Sweden, which holds the EU's six-month rotating presidency, pulled off a major political coup by securing unanimous backing for its plan to establish a single EU patent and a European patent court.
Patent reform has been on the Brussels agenda for several years but attempts to streamline a complex system have failed repeatedly.
The deal should help slash the cost of protecting new innovations in Europe, something small businesses have been particularly vexed by in recent years.
The cost of filing and protecting patents in Europe is substantially higher than in the US and Japan, and business organisations have consistently complained about the fragmented and inconsistent decisions handed down by European courts.
Companies often have to fight legal actions in several European countries at once, and national courts regularly come to conflicting conclusions on identical cases. The plans for a single patent court will make litigation cheaper and more predictable, diplomatic sources said.
The court will include local and central chambers under a common European appeal court. In the initial stages, companies will be able to continue to use national courts, allowing confidence in the new system to build up gradually.
A common understanding has also been reached on renewal fees and the cooperation between patent offices.
Jury still out on translation costs
Another perennial bugbear for innovative businesses has been the high cost of translating patents into all European languages. This has been a major factor in making it more expensive to protect new technologies in Europe.
The new agreement stopped short of resolving this issue, deciding instead that a proposed new patent regulation should be accompanied by a separate regulation on translation arrangements.
Business lobbies have highlighted the burden of translation costs which, they say, is a major deterrent to small businesses considering filing for patent protection. Patents typically cost three times as much in Europe as in the US.
The new reforms should cut the costs of protecting intellectual property in the EU at a time when the incoming European Commission is preparing a new innovation act, which is likely to stress the importance of SMEs for the knowledge economy.
