EU Takes Actions On Patent Law; ACTA May See Legal Fight

In a flurry of patent-related developments in Europe this week, plans for a single European patent moved a step closer, efforts to create a European-wide patent court faltered, the United Kingdom sought guidance in a case with implications for medicinal research, and the EU high court may be asked to review the controversial Anti-Counterfeiting Trade Agreement (ACTA).

Patents are currently granted by the European Patent Office, but, once awarded, become national and subject to the rules of the individual EU states designated in their applications, the EU Council of Ministers said in a background memo [pdf, p. 14]. European patents are, therefore, a “bundle of national patents” for which there is no single jurisdiction for disputes, it said. Claimants and defendants in infringement and other cases are forced to risk multiple lawsuits in several countries on the same issues, it said.

The European Commission in April 2007 proposed an integrated judicial system for patents which did not address translation issues. In July 2010, the Commission offered a proposal on translation arrangements for EU patents. But in December 2010, after extensive talks failed to resolve concerns by several governments about those arrangements, some countries asked to be allowed to cooperate on a single patent.

On 10 March, the Council of Ministers authorised the use of “enhanced cooperation” for unitary patents in all EU countries except Italy and Spain. It is now up to the Commission to make proposals on how to implement the cooperation, the council said.

Official endorsement of enhanced cooperation is an important step forward for businesses, entrepreneurs, growth and innovation, said Association for Competitive Technology President Jonathan Zuck. However, he said, “We need to be cautiously optimistic as there have also been setbacks along the road.”

Patent Court Rejected

Meanwhile, hopes for the long-awaited EU-wide patent litigation system were dashed by the European Court of Justice (ECJ). In an 8 March opinion, available here, the high court said the draft agreement between EU states, the EU and non-EU countries that are party to the European Patent Convention is not compatible with European law.

The draft agreement aimed to set up a European and Community Patent Court with a court of first instance, an appeals court and a joint registry. The ECJ, however, said such a court would lie outside the institutional and judicial framework of the EU, with a distinct legal personality under international law, and would pull jurisdiction away from national courts.

Moreover, it said, EU patent court decisions, unlike those of national courts handling cases involving EU patents, could not be the subject of infringement proceedings or give rise to financial liability on the part of member states.

The proposal would thus “alter the essential character of the powers conferred on the institutions of the European Union” and on EU countries which are indispensable to the very nature of EU law, the court said.

Putting the best spin possible on the situation, the Commission said it will analyse the opinion “very carefully with a view to identifying appropriate solutions.”

The ECJ “flexed their muscles and made it very clear that they’re not letting any other courts into their patch,” said patent attorney Gwilym Roberts, a partner at Kilburn & Strode in London. The only option now is to shift patent jurisdiction to the ECJ itself, but users are “deeply concerned” that the high court lacks sufficient expertise to handle this complex area, he told Intellectual Property Watch.

Now that enhanced cooperation has been adopted, “we will have an EU patent with no forum to hear it – it’s like having your date all set up and then the dance gets cancelled,” Roberts said. At best, there will now be a single EU patent that must be enforced country by country, but there may be solutions, Roberts said. These could include mutual recognition of patents or accepting the ECJ as the appropriate litigation forum, but the same problems arise over and over, he said.

Maybe it’s time politicians gave up on the idea and “turned their attention to more manageable, but equally weighty, IP issues,” Roberts said.

The ECJ ruling was “entirely correct” and the outcome foreseeable from the start, UK-based Intellectual Property Institute Director Jeremy Phillips wrote on the IPKat blog. Trying to get a unified patent law system within the current EU framework was “a bit like aiming a Mini at a brick wall and driving at it full speed in the hope of finding a gap in it.” It’s not clear who wanted the new system in the first place besides the Commission, he added.

The unitary patent offers the potential for EU businesses to obtain patents covering most of the EU more simply and cheaply than at present, but it remains to be seen if the single patent can provide the significant benefits it aims for without the kind of litigation systems rejected by the ECJ, said Daniel Brook, an IP, media and technology partner at Hogan Lovells in London. However, he said, “There appears to be a significant drive in Brussels to finally push this project forward after almost 50 years.”

UK Refers Case on Second Medical Uses

In a case that could allow patent term extensions in some situations where new uses are found for medicines already on the market, the UK High Court of Justice on 8 March asked the ECJ to rule on EU law questions in Neurim Pharmaceuticals (1991) Ltd v. The Comptroller-General of Patents.

Neurim discovered that some formulations of melatonin, a natural hormone that has not been patented by anyone, could be used to fight insomnia, the UK court said. It applied for a patent on those formulations in 1992 but did not receive marketing authorisation until 2007. By the time of the grant, the patent had less than five years to run, so Neurim applied for a supplementary protection certificate (SPC).

The UK Intellectual Property Office objected on the ground that the marketing authorisation was not the relevant first marketing authorisation (MA), which was for melatonin for use in sheep. The IPO argued that the active ingredient of Neurim’s product and the earlier one for sheep was melatonin, so Neurim’s MA was not the first and is not entitled to supplementary protection.

Neurim, among other things, said the point of an SPC is to give protection that supplements that of the basic patent, and that the SPC it sought would be the first for its patented product, whose first MA came in 2007.

The UK court said Neurim’s arguments are not only tenable but right. “Many kinds of valuable pharmaceutical research will not get the encouragement or reward they deserve if they are not.”

The referral is a “welcomed attempt to try to reverse” a previous ECJ decision which goes against the aims of the SPC regulations, said Kilburn & Strode Patent Associate Deborah Hart. The regulations were introduced to compensate for the delays associated with securing marketing approval for medicinal products and so to encourage research in drug development, she said.

Under current case law, the grant of an SPC for a product used by humans is not allowed where an earlier MA for the same product for veterinary use has been issued, she said. “This is unfair” because there is no reward for the investment and research required to obtain marketing approval for a product in humans, she said.

At first glance, the Neurim case seems to clear the way for obtaining SPCs for second medical uses, Hart said. But the UK court’s referral questions limit the situation to where there is no overlap between the patent for the new use and the earlier MA, she said. In Neurim, there is no overlap because one patent refers to sheep, the other to humans, she said.

This is unusual as the first marketing approval is normally for a pharmaceutical compound itself for treating humans, Hart said. That would prevent the grant of future SPCs where a new use of a product has been identified, such as finding that the same medicine treats a different disease, she said.

A win for Neurim, however, will only open up the possibility of extending the patent term in a limited number of cases, Hart said. It will not allow SPCs to be granted for all new uses, but will bring case law more into line with the goals of the regulations – rewarding and sparking innovation in this “perhaps under-utilised aspect of medicinal research.”

ACTA Headed to the EU High Court?

A much more contentious issue may be on its way to the ECJ if the European Parliament Legal Affairs Committee votes on 21 March to seek an opinion on ACTA, the Foundation for a Free Information Infrastructure said.

Last month, a group of European academics published an opinion [pdf] saying that some provisions of the draft deviate from EU law.

“For the sake of start-up companies, enforcement measures beyond current EU legislation should be avoided,” said FFII, which expressed strong support for a parliamentary referral to the ECJ.