OPINION – The European Union’s single patent system is in doubt again

21 Jul 2012

Lisa Jackson, ICT solicitor with Leman Solicitors

The European Union’s single patent system is in doubt again following legal bickering between the European Council and the European Parliament over the draft law establishing the unified patent and its related court. The inability of these two bodies to reach a decision could cost private companies a collective €289 million next year in unnecessary patent disputes.

Last week the European Parliament was due to vote on the unitary patent and its related patent court but it postponed the vote at the eleventh hour. The move came after the European Council deleted three articles from the proposed EU patent law. These changes had the effect of reducing the European Court of Justice’s role in the new patent system.

The European Parliament argued these changes were against EU law and refused to accept them. Further finger-pointing, squabbling and committee meetings within these EU institutions led to another delay in the introduction of the new system that has been in the works for almost 40 years.

This disappointing development followed the historic decision less than a month ago to locate the new unified patent court in Paris with specialised hubs in Munich and London. This agreement on the location for the pan-European patent court appeared to signify a major step forward in finalising the finer political details of the unified system.

The EU has an existing European patent system but this only grants the holder with a bundle of individual independent national patents for each individual EU member state. A patent holder currently has to translate a patent application into the official language of each EU member state to get this bundle of patents, an expensive and slow process.

The unitary patent, which will be granted by the European Patent Office in Munich, will offer an attractive alternative to this system. It provides a streamlined single-step process resulting in a patent that is protected in 25 EU member states, with Spain and Italy opting out of the new scheme. 

Patent cost

According to the European Commission, the new unified patent will cost about €680 which will be up to an 80pc cost saving on the existing system. Currently, patent applicants have to pay for extortionate translation and administrative costs to register a patent across the EU. This is generally in the region of €32,000 for the 27 EU member states. On top of this, annual renewal fees must also be paid. 

The pan-European court is also expected to deliver cost savings as it will reduce the amount of patent infringement litigation across the EU. Currently, the existing law governing patents, called the European Patent Convention, is applied differently throughout the national courts of the European Union. As a result, the same infringement claim taken in two countries could have two different results.

The inconsistent application of present patent law has also led to ‘forum shopping’ where patent holders pick the EU country to file their legal claim based on where they believe their dispute will be most favourably heard. This can vary depending on whether the body bringing the action is looking for the best award, the slowest court to hold up a dispute or cross-border reliefs.

Once a unified court is established, judgments will become predictable and the amount of awards granted for infringement of patent holder’s rights will stabilise across the EU. In a study carried out in 2009 by Prof Dietmar Harhoff, he estimated that the total savings to private organisations from having a single patent court by 2013 would range between €148 million and €289m for that year as cases would not be duplicated in the separate courts of the individual EU member states.

The existing patent system must be replaced and this must happen sooner rather than later. The longer internal wrangling between the different institutions of the European Union continues, the larger the burden on companies, universities and research centres who have patentable inventions they need to protect in Europe.

As it stands, the European Parliament’s discussion surrounding the Council’s changes to the draft law will continue in September. This further pushes out the timeline for agreeing the unified system and extends the existing barrier to innovation caused by the current system.

It is hoped that the draft law underpinning the single European patent and the unified patent court can be agreed upon quickly so the EU can being the process of establishing these measures to deliver security and cost-savings to its members. Until then, the single patent and its court remain in limbo.

Lisa Jackson is an ICT solicitor with Leman Solicitors. Follow Lisa on Twitter