CELEX: 62003CC0456
Language: en
Date: 2005-03-10
Title: Opinion of Mr Advocate General Ruiz-Jarabo Colomer delivered on 10 March 2005. # Commission of the European Communities v Italian Republic. # Failure of a Member State to fulfil obligations - Directive 98/44/EC - Legal protection of biotechnological inventions - Admissibility - Failure to transpose - Articles 3(1), 5(2), 6(2) and 8 to 12. # Case C-456/03.

OPINION OF ADVOCATE GENERAL
      RUIZ-JARABO COLOMER
      delivered on 10 March 2005 (1)
      
      Case C-456/03
      Commission of the European Communities
      v
      Italian Republic 
       
      (Failure of a Member State to fulfil its obligations – Legal protection of biotechnological inventions)1.     The Commission seeks a declaration that Italy has failed to fulfil its obligations under the harmonising legislation on biotechnological
         patents.
      
      2.     What is unusual about these proceedings is that it was only in its defence that the defendant Member State contested the Commission’s
         claims. The attitude of the defendant during the administrative phase could have led the Commission to conclude that the defendant
         tacitly acknowledged the alleged breach, since the defendant maintained that the relevant implementing legislation was shortly
         to be enacted.
      
      3.     Furthermore, the defendant’s stance has limited the exchange of arguments between the parties, to the detriment of the proper
         conduct of these proceedings for infringement of the Treaty.
      
       Directive 98/44
      4.     Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 (hereinafter ‘the Directive’) (2) is aimed at harmonising the legislation of the Member States on the legal protection of biotechnological inventions.
      
      The Directive was adopted pursuant to Article 189b of the EC Treaty (now, after amendment, Article 251 EC).
      5.     It is important to note that, according to the preamble, the Directive seeks to clarify  the legal protection of biotechnological inventions (fourth recital), following establishment of the fact that differences
         exist in the laws and practices of the different Member States which could create barriers to trade and hence impede the proper
         functioning of the internal market (fifth recital).
      
      The preamble goes on to state that uncoordinated development of those national systems is detrimental to the industrial development
         of such inventions (seventh recital), notwithstanding which, in the opinion of the European Parliament and the Council, it
         is not necessary to create a separate body of law and it will suffice for the rules of national patent law to remain the essential
         basis, albeit adapted or added to, for the legal protection of biotechnological inventions (eighth recital).
      
      6.     The ninth recital in the preamble states that since, in certain cases, such as the exclusion from patentability (3) of plant and animal varieties and of essentially biological processes for the production of plants and animals, certain concepts
         in national laws based upon international patent and plant variety conventions have created uncertainty regarding the protection
         of biotechnological and certain microbiological inventions, that uncertainty must be clarified by means of harmonisation.
         
      
      7.     In accordance with the 13th recital in the preamble to the Directive, ‘the Community’s legal framework for the protection
         of biotechnological inventions can be limited to laying down certain principles as they apply to the patentability of biological
         material as such, such principles being intended in particular to determine the difference between inventions and discoveries
         with regard to the patentability of certain elements of human origin, to the scope of protection conferred by a patent on
         a biotechnological invention, to the right to use a deposit mechanism in addition to written descriptions and lastly to the
         option of obtaining non-exclusive compulsory licences in respect of interdependence between plant varieties and inventions,
         and conversely’.
      
      8.     The preamble also states that it would be advantageous to encourage, by means of the patent system, progress in the treatment
         of diseases thanks to the existence of medicinal products derived from elements isolated from the human body or from technical
         processes aimed at obtaining elements similar in structure to those existing naturally in the human body (17th recital). 
      
      However, since the patent system alone is insufficient to encourage research into and production of biotechnological medicines
         which are needed to combat rare or ‘orphan’ diseases, the Community and the Member States have a duty to respond adequately
         to this problem (18th recital). 
      
      Finally, the Community legislature makes it clear that an invention susceptible of industrial application which is based on
         an element isolated from the human body or otherwise produced by means of a technical process is not excluded from patentability,
         even where the structure of that element is identical to that of a natural element, given that the rights conferred by the
         patent do not extend to the human body and its elements in their natural environment (20th recital).
      
      9.     Article 1(1) of the Directive provides: ‘Member States shall protect biotechnological inventions under national patent law.
         They shall, if necessary, adjust their national patent law to take account of the provisions of this Directive.’
      
      10.   Under Article 3(1) of the Directive, ‘inventions which are new, which involve an inventive step and which are susceptible
         of industrial application shall be patentable even if they concern a product consisting of or containing biological material
         or a process by means of which biological material is produced, processed or used’.
      
      11.   In accordance with Article 5(2) of the Directive, ‘[a]n element isolated from the human body or otherwise produced by means
         of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even
         if the structure of that element is identical to that of a natural element’.
      
      12.   Article 6 of the Directive provides:
      ‘1.      Inventions shall be considered unpatentable where their commercial exploitation would be contrary to ordre public or morality; however, exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation.
      
      2.      On the basis of paragraph 1, the following, in particular, shall be considered unpatentable:
      (a)      processes for cloning human beings; 
      (b)      processes for modifying the germ line genetic identity of human beings; 
      (c)      uses of human embryos for industrial or commercial purposes; 
      (d)      processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical
         benefit to man or animal, and also animals resulting from such processes.’
      
      13.   Chapter II of the Directive concerns the scope of the protection conferred by a biotechnological patent. It contains the following
         provisions: 
      
      Article 8
      ‘1.      The protection conferred by a patent on a biological material possessing specific characteristics as a result of the invention
         shall extend to any biological material derived from that biological material through propagation or multiplication in an
         identical or divergent form and possessing those same characteristics.
      
      2.      The protection conferred by a patent on a process that enables a biological material to be produced possessing specific characteristics
         as a result of the invention shall extend to biological material directly obtained through that process and to any other biological
         material derived from the directly obtained biological material through propagation or multiplication in an identical or divergent
         form and possessing those same characteristics.’
      
      Article 9
      ‘The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material,
         save as provided in Article 5(1), in which the product is incorporated and in which the genetic information is contained and
         performs its function.’
      
      Article 10
      ‘The protection referred to in Articles 8 and 9 shall not extend to biological material obtained from the propagation or multiplication
         of biological material placed on the market in the territory of a Member State by the holder of the patent or with his consent,
         where the multiplication or propagation necessarily results from the application for which the biological material was marketed,
         provided that the material obtained is not subsequently used for other propagation or multiplication.’
      
      Article 11
      ‘1.      By way of derogation from Articles 8 and 9, the sale or other form of commercialisation of plant propagating material to a
         farmer by the holder of the patent or with his consent for agricultural use implies authorisation for the farmer to use the
         product of his harvest for propagation or multiplication by him on his own farm, the extent and conditions of this derogation
         corresponding to those under Article 14 of Regulation (EC) No 2100/94.
      
      2.      By way of derogation from Articles 8 and 9, the sale or any other form of commercialisation of breeding stock or other animal
         reproductive material to a farmer by the holder of the patent or with his consent implies authorisation for the farmer to
         use the protected livestock for an agricultural purpose. This includes making the animal or other animal reproductive material
         available for the purposes of pursuing his agricultural activity but not sale within the framework or for the purpose of a
         commercial reproduction activity.
      
      3.      The extent and the conditions of the derogation provided for in paragraph 2 shall be determined by national laws, regulations
         and practices.’
      
      14.   With regard to compulsory cross-licensing, Article 12 of the Directive provides:
      ‘1.      Where a breeder cannot acquire or exploit a plant variety right without infringing a prior patent, he may apply for a compulsory
         licence for non-exclusive use of the invention protected by the patent inasmuch as the licence is necessary for the exploitation
         of the plant variety to be protected, subject to payment of an appropriate royalty. Member States shall provide that, where
         such a licence is granted, the holder of the patent will be entitled to a cross-licence on reasonable terms to use the protected
         variety.
      
      2.      Where the holder of a patent concerning a biotechnological invention cannot exploit it without infringing a prior plant variety
         right, he may apply for a compulsory licence for non-exclusive use of the plant variety protected by that right, subject to
         payment of an appropriate royalty. Member States shall provide that, where such a licence is granted, the holder of the variety
         right will be entitled to a cross-licence on reasonable terms to use the protected invention.
      
      3.      Applicants for the licences referred to in paragraphs 1 and 2 must demonstrate that:
      (a)      they have applied unsuccessfully to the holder of the patent or of the plant variety right to obtain a contractual licence;
         
      
      (b)      the plant variety or the invention constitutes significant technical progress of considerable economic interest compared with
         the invention claimed in the patent or the protected plant variety.
      
      4.      Each Member State shall designate the authority or authorities responsible for granting the licence. Where a licence for a
         plant variety can be granted only by the Community Plant Variety Office, Article 29 of Regulation (EC) No 2100/94 shall apply.’
      
      15.   Pursuant to Article 15, Member States were required to bring into force the laws, regulations and administrative provisions
         necessary to comply with the Directive not later than 30 July 2000, and forthwith to inform the Commission thereof. 
      
       The prior administrative procedure
      16.   Italy did not inform the Commission that it had enacted any of the measures required in the Directive. Since the Commission
         had no reason to believe that the defendant Member State had transposed the provisions of the Directive into national law,
         on 20 November 2000 it sent that Member State a letter requiring it to do so, in accordance with the procedure laid down in
         Article 226 EC.
      
      17.   The Commission did not receive a reply to that letter and, therefore, on 19 December 2002, it sent the Italian authorities
         a reasoned opinion in which it stated that, by failing to adopt the laws, regulations and administrative provisions required
         to transpose the Directive into national law, the Italian Republic had failed to fulfil its obligations under the Treaty,
         and granted the Italian Republic a period of two months in which to effect the transposition.
      
      18.   On 6 February 2003, Italy’s Permanent Representation to the European Union sent a letter to the Commission in which it stated
         that no measures implementing the Directive had yet been enacted. In a subsequent letter, dated 10 July 2003, the Permanent
         Representation stated that the procedure for drawing up the said measures was at an advanced stage.
      
       Procedure before the Court of Justice
      19.   Since it had received no further information, the Commission brought this action, which was lodged at the Court Registry on
         27 October 2003.
      
      20.   The application, defence, reply and rejoinder were lodged, following which neither party requested a hearing. I find surprising
         that waiver of a procedural stage during which the Commission would at least have had the opportunity to put forward its view
         regarding the total failure of the defendant to cooperate in good faith throughout these proceedings for failure to fulfil
         an obligation.
      
       Arguments of the parties
      21.   In the application, the Commission merely complained that the defendant had failed to transpose the provisions of the Directive
         into national law, and did not elaborate further. It was in the reply, therefore, that the matters at issue in these proceedings
         were first really debated. That delay in putting forward the claims in these proceedings can be attributed to the attitude
         of the Italian authorities during the pre-litigation phase.
      
      22.   In the defence, the defendant Member State argues that, although the enabling legislation designed to transpose the Directive
         into national law is still at the drafting stage, the measures currently in force already comply with the principles arising
         from the Community legislation, and the defendant places on the Commission the burden of proving the alleged breach.
      
      23.   The defendant also pleads Article 1 of the Directive, which requires transposition only in the event that it is necessary,
         and, by way of information, the defendant refers to Royal Decree No 1127 of 29 June 1939, in particular to Articles 12 and
         13 thereof.
      
      Under Article 12 of the Royal Decree, inventions which involve an inventive step and are susceptible of industrial application
         are patentable. The provision does not exclude from patentability the items defined therein, with the exception of discoveries,
         theories, plans, principles, processes and programmes. However, processes for the surgical or therapeutic treatment of humans
         or animals and diagnostic procedures used on humans or animals are not regarded as inventions for those purposes.
      
      Furthermore, when the Corte di cassazione (Court of Cassation) interpreted Article 12 it made the patentability of a chemical
         invention conditional on the requirement that it must be original, and as such must give rise to a form of intrinsic ‘inventive
         leap’ capable of bringing about an evolution in the state of the technology concerned such that it differs from what was available
         previously; that criterion is akin to the discovery or to the identification of a new use for previously acquired knowledge,
         since, from a scientific standpoint, the latter are no less important than the ‘straightforward’ creation of a product. (4)
      
      24.   The Italian Government infers from the aforementioned legislation and case-law that the concept of a patentable invention
         is wide enough in scope to encompass the protection of biotechnological inventions, as defined in Articles 2 and 3 of the
         Directive.
      
      25.   As regards Article 13 of Royal Decree No 1127, although it excludes from patentability inventions whose exploitation would
         be contrary to public policy or morality, this does not concern a mere legal or administrative prohibition.
      
      Article 13 provides that animal breeds and essentially biological processes for obtaining them are unpatentable. The provision
         does not apply to microbiological processes or to the product obtained using such processes.
      
      26.   The Italian Government claims that the aforementioned provisions are compatible with the requirements of the Directive.
      27.   With regard to the prohibition of the creation and use of human embryos, the Italian legislation was subsequently supplemented
         by Articles 13 and 14 of the Law on Medically Assisted Reproduction, which was approved by the Chamber of Deputies on 10 February
         2004.
      
      28.   Lastly, as regards Article 1(2) of the Directive (continued compliance with the TRIPs Agreement and the Convention on Biological
         Diversity), the Italian Government contends that those international agreements were transposed into national law some time
         ago. More recently, pursuant to Law No 27 of 15 January 2004, the Cartagena Protocol on Biosafety, relating to the Convention
         on Biological Diversity, also entered into force in Italy. Article 11 et seq. of that protocol govern measures for the prevention
         of risks linked to the use of living modified organisms, which are patentable under the rules laid down in the Directive.
      
      29.   Therefore, the Italian Government argues that it has fulfilled the objectives laid down in the Directive, from both a substantive
         and a procedural point of view, and on those grounds it claims that the application should be dismissed. 
      
      30.   In the reply, the Commission puts forward claims of a procedural nature and claims relating to substantive law.
      31.   In the former, the Commission draws attention to certain aspects of the conduct of the defendant Member State (failure to
         notify under Article 15(2) of the Directive; tacit admission of the breach during the administrative phase; drafting of legislation
         aimed at transposing the Directive into national law) in support of its contention that the measures required by the situation
         were not taken.
      
      32.   With regard to substantive law, the Commission ‘for completeness’ refers to five specific breaches of the Directive where
         no implementing provisions have been adopted in Italian law:
      
      1. concerning the possibility of obtaining a patent for an invention which concerns a product consisting of or containing
         biological material or a process by means of which biological material is produced, processed or used (Article 3(1) of the
         Directive);
      
      2. concerning the possibility of patenting an element isolated from the human body (Article 5(2)), having regard to the fundamental
         aim of the Directive which is to establish a uniform body of Community law in that sphere (17th to 20th recitals in the preamble
         to the Directive);
      
      3. concerning the prohibition of patentability in relation to certain specified procedures, such as the cloning of human beings
         and the use of human embryos for industrial or commercial purposes (Article 6(2));
      
      4. concerning the protection conferred by a patent relating to a biotechnological invention (Articles 8 to 11 of the Directive),
         which, as the 13th recital in the preamble thereto makes clear, is an essential element of the Directive;
      
      5. specifically concerning the relationship of dependence which can arise between a patent for a biotechnological invention
         and the system of protection for plant varieties (Article 12).
      
      33.   I will analyse the claims put forward in the rejoinder when dealing with the substance of the action and it is therefore unnecessary
         to go into the details at this juncture.
      
      34.   As a preliminary point, it should be recalled that the Court held in Commission v Italy(5) that the transposition of a directive into national law does not necessarily require that its provisions be incorporated
         formally and verbatim in express specific legislation; a general legal context may, depending on the content of the directive,
         be adequate for the purpose provided that it does indeed guarantee the full application of the directive in a sufficiently
         clear and precise manner so that, where the directive is intended to create rights for individuals, the persons concerned
         may ascertain the full extent of their rights and, where appropriate, rely on them before the national courts. However, in
         order to secure full implementation of directives in law and not only in fact, Member States must establish a specific legal
         framework in the area in question. (6)
      
      35.   The Commission seeks a declaration against the Italian Republic on account of the latter’s conduct during the administrative
         phase, and, in the alternative, on account of the failure of Italian national legislation to comply with the Community requirements.
      
      36.   I should like to begin by pointing out that these proceedings have not been conducted in the normal way or in accordance with
         the established procedures. Article 226 EC provides for a complex form of action which is designed to ensure that a Member
         State complies with Community law, and which, as a last resort, can lead to a declaration by the Court of Justice that the
         Member State concerned has failed to fulfil its obligations. The pre-litigation administrative phase, which concludes with
         the reasoned opinion of the Commission setting out the breach and fixing a period in which to remedy it, is followed, where
         applicable, by the judicial phase.
      
      However, it is settled case-law that the question whether a Member State has failed to fulfil its obligations must be determined
         by reference to the situation prevailing at the end of the period laid down in the reasoned opinion for remedying the breach.
         (7) It is at that point that the subject-matter of the action is determined, meaning that when the Court rules on the substance
         it is not required to take into account subsequent events.
      
      37.   In the case before the Court, by the end of the period laid down in the reasoned opinion, the Italian Government had already
         indicated acquiescence by its silence, and had also made a vague reference to draft legislation in progress.
      
      38.   The Commission complains about those matters and, while failing to state as much clearly (in the reply the Commission implies
         that it is dealing with the substantive legal aspects of the action only for the sake of completeness), appears to be of the
         opinion that such conduct tips the balance in its favour.
      
      39.   I do not share that opinion. There is no question that where the conduct of a Member State in proceedings impedes the Commission
         in its role, entrusted to it under the Treaties, as the guardian of Community law, that Member State deserves to be strongly
         reprimanded. However, such conduct can lead only to a political or moral reprimand and can never of itself lead to a declaration
         that the Member State concerned has failed to fulfil its obligations, even where the conduct in question can be classed as
         a breach of the duty to cooperate in good faith which is incumbent on the Member States; where applicable, it would be possible
         for such a breach to be punished by the Court in separate proceedings brought for that purpose.
      
      40.   The Commission implies that the attitude of the Italian Government in the pre-litigation phase is tantamount to acquiescence,
         but, as I pointed out on a previous occasion, (8) it is not for the parties to decide how an action under Article 226 EC is to be disposed of, and the acquiescence or lax
         attitude of a defendant during such proceedings does not lead automatically to the action against that defendant being upheld.
      
      41.   For its part, the defendant claims that the action should be dismissed because the application does not cite any specific
         complaints.
      
      42.   In accordance with Article 21 of the EC Statute of the Court of Justice and Article 38(1)(c) of the Rules of Procedure, the
         application must contain, inter alia, a brief statement of the pleas in law on which the application is based. In any application
         made under Article 226 EC, the Commission must indicate the specific complaints on which the Court is called upon to rule
         and, at the very least in summary form, the legal and factual particulars on which those complaints are based. (9)
      
      43.   The Italian Government cannot plead a situation which it helped to create. The lack of precision in the application can be
         attributed to the conduct of the defendant in the proceedings, from which it follows that that complaint cannot succeed.
      
      44.   It is therefore necessary to examine the five complaints put forward by the Commission, since there is no presumption that
         a Member State has failed to fulfil its obligations and the burden of proof falls on the party alleging that failure. (10)
      
      45.   First of all, the Commission complains that Italian law infringes Article 3(1) of the Directive, in that it does not permit
         the patenting of a product consisting of or containing biological material or a process by means of which biological material
         is produced, processed or used. 
      
      46.   In the defence, the Italian Government cites Articles 12 and 13 of Royal Decree No 1127/39 and the wide definition of patentable
         inventions contained therein, as interpreted in the case-law of the national courts.
      
      47.   The reply does not clarify the extent to which that approach is supposedly contrary to the obligation laid down in Article
         3(1) of the Directive and to the aims pursued by the Directive in general.
      
      The reply also fails to refute the arguments put forward by the defendant and to prove the breach. Accordingly, the first
         complaint must be dismissed.
      
      48.   Second, the Commission complains that Article 5(2) of the Directive, which permits the patenting of an element isolated from
         the human body, has not been implemented in Italian law.
      
      49.   The Italian Government again refers to the wide definition of a patentable invention which applies in Italy. It adds that
         the only rule‑making aspect of Article 5(2) is in its final phrase, which states ‘even if the structure of that element is
         identical to that of a natural element’. In the opinion of the Italian Government, such circumstances do not give rise to
         any difficulty because, under the case-law of the Corte di cassazione, artificial processes capable of bringing about technical
         progress are patentable and such progress occurs every time a natural function is artificially reproduced.
      
      50.   It is appropriate to apply to this complaint the same reasoning as was used with regard to the previous complaint; in other
         words, no evidence has been adduced to indicate that the definition of a patentable invention which is in force in Italy conflicts
         with the letter or the spirit of the Community provision, and, in particular, that it threatens the coherence of the Community
         legal order in that sphere.
      
      I do, however, have doubts about the explanation relating to the final phrase of Article 5(2). Nevertheless, that new complaint was not put forward by the applicant on whom it is incumbent to prove the failure to fulfil obligations, nor are there any
         grounds for the Court to examine the complaint of its own motion. 
      
      51.   The second complaint must therefore be dismissed in its entirety.
      52.   The basis for the third complaint is that the requirement that certain processes, such as the cloning of human beings and
         the use of human embryos for industrial or commercial purposes, are to be regarded as unpatentable has not been transposed
         into Italian law, as prescribed in Article 6(2) of the Directive.
      
      The Commission is of the opinion that Article 13 of Royal Decree No 1127/39 sets out only the general rule, which prohibits
         the patenting of inventions where their exploitation would be contrary to public policy or morality, and that, as such, it
         is an accurate reflection of Article 6(1) of the Directive.
      
      53.   The Italian Government pleads Article 13 of Law No 40 of 19 February 2004 on Medically Assisted Reproduction, which prohibits
         experimentation involving human embryos and provides that the production of human embryos and their selection for eugenic
         purposes, cloning, and fertilisation by gametes from other species are punishable by a prison sentence, a fine and suspension
         from professional practice. The Italian Government further claims that legislation of such a nature unequivocally classifies
         the practices of cloning and of altering a person’s genetic identity as contrary to public policy, thereby categorically precluding
         the patentability of such practices.
      
      54.   As a preliminary point, it is important to note that the national provision referred to was enacted after the expiry of the
         period laid down in the reasoned opinion, and also after the Commission had brought this action for failure to fulfil obligations
         on 27 October 2003. Accordingly, the provision cannot be taken into account for the purpose of analysing the conduct complained
         of.
      
      55.   Purely for academic purposes, it is appropriate to point out that notwithstanding that, in the light of the wording of Article
         13 of Law No 40/2004, the competent authorities would, pursuant to Article 13 of Royal Decree No 1127/39, probably reject
         a patent application for processes involving cloning or manipulation of human embryos for commercial or industrial purposes,
         Article 6(1) of the Directive requires that inventions be considered unpatentable where their exploitation would be contrary
         to ordre public (public policy) and provides that ‘exploitation shall not be deemed to be so contrary merely because it is prohibited by
         law or regulation’.
      
      That statement may be interpreted as requiring the transposition of the principle that commercial processes involving the
         use of human embryos are not patentable. In any event, it is clear from a careful reading of the Directive that the principle
         must be transposed.
      
      56.   For the reasons set out in point 54 of this Opinion, it is appropriate to declare, with regard to the third complaint, that
         there has been a failure to fulfil obligations.
      
      57.   The fourth complaint put forward by the Commission is more ambiguous in nature than the previous ones, and focuses on ascertaining
         whether, under Italian law, patents in respect of biotechnological inventions receive treatment equivalent to that granted
         in Articles 8 to 11 of the Directive.
      
      58.   The Italian Government claims that those provisions merely extend the protection provided by a biotechnological patent to
         material resulting from application of the patented process.
      
      In its view, Article 1bis(1)(b) of Royal Decree No 1127/39 meets those criteria in that it confers on the holder of the patent
         the exclusive right to apply a particular process, and to use, market, sell or import for such purposes the product directly
         obtained from the process concerned.
      
      59.   I am not convinced by the defence put forward in that regard. Without undertaking an interpretation of Italian law, it is
         clear from merely reading Articles 8 to 11 of the Directive and Article 1bis of the Royal Decree that the Community provisions
         govern specific situations which fall outside the scope of the protection accorded to the product of a patent under the Italian
         legislation.
      
      60.   Thus, for example, Article 8 of the Directive governs the protection of a product but, unlike the Italian legislation, it
         refers not only to patentable processes but also to the biological material itself, provided that such material is capable
         of propagation or multiplication.
      
      Article 9 of the Directive provides specifically for protection to be extended to products containing patented genetic material
         in which the latter continues to perform its function. That case differs conceptually from the connection between the process
         and the product, which is the only case governed by the Italian legislation.
      
      Articles 10 and 11 contain specific derogations from the general rule providing for the extension of the protection (propagation
         or multiplication for placing on the market; specific features of agricultural use) which are not reflected at all in Article
         1bis of Royal Decree No 1127/39.
      
      61.   On those grounds, it is appropriate to uphold this part of the application.
      62.   Finally, by its fifth complaint the Commission contends that Italian law contains no provision governing the entitlement of
         a holder of a registered plant variety right to obtain, on reasonable terms, a compulsory licence from the proprietor of a
         biotechnological invention where the licence is necessary for the exploitation of the plant variety concerned.
      
      63.   The Italian Government invokes Article 5 of Royal Decree No 1127/39, which precludes the application or use of a protected
         invention to exploit another industrial invention without the consent of the holder. Moreover, the Italian Government states
         that the Royal Decree provides for an extensive system of compulsory licensing.
      
      Article 54(2)(b) of Royal Decree No 1127/39 permits such licences where it is not possible to use the patented invention without
         infringing rights attaching to a prior patent. In such cases, it is appropriate to grant protection to the holder of the subsequent
         right to the extent necessary for exploitation of the invention, provided that the latter constitutes significant technical
         progress of considerable economic importance compared with the first invention.
      
      The Italian Government also asserts that, although the wording of the legislation implies that, in principle, the administrative
         authorities have a margin of discretion when it comes to granting such licences, in practice they grant licences only provided
         that the other conditions are met.
      
      64.   Italian law does not provide for all the cases of compulsory cross-licensing governed by Article 12 of the Directive, although
         it is clear that both are underpinned by the same philosophy.
      
      In addition to the apparently discretionary nature of the licence under Royal Decree No 1127/39, an interpretation of the
         national legislation by reference to the Directive requires that the rules governing patents be extended by analogy to plant
         varieties and that the concept of an ‘appropriate royalty’ as consideration for the use of the licence also be introduced.
         Furthermore, Article 12(3)(a) expressly makes the grant of a licence conditional on the provision by the applicant of proof
         that he has applied unsuccessfully to the holder of the patent or of the plant variety right to obtain a contractual licence,
         a requirement which is absent from the Italian legislation.
      
      65.   For the reasons set out, this part of the application must be declared well founded. 
       Costs 
      66.   The Italian Republic has not applied for costs from the applicant, and accordingly it must bear its own costs, in accordance
         with Article 69(5) of the Rules of Procedure.
      
      67.   As regards the Commission’s costs, given the fact that each party has been partially unsuccessful, and, above all, the evasive
         procedural strategy of the defendant Member State, which has prevented the proceedings from progressing in the usual manner,
         I propose that those costs be shared equally between the parties, in accordance with Article 69(3) of the Rules of Procedure.
      
       Conclusion 
      68.   In the light of the foregoing considerations, I propose that the Court of Justice should declare that the Italian Republic
         has failed to fulfil its obligations under Article 6(2) and Articles 8 to 12 of Directive 98/44/EC of the European Parliament
         and of the Council of 6 July 1998 on the legal protection of biotechnological inventions, that the remainder of the application
         should be dismissed, and that the defendant Member State should be expressly ordered to pay its own costs and half of the
         costs incurred by the Commission.
      
      1 –	Original language: Spanish.
      
      2 –	OJ 1998 L 213, p. 13.
      
      3 –	This footnote is not relevant to the English translation.
      
      4 –      Cass. 28 June 2001, No 8879.
      
      5 –	Case 363/85 [1987] ECR 1733, paragraph 7.
      
      6 –	Case C-131/88 Commission v Germany [1991] ECR I-825, paragraph 8.
      
      7  –      See, for example, Case C-152/98 Commission v Netherlands [2001] ECR I‑3463, paragraph 21; Case C-384/97 Commission v Greece [2000] ECR I-3823, paragraph 35; and Case C-214/96 Commission  v Spain [1998] ECR I-7661, paragraph 25.
      
      8  –	Joined Opinion in Case C-367/98 Commission v Portugal, Case C-483/99 Commission v France and Case C-503/99 Commission v Belgium [2002] ECR I-4731, point 76.
      
      9 –	Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraph 28.
      
      10  –	See particularly Case 96/81 Commission v Netherlands [1982] ECR 1791, paragraph 6; Case C‑404/00 Commission v Spain [2003] ECR I-6695, paragraph 26; and Case C-434/01 Commission v United Kingdom [2003] ECR I-13239, paragraph 21.