In a judgment issued on 16 April 2013 (here), the CJEU has dismissed challenges by Spain and Italy which could have struck a fatal blow to the proposed unitary patent and Unified Patent Court (UPC) system. The challenge was to the legality of Council Decision 2011/167/EU of 10 March 2011 authorising the use of the “enhanced cooperation” procedure to create the unitary patent, and seeking annulment of that Council decision.

The Court summarised the cases made by Spain and Italy as follows:

“In support of its action, the Kingdom of Spain claims, principally, that the contested decision is vitiated by misuse of powers and failure to have due regard for the judicial system of the Union. In the alternative, it alleges breach of the conditions set forth in Article 20 TEU and in Articles 326 TFEU and 327 TFEU, especially those relating to the non-exclusiveness of those competences whose exercise is authorised in respect of enhanced cooperation, to the requirement that recourse be had to the latter only as a last resort and to not undermining the internal market.

In support of its action, the Italian Republic maintains that the contested decision is marred, first of all, by the fact that the Council has no competence to establish enhanced cooperation in order to create protection by a unitary patent (‘the enhanced cooperation in question’), next, by misuse of powers and breach of essential procedural requirements, namely, and in particular, failure to give reasons and breach of the condition laid down in Article 20(2) TEU, that the decision authorising enhanced cooperation must be adopted as a last resort and, last, various infringements of Article 20 TEU and of Articles 118 TFEU and 326 TFEU.”

In more detail, five pleas were made as follows, and each was rejected:

• that the Council lacked competence to establish the enhanced cooperation in question;
• misuse of powers;
• breach of the condition that a decision authorising enhanced cooperation must be adopted as a last resort;
• infringement of Article 20(1) TEU and of Articles 118 TFEU, 326 TFEU and 327 TFEU; and
• disregard for the judicial system of the Union.

Where then does this leave the dossier? This decision was not unexpected in that Advocate General Bot came to the same view in December 2012.  Nonetheless, plainly an important hurdle has been overcome, and the decision will doubtless encourage Member States in progressing preparations to set up the UPC which began in earnest in March following signature of the UPC Agreement on 19 February 2013. Further, it may be that this decision may cause Italy, which has signed the UPC Agreement but is not participating in the unitary patent part of the project, to review its position and possibly join in that part of the system also.

Substantial hurdles remain, however. Foremost among these is a yet further Spanish challenge to the legality of the proposed regime: this time to the unitary patent and language Regulations themselves. This action was brought in late March 2013, and until a decision in that action is handed down, an element of uncertainty undoubtedly remains. The decision is likely to be some time in the first part of 2015.