Application and Sources of EU Law

In this section, we will examine how EU law applies to our patent procedures and how it functions.

Application of EU Law

If the UPC has jurisdiction

If the UPC has jurisdiction, EU law is directly applicable.

Indeed, the UPC Agreement specifies that the court must apply EU law (Articles 20 and 24 of the UPC Agreement).

If the UPC does not have jurisdiction

If the UPC does not have jurisdiction, EU law is normally not to be taken into consideration since the EPC is a source of international law and not EU law.

However, the EPO may well recognize certain general principles of law common to all Member States (and as many Member States are also members of the Union …) (D11/91).

Interpretation of EU Law

The question of the interpretation of EU law necessarily arises.

Indeed, several points must be noted before proceeding further:

• The CJEU reserves the exclusive right to carry out this interpretation, as otherwise divergences in interpretation would arise and the uniformity of the application of the law would be compromised (Article 267 TFEU);
• Only national courts may refer questions for a preliminary ruling on interpretation (i.e., an international court does not have this capacity) (Article 267 TFEU).

Thus, to enable the UPC courts to refer questions for a preliminary ruling and thereby apply EU law correctly, the various parties negotiating the UPC Agreement skillfully arranged for a UPC court to be, in reality, a national court (or more precisely, a common court of each Member State, Article 1 of the UPC Agreement).

This was, moreover, a requirement according to the CJEU’s opinion on the predecessor of the UPC (Opinion 1/09 of 8 March 2011, CJEU).

This « common » court nonetheless greatly simplifies matters in practice, particularly for the enforcement of decisions: when a UPC court issues a decision, it is a decision of a French court, but also a Belgian court, a German court, etc.

Sources of EU Law

EU Treaties

The European Union is governed by numerous historical treaties, but two main treaties may be cited:

• Treaty on European Union (TEU);
• Treaty on the Functioning of the European Union (TFEU).

Derived Sources

Derived EU law consists of other sources of EU law, defined in Article 288 TFEU:

• Regulations, equivalent to national laws at the EU level: they establish norms directly applicable in each Member State.
• Directives, with a unique legal status: addressed to all Member States or sometimes to certain ones, they set mandatory objectives but generally leave Member States free to choose the means to achieve them within a specified timeframe.
• Decisions, binding on a limited number of addressees.
• Recommendations and opinions, which are not binding on the Member States to which they are addressed. However, the Court of Justice of the European Union considers that a recommendation may be used to interpret national or EU law.

This derived law is, by far, the most abundant source of law.

Fundamental rights and general principles of European Union law

There is no exhaustive list of fundamental rights and general principles of European Union law, but the following can be cited:

• Fundamental rights
  • the right to property,
  • freedom to conduct a business,
  • inviolability of the home;
  • freedom of opinion;
  • protection of the family;
  • protection of private life;
  • freedom of religion and belief;
  • equal treatment,
• General principles
  • primacy of European Union law,
  • the principle of subsidiarity,
  • respect for fundamental rights,
  • the principle of proportionality.

Among fundamental rights, it should be noted that there are a number of absolute rights (i.e., rights that do not admit of any exception), such as the prohibition of torture.

Of course, for a principle to be recognized as a general principle of European Union law, a number of indicators are required, and the mere mention of a concept in the treaties is not sufficient to render it general (e.g., C-147/13, in which Spain argued that the use of all the languages of the Union was a general principle and therefore opposed the limitation of languages before the EPO to three official languages).

Charter of Fundamental Rights

First proclaimed in Nice on 7 December 2000, then officially adopted in its final version by the Presidents of the European Commission, the European Parliament, and the Council of the EU on 12 December 2007, the Charter of Fundamental Rights acquired binding legal force with the Treaty of Lisbon.

Article 6 of the TEU provides, in its first paragraph, that this Charter has « the same legal value as the Treaties. »

Regarding intellectual property rights, this Charter states in Article 17 that intellectual property rights must be protected.

External agreements concluded by the EU

External agreements are conventions concluded between, on the one hand, the EU with or without its Member States, and on the other hand, third countries, regional groupings, or international organizations.

For example, agreements concluded within the framework of the World Trade Organization (WIPO) are external agreements.

Case law of the CJEU

The case law comprises the judgments of the two courts of the Court of Justice of the European Union:

• the Court of Justice, and
• the General Court.

This case law is particularly important as it ensures a unified interpretation of the treaties.

Of course, this case law also defines the general principles of European Union law (as discussed above) as well as fundamental rights.

Hierarchy of sources of law

To summarize the hierarchy of sources of European Union law mentioned above, the following diagram can be used:

Balance between the different sources of law

Introduction

If two sources of law of different hierarchical levels conflict, the source with the higher hierarchy prevails.

This is trivial, but we may encounter greater difficulty when these two sources are of the same « level, » for example:

• if the principle of equal treatment conflicts with the principle of property;
• if the principle of free movement conflicts with the principle of public health.

Balance in the Field of IP

The field of IP gives rise to a number of situations in which IP rights interfere with EU principles:

• right to property;
• right to privacy (e.g., filtering systems, C-160/15, 8 September 2016, CJEU);
• freedom to conduct a business (C-160/15, 8 September 2016, CJEU);
• freedom of expression (e.g., reuse of a work for political or commercial purposes, C-201/13, 3 September 2014, CJEU);
• etc.

Each situation must therefore be resolved with the principle of proportionality in mind.

Principle of Proportionality

The principle of proportionality is a general principle of the EU (Case 11/70, 17 December 1970 CJEC, now codified by Art 5.4 TEU and Art 52.1 of the Charter of Fundamental Rights).

Normally, the principle of proportionality should be applied by verifying a three-step test:

• verifying that the law is suitable (i.e., it effectively achieves the intended objective);
• verifying that the law is necessary (i.e., there is no other means of achieving the intended objective, considering its impact);
• verifying that the law is balanced with the principle it calls into question.

However, the CJEU may be more flexible and apply only the first two tests (C-58/08 of 8 June 2010, CJEC) or only the last test (C-70/10 of 24 November 2011, CJEC).

The CJEU may even only require that the EU norm in question is not manifestly disproportionate (C-331/88, CJEC).

In short, this principle of proportionality is quite flexible 🙂