The Arbitrary World of EU judges

As we've noted before, the EU is in desperate need of a single patent - virtually overnight, such a patent would boost competitiveness and growth and attract innovation, not least by cutting costs for SMEs. It's currently around 15 times more expensive to obtain a patent across the EU than obtaining patent protection in the US. Or to illustrate using other estimates: a patent validated in 13 EU countries costs as much as €20,000, of which nearly €14,000 arises from translation alone (according to the European Commission).

So it was welcome news when EU leaders agreed to press ahead with an EU patent, despite the silly opposition from Spain and Italy.

But apparently, the ECJ - the omnipotent (or so it thinks) EU court seated in Luxembourg - has different ideas. It now says that establishing a new court to judge patent litigations - which was part of the proposal for a single EU patent - is incompatible with EU law.

The ECJ is worried that giving some judiciary powers over patents to a 'non-EU institution' raises questions over....wait for it...checks and balances.

We don't suggest that EU law is arbitrary (not that we would), but let's see if we got this straight. Establish three new EU financial supervisors - through a qualified majority vote - with binding powers over national supervisors in seven broad areas, and the mandate to interpret (i.e. quasi-judicial powers), apply and enforce provisions in over 20 separate EU laws (including initiating dawn raids against individual firms in the case of credit rating agencies) is no problem. But it's not okay to establish a Court looking only at patents? Meanwhile, it's okay to switch legal bases in various ways (data retention magically becomes a Single Market issue, eliminating national vetoes, working time becomes a health & safety provision, etc.).

There's a huge amount of arbitrary government in the ECJ's reasoning. If the Luxembourg judges were consistent, we would applaud their new found appreciation for checks-and-balances, but they're quite clearly not.

Sadly, it's the European economy and recovery that will suffer.

Now, if it is indeed the case that the ECJ is concerned about a body whose status as a non-EU institution is unclear, and about the absence of clear guarantees about how it would be bound by EU law and what kind of checks and balances would apply to it - which were all concerns flagged by the ECJ - then such concerns must apply to other bodies with similar a status as well, correct?

As it has turns out, the European Financial Stability Facility - the eurozone's €440 billion bail-out fund - is a non-EU institution, it's unclear whether it's bound by EU law (i.e. the no bail-out clause) and it's even more unclear what checks and balances apply to it (for certain no Parliamentary control).

So the EFSF must be illegal too right? Or are we missing something?

A two-speed EU patent

EU ministers and MEPs have done something very sensible: agreed on an EU-wide patent.

According to the Commission, obtaining a patent protection for all member states in the EU is currently around 15 times more expensive than obtaining patent protection in the US. And for a change, their estimate might actually be about right.

The absence of an EU-wide patent is a massive obstacle to growth and innovation in Europe - and a barrier for fledgling SMEs in particular. Given all the regulations pumped out by Brussels every year - many far from essential - it's surprising that it has taken so many years for EU leaders to agree on something that instantly can have such a positive impact on Europe's economy and competitiveness. But it's welcome nonetheless.

Not everyone is happy though. Spain and Italy oppose the proposal, feeling snubbed as the EU patent will primarily be translated into English, German and French (who cares about competitive disadvantages for Europe against the rest of the world, eh?).

Spanish and Italian opposition means that other member states will press ahead with a patent under so-called structured cooperation (which allows at least nine member states to take a proposal forward even if some other countries oppose it).

The benefits of this proposal aside, we now await a rash of media comments on how Spain and Italy will be stuck in the EU's "slow lane" on innovation. Because, surely, media's two-speed Europe analogy cannot only apply to the euro?

The Italian government seems to have few regrets, however. El Pais quotes a fuming spokesperson for the Italian government saying that the proposal has been approved "in a worrying and surprising way." Referring to a pending court case at the ECJ (lodged by Spain and Italy on discrimination gounds), he goes on,

It's a failure of respect between the EU institutions.

As ever, there's more to two-speed Europe than what meets the eye.

Regardless, well done EU ministers and MEPs for finally pulling your fingers out.