C-44/98

BASF V PRÄSIDENT DES DEUTSCHEN PATENTAMTS

OPINION OF ADVOCATE GENERAL LA PERGOLA delivered on 22 April 1999 *

I — The question referred for a preliminary Member State within three months of the ruling and the facts and law in the main publication in the European Patent Bulletin proceedings of the mention of the grant of the patent?'

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3. The rules on the use of languages courts of the contracting States. contained in the Convention are particu- larly important as regards the outcome in the present case. They are designed to reconcile various requirements: efficiency of proceedings before the European Patents Office (hereinafter 'the EPO') with equality between the languages of the Contracting States; and the interests of a patent appli- 4. The basic feature of the European patent cant or patent holder with those of his system is the national protection offered by competitors. 1Article 14 of the Convention states that patent applications must be filed in one of the official languages of the EPO, 2 — Under Articles 78 and 98 of the Convention, European that is to say, English, French or German. patent applications and specifications must contain a description of the invention, one or more claims, and any However, natural or legal persons having drawings referred to in the description or the claims.

The translation in English, French or German applicant must also: (v) disclose the invention in such terms within three months after the filing of the that the technical problem and its solution can be under- stood, and (vi) describe the figures in the drawings, if any. In European patent application, and no later addition, the purpose of the description is to define the matter for which protection is sought in the patent than 13 months after the date of priority application: this should be on the basis of the principle (see Rule 6 (1) of the Implementing Reg- that the claims which define the object of that protection must be clear and concise and be supported by the ulations to the Convention, hereinafter 'the description (Article 84 of the Convention). Similarly, Arti- cle 69 of the Convention provides that the extent of the Regulations'). The language in which the protection conferred by the European patent or a European applicant chooses to draft or translate the patent application is to be determined by the terms of the claims; nevertheless, the description and drawings are to be patent application is to be used in all used to interpret the claims. The Protocol on the Inter- pretation of Article 69, which forms an integral part of the proceedings before the EPO relating to that Convention, states that Article 69 should not be interpreted in the sense that the extent of the protection conferred by a application or to the patent issued as a European patent is to be understood as that defined by the result of those proceedings. In particular, strict, literal meaning of the wording used in the claims (the description and the drawings serve only to dispel any applications for European patents and the ambiguities); neither should Article 69 be interpreted in the sense that the patent protection extends to what, from a relevant specifications must be published in consideration of the description and drawings by persons skilled in the art, the patentee has contemplated, with the claims serving merely as a guideline. On the contrary, Article 69 of the Convention is to be interpreted as defining a position between these extremes which combines fair 1 — See van Benthem, J.B_: 'The Solution of the Language protection for the patentee with a reasonable degree of Problem in the European Patent Conventions', in 17C, 1975, certainty for third parties.

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each of the designated States (see point 2 and permanent protection of the applicant above). This explains why Contracting respectively: provisional protection is con- States whose official language is not the ferred on the applicant from the date on language of the proceedings must have a which the application is published, whilst text drafted in or translated into their own permanent protection comes after the Eur- language, which is also in the interest of opean patent has been granted. These innovative and competitive capacity of provisions are intended to compensate for their national economy. The provisions the initially unfavourable situation of Con- regarding publication of measures having tracting States whose official language is legal effects erga omnes as regards patents not one of the official languages of the EPO must also be read in conjunction with the (or the language of the proceedings), by provisions of Articles 61 (3) 3and 65 4 of enabling them to require that such docu- the Convention, which concern provisional ments will be effective in their territory only if there is a translation in a language of that State. 5

The 4 — Under Article 65 of the Convention ('Translation of the second and third subparagraphs of Article specification of the European patent'), as amended from II (3) of the Gesetz über internationale 1 January 1996 by the Decision of the Administrative Council of 13 December 1994: Patentübereinkommen (Law on Interna- `1. Any Contracting State may prescribe that if the text, in which the European Patent Office intends to grant a European patent or maintain a European patent as amended for that State, is not drawn up in one of its official languages, the applicant for or proprietor of the patent shall 5 — I should like to point out, incidentally, that the translation supply to its central industrial property office a translation of the claims or of the full text of the patent is important not of this text Ín one of its official languages at his option or, only as regards the possibility of obtaining national where that State has prescribed the use of one specific protection from the designated Contracting State, for the official language, in that language. The period for supplying application or for the patent issued, but may also play a the translation shall end three months after the date on decisive part in determining the scope to be accorded to the which the mention of the grant of the European patent, or patent, and hence also in determining the extent of that the maintenance of the European patent as amended, is protection. By way of derogation from the basic principle published in the European Patent Bulletin unless the State that the authentic text is the one in the language of the concerned prescribes a longer period. proceedings (see point 3 above), Article 70 (3) of the

3. Any Contracting State may prescribe that in the event of tion which is narrower than that conferred by it in the failure to observe the provisions adopt in accordance with language of the proceedings. In other words, Contracting paragraphs 1 and 2, the European patent shall be deemed States may, in order to establish whether or not an to be void ab initio in that State' (emphasis added). infringement has been committed, rely on the version of According to the order for reference, the decision to require the application or the patent in the language of that State, translation of the European patent specification was where that version confers an exclusive right which is more adopted in all the Contracting States apart from Luxem- limited than that deriving from the text of the document in bourg and Monaco. the language of the proceedings.

'(1) If the text in which the European Patent Office intends to grant a Eur- opean patent for the Federal Republic of Germany is not drawn up in Ger- man, the applicant for or proprietor of 6. BASF AG, the plaintiff in the main the patent shall supply to the German proceedings, is the proprietor of European Patent Office within three months of patent 0 398 276, which concerns an the publication of the mention of the "automotive paint sealer composition". grant of the European patent in the This patent, issued by the EPO in respect European Patent Bulletin a German inter alia of the Federal Republic of Ger- translation of the patent specification many, was transferred to it by BASF and shall pay a fee in accordance with Corporation, a company formed under the scale of fees. laws of New Jersey (USA); it was entered in the German Patent Register on 26 August 1997. A mention of the grant of the patent at issue was published in English in the European Patent Bulletin on 24 July 1996. By order of 5 May 1997, notified to the BASF Corporation on 22 May of that year, the German Patent Office found, under the second and third subparagraphs of Article II (3) of the IntPatÜG, that the patent in question was to be deemed void ab initio in Germany since the company had not filed a German translation of the specification within the prescribed time-limit. The BASF Corpora- tion brought the present action before the Bundespatentgericht in order to obtain the annulment of the German Patent Office's (2) If the translation is not filed within the decision; the action was subsequently taken prescribed period or in a form suitable over by BASF AG. for publication or if the fee is not paid within the prescribed period the Eur- opean patent shall be deemed to be 7 — My translation. Article 2(1) of the Verordnung über die Übersetzungen europäischer Patentschriften (Regulation on the translation of European patent specifications) of 2 June 1992 (BGBl. 1992 II, p. 395) states that the claims, description and drawings of a European patent must be 6 — BGBl. 1991, II, p. 1354. translated.

8. BASF takes a different line in the obser- vations it has submitted to the Court. It argues that owing to the high cost of translating a specification as required by the Federal Republic of Germany (and by 9 — According to BASF, the cost of translating a patent specification into the ten other official languages of the Member States is on average DM 40 000 (about EUR 20 450), which is almost double the amount which the applicant must pay before the patent is granted in taxes and 8 — The Commission however has stated that if the Court were advisers' fees. The company also points out that if an to declare that the requirement to translate the patent applicant for a European patent foregoes protection of his specification constituted a measure having an effect equiva- invention in part of the Community this may result not only lent to a quantitative restriction on imports, that require- from his failure to file a translation of the specification once ment would not be regarded as being justified under the patent has been issued but also from his failure to Article 36 of the Treaty since it is disproportionate in designate at the start some Member States as Contracting relation to the requirement to provide protection of the States in which protection of the patented invention m a y be patent as against third parties. According to the Commis- claimed. However, the designation fee in Germany is only sion, it is sufficient to require a translation of the claims D M 150 (approximately EUR 77) for each State and s o this alone, since a translation of the description of the invention alone cannot constitute sufficient reason for limiting the is only necessary in specific cases to be determined on a geographical scope of the protection sought, unlike transla- case-by-case basis. Given the course of action which I intend tion costs which are very high. to propose to the Court (see points 13 to 19 and Part IV 10 — According to BASF, in circumstances such as those in the below), it does not appear necessary to consider in detail the present case, this segmentation of the market is the result argument referred to here, which the Commission only of the following measures having an effect equivalent to raised as a secondary point. I shall merely refer incidentally import restrictions: to Articles 69 and 84 of the Convention, which provide that (a) Whilst the patent holder, or his licensees and compe-

purpose. This is not to mention the serious legal uncertainty (b) The patent holder may be forced to refrain from which the course of action proposed by the Commission, marketing the invention in the free zone so as not to namely, requiring the translation of a description only in undermine the higher prices in the protected zone through special circumstances, would cause as far as the applicant is re-importing. It is thereby excluded in practise from concerned, since, with the possibility of the patent being competing in the free zone. void ab initio, he would ultimately run the risk of (c) However, the patent holder can defend himself against incorrectly assessing whether or not it was necessary to imports into the protected zone of goods legitimately translate all of the specification in a particular case. marketed by competitors in the free zone, as importation would constitute an infringement of patent.

translation of the specification should be 9. Furthermore, according to BASF, the filed should therefore be declared incom- patent holder has a fundamental interest patible with the provisions of the Treaty in informing his competitors in their own concerning the free movement of goods. language and in good time of the existence The plaintiff goes on to say that the penalty and content of his patent. This interest is consisting of the nullity of the European linked to the consequences which such patent unless a translation of the specifica- information has within the national legal tion is filed within the prescribed time-limit systems in respect of the provisions pena- is out of proportion to the objective lising the infringement of a patented inven- pursued by the legislation at issue, which tion. Penalties less strict than the penalty is to provide as much information as provided for under German law might be possible about the existence and content considered, such as the patent holder being of the new patent right. Above all, the need unable to enforce his rights of prohibition to give the public access to documents and compensation under the patent until a relating to the proceedings in the official translation is filed, or the possibility of language of the designated State actually competitors who have already used the arises when the application for the Eur- patented invention in good faith before a opean patent is published, and thus at a translation is filed being granted a right of subsequent use. 14 The national govern- time when, under the system introduced by ments take the opposite view, that nullity the Convention, translations into that lan- ab initio of the European patent, which guage are not yet available. 11 BASF also enables the risks of involuntary infringe- argues that a translation of the specification ment to be minimised, is the only one of the in the official language of the State in various possible penalties which seems fully respect of which the patent is issued is to satisfy the principle of legal certainty. irrelevant as regards determining the extent of the patent's protection, since under Article 70(1) of the Convention only the text of the patent in the language of the proceedings is authentic. 12 Finally, inter- ested third parties in practise very rarely consult translations. 13

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The decision of the now parties. That is so a fortiori since the patent holder as to the actual use of his Convention makes provision for both the patent and, as the case may be, as to the requirement for the text of a patent drafted methods employed for this purpose should in a foreign language to be translated and not therefore call into question the validity the penalty that the patent will be void ab of the patent granted. Lastly, according to initio if a translation is not filed not as the national court, if the requirement of a obligations, but merely as options for the translation does constitute an obstacle to Contracting States (see footnote 4 the free movement of goods within the above). 16 Community, such an obstacle can scarcely

. . when an inter- national agreement allows, but does not require, a Member State to adopt a measure which appears to be contrary to Community law, the Member State must 15 — The order for reference states that it is estimated that the refrain from adopting such a measure'. Consequently, the costs of translating the specifications of European patents Court concluded that 'Article 30 of the Treaty is to be borne annually by the industry amount to some DM 430 interpreted as requiring a Member State to ensure that this million (in the region of EUR 220 million). For example, a provision is fully effective by disapplying a national European patent granted for the eight most commonly practice contrary to it unless that practice is necessary in designated Member States involves translation costs and order for the Member State concerned to comply with costs involved in filing the translation with the various obligations towards non-member states laid down in an competent national authorities of over DM 20 000 agreement concluded prior to the entry into force of the (around EUR 10 226); see European Commission: Pro- Treaty or to accession by that Member State'.

To this is added the fact that many Community countries are not involved (see judgment in Joined Cases undertakings apply for a large number of patents during C-241/91 P and C-242/91 P RTE and ITP v Commission the course of a year. [1995] ECR I-743, paragraph 84.

19 — OJ 1989 L 4 0 1 , p. 1. The translation requirement intro- duced by the abovementioned Community Patent Agree- ment - which is in the process of ratification and, like the 1975 Convention which it is intended to replace, has the twin objectives of creating a Community patent and introducing a Community system of national patents - seems even stricter than that laid down in the Convention on the Grant of European Patents. The Community Patents

See also Article 30 (6)). It is precisely the very high costs of footnotes 9, 1 1 , 13 and 15 above and the portions of text translating the whole of the specification which (together to which they relate. with the lack of legal certainty involved with the system of judicial protection introduced) form the main obstacle to 18 — According to the Communication of the conclusions the success of the system introduced by the Convention on relating to the hearing of the interested parties on the the European Patent for the Common Market.

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However, accord- the conditions and detailed rules regarding ing to the national governments which have the protection conferred by patents. 21 I am submitted observations, the requirement to not overlooking the fact that a measure file a translation of the specification in such as that at issue in the main proceed- good time is primarily designed to ensure ings does not concern the movement of that economic operators active on the goods, whether or not they are covered by a market of the Member State for which a patent, but rather one of the conditions for European patent has been granted do not that patent to have full and lasting effect in run the risk of having such penalties

As the 'requirement' I mean in this case not an Danish and Finnish Governments pointed obligation as to conduct imposed uncondi- out, it would be unjust and inefficient to tionally on the holder of a power, and thus require third parties, who are already in a subject to the sanction of mandatory inter- subordinate position in relation to the vention, by way of substitution, by the legal inventor's monopoly over enjoyment of system, in the event of failure to comply, his product, to translate the patent specifi- but rather a condition which the person cation themselves individually in order to concerned has to satisfy only in so far as it be certain that they are not infringing the is instrumental to the pursuant of a parti- cular result which he wishes to achieve and which is favourable to him. 22 As regards 23 — I would also point out that according to the case-law of the Court, the specific purpose of a patent is to guarantee in the present case, the United Kingdom particular to the holder, in order to compensate the creative effort which the invention represents, the exclusive right to use it for the production and initial placing on the market of industrial goods, both directly and through the granting of licences to third parties, and the right to oppose

legal relationship described between a power and an follows from the principle of Community exhaustion (see obligation (to do or not to do) is to resolve conflicts of judgments in Case 15/74 Sterling Drug [1974] ECR 1147, interest between a number of persons. In individual cases and in Case 19/84 Pharmon [1985] ECR 2281, paragraph the legal system tries to prevent a situation in which a right 22) that if a patent holder decides in full knowledge of the is exercised by an individual in order to satisfy different fact to market a product in any Member State in which it is interests from those for which it was granted and thus not patentable, he must accept the consequences of his leads to an unregulated sacrifice of the rights of the persons decision as regards the possibility of parallel imports (see against whom that right is exercised. The legal system inter alia judgments in Case 187/80 Merck [1981] ECR therefore provides, for the benefit of the latter, suitable 2063, paragraphs 9 to 11). See also judgment in Joined instruments for monitoring and guarantee purposes, both Cases C-267/95 and C-268/95 [1996] ECR I-6285, by determining in advance the conditions governing the paragraphs 30 to 37. exercise of that right, and by taking administrative action 24 — As we know, legal certainty is one of the general principles beforehand (declaring exercise of the right void) or after- of the Community legal system (see inter alia judgments in wards (duty to compensate for loss) in the event of failure Case 78/74 Deuka [1975] ECR 421 and in Case C-325/91

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14. Indeed, the Court's case law cited concluded. Thus, although a European above disclosed another principle: whilst patent may be void ab initio in a national Member States are given exclusive powers territory, possibly as a result of the patent to prescribe in which cases and according holder's inertia with regard to filing a to what procedures a patent gives protec- translation, this certainly does not consti- tion, they are not allowed to take Arti- tute a legal obstacle to the marketing in cle 222 of the EC Treaty as a basis on Germany of the product for which patent which to adopt measures in relation to protection had been applied, nor to the industrial and commercial property which movement of the product in question across would adversely affect the principle of the frontiers. A penalty such as that contained free movement of goods within the internal in the law at issue appears to be applicable market. 26 I do not understand how Arti- in this context without any discrimination cle 30 of the Treaty can be applied in based on the origin of the goods which may be traded between Member States, and is therefore by no means protectionist.

paragraph 14. Article 222 provides: 'This Treaty shall in and do not permit the use of another language which is no way prejudice the rules in Member States governing the easily understood by the purchasers or ensuring the system of property ownership'. consumer is informed by other means).

entails the loss ab initio of the right to legal system would be determined, accord- commercial exclusivity otherwise belonging ing to the plaintiff, not by the fact that the to the holder in the State in which the contested law requires a translation but patent had been granted, the measure at rather by: (i) the high level of costs which issue may actually have the effect of the patent holder must meet for translating removing a possible obstacle to access to the specification and (ii) the fact that the the national market for the invented pro- economic operator concerned may lack duct. sufficient funds, in particular if it is a small or medium-sized undertaking. 29 These are clearly imponderable circumstances of a purely economic nature and in any case irrelevant to the national measure at issue. The aspect of the high cost of translations, in particular, appears likely to vary accord-

However, even if it were established that the requirements imposed by the Convention's rules on the use of languages were of great significance in the choice of the States for which patent 16. BASF has also claimed that the penalty protection is sought, as BASF has laid down by the German legislature for claimed, 28 'involuntary'waiver of protec- failure to file the patent specification within tion for an invention under the German the prescribed time-limit may lead to division of the Community market into a protected zone, and a free zone comprising 28 — The argument put forward at the hearing by the Austrian Germany and possibly the other Member Government in contradiction of the plantiff's assertion States which are not designated in the seems to me very interesting: even after the German legislature adopted the contested law which introduced the application or in respect of which the requirement to translate a patent specification into Ger- man the number of European patent applications in which Austria was also designated (without any additional translation costs being involved) did not undergo any appreciable increase as one would have expected. The 29 — It seems doubtful at least that the arguments set out in the percentage of designations of Austria and Germany text — apart from the fact that they are well founded and remained basically unchanged (in 1997 the two countries relevant tor the purposes of resolving the case in the main were designated respectively in 64.51% and 98.05% of proceedings — could apply to a company such as BASF applications filed by applicants from the Member States, AG, the dominant company in the group of companies of Japan and the Uniteci States; 37.17% and 97.66% the same name, whose turnover in 1998 was around DM respectively of the total number of patents (39 646) 54 065 000 000 (approximately EUR 27 643 000 000 and granted during the same year following applications a pre-tax profit of around DM 5 419 000 000 (approxi- submitted by persons from the same geographical area mately EUR 2 771 000 000 and which at 31 December were granted in respect of Austria and Germany: see EPA/ 1998 had 105 945 employees (see 1998 Annual Report, EPO/OEB, 1997 Annual Report, Munich, 1998, pp. 56, http://www.basf/htm/e/dat.

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Moreover, the right of a holder of a patent (be it European or national) to oppose infringements of the invention in States in which he has the monopoly as regards first placing it on the market, clearly also concerns the importa- tion of competing products manufactured and marketed by third parties in a country 18. According to earlier judgments of this within the free zone. 30 Court, Article 30 of the Treaty does not preclude a national measure whose restric- tive effects on the free movement of goods are too uncertain and indirect to warrant the conclusion that it is an undue restric- tion on trade between Member States. 32 As has been observed in legal literature, 33the

sense. To my mind, this excludes the is aware and which, although not linked to the subject- possibility of patent rights being subsumed matter of the agreement for sale and its characteristics, are designed to bring about a decision by the other contracting party; see also judgment in Case C-266/96 Corsica Ferries [1998] ECR I-3949, paragraph 31) concerning the require- ment imposed by the laws of a Member State on shipping companies established in another Member State, whose 30 — As the Spanish Government observed, the only solution vessels call at the ports of the first State, to use, in return which would prevent the isolation of the markets con- for payment of an amount exceeding the actual cost of the demned by BASF would be to abolish the national patent service provided, the services of groups of local handlers systems and replace them by an exclusive unitary system of w h o have exclusive franchises. Community patents.

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However, I consider that simply contemplating such possibilities is insufficient to show that there is a restriction on the trade in goods between Germany and the other Member States. 3 5There seems, therefore, to be nothing to be obtained from referring, as BASF did at the hearing, to the Court's 19. On the basis of what has been observed judgment in Commission v United King- so far, there can be no question, also in the dom, in which the Court held that a case of a measure like the one at issue in the national measure granting a compulsory main proceedings, of its restricting imports, licence to a national manufacturer in even indirectly or potentially. The only exchange for reasonable remuneration in factor which BASF has been able to put a case where demand for the patented forward to support its claim that the law in product is satisfied on the domestic market question is a measure having an effect mainly through imports, 'necessarily equivalent to a quantitative restriction is reduces imports of the patented product the following: operators with small or medium-sized businesses, or in any event lacking sufficient funds, who are interested in obtaining patent protection for their inventions in Germany might be discour- aged from making their patents effective in 35 — See Opinion of Advocate General Darmon delivered on 12 December 1989 in Case C-69/88 Kranz [1990] ECR that State due to the high cost of obtaining I-583, point 13 (p. I-588).

p ossibilities for selling imported products was laid down y the Court in Joined Cases 177/82 and 178/82 Van de quantitative restrictions on imports, where such an effect — however indirect and tenuous — cannot be Haar and Kaveka de Meern [1984] ECR 1797. altogether ruled out' (see point 16).

In the light of the foregoing I propose that the Court should answer the question referred by the Bundespatentgericht as follows:

Article 30 of the Treaty does not preclude a national measure which provides that where the holder of a patent granted by the European Patent Office with effect for a Member State does not file with the patent office of the Member State in question within the prescribed time-limit a translation of the patent specification in the official language of that Member State, in a language other than that in which the European patent is drafted, the patent concerned shall be deemed to be void ab initio.

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