Single European Patent Dominates IP Summit As European Parliament Vote Nears

Brussels, Belgium – As the value of intellectual property reaches unprecedented heights, policymakers, business leaders, and legal experts discussed the need for international patent harmonisation during a two-day patent conference in Brussels last week. With the vote on the European unitary patent and common litigation system just days away from parliamentary vote, participants focussed on what the new system may mean to business.

The private-sector Pan-European Intellectual Property Summit (IP Summit) devoted to patents provided a forum to discuss “the future of patent systems, strategies, and marketplaces,” gathering over 500 participants in Brussels from 6-7 December.

Echoing one of central themes to emerge during the conference, the director general of the World Intellectual Property Organization, Francis Gurry, said that trends in the realm of innovation and the economy demonstrate an urgent need for a multilateral rules-based IP system. However, he said that progress in its construction has been slow – especially in the area of patents.

During his intervention, Gurry announced that the World Intellectual Property Indicators Report, which WIPO will release next week, shows a 7.8 per cent increase in patent applications worldwide in 2011. This marks the second year running of a rise in global demand for patents.

For Gurry, increased international cooperation will be required to deal with the surge and pointed the Patent Cooperation Treaty (PCT) as the basis of international work-sharing. WIPO administers the PCT and is overseeing reforms of the four-decade-old system (IPW, WIPO, 10 October 2012).

However, he called progress toward an international rules-based system in the field of intellectual property, especially in the patent arena, “extremely slow.”

“We haven’t be able to articulate that common interest in the area of innovation and patents yet, which is a great shame because the rest of the world, the economy, is increasingly basing itself upon an innovation consensus in the way in which it proceeds to develop economic strategy,” Gurry said.

In this context, the WIPO Director General said that ongoing plurilateral efforts “are extremely encouraging.”

Indeed, in the run-up to what may be the final steps in the creation of a European unitary patent and a common litigation system, the unitary patent package took centre stage during the IP Summit.

All Eyes on EU Parliament

Agreed by a working group of the Council of the European Union in November, the unitary patent package includes regulation to create a single European patent through enhanced cooperation of all but two of the 27 member states (Italy and Spain are not participating) and an international agreement to create a unified patent court, establishing a single and specialised patent jurisdiction (IPW, European Policy, 20 November 2012).

Next week, two major legislative steps will take place in the finalisation of the regulations. On 10 December, they will be presented before the Competitive Council, a configuration of the Council of the EU, for adoption. The following day, the European Parliament will discuss and vote on the unitary patent package during a plenary session in Strasbourg.

According a European Commission draft memo [doc], “the unitary patent will be available on a one-stop shop basis at affordable costs as it will be centrally granted through the European Patent Office (EPO),” no longer requiring additional validation requirements. The Commission says the common litigation system would help to avoid “unnecessary duplication of litigation cases before the various courts of the various Member States concerned, and enhance legal certainty.”

Once fully implemented, the Commission calculates tremendous cost savings [pdf]. Estimates show that after the transitional period it will cost €5,000 euros to obtain a European patent with unitary effect versus about €36,000 euros to obtain patent protection across the 27-country territory today.

European Commission Director of Intellectual Property Kerstin Jorna said, “We will do everything we can to get the first EU unitary patent granted by spring 2014.” In order for that to happen, at least 13 member states would have to ratify the agreement by this time next year.

Jorna called the unitary patent “a new tool to innovate in the EU single market,” as it would become a third option for patent filers in Europe. Companies and inventors would still be able to apply for patents through national offices or opt for the “classical” European patent that exists today.

EPO President Confident

During the two-day conference in Brussels, Benoît Battistelli, president of the EPO was confident in a positive outcome. “We are about to and we will have reached, next week, a political agreement among 25 EU members to create this long-awaited unitary patent, and I think this is very good news,” said Battistelli.

Some European policymakers were a bit more reserved. Vicky Christoforou, first counsellor for legal matters on IP at the mission of Cyprus to the EU in Brussels, coordinates the IPR team of the Cyprus Presidency of the Council of the EU, and chairs the Council Working Party on IP. During the IP Summit, she spoke during a workshop on the unitary patent and the unified patent court.

“I share the optimism of Mr Battistelli, but since this patent package has a long history – the first idea dates back to 1973 – it merits that we remain a bit reserved. Let’s keep our fingers crossed that Parliament will vote in favour. The indication that we have is that they will,” Christoforou told Intellectual Property Watch.

Most EU political parties support the package – but not all. The Greens/European Free Alliance strongly opposes it, questioning the legality of the enhanced cooperation of the patent package. In an open letter [pdf] to the European Parliament, Austrian member Eva Lichtenberg called her colleagues to postpone the vote until “the legality of the procedure has been verified, at the very least.”

Unanswered Questions

In terms of business support, according to Christoforou, the private sector was involved in the development of the proposals of the new regulations and is “really on board.”

BUSINESSEUROPE, a European business lobby representing small and medium businesses through its members, urged the adoption of the patent package “which is key to reducing patenting costs and boosting Europe’s growth and innovation,” in an open letter to the Council [pdf] submitted on 6 December.

However, the Confederación Española de Organizaciones Empresariales (CEOE, Spanish Confederation of Employers’ Organizations) and members of BUSINESSEUROPE did not sign the letter as it considers the current package “creates discriminatory competitive disadvantages and does not provide a level playing field.”

Other concerns from business leaders and legal experts were raised during the conference. Simon Ayrton, partner at Powell Gibert LLP, participated in the session on litigation strategies in the pharmaceutical and biotech industries, and said that the unitary patent system will be “a target for patent trolls” during the first wave of implementation. “Patent trolls” refer to non-practicing entities (NPEs) who litigate against alleged patent infringers in an opportunistic manner.

Additionally, conference participants raised questions about the level of maintenance fees for future patent applicants under the new regime (which yet to be decided), future court costs, and the risk of the development of forum shopping.

Other IP Summit topics included reforms to US patent law, patent strategies in portfolio management, the state-of-play in patent wars and the role of antitrust authorities, IPR financial markets, and trade secrets legislation.

Related articles:

http://www.ip-watch.org/2012/06/29/europe-reaches-agreement-on-unitary-patent/

http://www.ip-watch.org/2011/12/20/wipo-reports-uptick-in-ip-filings-in-2010/

http://www.ip-watch.org/2012/11/30/wipo-epo-leaders-at-oecd-adjust-the-patent-system-for-the-globalised-knowledge-based-society/