A system that made patent registration up to 60 times more expensive in Europe than in China is being scrapped in favour of a one-size-fits-all pan-European process. But Spain and Italy refused to join the scheme because of language concerns.
Signing off on a plan first considered in 1973, 25 of the EU's 27 industry ministers – apart from Spain and Italy – agreed to allow inventors to register their idea with one EU agency.
The old system makes the process 18 times more expensive than in the United States and 60 times more than in China. Under the previous system, patents had to be registered separately in individual EU countries.
"Discussions have been under way for more than 30 years and this decision will help to revive the European economy," said Neoklis Sylikiotis, the Cypriot industry minister who chaired the meeting and whose country holds the rotating EU presidency.
Door is open for Spain and Italy: Barnier
Rome and Madrid are challenging the right to proceed at the EU Court of Justice (ECJ), saying the new patent system does not give due recognition to their languages.
A top advisor to Europe's highest court is scheduled to give an opinion on Italy's and Spain's legal challenge on Tuesday and judges in the court will make a ruling in the next few months.
"This is a historic decision that enhances Europe's competitiveness," EU Internal Market Chief Michel Barnier, who attended the meeting of ministers, told a news conference.
"The door is open for Italy and Spain to join."
The European Parliament is expected to approve the single patent system on Tuesday in Strasbourg. If the ECJ rejects Rome's and Madrid's case, the patent can come into force on 1 January 2014.
US companies far ahead
An EU patent, which will still cost more than double the US level at about €5,000 on average, will not revolutionise innovation in Europe overnight.
But the reform is good for business at a time when Americans obtained four times as many patents as Europeans did in 2011.
Patents, which grant the exclusive legal right to develop and exploit an idea for a limited period of time, are seen as central to encouraging innovation by ensuring that innovators can properly benefit from their efforts.
An EU patent was first created in 1973 in Munich, but the agreement never entered into force, according to the Parliament.
While EU countries have long agreed over the benefits of a unitary patent, Germany, France and Britain disputed who should host the court that will adjudicate in patent disputes.
The EU's public debt and banking crisis and a stagnant economy helped overcome those divisions, as EU leaders search for growth at a time of sharp spending cuts.
At a summit in June, German Chancellor Angela Merkel, French President François Hollande and British Prime Minister David Cameron agreed to split the court between three centres – Munich, Paris and London, depending on the type of patent.
Under the compromise, the court's headquarters will be in Paris, with some functions in London and Munich.
Anyone seeking to challenge an infringement of their patent in life sciences, for example, will do so in London. Cases concerning engineering and physics will be dealt with in Munich.