Guest Article: Gill Jennings and Every LLP

A unitary European Patent: One step forward, half a step back

Ministers have voted to develop Europe-wide patent, but the Court of Justice of the European Union decision threatens to derail the litigation system.

Potentially good news for innovators looking to protect their inventions in Europe: EU Ministers have voted to create a unitary European patent that would remove the need for multiple national patents and multiple  translations across Europe. However, in the same week the Court of Justice of the European Union (CJEU) rejected the creation of a pan-European patent court. Without the establishment of such a court, GJE believes that the effectiveness of a pan-European patent will be seriously compromised.

"The vote by the Council of the European Union is great news and much to be welcomed" said Gill Jennings & Every senior partner, Michael Brunner, former Secretary General of AIPPI. "The creation of a unitary, pan-European patent will offer innovators huge cost savings by removing the need for multiple, expensive translations and renewal fees in many countries of the EU."

25 countries supported the pan-European move, with only Spain and Italy voting against. The two argue that the plan - which proposes that pan-European patents, granted by the EPO and published in English, French or German but with the claims in all three languages as at present, will disadvantage their companies.

A treaty for the implementation of a so-called Community Patent, to cover the whole of the then European Community, was agreed by member states over 40 years ago, but has never made it to the European statute book. For the last 30 years it has been possible to use a single application procedure through the European Patent Office (EPO) to obtain a 'bundle' of equivalent patents in European states. However many member countries still require the patent to be translated into their national language at enormous expense.

Michael Brunner pointed out that whilst the so-called 'London Agreement', signed by many members states of the EPO a couple of years ago, has helped to reduce or remove the need for translations in some countries, most still require translations of the patent claims and all require annual renewal fees to maintain the patent's validity in that country. Infringement and validity are also subject to national courts, all of which add significant costs to the patent landscape in Europe.

A recent study for the European Commission showed that the cost and complexity inherent in the current system, means that European patents are validated on average in only five Member States, creating patent right "borders" within the Union. The study suggests that the combination of translation costs, official fees and country-specific additional fees can add up to about 40% of the overall costs of patenting in Europe.

With Spain and Italy rejecting the unitary plan, the new legislation will be drawn up under the rarely used "enhanced cooperation procedure", which allows groups of member states to adopt new rules where unanimous agreement cannot be reached. The Commission expects to publish draft regulations by the end of March.

Creating a unitary patent is only one step on the path to a single European patent. An effective system also requires a judicial procedure for handling litigation. There have been attempts for many years to provide an expert court able to rule on European Patent disputes. The latest attempt was derailed last week when the CJEU ruled that proposals to establish such a court (the European and European Union Community Patent Court), separate from the CJEU, are incompatible with European Union Law.

Experts throughout Europe have long argued for the establishment of a specialised court dedicated to hearing cases related to both existing European Patents and the proposed unitary patent. They argue that the The CJEU itself lacks the technical expertise necessary to judge the complex technical and related legal issues surrounding patent disputes.

Many countries in Europe already have such courts which provide high calibre judgements in this complex area of the law. The CJEU ruling concluded that such a court would be incompatible with existing EU treaties since the extra-EU agreement governing the proposed court would deprive the national courts of member states and also the CJEU itself of their powers to apply EU law.

Michael Brunner said that, "Despite this set-back, bearing in mind that as recently as 2010 and for the last 30 years no-one could really see the possibility of agreement on a proposal to establish a pan-European unitary patent, the proposals from the Council of Ministers to give the green light to the process are a great source of optimism that a way can be found to bring the system into effect shortly. A way will have to be found for disputes relating to such patents to be adjudicated pro tem and this itself may lead to improvements in judicial processes and judgements around Europe until an EU-plus court can be established. But, at long last it looks as though there is the political will to provide a unitary system and to set aside the stale arguments over languages which have dogged progress for decades."

Further Articles from GJE:

Telegraph Business Innovation Article December 2010

ATelegraph Business Innovation Article - Panel of Experts December 2010