Halve patent fees for SMEs, says EU think-tank


Small, innovative companies should be given special status by the European Patent Office (EPO) in order to remove barriers to intellectual property protection, according to a new report by the Brussels-based Bruegel think-tank.

The time, expertise and costs involved in filing new patents is prohibitive for small firms, independent inventors and universities, according to the report’s author, Bruno Van Pottelsberghe of Brussels Free University (ULB). 

Driving costs skyward are the fees charged by the EPO, the price of retaining expert legal and technical advice, and translation costs. Enforcing patents in several European jurisdictions is also expensive, Van Pottelsberghe says, who says the introduction of a single patent court could save businesses up €289 million per year. The report suggests creating special patent status for SMEs and young innovative companies, which would bring Europe’s patent system into line with the US and Japan, where small firms have enjoyed special treatment for many years. 

“This would imply setting reduced SME fees at the EPO at, for instance, about half the fee level applicable to other companies,” the report says. Europe’s system must be streamlined to make it more attractive to all users, said Van Pottelsberghe, who called for major reform of how the EPO is run. 

He was critical of the governance structures of the Office, which has a board made up of 35 representatives of patent offices in member states. A new administrative council with just 10 members from national patent offices, plus representatives of businesses, consumer associations and the academic sector is proposed as an alternative. 

The report suggests greater cooperation between patent offices across the world but, in light of varying quality standards between Europe and the US, falls short of calling for mutual recognition of patents. 

Bruno Van Pottelsberghe of Brussels Free University (ULB) said Europe's patent system remains fragmented, despite years of work to make it more efficient. He said the relative cost to companies of securing a European patent can be more than in the US given the quality of the patent and the size of Europe’s market. 

He said national patent offices should offer advice and support to companies but should leave the role of granting payments to the EPO. 

Maria Cimaglia, the European Association of Craft, Small and Medium Sized-Enterprises (UAEPME), said patents are too costly and complex for SMEs. "The complexity of the system means we need to use external patent experts but the cost of obtaining and defending patents can destroy a small firms," she said. 

Marco Connor, former patent examiner at the EPO and now head of patent practice at Kirkpatrick consultancy, said pressure on examiners has increased and the quality of patents will suffer. Discussing SMEs, he said hiring a patent attorney is very important as inventors are usually not experts in writing patent applications. He said some regional governments in Belgium will pay up to 70% of the costs incurred by small firms and similar schemes are in place in other EU countries. 

Margot Fröhlinger, of the European Commission's directorate-general in charge of the internal market, said controlling costs is important but the aim is not to have "cheap patents". "It is vital that patent examiners are paid to give advice to companies and to write good quality patents," she said. 

However, the Commission is aiming to cut "unnecessary costs", including translation fees. "Translation costs are absolutely unnecessary because they are hardly ever consulted," Fröhlinger said. 

She also said European companies are suffering from the import of "blatant" copies of their products, including machinery producing in China. Antwerp harbour is the biggest port of incoming machinery, and customs authorities are powerless because intellectual property is not sufficiently protected, according to the Commission official. 

Fröhlinger stressed that the EU executive sees improving access to patents for independent inventors, SMEs, academia and public researchers as very important. 

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

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

Earlier this year, the Czech EU Presidency said it would seek to advance the issue, and 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 (EURACTIV 6/3/09). 

In March, the European Commission said it would seek powers from EU member states to conclude an agreement on a unified patent litigation system, which would establish a court with jurisdiction over existing European patents and the future Community patent system (EURACTIV 25/3/09). 

EU ministers have now asked the European Court of Justice to examine whether such a system would be compatible with the European Treaties. A response may take up to 18 months to arrive (EURACTIV 27/5/09

  • End of 2010: 

    The European Court of Justice is expected to offer its legal opinion on the compatibility of the proposed Unified Patent Litigation System (UPLS) is compaitible with Community law.   

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