25 countries give green light to European patent

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Ministers from 25 member states have decided to go ahead with plans to introduce a common system for registering patents that would save European businesses millions of euros each year. Meanwhile, Italy and Spain are still refusing to join in, and difficult legal issues remain unresolved.

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.

Zoltán Cséfalvay, the Hungarian minister of state for strategic affairs, described the anticipated advantages of a common patent system, emphasising the potential benefits in terms of increased spending on research and technological development (R&D) across the European Union.

"A higher quality, simpler, less costly and more business-friendly patent system would be expected to induce further investment into R&D and thus raise our innovation capacity," said the minister, whose country holds the rotating EU presidency.

"I am deeply convinced that there is a direct link between the availability of a reformed patent system and the level of R&D expenditure, and that the eventual creation of the unitary patent will lift our innovation capacities significantly," he added.

Cséfalvay considers that the fragmented patent system in the European Union, where inventors have to deal with 27 different legal systems, actively discourages private investment.

"Now we [are taking] the first step to establish a unitary patent system which will make it possible that inventors can more easily get access to financing, and I think that it is also an important step when we talk about how can Europe catch up in the innovation competition," he said. 

BusinessEurope, which represents industrial and employers' federations from 34 countries, had supported the proposal for a majority of EU member states to make use of the 'enhanced cooperation' procedure in order to move forward with a common patent.

BusinessEurope hopes that the Ministers' decision will allow rapid progress on the European patent, which it considers necessary to enable companies, including small and medium-sized enterprises (SMEs), to protect the results of their innovation while avoiding excessive costs.

The American Chamber of Commerce to the European Union (AmCham EU) has also welcomed the Ministers’ decision to move forward on a unitary patent.

John Vassallo, Chair of AmCham EU, said: "Quality, cost-effectiveness, efficiency and legal certainty must be the objective of any change to the legal framework for patents in Europe. With a fully functioning EU patent, the EU Member States would give a clear signal that intellectual property is a driver of innovation, competitiveness and growth for Europe in a global economy."

UEAPME, the European association representing small and medium-sized enterprises (SMEs), has also welcomed the decision to go ahead with reinforced cooperation on a common patent.

Maria Cimaglia, Legal Affairs Counsel at UEAPME, told EURACTIV: "More affordable patents will act as a driver for innovation and foster SMEs’ competitiveness in the single market and beyond. UEAPME has backed the project from its very early stages, as a single EU-wide process would dramatically reduce patent-related costs for small businesses."

"We hope that Spain and Italy will join the system in the near future. This would guarantee rules that apply across the board in Europe. It would also avoid putting Spanish and Italian small businesses at a competitive disadvantage, which is an unfortunate side effect of the agreement reached," said Cimaglia.

Patent titles in Europe are currently granted by the European Patent Office (EPO), which was set up in 1977 and now covers 38 countries including all of the EU member states.

However, the so-called 'European patent' offered by the EPO is in reality nothing more than a bundle of national patents, with each country having its own set of different rules.

The current situation results in significant costs and legal difficulties for companies that want to protect their inventions and innovations across the whole of the European Union.

Since the 1970s, the EU member states have regularly discussed the idea of setting up a common European system for the registration of patents. Such a system would reduce costs for businesses, simplify litigation proceedings, and improve the effectiveness of the single market.

Following a Commission proposal in 2000, EU member states were unable to agree on working languages, nor on setting up a single jurisdictional system to resolve legal disputes.

In December 2009, they adopted conclusions on an "Enhanced patent system for Europe", although the sensitive issue of translation arrangements was not covered.

In July 2010, the Commission made a new proposal on the translation arrangements for the EU patent. But once again, the member states were not able to reach an agreement on this issue.

 

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