Community Patent

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Despite widespread support for the idea of an EU-wide patent that would save companies the cost and effort of having to apply for protection under different national patent regimes, MEPs and member states have been unable to find a system that obtains all around consensus. 

The idea of a Community Patent, which would allow individuals and companies to obtain a unitary patent throughout the EU, dates back to the 1960s, but until now, all efforts have proved fruitless. 

Thus, patents continue to be awarded on a national basis or through the European Patent Office (EPO), established in 1973 by the European Patent Convention (EPC), to issue so-called ‘European Patents’. 

The EPO is not an agency of the EU but an autonomous body with 31 member states. 

The European Patent is different from the Community Patent in that it is not an EU-wide patent, but rather a bundle of national patents that must be translated into contracting states’ official languages in order to be legally valid in their territory. There is nevertheless single application and granting procedure, which saves time and money for applicants. 

In follow-up to the Lisbon Council, which outlined a ten-year plan to make the EU more competitive (see our LinksDossier on the Lisbon strategy), the Commission, in July 2000, proposed the creation of a Community Patent to tackle the deficiencies of the EPC system, which generates large translation - as well as enforcement - costs for businesses, as disputes must be handled via individual national courts. 

However, it took the member states until March 2003 to reach agreement on a 'common political approach' concerning the establishment of a Community Patent Court which would rule on disputes, language regimes, costs and the role of national patent offices. 

Based on this, the Commission presented a proposal, in December 2003, to confer formal jurisdiction over Community Patents disputes to the Court of Justice (CoJ) and to establish a Community Patent Court to exercise the CoJ's jurisdiction on its behalf. But the proposal never received Council’s approval. 

Discussions have been at a virtual standstill since then.

High translation and litigation costs creating barrier to innovation: 

Costs related to translation and to working disputes through different national legal systems make patenting an invention in Europe much more expensive than in the US or Japan. It also creates a significant barrier to research, development and innovation. 

Having a European patent fully translated into just one other language costs approximately €1,400 - not to mention the time lost while waiting for translations to be completed. 

The Commission’s December 2003 proposal dealt with translation costs by proposing that, in order to be legally valid in all member states, patent applications and grants would only have to be translated into one of the three working languages of the EPO (English, French, German) with a translation of the claims in the two other working languages. 

Although seemingly an administrative issue, translation actually became the main sticking point for ministers. When the March 2004 Competitiveness Council failed to agree on time delays for translation, on the legal validity of patents in case of translation errors and on the number of languages required (with some actually demanding translation in all official languages – which would have done nothing to solve the cost issue), the debate was put to one side. 

Alternative solutions to a Community patent:   

  • The London Agreement – an attempt to tackle translation costs: 

The London Agreement of 17 October 2000 is a voluntary agreement aimed at reducing the cost of translation necessary to obtain a European patent under the EPC. Under the terms of the agreement, a patent would only have to be published in English, French or German for it to be enforceable in all signatory countries. 

The agreement, which had to be ratified by at least eight countries, including France, Germany and the United Kingdom, to enter into force, is expected to become applicable as of 2008 in the ten signatory countries, after the French Senate gave its approval for ratification on 10 October 2007. 

  • The European Patent Litigation Agreement (EPLA) – an attempt to reduce litigation costs: 

The EPLA is again not a Brussels initiative, but one from the EPO. The idea is to set up a European Patent Court (EPCt) under the authority of the EPO, so that patent-holders can avoid having to go through costly legal procedures in each individual country in order to resolve disputes. The Commission may request a mandate from the Council to participate in the negotiations on the EPLA. 

However, the EPLA risks reviving the whole software patent debate – which came to an abrupt end in July 2005, when MEPs rejected the Commission’s proposed software patent directive (see our LinksDossier on Computer Patents). Indeed, the EPLA would cover all patents, including software, which Europe so far does not officially recognise as worthy of patent protection. 

Critics of the EPLA say that it will lead to a flood of software patent lawsuits that will be judged by an undemocratic body, as judges serving on the EPCt would be handpicked by the EPO. This, they say, could lead to a de facto legalisation of software patents by giving more power to the EPO – a body which consistently contradicts European legislation by granting software patents despite national courts rejecting them. 

Also, some countries fear that the creation of an EPCt would destroy existing national patent litigation administrations. 

The way forward:

Internal Market Commissioner Charlie McCreevy, on 3 April 2007, presented a communication entitled "Enhancing the patent system in Europe" with a view to reopening the debate on patent and jurisdictional arrangements in Europe. The text proposes creating an integrated EU-wide jurisdictional system for patents, which would combine elements of both the draft European Patent Litigation Agreement (EPLA  ) and of specific Community jurisdiction for patent litigation based on the EC Treaty. 

Charlie McCreevy, European Commissioner for Internal Market and Services said: " The Community Patent and the EPLA are not mutually exclusive initiatives. They are both aiming for the same goal: a better, cheaper, more reliable patent system. That's why I want to pursue both." 

The European Business Federation UNICE stresses the need for a solution that is user-friendly in terms of quality, affordability and legal certainty. The EPLA, it believes, would provide “an important step in the right direction”. Speaking for UNICE, Dr. Klaus Dieter Langfinger, Vice-President Global Intellectual Property BASF criticised the high costs created by the obligation to translate patent claims into all official languages, commenting that only 3% of translated patents are ever opened and read at national patent offices: “Most of this expense could just be thrown directly in the waste basket.” 

Smaller businesses, represented by the European SME employers’ organisation UEAPME, say that “the current European system, with its high costs and legal uncertainties” prevents small enterprises from developing and expanding. UEAPME Secretary General Hans-Werner Müller singled out translation and litigation as the two key issues, saying that the systems foreseen by the London protocol and the EPLA could present workable solutions but that: “None of these measures can be seen as an alternative to a fullfledged European Community Patent.” 

The American Chamber of Commerce (AmCham EU)  says a well-functioning and accessible patent system is indispensable to keep investments, research and skills in Europe. It believes that “a Community patent could add value, but the common political approach adopted in 2003 is clearly not a satisfactory compromise that could lead to a workable system” and that “the EPLA and the London Agreement represent the best chance of making progress toward the goal of an improved patent system.” 

The Association of European Chambers of Commerce and Industry EUROCHAMBRES proposes to use mediation instead of court as an alternative dispute resolution procedure in order to reduce litigation costs: ““We advocate a strong policy decision from the European Union, in order to minimize the patent translation costs, optimise the use of information technologies and promote a more appropriate dispute resolution procedure like mediation.” 

In a joint motion, Socialist, Green and Leftist groups in the Parliament state that the EPLA will compromise judicial independence, increase litigation costs and expose SMEs to greater risks. They add that bestowing central patent-authority on an independent body would be against the principle of a united Europe: “The creation of a non-EU European Patent Judiciary (EPJ) and a non-EU European Patent Court would call into question the commitment of its contracting states (that are also Member States) to the Community courts and the Single Market.” 

Pieter Hintjens, president of the Foundation for a Free Information Infrastructure (FFII), which represents 3,500 IT companies and 100,000 IT individuals dedicated to the development of information goods for the public benefit, says that, by making litigation 2 to 3 times more expensive (as cases will automatically have to be defended on a European level), the EPLA will make it much harder for SMEs to enforce and defend their patents. Furthermore, he adds that the EPLA would remove all national patent courts in favour of a court where the judges would be appointed by the EPO, which, despite its total lack of political accountability at EU-level, is trying to steer Europe’s patent policy. 

According to Florian Mueller, the software developer who founded the NoSoftwarePatents campaign which lobbied against the Commission’s software patent proposal: “The actual motivation behind the push for the EPLA is this: it's all about handing control over the judicial system - as far as patents are concerned - to the same group of people that governs the European Patent Office.” He adds: "From a software-patents point of view, the EPLA would have far worse consequences than the rejected patentability directive would have had: not only would software patents become more enforceable in Europe but also would patent-holders in general be encouraged to litigate." 

  • 3 Apr. 2007: Commission published a Communication external  on enhancing the patent system in Europe based on the results of a six-month public consultation.
  • 20 Nov. 2007: Competitiveness Council to debate possible elements of a future unified and integrated patent litigation system for the EU.

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