The proposal for a European Patent Litigation Agreement would commit its signatory states to an integrated judicial system for patent disputes, including uniform rules of procedure and a common appeal court.
Backed by Internal Markets Commissioner Charlie McCreevy, the EPLA's European Patent Court would supercede national courts, and critics have argued that the court would take control of patent policy out of the hands of the elected European Parliament and put it into the hands of unelected officials. Critics worry that the EPLA could make software patents more common.
The European Parliament debated the agreement in October and though MEPs obtained concessions from McCreevy, they still failed to back the plan. They asked for it to be examined more closely amidst fears that the plan would make the awarding of patents less accountable and more expensive.
The Parliament asked its Legal Service to analyse how the EPLA would fit with existing rights, obligations, laws and treaties that make up the 'acquis communautaire', the essence of the European Union. The Legal Service advises the European Parliament on legal issues and also acts as its representatives in court actions.
The Legal Service concluded that not only do some of the provisions of the EPLA directly conflict with an existing EU Treaty, but that EU member states do not have the right to construct new agreements on matters already governed exclusively by the EU.
"Compliance with Article 98 of EPLA would prima facie constitute a breach of Article 292 EC Treaty," said the Legal Service's report. Article 292 says that "member states undertake not to submit a dispute concerning the interpretation or application of this Treaty to any method of settlement other than those provided for therein," which is taken to mean that disputes between EU member states on matters of EU law should be resolved exclusively by the European Court of Justice.
Article 98 of the proposed EPLA says: "any dispute between Contracting States concerning the interpretation or application of this Agreement which is not settled by negotiation shall be submitted, at the request of one of the States concerned, to the Administrative Committee, which shall endeavour to bring about agreement between the States concerned."
"If such agreement is not reached, any one of the States concerned may submit the dispute to the International Court of Justice for a binding decision," it says.
Those two sets of rules relating to how to settle disputes compete, says the Legal Service, and in that case the EC Treaty must take precedence.
It also says that member states are simply not allowed to make an agreement between themselves concerning matters already covered by EU laws and treaties, particularly where those agreements could affect relations with countries outside of the EU.
"Where common rules have been adopted, the member states of the European Community no longer have the right, acting individually or even collectively, to undertake obligations with non-member countries which affect those rules," said the Legal Service.
The legal opinion also said that the EPLA conflicts with a European Directive which already deals with intellectual property. "Directive 2004/48/EC harmonizes national legislation on the enforcement of intellectual property rights. Not only would EPLA govern matters already dealt with by this Directive, but there are also contradictions between the two instruments on a number of matters," it said.
The agreement, therefore, is not valid, said the Legal Service. "The Community's competence is exclusive for the matters governed by EPLA and Member States therefore are not entitled on their own to conclude that Agreement," it said.