EU moves a step closer to establishing a unitary patent

The European Council concluded the negotiations on the EU's future unitary patent system at its meeting on 29 June. The long-awaited decision paves the way for establishing less expensive, simpler and more efficient patent protection for businesses in the EU, especially for small and medium-sized enterprises,

The last outstanding issue to be resolved by ministers was the seat of the Unified Patent Court's Central Division of the Court of First Instance. They agreed that it would be based in Paris and have two specialised sections, one in London and the other in Munich. The office of the Court's President will also be based in Paris. The first President of the Court should come from the member state hosting the Court's Central Division.

The Unified Patent Court will have exclusive competence in respect of actions relating to the validity or infringement of a European unitary patent. This will eliminate the risk of multiple patent lawsuits in different member states concerning the same patent, as well as the risk that court rulings on the same dispute might differ from one member state to another.

The single system is also expected to bring down patent litigation costs for businesses significantly. The European Commission has calculated that, with the single court, litigation expenses incurred by European companies can be reduced by approximately €289m each year.

Obtaining a patent that would be valid in 13 member states today can cost up to €20,000, and approximately €14,000 of that sum would be spent on translations alone. In comparison, it costs approximately €1,850 to obtain an American patent.

The future unitary patent would be valid in all participating member states and be obtained with a single application. The use of languages would draw inspiration from the current system managed by the European Patent Office, where the working languages are English, French and German, and this will cut down the costs of acquiring patent protection.

After 30 years of negotiations, we now have an agreement on the European patent

‘After 30 years of negotiations, we now have an agreement on the European patent,’ said Danish Prime Minister Helle Thorning-Schmidt. ‘The European businesses will now experience – when we have it finalised – that instead of applying for a patent in 27 member states, they can now apply in one place. And that will be good for growth and business in Europe.’

Agreement on the Unified Patent Court is the third element in the future unitary patent system in the EU; the other two are a regulation on the unitary patent itself and a regulation on translation arrangements for that patent. The member states and the European Parliament agreed on the two regulations in December 2011.

The European Parliament will vote on the unitary patent ‘package’ in July 2012. The Council will adopt the two regulations shortly thereafter. The member states will sign the Unified Patent Court agreement in the second half of 2012. After it is ratified by a sufficient number of member states (at least 13), it will enter into force. This is expected to happen in early 2014. The two regulations will enter into force at the same time.

A vital part of the Court covering the pharmaceutical and life sciences industries will be coming to London

The decision to locate one of the specialized sections of the Unified Patent Court in London was welcomed by UK Prime Minister David Cameron.

A vital part of the Court covering the pharmaceutical and life sciences industries, in which Britain excels, will be coming to London. This brings millions of pounds and hundreds of jobs,’ he said. ‘And I secured the changes to the nature of the patent system that businesses were demanding.’

The ABPI (Association of the British Pharmaceutical Industries) also greeted the news enthusiastically, as did the Confederation of British Industry (CBI). ‘The pharmaceutical industry is strongly in favour of a high quality system for settling IP disputes and has been very engaged in discussing the proposals as they have developed. We look forward to our continued involvement in designing the system we need,’ said Stephen Whitehead, chief Executive of the ABPI.

The pharmaceutical industry is strongly in favour of a high quality system for settling IP disputes

Matthew Fell, CBI Director for Competitive Markets, added: ‘Businesses will be reassured that the European Patent scheme will not fall under the jurisdiction of the European Court of Justice, because of the risks involved in a non-specialised court having a say in decisions over their intellectual property.

‘Securing a high quality patent system was always the main priority for businesses, rather than squabbling over the location of the patent court. The move to split the European patent court between Paris, London and Munich seems a sensible compromise, and will draw on the UK’s expertise in life sciences.’

However, intellectual property specialist company Marks & Clerk injected a note of caution. ‘Today’s agreement does not in fact represent a final agreement on the Unitary Patent Court or a victory for the UK Government,’ warned Keith Hodkinson, Partner and Chairman of Marks & Clerk International.

‘While the location the court is certainly of economic significance, and the decision to locate at least certain specialist work in London is of course welcome, the chief concern for the professions and industry has always been the fundamental flaws in the regime, rather than the issue of where cases are heard.

The chief concern for the professions and industry has always been the fundamental flaws in the regime, rather than the issue of where cases are heard

‘Specifically, we have consistently opposed the provisions in articles six to eight governing the role of the European Court of Justice. Today’s agreement from the Council of Ministers "suggests" that these articles be deleted, but it is not at all clear that the Council of Ministers can insist on this or that the Commission will agree or what, if anything, would take the place of the deleted articles.

‘It is also unclear what will happen to the issue of bifurcation (splitting infringement and invalidity issues into separate proceedings). So, despite talk of final agreement there are a number of pressing questions yet to be answered, and this process could yet continue for some time.’