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European unitary patent approved

Posted on behalf of Michele Catanzaro.

Michel Barnier, Europe's Commissioner for Internal Market and Services

Michel Barnier

The European Parliament yesterday ended decades of wrangling over how to streamline the European Union (EU) patent system. On 11 December it approved an ‘EU patent package’, an agreement among 25 member states to roll out a new unitary patent that will be valid in all signatory nations and will be overseen by a single patent court.

In a statement, Europe’s commissioner for internal market and services, Michel Barnier, defined the new framework as “a one-stop shop for obtaining a patent having immediate effect in most parts of the EU’s territory”, and said that the first unitary patents are expected to be granted in April 2014.

The European Commission hopes that a unified patent will make it cheaper to protect intellectual property in the EU. Companies wishing to patent their innovations in Europe must apply separately to each country, racking up an average cost of €36,000 (US$47,000) in taxes and fees, according to the commission. That compares with about €2,000 for a patent application in the United States and €600 in China. Under the new framework, a patent issued by the European Patent Office will be automatically valid in 25 countries, and its cost is expected to drop to an average €4,725. Europe has been trying to set up such a patenting framework since the mid-1970s.

But the unified patent is not pleasing everyone. Spain and Italy have refused to sign up, miffed that the patents will only be issued in English, French or German. And some intellectual property experts have criticized the system for being far too complex.

“The current regulation represents a significant step back in terms of patent law quality,” says Thomas Jaeger, a senior research fellow at the Max Plank Institute of Intellectual Property and Competition Law in Munich, Germany. Jaeger co-authored a paper in October raising concerns about the new regulation. “The validity of the patent and its infringement depend on an overlap of national, EU, and international laws — up to four levels of patent protection — that makes the new regulation extremely complex,” he says. “Moreover, the system is imbalanced in favour of the patent holder.” For example, the unitary patent does not include the option to issue compulsory licences, a common tool in patent law that allows companies to innovate by building on the technologies detailed in rivals’ patents.

On the day before the EU patent package was approved, the large technology companies Ericsson, Nokia and BAE Systems sent open letters to European Members of Parliament, defining the proposal as “bad for European business”. Their main concern is that the system could make it too easy for litigants to challenge patents, by “using threats of pan-European injunctions to extract money from legitimate European businesses”, as one of the letters points out.

Indeed, a Nature Comment piece in 2010 by Bruno van Pottelsberghe de la Potterie, an economist at the Free University Brussels and former chief economist at the European Patent Office, argued that:

Most alarmingly, the proposed EU patent would be a third layer atop the current European and national patents. Keeping the current patent systems in parallel with the new EU patent is likely to pave the way for yet more of the abusive legal behaviour practiced by some companies. For instance, a company could file for a national patent on minor improvements to an invention, made by itself or by another firm, that has already been granted a EU patent. The extra layer could lead to a greater amount of litigation in parallel, which would hold back small technology firms and universities even more.

Jaeger and his colleagues are also concerned about the unified patent court, which will have bases in Paris, London and Munich. In March 2011, the European Court of Justice dictated that the proposed court was incompatible with Union treaties, and some believe that the unified patent court would effectively sideline the court of justice in patent disputes (see ‘Single-patent legislation hits another roadblock‘).

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    Mark Richardson said:

    Given that the first unitary patent is expected to be granted by April 2014 the next year and a bit promise to be quite interesting for patent law in Europe. The unitary patent package still has a number of unknown elements that we are yet to hear about (cost of renewal fees for unitary patents, rules of procedure for the unified patent court). We’ve put together a post discussing these issues here http://ipcopy.wordpress.com/2012/12/20/unitary-patent-package-qa/

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