Enhancing the patent system in Europe

Protecting intellectual property promotes innovation and strengthens the European Union's competitiveness. Patents can play a central role here, but substantial reforms are needed at European level. Making a Community patent system a reality and improving the current procedures for resolving disputes should, together with supporting measures, make the patent system more accessible and lead to savings for all involved.

ACT

Communication from the Commission to the European Parliament and the Council of 3 April 2007 - Enhancing the patent system in Europe [COM(2007) 165 final - Not published in the Official Journal].

SUMMARY

The communication points out that the current European patent system is considerably more expensive than the US and Japanese systems. A Community system would be much more attractive than the present system of European patents, which is simply a bundle of national patents. A European patent designating 13 countries is 11 times more expensive than a US patent and 13 times more expensive then a Japanese patent. The existing system for resolving disputes in the EU, with the risk of multiple litigation in a number of Member States on the same patent issue, involves the parties concerned in unnecessary costs and creates a lack of legal certainty.

In view of the difficulties being experienced in the area of patents and, in particular, in creating a Community patent, in 2006 the Commission launched a broad consultation, involving all those concerned, on the future of patent policy in Europe. The results of the consultation leave no doubt as to the urgent need to create a simple, cost-effective and high quality patent system in Europe.

This communication aims to draw operational conclusions from the consultation and enable the Council to open discussions on the reform of the system of patents and, in particular, on the Community patent and jurisdictional arrangements. It also puts forward a number of supporting measures to improve the patent system, concerning patent quality, knowledge transfer and enforcement issues.

The Community patent

Many stakeholders continue to support the Community patent as the approach that will yield most added value for European industry under the Lisbon Strategy. However they criticise the Council's Common Political Approach adopted in 2003 on the grounds of the high costs of translation and the excessive centralisation of the proposed jurisdictional system.

The Commission believes that a truly competitive and attractive Community patent can be achieved provided there is political will to do so. Concerns about over-centralisation should be taken into account in the creation of the EU-wide patent jurisdiction system. On translation costs, the Commission will explore with the Member States ways of improving the language regime with a view to reducing costs while increasing legal certainty.

Jurisdictional system

Currently, any disputes arising from a European patent granted by the European Patent Office (EPO) can be brought before the national courts. This is because each European patent is a bundle of national patents, which are subject to the national rules of the EPO Contracting States designated in the application. In the absence of a single jurisdiction, disputes are dealt with in accordance with national laws and procedures.

This situation creates difficulties that damage legal certainty and impede business decisions on patented products:

• multiple litigation: the same issue can be brought before the courts in several countries, creating a difficult situation for competitors;
• high costs: the parties concerned have to pay court fees and hire lawyers and experts in all the countries in which action is brought;
• inconsistencies: courts deal with cases in accordance with national law, which can produce different and sometimes contradictory results;
• choice of forum: given the possibility of choosing which jurisdiction is to apply, parties tend to choose the one most likely to deal with the matter in a way that favours their interests.

The major advantage of a single jurisdiction for patents are the savings made by the parties involved in a dispute. The costs of disputes are currently excessive and vary considerably according to a number of factors, including the complexity of the case, technical aspects and the sums involved. These costs weigh most heavily on individual inventors and small businesses, which can be discouraged from taking out patents and, more generally, from investing in research and development.

Discussion of the new jurisdictional system

The Member States agree on the need for a Europe-wide patent court system that would guarantee cost-effectiveness, legal certainty and proximity to users. However, discussions have revealed differences about how to proceed.

Recent discussions with the Member States have brought to light different views on the jurisdictional system: some Member States support the draft European Patent Litigation Agreement (EPLA) in the context of the European Patent Convention, which aims to create a single jurisdiction for disputes concerning European patents, while others favour the creation of a specific Community jurisdiction based on the Treaty for litigation on European and Community patents.

Under these circumstances, the Commission believes that consensus could be built on the basis of an integrated approach that combines features of both EPLA and a Community jurisdiction. This could involve one single court system with competence for litigation on European patents and future Community patents. Such a judicial system could be based on the EPLA model and allow for harmonious integration into the Community jurisdiction. Initially, efforts should be concentrated on building consensus among Member States around these principles.

The jurisdiction would have competence for infringement and validity actions as well as for related claims such as damages. It should ensure an appropriate degree of proximity to the parties concerned and comprise a limited number of first instance chambers as well as a fully centralised appeal court that would ensure uniformity of interpretation. These chambers, which could make use of existing national structures, should form an integral part of the single jurisdictional system.

The first instance chambers and the appeal court should work under common rules of procedure based on best practices in the Member States.

The patent jurisdiction should have legally and technically qualified judges with full judicial independence.

Finally, the patent jurisdiction must respect the European Court of Justice as the final arbiter in matters of EU law, including questions relating to Community legislation and to the validity of future Community patents.

Supporting measures to improve the patent system

With a view to promoting a reliable patent system, the Commission proposes the following supporting measures:

• guaranteeing patent quality: rigorous patentability criteria must be applied to maintain the high quality of European patents. Cooperation between patent offices will reduce costs and delivery times;
• supporting small businesses: small businesses must be given all necessary advice on patents. The Commission is providing backing for support projects under the PRO INNO Europe initiative and the Competitiveness and Innovation Framework Programme;
• improving technology and knowledge transfer: between European businesses on the one hand and between research centres and businesses on the other;
• enforcing patent rights: the legal framework for patents must be strengthened, taking account of the different ways of resolving disputes, including alternative dispute resolution systems, patent litigation insurance and international standards.

Background

The promotion of intellectual property rights (IPRs) and, in particular, patents is part of the Lisbon Strategy for Growth and Jobs, in that it stresses the role of patents as a driving force for European development.

A separate, detailed communication on intellectual property rights is planned for 2008. This will supplement this communication and cover the main non-legislative and horizontal questions relating to all aspects of intellectual property.

Last updated: 22.06.2007