EU Law Blog

Stem Cells, Patents and Public Policy: Ruling of EBoA on WARF/Thomson application

The European Patent Office's Enlarged Board of Appeal (EPoA) ruled on November 25th 2008 that it is impossible to grant patent protection to a certain stem cell application for reasons of public policy.

Back in 1995 the Wisconsin Alumni Research Foundation (WARF) filed an application with the EPO for a patent for a method for obtaining embryonic stem cell cultures from primates, including humans.

On July 13th 2004, an EPO Examining Division refused to grant a patent for the application on the grounds that it was found to be incompatible with the European Patent Convention (EPC). A principal reason for the refusal was that the method of obtaining stem cells used as the starting material a primate (including human) embryo which was destroyed in the process.

Then, in 2005 the Technical Board of Appeal competent in the case referred a number of points of law to the EPO's supreme judicial body, the Enlarged Board of Appeal, which is in charge of ensuring uniform application of the patent law.

The EBoA decided that patent protection could not be given to such a method because it necessarily involves the use and destruction of human embryos. The EBoA held that a patent could not be granted to protect an invention the commercial exploitation of which is contrary to public policy or public morality. It also held that the EPC prohibits patenting on uses of human embryos for industrial or commercial purposes. By the same token, the EPoA held that the provisions Directive 98/44/EC on the legal protection of Biotechnological inventions also provides that patents shall not be granted for inventions concerning uses of human embryos for industrial or commercial purposes. The EBoA must apply Directive 98/44/EC as it forms part of the EPC since 1999 and is applied by the EPO.

The ruling of the EPoA seems a narrow one. It made no determination of the patentability of claims based on any of the traditional criteria used to assess patentability – usefulness, novelty and non-obviousness. It makes clear that its decision does not address the question of patentability in general of inventions relating to human stem cell cultures.

The issue came up as to whether the EPoA should and could refer a question to the Court of Justice under Article 234 EC. It ruled that it could not do so as no legal and institutional links existed between it and the Court of Justice. Consequently, it was most unlikely that the Court of Justice would consider that the EBoA was a court or tribunal of a member State of the EU. It thus distinguished its situation from that of the Benelux Court which was in issue in Case C-337/95 Dior v. Evora, paragraph 31.

Lisbon Treaty and Czech Constitutional Court

The Czech Constitutional Court handed down its judgment of November 26th 2008 on whether ratification of the Lisbon Treaty was compatible with the Czech Constitution.

The Constitutional Court held that Articles 2 § 1 (before renumbering, Article 2a § 1), 4 § 2 (before renumbering, 2c), 352 § 1 (before renumbering, 308 § 1), 83 (before renumbering, 69b § 1) and 216 (before renumbering, 188l) of the Treaty on the Functioning of the European Union and Articles 2 (before renumbering, Article 1a), 7 and 48 §§ 6 and 7 of the Treaty on European Union, as amended by the Treaty of Lisbon, and the Charter of Fundamental Rights of the European Union are not inconsistent with the constitutional order of the Czech Republic.

The Constitutional Court stated that there would be a breach of the Czech Constitution if, on the basis of a transfer of powers, an international organization could continue to change its powers at will, and independently of its members, i.e. if a constitutional competence (competence competence) were transferred to it. But, the Court held, the Treaty of Lisbon does not have such consequences in relation to the EU, and and consequently it is consistent with the constitutional order of the Czech Republic.

Texts and materials on institutional matters: "Dorie"

The EU institutions - and the Commission in particular - have set up what looks like a useful database of texts and materials on institutional affairs.

Here a link to it.

The database is given the improbable name of "Dorie". The website states the following:

"Dorie is intended for a specialised audience interested in European institutional matters. It is a collection of documents put together over the years by the European Commission for its own purposes. The documents concern EU institutions and decision-making processes, and various intergovernmental conferences (including the 2002-03 constitutional convention) that have made changes to the founding treaties."

It is still a work in progress but seems worthwhile already.

Languages and EU law: Case T-185/05

There's nothing quite as sensitive as the law of languages in EU law. And the judgment of the Court of First Instance in Case T-185/05 Italy v. Commission shows just how sensitive and litigious the member States are about languages.

The Commission decided in principle in 2004 to publish job vacancies for a senior positions in English, French and German only. Then, in 2005, it published a vacancy for the post of Director general in OLAF, the Commission's infamous anti-fraud office, in English, French and German only.

Italy, supported by Latvia and Spain, brought an action to annul both the 2004 decision of principle and the job vacancy in OLAF on the ground that they breached Regulation n° 1/1958 which, they claimed, required that all notices affecting citizens throughout the EU must be published in all languages. They also claimed that publication in selected languages was a breach of Article 12 EC because it discriminated against the citizens who spoke the other languages.

The Court of First Instance annulled the two measures.

But the Court of First Instance did not agree with Italy that the Commission had breached Regulation n° 1/1958. It held that Regulation n° 1/1958 did not lay down a general principle that the institutions are required routinely to publish the vacancy notices at issue in the Official Journal in all the official languages. The Court of First Instance recalled that Regulation n° 1 does not apply to relations between the institutions and their employees, including candidates for jobs (Case T-203/03 Rasmussen v. Commission, paragraph 60).

The Court of First Instance also held that there is no general principle of EC law that confers a right on every citizen to have a version of anything that might affect his interests drawn up in his language in all circumstances (Case C-361/01 P Kik v OHIM, paragraph 82). Such a general principle could not, for example, be inferred from Article 290 EC and Article 314 EC.

On the other hand, the Court of First Instance found that the publication of posts in selected languages is discriminatory and should be annulled for that reason.

Antitrust, Restriction by Object and Agreed Capacity Reductions: Case C-209/07

The Court of Justice has handed down a neat judgment in Case C-209/07 Competition Authority v. Beef Industry Development Society ("BIDS") and Barry Brothers on what constitutes a restriction of competition "by object" within the meaning of Article 81 §1 EC.

The story goes something like this. Ireland is a big beef producing country but there was an overcapacity in the slaughterhouses. In 1998 the Irish Government and industry representatives commissioned a market study on that overcapacity. A "Beef Task Force" was then established by the Minister for Agriculture and Food which made a further report in 1999. That report recommended to the industry that it should reduce its overcapacity.

To do just that, certain meat processors formed the Beef Industry Development Society Ltd ("BIDS"). The members of BIDS produce about 93% of the beef sold in Ireland. The object of BIDS is to implement the reductions in the overcapacity of the slaughterhouses (‘the BIDS arrangement’). Its aim was to achieve a reduction of overcapacity of 25% within one year. In particular, the arrangement provided that some of the processors which are members of BIDS (‘goers’) undertake to leave the processing industry, to decommission their processing plants and to respect a two-year non-compete clause (‘exit agreements’). In exchange, goers are to be compensated by BIDS by means of compensation payments to be financed by the members of BIDS which stay in the processing industry (‘stayers’).

The Irish Competition Authority considered the BIDS arrangement to be restrictive of competition and sought orders from the Irish High Court restraining BIDS from implementing the arrangement. The High Court dismissed the claims of the Competition Authority which then appealed to the Irish Supreme Court. Both the High Court and the Supreme Court held that the BIDS arrangements had an effect on trade between member States because most Irish beef is exported. The Supreme Court considered also that the BIDS arrangement had the effect of restricting competition within the meaning of Article 81 (1) EC but was uncertain whether the arrangement had the object of restricting competition. Consequently, it asked the Court of Justice whether such an arrangement had the object of restricting competition within the meaning of Article 81 §1 EC.

The Court of Justice held that such an arrangement did indeed have the object of restricting competition within the meaning of Article 81 §1 EC.

The Court recalled that, to come within the prohibition laid down in Article 81 §1 EC, an agreement must have ‘as [its] object or effect the prevention, restriction or distortion of competition within the common market’. It has been settled caselaw since the judgment in Case 56/65 LTM that the alternative nature of that requirement, indicated by the conjunction ‘or’, leads, first, to the need to consider the precise purpose of the agreement, in the economic context in which it is to be applied. Where, however, an analysis of the clauses of that agreement does not reveal the effect on competition to be sufficiently deleterious, its consequences should then be considered and for it to be caught by the prohibition it is necessary to find that those factors are present which show that competition has in fact been prevented or restricted or distorted to an appreciable extent.

It also recalled that in deciding whether an agreement is prohibited by Article 81 §1 EC, there is no need to take account of its actual effects once it appears that its object is to prevent, restrict or distort competition within the common market (Joined Cases 56/64 and 58/64 Consten and Grundig v Commission, and Case C‑105/04 P Nederlandse Federatieve Vereniging voor de Groothandel op Elektrotechnisch Gebied v Commission, paragraph 125). That examination must be made in the light of the agreement’s content and economic context (Joined Cases 29/83 and 30/83 Compagnie royale asturienne des mines and Rheinzink v Commission, paragraph 26, and Case C‑551/03 P General Motors v Commission, paragraph 66). The distinction between ‘infringements by object’ and ‘infringements by effect’ arises from the fact that certain forms of collusion between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition.

The Court analysed the BIDS arrangement and found that it was clearly intended to enable several undertakings to implement a common policy of encouraging some of them to withdraw from the market and to reduce the overcapacity which affects their profitability by preventing them from achieving economies of scale.

It found that such an arrangement conflicts patently with the concept inherent in the rules on antitrust in the EC Treaty, according to which each economic operator must determine independently the policy which it intends to adopt on the common market. It recalls that Article 81 §1 EC is intended to prohibit any form of coordination which deliberately substitutes practical cooperation between undertakings for the risks of competition.

[The Eur-Lex website is working now. Probably not for long. But links have been added.]

Citizenship, Grants, Students and Ex-workers: Case C-158/07

Has the Court of Justice halted the inexorable march of rights under the banner of "citizenship" ? Perhaps not. But the recent judgment in Case C-158/07 Jacqueline Förster v. Hoofddirectie van de Informatie Beheer Groep does give the member States some latitude to treat citizens of other member States differently from their own.

Here's the story. Jacqueline Förster, a young German woman, went to the Netherlands and enrolled for training as a primary school teacher in 2000. She got a job to help support herself while she studied. She also got a grant from the competent Dutch authority, the IB-Groep, from September 2000. That authority took the view that Ms Förster was a ‘worker’ and, consequently, should be treated in the same way as a student of Dutch nationality as regards maintenance grants. Later, when it checked up, the IB-Groep discovered that Ms Förster had not been gainfully employed between July 2003 and December 2003. As she could no longer be considered to be a worker, the IB-Groep annulled the decision giving her a grant that was paid between July and December 2003 and asked her to repay the amounts paid during that time.

Ms Förster challenged that decision and claimed that she was already sufficiently integrated into Dutch society during the period at issue to be able to claim a maintenance grant as a student under EC law. She relied on the judgment in Case C-209/03 Bidar in which the Court of Justice held that the existence of a certain degree of integration may be deemed established by a finding that a student has resided in the host member State for a certain length of time. But, following that judgment the IB-Groep adopted a policy rule which provided that a student from the EU must have been lawfully resident in the Netherlands for an uninterrupted period of at least five years before claiming a maintenance grant.

The competent Dutch court, wondering whether Ms Förster should be treated like a Dutch national, then referred questions to the Court to ask under what conditions a student from another member State may be entitled to a grant and whether the residence requirement of 5 years is compatible with EC law.

The Court of Justice replied that such a 5 year requirement was indeed compatible.

In the first place, the Court held that Ms. Förster did not come within the ambit of Regulation 1251/70 that entitles a worker who has ceased her employment activity to remain permanently in the territory of a member State after having worked there as an employed person and to continue to be entitled to equality of treatment with nationals, subject to certain conditions: Ms Förster did not, as a matter of fact, meet those conditions.

Then, the Court held that that a residence requirement of 5 years, such as that laid down by the Dutch authorities, does not go beyond what is necessary to attain the objective of ensuring that students from other member States are to a certain degree integrated into the society of the host member State, as required by the judgment in Case C-209/03 Bidar. The Court found that the residence requirement was applied on the basis of clear criteria known in advance (see Case C-138/02 Collins). Consequently, the Court held a student who is a national of one member State and travels to another member State to study there can rely on the first paragraph of Article 12 EC in order to obtain a grant where she has resided for a certain period in the host member State. But Article 12 EC does not preclude the application to nationals of other member States of a requirement of five years’ prior residence even when such a requirement is not imposed on nationals.

Appointments to the Court of Justice in October 2009

We drew your attention in a post a while ago to a letter sent by the President of the Court of Justice to the President of the Council on judicial reappointments in which he asks that decisions on appointments be taken as early as possible.

It seems that the Council is taking the matter to heart and has now asked the member States for nominations by January 15th 2009 at the latest.

You can read the document here.

The handy thing is that the document contains a reference to the system of rotation of Advocate generals. it is set out Declaration n° 2 by the Plenipotentiaries annexed to the Final Act of the Treaty concerning the accession of Norway, Austria, Finland and Sweden to the EU (OJ 1994, C 242, p. 345) (we'd love to provide a link by the Eur-lex is malfunctioning ... again).

State liability, Pharmaceuticals and Marketing Authorization: Case C-452/06

Here's an interesting judgment handed down the other day about the liability of a member State for failure to recongize the marketing authorization for a drug granted pursuant to Directive 2001/83 on the Community code relating to medicinal products for human use in another member State. In its judgment in Case C-452/06 Synthon BV the Court of Justice decides that such a failure by a member State does indeed constitute a sufficiently serious breach of of EC law capable of rendering that State liable in damages.

The judgment is interesting for other, more technical aspects of the law relating to pharmaceutical drugs but we won't concern ourselves with those here.

On the issue of state liability, the Court repeats its traditional caselaw (Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame, paragraph 51; Case C-5/94 Hedley Lomas, paragraph 25; and Case C-278/05 Robins and Others, paragraph 69), according to which, for a member State to incur liability for damage caused to individuals by a breach of EC law it is necessary that:
– the rule of law infringed should be intended to confer rights on individuals;
– the breach should be sufficiently serious;
– there should be a direct causal link between the breach of the obligation incumbent on the State and the damage sustained by the injured parties.

It also recalls that it is in principle for the national courts to determine whether the conditions for State liability for breach of EC law are met. Nevertheless, the Court of Justice may indicate certain circumstances which the national courts may take into account in their evaluation (Case C-150/99 Stockholm Lindöpark, paragraph 38).

As to the condition requiring a sufficiently serious breach of EC law, the Court of Justice recalls that such a breach is established where it implies manifest and grave disregard by the member State for the limits set on its discretion, the factors to be taken into consideration in this connection being, inter alia, the degree of clarity and precision of the rule infringed and the measure of discretion left by that rule to the national authorities (Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame, paragraphs 55 and 56, and Case C-278/05 Robins and Others, paragraph 70).

If the member State is not called upon to make any legislative choices and has only considerably reduced, or even no, discretion, the mere infringement of EC law may be sufficient to establish the existence of a sufficiently serious breach (Case C-5/94 Hedley Lomas, paragraph 28, and Case C-278/05 Robins and Others, paragraph 71). As a consequence, the member State’s discretion, which is broadly dependent on the degree of clarity and precision of the rule infringed, constitutes an important criterion to determine whether there has been a sufficiently serious breach of EC law (see, Case C-278/05 Robins and Others, paragraphs 72 and 73).

In the present case, the Court of Justice found that although determining whether a pharmaceutical product is essentially similar to another is a complex assessment, failure to accord mutual recognition to a marketing authorization already granted in another member State does indeed constitute a sufficiently serious breach of EC law to give rise to liability in damages. The Court of Justice recalled that Directive 2001/83 lays down clear and precise obligations on member States in the context of the recognition of a marketing authorisation already granted by another member State applying one of the procedures provided for that purpose in the directive.

For a previous post on Case C-278/05 Robins and Others, see here.

Immunity of Members of the European Parliament: Joined Cases C-200/07 and C-201/07

Here's a rather curious but interesting case dealing with the immunity from suit of Members of the European Parliament.

The Court of Justice held in Joined Cases C-200/07 and C-201/07 Marra v. De Gregorio and Clemente that in principle Members of the European Parliament enjoy absolute immunity barring any judicial proceedings in the courts of member States. But there is quite a bit more in the judgment as we'll see.

What happened was that Alfonso Marra, when he was a Member of the European Parliament, distributed leaflets to which two men, De Gregorio and Clemente, objected because they considered they contained derogatory remarks about them. De Gregorio and Clemente sued Marra in damages before an Italian court and won. The case went on appeal to the Naples Appeal court which upheld the award of damages made at first instance. Those courts did not agree with Marra that the distribution of the leaflets took place in the performance of his parliamentary duties. Marra then appealed to the Italian Supreme Court, the Corte di cassazione, claiming that prior authorization to bring the suit was needed from the European Parliement according to Rule 6 of its Rules of Procedure and without such authorization, claiming immunity from suit on the basis of Article 9 of the Protocol on the Privileges and Immunities of the European Communities. That provides:

"Members of the European Parliament shall not be subject to any form of inquiry, detention or legal proceedings in respect of opinions expressed or votes cast by them in the performance of their duties."

The problem was that Mr Marra had asked the European Parliament to rule on his immunity which it did so in a resolution that was never communicated to the Italian courts seised. Those courts thus were not aware that he had asserted his immunity.

The Court of Justice made clear that it was not asked by the Italian Supreme Court whether the leaflet distributed by Mr Marra constitutes an opinion expressed in the exercise of parliamentary duties within the meaning of Article 9 of the Protocol. It stated that it was asked to give guidance on where a Member of the European Parliament does not make a request to the Parliament for defence of his immunity, or where a decision from the Parliament on that immunity is not communicated to the national judicial authorities before which actions such as those in the main proceedings are brought, those authorities are required to request the Parliament to waive the immunity of the member in question, and to await the decision of that institution before ruling on whether such immunity exists.

The Court of Justice held first of all that the national courts have exclusive jurisdiction to determine whether the conditions for applying the immunity granted by Article 9 of the Protocol on Privileges and Immunity are met. If a national court has a doubt concerning the interpretation of that provision they may refer a question to the Court of Justice pursuant to Article 234 EC. National courts are not obliged to refer to the Parliament the decision on whether the conditions for recognising that immunity are met, before ruling on the opinions and votes of Members of the Parliament. It held that the Rules of Procedure are rules of internal organization and cannot grant powers to the Parliament which are not expressly acknowledged by a legislative measure, in this case by the Protocol. Consequently, even if the Parliament, pursuant to a request from the Member concerned, adopts, on the basis of those rules, a decision to defend immunity, that constitutes an opinion which does not have binding effect with regard to national judicial authorities.

But, the Court of Justice continued, there was a duty on the national courts and the European Parliament to coöperate pursuant to Article 10 EC. As a result, where an action has been brought against a Member of the European Parliament before a national court and that court is informed that a procedure for defence of the privileges and immunities of that Member, as provided for in Article 6(3) of the Rules of Procedure, has been initiated, that court must stay the judicial proceedings and request the Parliament to issue its opinion as soon as possible. Once the national court has established that the conditions for the absolute immunity, provided for in Article 9 of the Protocol are met, the court is bound to respect that immunity, as is the Parliament. It follows that such immunity cannot be waived by the Parliament and that, as a result, that court is bound to dismiss the action brought against the Member concerned.

There is an interesting little procedural twist in the case. The European Parliament wished to lodge written observations with the Court of Justice. Article 23 of the Statute of the Court of Justice affords the European Parliament the right to submit its observations on references for preliminary rulings concerning acts adopted ‘jointly’ by the European Parliament and the Council of the European Union. But, that provision does not explicitly afford the Parliament the right to submit observations in cases, such as those in the main proceedings, which concern the Protocol and its Rules of Procedure.

The Court of Justice overcomes that difficulty by interpreting Article 23 of the Statute broadly. It held that since Article 23 affords the Parliament the right to submit written observations in cases concerning the validity or interpretation of an act for which it is a co-legislator, such a right must, a fortiori, be afforded to it where a reference for a preliminary ruling concerns the interpretation of an act adopted by that institution of which it is the sole author, such as the Rules of Procedure.