This article is part of our special report European Business Summit.
Innovative companies could see a dramatic reduction in the cost of patenting new inventions, if a controversial European Commission plan is adopted by EU governments. The new rules could pave the way for a single European patent to be issued in one of just three languages – English, French or German.
The move is designed to make translation costs 20 times cheaper and promises to bring to a close a long-running language dispute which has scuppered efforts to streamline Europe's expensive patent system.
However, the decision to examine and grant patents in the three languages currently used by the European Patent Office (EPO) could cause friction with Spain and Italy, who are unhappy with the preferential treatment given to English, French and German.
EU Internal Market Commissioner Michel Barnier said he had earlier proposed a "five-language solution" but this had been blocked by Spain, which held the rotating EU presidency until the end of June 2010.
Barnier noted that English, French and German are working languages of the EU and the EPO. He said that at present, 48% of patents are field in French or German, with the remainder presented in English.
"I didn't invent the working languages of the European Community or of the EPO, which has been working with three languages for 30 years," he said.
In an effort to quell disquiet, the EU executive is proposing a special arrangement for member states where German, French and English are not official languages. Inventors from these countries will have the option of filing applications in their own language and having the cost of translation into a working language of the EPO reimbursed.
Barnier said the proposal "strikes the right balance" between pragmatism and linguistic pluralism.
US will still be cheaper than Europe
At present, a patent valid in, for example, just 13 European countries would cost around €20,000. Up to €14,000 of these costs arise from translating documents into multiple languages.
Barnier's plan would bring the cost of protecting intellectual property in all 27 EU member states down to €6,200, of which 10% would be due to translations. An American patent costs about €1,850.
New machine translation system in the works
As a supplement to the new arrangements, a new automatic machine translation system is currently under development at the EPO.
It will give real-time access to existing patent information free-of-charge. However, these translations will have no legal value and should be used for information purposes only.
The EU already contributes €2 million to this project through its Patent Language Translation Online (PLuTO) programme and intends to expand this.
The translation of a full patent into any EU language would still be required in the case of a legal dispute. In such cases, the patent owner would have to pay for translation into the language of the relevant court. It is estimated that approximately only 1% of all patents are disputed.
Plans for a single EU patent litigation court were tabled last year but the European Court of Justice is yet to rule on the legality of the proposal (EURACTIV 25/3/09). Its decision, according to officials, could come by the end of the year.
Practical issues remain
Some practical elements of the proposal remain to be worked through in collaboration with the EPO. The major stumbling block is that the Munich-based organisation is an independent body with 37 members and is not controlled by Brussels.
It cannot impose its will on the EPO and will have to convince the patent organisation to reimburse some translation costs for EU firms.
In cases where the EPO might reimburse the cost of translating a patent into French, English and German, Brussels wants these funds to come from the fees paid in applying for the proposed EU patent.
However, EU sources said it was not the intention to pay translation costs for non-EU countries which are members of the EPO – such as Switzerland or Turkey.
All eyes on European Council
The major stumbling block will be the European Council, where many previous attempts to break the patent impasse have fallen by the wayside due to opposition by member states.
Barnier said he would be willing to amend the text in negotiation with member states but added that he wants to be the last commissioner to announce that a single EU patent is within reach.
Commissioner Barnier said failing to clear the final hurdles to an EU patent would be unacceptable. He said a strong intellectual property system is vital to Europe's priorities: creating a knowledge economy, promoting innovation, tackling counterfeiting, completing the single market and cutting red tape for SMEs.
The regulation on translation arrangements for patents would be one of 30 proposals in the Single Market Act, which will "re-launch and deepen the internal market," the commissioner said.