The establishment of a European and Community Patent Court, as proposed by the Council of the European Union (EU), is incompatible with EU law, the EU Court of Justice (CJEU) has said.

In an opinion given yesterday at the request of the Council, the CJEU observes that the proposed European and Community Patent Court would be outside the "institutional and judicial framework" of the EU; it would be "an organisation with a distinct legal personality under international law," whose existence would divest the courts of the EU member states of their jurisdiction to hear "a significant number of actions brought by individuals in the field of patents."

Moreover, if a decision by the Patent Court were to be in breach of EU law, "it could not be the subject of infringement proceedings, nor could it give rise to any financial liability on the part of one or more member states," the opinion adds.

The decision to establish the Patent Court "would alter the essential character" of the powers conferred on the institutions of the EU and on the member states "which are indispensable to the preservation of the very nature" of EU law and, therefore, the envisaged agreement to create the Patent Court is not compatible with the provisions of EU law, says the CJEU.

Patent experts have responded to the opinion with dismay, with Will Cook, a partner at Marks & Clerk Solicitors, describing it as "a huge step in the wrong direction for those frustrated by the existing diverse, complicated and varyingly expensive national systems."

The Council's proposals for a unified patent litigation system went hand-in-hand with its plan for a Community Patent and have been widely welcomed by industry judges and patent professionals alike, he said. However, from an enforcement point of view, even if the Community Patent proposals were to go ahead, "that patent seems likely to wither in the glare of uncertainty as to how involved the CJEU will become at appeal level. For the unitary court to work, there must be confidence that any final court of appeal will implement clearly and consistently the technical and specialised patent law covering the jurisdictions in question." said Mr Cook.

"Many industry players would need much more confidence that the CJEU would have significant specialist patent experience before entrusting their disputes, ultimately to that court," he said. And while the Court of Justice has rejected the proposal for a unified patent litigation system on the grounds that it would not position the CJEU as the final court of appeal, the one thing that everyone agrees on - apart from the European Court of Appeal - is that the CJEU "should not be the final court of appeal in a centralised system," he added.