New Impetus on EU Patent, Unified EU Patent Court and UPLS

During the Intellectual Property Business Congress (IPBC) in Munich one of the more interesting presentations was from Margot Fröhlinger, Director knowledge based economy of the EU Commission (DG Internal Market and Services) who handles the unpopular file on the creation of the EU patent and the creation of  a unified patent litigation system in Europe. Who thinks that US Patent Reform is cumbersome, it pales next to the patent reform process in Europe. The issue at hand is the creation of a unified EU patent litigation system, the UPLS as well as the creation of a single first instance court. As the drafts are now debated within the Union, it would create a first instance court to litigate EU patents. In the new system the EPO would still be granting patents, but would then create two types of patents, firstly the (already known and existing) European Patents (“EP”) and a new type of patent, the EU Patent (“EUP”). The only difference between the two patents granted by EPO is that an EP once allowed and issued, falls into a bundle of “national patent rights” covering the countries in the EU that have been designated by the patentee.  The EUP, however, would, once issued, deliver a unified patent “automatically” granted for all EU countries.

The promising part is that a majority of EU industry now needs no more convincing that time for political maneuvering and stalling is over: in order Europe to stay (or better: improve) competitiveness, we need to do more than debate languages or get entangled in lawyering. This is even the more urgent now China is IP and innovation really serious (and not only talk about it) by adopting a very ambitious 5 year plan on Intellectual Property.  The EU cannot just to pay lip service to the “knowledge economy”. For innovation to work we also need to bring the patent system onto a higher level, both in terms of quality as well as in terms of enforcement. Unlike what many ICT professionals like to defend thse days, turning “knowledge” into workable ideas and products requires a well functioning and modern, unified EU patent system. Quarrels about national patent offices’ share of the pieand bickering about languages must be over now, it is time to act.

Once the new EU patent will be in place, which is, in an optimistic scenario, not expected to happen before 2015-2016, there would be a separate first instance court who will handle all EU patent infringement and validity cases. This in turn would make both protection and enforcement of patents more predictable and more efficient. It would allow industry to use the knowledge we collectively possess in the EU to be more effectively licensed and monetized more effectively towards Asia and the US.

So a little bit of background where we are now with the new EU patent. Are we optimistic? Not really. Although the current architecture of the proposal received generally broad consensus, old time obstacles remain unresolved for the moment: language and position of small countries and their Patent Offices.  Recently legal objections (in essence driven by political reasons)  were raised on whether the creation of a court would be impossible under the current EU Treaty as this created the ECJ (European Court of Justice) to be the only (?) EU court handling EU related legal matters. The opponents of a new EU Patent Court argue that the current plans for a single court are not compatible with the EU Treaty, not allowing a separate legal entity next to the ECJ. In an optimistic scenario the ECJ, called  to rule on this issue, would have minor objections against the current proposal allowing the Union and its participants in the discussion to provide improvements, then to have this signed and ratified by the EU member states. Obviously this would not work when the ECJ will rule that the single court in the UPLS system is not allowed under the current legal status of the Union.

The issue of languages remains the Big Divide. Currently a patentee must file a translation of the claims of the patent in the language of the country for which the patent is designated, with the exception for the three “official languages, English, German and French. The proposal is however to skip the requirement for this additional and costly claims translation altogether. Next week the EU Commission has the translation issue again on the agenda.  Margot Fröhlinger suggested that a solution or compromise on languages could be reached by using the so called “Enhanced Cooperation” option could be used. Basically, “enhanced cooperation” allows those countries of the Union that wish to continue to work more closely together to do so, while respecting the single institutional framework of the Union.  This option has been used in the past to rescue other politically sensitive dossiers. It might open the door for a language compromise.

The position of smaller countries as well as the costs for SMEs under the new system remain other  issues to be resolved, but the general belief is that once the institutional and legal obstacles as well as the political hurdles can be taken, the EU Patent Reform can be finally, after discussions since 1978 when the first proposal for a “Community Patent” was launched.

In order for the proposals to work,we argue, industry must speak with one tongue and must take a much more forceful approach towards national politicians than they have done so far. The debate has been mostly dominated by lawyers, judges and civil servants.  From now on the industry organisations have to do better and faster.

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