European Commission may ask European Court of Justice for opinion on EPLA ratification, says patent-law campaigner

Starnberg, Germany, 10 Jul 2006

As I explained in my previous blog entry, EU internal market commissioner Charlie McCreevy is going to announce pretty soon that he wants to help to get the European Patent Litigation Agreement (EPLA) ratified. The EPLA is a new attempt to make software and business method patents more enforceable in Europe, and beyond that effect, it would generally encourage certain types of patent holders to litigate.

But there's a technical problem ("technical" in terms of "legally technical"): The European Commission's legal services say the EPLA is a so-called "mixed agreement" that the member states of the EU cannot conclude on their own: they need the EU involved. To be very precise, it's not the EU (European Union), but the EC (European Community, formerly called European Economic Community) that has to do this. However, for the purposes of this blog, I'll just talk about the EU (it's about the same set of member states anyway).

The Commission's legal services say that the EPLA interacts with parts of the acquis communautaire (the totality of existing EU law), in particular Regulation 44/2001 ("Brussels I Regulation" on jurisdiction) and Directive 2004/48 (intellectual property rights enforcement). There is a rule in the EU that if a certain field of law has already been regulated by the EU, the EU member states must not enter independently intointernational treaties that affect the same law because conflicts might arise sooner or later.

The Commission's position is shared by, among others, Klaus-Heiner Lehne, an influential conservative MEP (Member of the European Parliament), but not by the proponents of the EPLA. A number of them, including the Brussels-based lobbying organization EICTA, claim that the EPLA is perfectly in line with the acquis communautaire. And they stress that negotiations on the EPLA began years before the two aforementioned pieces of EU law took effect, claiming that the European Court of Justice (ECJ) has previously allowed EU member states to move forward on their own with an international treaty because the beginning of negotiations predated the affected parts of the acquis communautaire. There are some other theories as well.

The motivation on the part of the pro-EPLA movement is obvious: They want the EPLA to be ratified, and it's easier for them to get a number of countries (possibly even just two, such as Germany and another one) to do so directly. As soon as the EU is involved, certain decisions have to be taken at the EU level. And for decisions in the EU, you either need (depending on the type of decision) unanimity in the EU Council (i.e., the votes of all member states, which means that presently 1 out of 25 countries could block the decision) or a qualified majority (much more than 50% of the votes) in the Council plus the support of the European Parliament. The software patent directive failed because of the latter requirement: the EP voted it down.

That's exactly what the proponents of the EPLA fear, and they believe it's easier for a couple of countries to get started with the EPLA. National governments could agree on such a deal in direct negotiations (at a diplomatic conference), and could then have their national parliaments (in which the government parties typically have a majority) ratify the deal. The EPLA would only take effect in those countries which ratify it, of course. In the EPLA, a minimum number of countries would have to be defined for the agreement to take effect, and that number has not been agreed upon thus far, but some even said two countries might be enough if one of them is large (such as Germany, which is very keen to get the EPLA ratified).

Even though the proponents of the EPLA would like to lower the hurdle for ratification, most of them (except for a very few die-hard radicals) would rather not take their chances. If some EU member states pressed ahead with the EPLA in breach of their EU-related obligations, the ECJ might later rule that their having ratified the EPLA took place on illegal grounds. That would be a nightmare, especially if it were to occur at a point in time at which the European Patent Court (which would be created under the EPLA, but outside the EU) might already have adjudicated a number of cases: those rulings might then become invalidated, at least as far as the EU is concerned.

At this EPLA-focused conference in London on June 30 (i.e., 10 days ago), Jacqueline Minor, a high-ranking Commission official (her title is "director, knowledge-based economy"), made a presentation. In her talk, she mentioned the possibility of the Commission obtaining an ECJ opinion under Article 300(6) of the Treaty Establishing the European Community ("EC Treaty") beforehand. That paragraph says the following:

The European Parliament, the Council, the Commission or a Member State may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the provisions of this Treaty. Where the opinion of the Court of Justice is adverse, the agreement may enter into force only in accordance with Article 48 of the Treaty on European Union.

The second sentence basically means that if the ECJ says a proposed agreement (such as the EPLA) is not in line with the EC Treaty, the EC Treaty has to be modified, which requires a unanimous decision by the EU member states.

I'm pretty certain that the Commission is going to obtain the ECJ's opinion on the EPLA. I have no doubt McCreevy wants the EPLA ratified, and even though the Commission as a whole would, for institutional reasons, not view favorably the conclusion of the EPLA without the EU's involvement, I think McCreevy personally would love the idea of lowering the hurdle for the ratification of the EPLA. And if the ECJ says the EU has to be involved, then no one can blame the Commission for having had a correct legal opinion. The Commission and particularly McCreevy only have something to gain and nothing to lose by asking the ECJ for an opinion, so I can't imagine they wouldn't do it. Even most of the proponents of the EPLA would very much prefer to have legal certainty, one way or the other. Dr. Minor said in her speech that the ECJ can deliver such an opinion within three to six months. But there's no guarantee: it can always take longer.

When the Commission will formally ask the ECJ for an opinion is another question. Maybe McCreevy will already announce this at the hearing on Wednesday. Maybe he'll do so at some point after the summer vacation season.

There are also some question marks concerning the status of the EPLA-related documents that the ECJ would have to analyze. There is a draft EPLA, but it contains placeholders because some questions have not yet been resolved and would have to be hammered out at an intergovernmental conference. There is also a draft statute for the EPLA court, but there are no Rules of Procedure for the EPLA court yet. The Commission might first ask the intergovernmental working party that negotiates the EPLA to get its act together and present a final set of proposed documents (possibly even including the Rules of Procedure) for the ECJ to decide on. Or if the Commission asks the ECJ on the current basis, the ECJ might be unable to provide a definitive opinion for the lack of a complete and final set of EPLA documents.

Related blog entries, including a copy of Florian Mueller's speech to be delivered at the Commission hearing on patent policy on 12 July, can be found at No Lobbyists As Such

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