnote 141
Perhaps the final conclusion to be drawn is that even if the unitary patent system could be said to satisfy the economic motivations of post-war patent reformers—a proposition the truth of which is far from clearFootnote 142—a persistent ambivalence and suspicion regarding their political ideals might nonetheless prevent their aims from becoming a reality.Footnote 143 The suggestion returns us to the objectives of the system, and their connection to the aims of legal integration more generally.
Perhaps unsurprisingly, Regulation 1257/2012 makes no reference to either the goal of European federation or a fear on the part of EU lawmakers of being sidelined by competing patent initiatives (such as, most recently, the European Patent Organisation's proposed European Patent Litigation Agreement). And yet three things make it difficult to dismiss such motivations entirely. The first is the wider economic and political climate in which the project has been pursued, including the recent economic crisis in Europe, throughout which the legitimacy and viability of the EU has been repeatedly questioned. The second is the reference made by EU lawmakers in seeking support for other recent initiatives to the prospect of it being sidelined in the European patent field.Footnote 144 And the third are the allegations of misinformation, secrecy, and bad faith within the EU over the unitary patent project and its objectives respectively.Footnote 145 In combination, these considerations might support an impression of the system as a means for the EU to defend and strengthen its interests in the increasingly competitive European and international patent fields. They also connect to three of the most common and trenchant criticisms of EU law-making generally. The first focuses on its expansionist tendencies, including in areas of fundamental rights and private law,Footnote 146 and often following decisions of the CJEU.Footnote 147 The second focuses on the perceived non-transparency of its law-making procedures and—as expressed by Joseph Weiler with characteristic force—its ‘democratic deficit’, evidenced by its pursuit of an ambitious constitutional and legal agenda, and its failure ‘to defend and protect the values it professes to hold most dear’.Footnote 148 And the third focuses on its perceived political Messianism, viz., its reliance on the vision of European integration to justify its actions and means.Footnote 149 These are strong criticisms which strike at the heart of the EU's formal and normative legitimacy,Footnote 150 and go some way to explaining the open hostility which is frequently expressed towards greater EU involvement in intellectual property, including—and as seen in recent debates on the unitary patent proposal—from senior members of governmentFootnote 151 and the judiciary.Footnote 152
In 2013, Gráinne de Búrca offered a defence of the EU against the charge of Messianism specifically with reference to its shifting raison d’être over the past 60 years. In the argument she made, that charge overlooks the change in the EU's primary mission from promoting Europe's internal peace and prosperity to enhancing its ‘global economic and political influence and role’.Footnote 153 The argument may have especial relevance and credence here for the simple reason that enhancing Europe's external influence and role has long been a driver of the European patent project. In addition, and regardless of whether it does, by calling attention to the ‘internal’ and ‘external’ dimensions of legal integration, de Búrca recalls the philosophical ambivalence which has always been at the European patent project's heart.Footnote 154 If it seems natural now for the EU to focus increasingly on its own institutional place and strength on the global stage, it is equally natural for Member States to continue to focus on their internal peace and prosperity. What remains to be seen is what response to the latest solution to the old and vexing problem of a European patent such a focus will produce.
