Striking Deficiencies of the EU Legislative Process for Implementing a Unified Patent Infrastructure

While some understand the 'Berlaymont' façade as symbol for a spirit of transparency, openness, and citizen involvement of EU policy making, others only recognise a good business for window wipers.

The epic and painful process of drafting and implementing a unified European patent infrastructure, which got stuck again on the latest Competitiveness Council meeting of 31 May/1 June 2012 (see our reports here and here as well as further coverage [1], [2]) discloses frightening mechanisms and structural deficiencies of the European policy-making process that may endanger stability and acceptance of and confidence in the European Union as a whole, particularly before the background of the current severe financial and depths crisis that shakes the Union like nothing else before.

Upon a closer look at the process, four major problems can be identified that prevent EU politicians to find a reasonable solution satisfying the needs of the European innovative economy:

1. Ignorance as to users and experts and their mostly well-founded observations;
2. A striking lack of transparency preventing public involvement;
3. An information policy that disguises more than it discloses; and
4. National egoisms, inappropriate horse-trading and power games.

Below I collect some striking examples of each of the above four phenomena.

1)  Disregard of system users and experts. Particularly under the Polish Presidency (2nd half-year of 2011) and continued under the Danish Presidency (1st half-year  of 2012) the substantive work of drafting and negotiating the Unitary Patent Regulation and the UPC Agreement was increasingly accompanied by criticism among potential users of the new system, such as industry representatives, attorneys and lawyers, patent judges and further legal experts (cf. e.g. EPLAW resolution, Venice patent judge’s resolution, opinion of Sir Robin Jacob, opinion of Prof Krasser, ICC paper , IP Federation, CIPA, Business Europe, FICPI position paper, etc.). The general demand of all those groups was to not push through a faulty, merely political solution but to slow down the legislative process, organize a proper user-consultation and then arrive at a legally sound and practically useful solution acceptable for potential users.

Instead, the politicians dealing with this matter decided to drop all expert advice and disregard all user concerns in order to force a breakthrough by some purely political decision just to achieve something the heavily shaken European Union can celebrate as a success.

A good example for this push-through-attitude is the 20 December 2011 vote of the EU Parliament’s powerful JURI committee (see members) for the EU25 Unitary Patent Regulation after a series of back room negotiations, despite the fact that Articles 6 to 8 of the proposed Regulation were strongly criticized as to having the effect that substantive patent law becomes subject to EU legal order and making the European Court of Justice the last instance for all patentability and infringement issues raised in connection with a Unitary Patent, as pointed out by the above-referenced stakeholders and also a few politicians such as JURI member Cecilia Wikström (SE, ALDE) [1, 2, 3] and UK IP Minister Baroness Wilcox and the UK Scrutiny Committee (however, see also our defense of Art. 6 to 8 and the CJEU). In spite of all that controversy, the Linguistic Secretariat Of The EU Council began to finalize the Regulation text already in January 2012, which could only be interpreted as a clear signal to potential system users that the dice were cast at least for the Regulation – again without consulting system uses and experts and despite ongoing controversies and criticism (“disaster“, “bound to fail“, etc.).

The preliminary and dramatic endpoint of this disturbing development is marked by the somewhat desperate e-mail that prominent IP litigator and former legal expert consultant to the EU Commission Jochen Pagenberg sent to EU Council President Herman Van Rompuy (see also this article), in which he addressed the following severe issues:

• Abandonment of the original goals (patent litigation system working in practice and attractive to its users) occurred behind closed doors in an unprecedented process of legislation, as the papers of the “patent package” had never seen the light of a public discussion;
• Matter has been handled by the instances in Brussels over the last six months in such an  undemocratic behavior that few people in Europe would have imagined;
• Council hides legislative texts from public discussion because they fear that otherwise users and members of national parliaments would learn about negative impacts of the project and therefore would oppose and refuse ratification;
• Many additional flaws have found their way into the texts as a result of political compromises which again have never been discussed with users.

2)  Lack of Transparency. We have frequently reported on the EU’s tendency to lock away documents offering substantial content that may, however, provoke discussions and objections among stakeholders (see e.g. intransparent wheeling and dealing, EU locks away documents, something to hide), which is not what one may expect of democratic institutions like the EU Council and its Presidency. For example, in preparation of the recent Competitiveness Council meeting, the Danish Presidency circulated important Document 10059/12 („Draft Agreement on the creation of a Unified Patent Court – Suggested way forward for a political agreement”) which was not disclosed to the public. The not less important Opinion of the Legal Service regarding the compatibility of the draft agreement (doc. 13751/11) with Opinion 1/09 of the European Court of Justice was likewise classified confidential (“LIMITE”). After a request for public access according to Reg. No. 1049/2001, we were served with a useless, heavily redacted version of the requested Document.

In view of the soon to be expected new EU Freedom of Information Rules, it is feared that a re-definition of the concept of a “document” as being ”finalized for the purpose it was intended” enables all kinds of intransparencies and political arbitrariness as sensitive texts may be prevented from maturing into “document” status. Clearly, this sort of modern Machiavellism is less than acceptable in view of the future development of the European democracy in the 21st century. A few recent examples of such practice may be seen here, here, or here.

3)  Information of the public and political marketing. Closely linked with the previous point is the way the EU Commission, the EU Council, the respective Council Presidencies and the EU press legion inform the public on the development of this matter. The press releases and official statements are full of breakthroughs and historical successes (“step closer“, “done deal“, “green light“, etc.) that, looked at it in bright light, mostly turn out to be marginal or formal steps only. The most absurd official PR language, however, relates to the alleged cost reductions of up to 70% – or even ridiculously 80% (e.g. here, here) – the Unitary Patent will allegedly bring for patent applicants (and/or proprietors?), in particular SMEs, which is constantly repeated like a mantra also by high EU and EPO representatives such as Commissioner Michel Barnier and EPO President Benoît Battistelli, who really ought to know better (see here).

The latest such misinformation came from Danish Business and Growth Minster Ole Sohn in a press conference of 30 May 2012 (see video), in which he explained in all seriousness that obtaining an EP patent costs about 36.000 EUR, as compared to 2.000 EUR for an US patent and 600 EUR for a CN patent. One is inclined to recommend the Danish Presidency to better consult a patent attorney before making such statements.

In any case, such unrealistic promises are nothing more than political marketing and window dressing based on unrealistic assumptions that will undermine the confidence of professionals in the skills and expertise of the politicians in charge.

4)  Particularism and national egoisms. It is almost a tradition that important EU project nearly or fully fail because of contra-productive paticularisms and national egoisms, as was demonstrated lately by British Prime Minister David Cameron who refused to increase fiscal integration within the EU and introduce a financial-transaction tax on the EU summit on 9 December 2011 for no other reason than to protect the London City‘s banking industry from financial burden.

It is because of examples like this that nowadays the European Union is increasingly recognized as a hardly manoevrable super tanker which is not any more able to follow new paths for the sake of economical and civil progress since its multi-national crew is constantly arguing about the course.

In fact, the 40 years long history of the Community Patent is an ideal example of constant failure due to national egoisms, mostly related with holy language issues. For example, after the previous attempt to implement a European patent infrastructure – the Community Patent Regulation – was stalled in 2004, then-Commissioner for the Internal Market Frits Bolkestein feared in March 2004 that “the failure to agree on the Community Patent undermines the credibility of the whole enterprise to make Europe the most competitive economy in the world”, adding that this was a result of the “vested, protectionist interests” of the member states. Then-President of the EU Commission Romano Prodi likewise recognized that “member states [...] were not coherent”.

Since the formal restart of the EU Patent project during the Portugese Presidency in the 2nd half-year of 2007 and the after the important steps made under the Swedish Presidency in the 2nd half-year of 2009 (single patent court, accession of the EU to the EPC, patents validated for the EU will have unitary effect), the language issue – blocking a harmonized EU patent infrastructure for decades – resurfaced under the Belgian Presidency (2nd half-year of 2010) and lead to the final collapse of a true EU patent effective for the full EU27, since Spain and Italy opposed to the suggested three-language regimein line with Art. 14 EPC (cf. joint letter of Messrs. Zapatero and Berlusconi). This time it was particularly Spain (“we cannot accept discrimination”) that stubbornly refused to subordinate national interests under a European ‘reason of state’, much to the detriment of European progress. By the later decision to establish a smaller EU25 patent (without ES and IT) by means of enhanced co-operation, the originally targeted EU27 Unitary Patent was formally buried under the Hungarian Presidency (1st half-year of 2011) as the EU Council authorized enhanced co-operation on 10 March 2011. The triumphant celebration of this different type of “break though” (see here) was in fact only a side aspect of another epic failure.

From a perspective of European cooperation, things became even worse as the EU administration decided that it was politically wise to claim that the draft texts are “broadly accepted in substance” and “only the seat of the Central Division remains to be decided” (see e.g press release after Competitive Council of 5/6 December 2011) by which the destiny of the whole project was reduced to one particular question of power (only later identified as a real obstacle) to be decided in the usual EU horse-trading way between the EU’s largest member states Great Britain, Germany, and France who all throwed down the gauntlet in the competition to host the important 1st instance EU Patent Court.

In brief, the political game of power went so that Paris, presented as a compromise candidate for the opposing London and Munich bits, was initially rejected but recently declared favorite. Before this background, the Italian change of attitude to support the Unified Patent Court (but, interestingly, not the Unitary Patent) if the Central Division is awarded to Milan will not be of much help and can be seen as another example of national opportunism (see here). Most of the arguments pro and con the various candidates are focused on particular national interests (“Billions at stake”) but not so much on European interests and perspectives (see here and here).

Conclusion. We all know that none of the above phenomena is appropriate to characterize a democratic legislation process in an enlightened society governed by democratic institutions and leaders. One thing is clear, Europe as a whole and all its single nations need to overcome such antiquated behavioral patterns to be able to advantageously shape both an efficient patent infrastructure in particular and the future of our continent in general.