High patent costs impeding innovation in Europe

3 Dec 2004

The fact that the cost of obtaining a European patent may be five times higher that the cost of a US patent is acting as a barrier to innovation, particularly in universities and SMEs, and largely accounts for the much lower number of patented inventions coming out of public research in Europe.

This claim was made at a UCD conference on technology transfer last week by ProTon Europe, a pan-European network of knowledge transfer offices within universities and public research offices. The conference addressed a range of European technology transfer issues that are seen as critically important to Ireland and its efforts of develop a knowledge-based economy. One of these was the need to reduce the cost and complexity of the European patent system.

After the conference, the network issued a statement on collaboration between universities and industry and how ensuing intellectual property (IP) should be managed. The statement noted that the patent process was dragging down the productivity of European research. “The complexity and cost of the patent system in Europe is much less appropriate to university-based inventions than the US patent system and is acting as a barrier to innovation from public research,” it read.

In an interview with siliconrepublic.com, Dr Pat Frain, director of technology incubator NovaUCD and chairman of ProTon Europe’s Intellectual Property Working Group, explained the reasons for the cost differential. “About 25pc of the cost of a euro patent would be in translation fees. Agents’ fees are about three times higher than the US and renewal fees are about six times higher. But the main reason why the costs are so much higher is that you are bundling a whole lot of national patents rather than having a single European patent.”

ProTon argues that the European patent system compares poorly with the US in a number of key ways. One of these is that it lacks a so-called grace period. In the US, after a research has published or disclosed his invention, he or she is given 12 months to file a patent. This gives the researcher time to talk to industry partners about commercialisation opportunities and so on. ProTon noted that the introduction of a grace period would be a significant step in the right direction since it would help universities and SMEs identify potential commercial partners and provide a safety net in the event of inventions being inadvertently disclosed.

However, it acknowledged that there would be difficulties applying a grace period to the ‘first to file’ system that exists in Europe (as opposed to the ‘first to invent’ system in the US) and these needed to be resolved in consultation with all the parties involved in research.

There are other hurdles to be overcome too, noted Frain, such as differences of opinions on the patent issue. “While universities and SMEs want to see to a less costly and complicated system introduced in Europe, a lot of large companies feel this would reduce the quality of the patents. So there is no uniformity of views.”

Frain also stressed that while the patent system needed to be urgently addressed, it was not the reason why Europe lags the US in terms of innovation. “I think the real problem is not that there’s not been a lot of patents filed. The real issue is the lack of investment in research.” He added: “Even with increased funding through Science Foundation Ireland and the PRTLI our expenditure on R&D as percentage of GDP is only 1.3pc compared to 1.9pc in the rest of Europe. While Europe is committed to reaching 3pc by 2010, the US is already at 2.9pc and Japan is just over 3pc.”

The ProTon statement also endorsed the ‘innovation model’ of technology transfer, recognising that IP management and licensing are not sufficient to promote innovation. It was necessary for knowledge transfer organisations to be involved in joint research with industry and in the creation of new companies “as these do not occur spontaneously to a sufficient extent in Europe.”

By Brian Skelly