The decision to proceed with a Europe-wide patent system was taken by EU ministers in Brussels yesterday (10 March), with the agreement of all the countries except Italy and Spain.
These two countries have chosen to exclude themselves from the process, because they refuse to accept the proposed rules regarding the choice of official languages.
Most of the ministers were able to accept the principle that all patent applications should be submitted using one of the three working languages of the European Patent Office (EPO), which since 1977 have been English, French and German.
However, the Italians and Spanish are afraid that such an approach would give an unfair advantage to companies based in France, Germany and the United Kingdom, which would all be able to make Europe-wide patent applications in their native languages.
The two Southern European countries had argued that their languages should be included as well, otherwise there should be just one reference language. But the French government was not willing to accept the idea that all patent applications should be submitted in English.
After many months of unsuccessful negotiations it finally became apparent, at the end of last year, that it would not be possible to achieve an agreement between all 27 countries on the sensitive issue of which languages could be used for patent applications.
Some of the member states then started to think about going ahead with a common patent system between themselves, making use of the so-called 'enhanced cooperation' procedure that has been part of the EU treaty since 1999.
Agreement among 25 member states
Enhanced cooperation allows a group of countries to adopt new common rules among themselves, in areas where an EU-wide agreement cannot be reached.
The procedure was first put into practice last summer (July 2010), when 14 countries launched an agreement on how to manage divorces involving couples with connections (of nationality and/or residence) to more than one member state.
Last month (on 15 February), the European Parliament gave its approval for member states to make use of the enhanced cooperation procedure for setting up a common patent system.
The agreement among 25 member states concerns the creation of the European patent – which in legal jargon is known as a "unitary patent title" – as well as the use of English, French and German as the three main working languages.
However, another potentially more difficult issue is not covered by the ministers' agreement. This concerns the idea of setting up a common jurisdiction system including a tribunal to resolve legal disputes, for example concerning the scope of individual patents.
On Tuesday (8 March), the European Court of Justice ruled that the creation of a Community Patent Court would not be compatible with the provisions of EU law, thereby casting a shadow of doubt over plans to establish a Europe-wide patent system.
Minister: 'An historic day for innovation'
Yesterday's meeting in Brussels was chaired by Zoltán Cséfalvay, the Hungarian minister of state for strategic affairs.
"Today is really an historic day for innovation and the internal market," the minister told journalists. "Under the Hungarian Presidency the stars have aligned for European patent reform for the first time in nearly 50 years," he added.
Cséfalvay said he would have preferred to see all of the member states taking part in a common system, and declared that both Spain and Italy would be welcome to join the initiative "anytime they consider it appropriate".
But the minister also underlined that "a significant majority of member states were determined to go ahead and not lose any more time".
The Hungarian Presidency estimates that the direct costs of a fragmented patent system add up to around €750 million of extra costs on European businesses every year.
Barnier: 'Pioneers going ahead'
The EU commissioner for the internal market and services, Michel Barnier, told journalists that he regretted it had not been possible to reach an agreement among all of the EU's member states.
"Of course 27 out of 27 would be the ideal," he admitted; "unfortunately we haven't achieved that".
"But the whole spirit of enhanced cooperation says that there will be these pioneers going ahead, and it will be an advance group that will be open to other member states to join whenever they like," said the Frenchman.
Barnier insisted that there would be no discrimination, and that all European companies, including Spanish and Italian ones, would be able to make use of the common patent.
The commissioner envisages that all of the patents processed by the new system would be translated into English if necessary, and also into the applicant's own language. The cost of these translations would be included in the basic price of registering a patent.
Barnier promised that "as of 30 March" the Commission would present draft regulations on the creation of the patent and the language regime.
Regarding the more delicate question of whether and how to develop a common patent jurisdiction system, he said that the Commission would continue working on this issue, while paying close attention to the recent ruling made by the European Court of Justice (ECJ).
"In a few weeks' time, I think we'll be able to come up with a common position on this with the Council, while of course respecting the Court's ruling," said Barnier.