Commission proposes compromise over European patent

The European Commission has proposed the creation of a new jurisdictional system for patents in Europe in the hope that this will please all 27 member states and give new momentum to the draft community patent.

For the Commission this proposal is a beginning for discussions, but 'there has to be a willingness by all member states to move ahead', said the spokesperson for Charlie McCreevy, the Commissioner responsible for the internal market. The Commission is planning to present a complete strategy on intellectual property rights by the beginning of 2008.

The system presented on Tuesday combines elements drawn from two opposing visions: one provides for a European jurisdiction going beyond the EU while the other would see jurisdiction limited to the EU.

The first scenario amounts to the EU ratifying the EPLA (European Patent Litigation Agreement), which envisages a single jurisdiction for all states on the continent, and would take away the votes of the UK and the Netherlands among others. The latter believes that companies would gain in terms of cost and speed.

The other scenario, supported by about 10 member states, including France, requires the creation of a strictly community-based jurisdiction.

'We suggest combining the features of both systems,' the deputy director general of the Internal Market DG, Thierry Stoll, explained. In accordand with the EPLA system, it is therefore envisaged that national jurisdictions be competent to deal with cases linked to European patents in first instance - and to the future community patents if these exist one day. However, the appeal jurisdiction will be unified at the community level.

Specifically, the new system offers two stages of jurisdiction, along with a special role for the European Court of Justice (ECJ): a limited number of national courts will be used in first instance, while appeals will be centralised at the Court of First Instance of the European Communities (CFI) - despite its title. The ECJ will be used as the Court of Cassation.

One of the aims of the proposal is to bring down the costs of legal procedures. Currently between Euro 50,000 and €1.5m has to be paid out merely at first instance. This is unaffordable for most small and medium-sized enterprises (SME).

The root of the problem is that the European patent is not living up to its name, as it relies mainly on national systems. A company wanting to file a patent in Europe has two choices: apply on a national level or apply for a European patent from the European Patent Office (EPO, which is not an EU institution) under which 31 countries are grouped.

In both cases, the patent has to be translated to be valid in each national jurisdiction. The European patent will be available in national patents, each one examined by a national jurisdiction in the case of legal action.

This situation, to which extravagant translation costs are added, leads to the average cost of a patent being nine times more expensive in Europe than in the US or Japan.

One solution would be to create a genuine unified community patent. This project has been sitting with the European Commission for about 20 years without ever coming to fruition because of the lack of motivation on the part of the member states to make it a reality.

However, Brussels continues to see the creation of this single patent as a key objective: 'the Community patent remains the solution which would be both the most affordable and legally secure answer to the challenges with which Europe is confronted in the field of patents and innovation'.

The Commission also plans to raise once more the question of patent translations with the member states. A protocol prepared under the aegis of the EPO and already ratified by several countries provides for a simplification of the current linguistic regime requiring a patent translation in each state in which companies wish it to be valid.

However, France is dragging its feet to ratify this 'London Agreement' that would limit the obligation to translate into the national language to one part of the patent - 'the claims'.

In Brussels, supporters of the agreement are pinning their hopes on Paris ratifying this text after the presidential elections, thus enabling it to enter into force.