Patent applications falling across Europe

Preliminary figures from the European Patent Office (EPO) reveal that the number of applications for new patents is down 7% in the first two months of 2009. This is the first reduction in patent applications in over a decade, sparking fears that Europe’s knowledge economy is under threat.

Applications to the EPO have doubled since 1995, leaving the agency with a backlog of between 400,000 and 500,000 applications. More than half of the applications filed last year were not granted. 

However, the advent of the financial crisis has brought a sharp downturn in the exponential growth of new intellectual property filings. 

An EPO survey of its clients, published this week (April 27), forecasts a levelling-off of new patent applications in 2009 and 2010, but this study was conducted in mid-2008, and is unlikely to have factored in the recession, which has deepened in the meantime. 

Early indications for 2009 suggest applications for this year are likely to be down for the first time since the early 1990s. 

The news comes as a major blow to the EU’s Year of Innovation and Creativity (see EURACTIV LinksDossier) and its much-vaunted Lisbon Strategy, which aims to turn the EU into the most competitive knowledge-based economy in the world by 2010. 

It has also emerged that the EPO is working to plug a €60 million hole in its finances. It is understood the agency, which last year faced industrial action, is working to contain its costs amid concerns that its deficit could be even greater in 2010. The EPO has a budget of €1.2 billion and long-term liabilities of €2 billion. 

The figures were discussed at a Science|Business workshop held in Brussels. 

Roland Strauss, from the independent stakeholder platform Knowledge4Innovation, said any reduction in new patents "could become a huge problem," particularly if it meant a fall-off in granting applications for new drivers of economic activity. 

Concerns about the impact of declining patent applications were echoed by BusinessEurope, the EU business lobby group, which described the apparent fall-off in patent applications as "unfortunate, but understandable". 

Ilias Konteas, legal affairs advisor at BusinessEurope, said companies are hesitating to put in new applications amid the financial uncertainty facing all enterprises. He said a similar trend can be seen in applications for trademarks. 

"It is a concerning signal. Everyone agrees that boosting innovation will help us find a way out of the economic crisis, but businesses need support," Konteas said. 

Speaking to EURACTIV from the European Patent Forum in Prague, he highlighted a range of areas where the existing patent system could be streamlined to make it more attractive to innovative industries. 

He said applying for a patent was relatively more expensive in Europe compared to the US or Japan, and protecting intellectual property could be frustrating and costly given the inconsistencies between courts. 

"There have been cases where a patent is declared valid in one EU country but not in another," he said. 

Konteas said industry was broadly supportive of efforts to establish a single court for patent rights, although there were still a number of technical issues to be ironed out. 

"Politicians have to give businesses the tools if we are to innovate and return to growth. It's time for member states to stop discussing these issues and start taking the right decisions," he said. 

Patent applications in Europe have grown steadily since the early 1990s, leading to concerns about excessive delays in processing new patents. Costs for patent applications are also higher in Europe than in the US and Japan. 

Moves to develop a Community patent for the EU began in 2003, but progress has been hampered by repeated technical and legal difficulties. The issue was resurrected under the French EU Presidency last year, and it had originally been hoped that patent issues might form part of the Small Business Act

But differences over sensitive translation arrangements proved insurmountable, and the French proposal fell foul of "political obstacles", despite broad agreement that reform is urgently required (EURACTIV 2/12/08). 

Sweden has indicated that it will make the creation of a single patent a priority issue for its six-month term at the EU's helm, which begins in July. However, several presidencies, including the Czech Republic, have made similar statements without much progress (EURACTIV 6/3/09). 

The European Commission is currently seeking powers from EU member states to conclude an agreement on a unified patent litigation system, which would establish a court with jurisdiction for existing European patents and the future community patent system (EURACTIV 25/3/09). 

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