A new proposal by European Union governments could signal the end of a years-long struggle for a unified European patent and patent court. The compromise, which has the support of the European Commission (EC), appears likely to make it through the European Parliament despite pockets of resistance.

The working group of the Council of the European Union agreed on the patent package on 19 November, the EC said. The package consists of a regulation creating a European unitary patent through enhanced cooperation of 25 of the 27 member states (Spain and Italy are not participating); a separate regulation establishing a language regime for the patent; and an international agreement involving 26 EU countries setting up a single, specialised jurisdiction to hear patent cases.

Under the compromise, there will be a one-stop-shop for unitary patents at the European Patent Office (EPO) in Munich, and the patent will be effective in 25 EU countries, the EC said. After a 12-year transitional period, there will be a language regime that works in 23 languages before and after a patent registration procedure at the EPO. Requests for registrations can be filed in all EU languages, and will be processed in one of the three working languages of the EPO – English, French and German. After registration, patent claims and descriptions will be translated into all languages. The agreement will cut the translation costs for obtaining a single EU patent by 80 percent, the EC said.

The compromise creates a specialised unitary patent court, eliminating the need to litigate the same patent in different territories, the EC said. All governments agreed that the court will be seated in Paris, with a satellite court in London to handle chemical and pharmaceutical patents, and another in Munich to deal with mechanical engineering patents. All companies, no matter where established, can obtain a unitary patent, the EC said.

The new text scraps three provisions. Article 6 gave European unitary patent holders the right to prevent third parties from making direct use of their inventions without permission. Article 7 allowed patent holders to stop third parties from exploiting their inventions indirectly by knowingly supplying means relating to an essential element of the invention. Article 8 places several limits on the effects conferred by the single patent. Among other things, the provision would have denied protection to the patent when used in private acts done for non-commercial purposes or those done for experimental purposes related to the subject matter of the patented invention.

The removal of these key provisions gutted the European Court of Justice’s power to enforce the patent regulation, Bernard Rapkay, of Germany and the Socialists and Democrats, who is writing the legislative report on the proposal, said when the Council announced the change in July. With those clauses out, “there is nothing left to regulate,” he said. The provisions are now in the international agreement.

Unitary Patent “Will Make a Difference”

With Europe’s economic state less than encouraging, EU institutions must send positive signals to companies that are investing in future growth, Internal Market and Services Commissioner Michel Barnier told the European Parliament Legal Affairs (JURI) Committee at a meeting last night. Creation of a unitary patent will be a significant concrete, but also symbolic, advance, he said. The only question that matters, he said, is whether the patent will make a difference. “For me, without hesitation, the answer is yes.”

An EC impact assessment shows that the total cost of obtaining patent protection in Europe now is €36,157 euros. A unitary patent in 25 member states will cost €6,425 during the 12-year transition period, and €4,725 after that period, it says. By comparison, the total cost of a patent in the United States is €1,850.

Don’t Open the Champagne Yet

JURI committee members generally welcomed the Council proposal, an 11 November committee press release said. Although the compromise is “suboptimal … “we could accept it,” Rapkay said.

In particular, he said, the new text seems to be compatible with EU law, respects the European Court of Justice’s power to ensure consistent application of EU legislation, and upholds Parliament’s right to be involved if patent rules are changed, he said.

Most of the political groups supported the new plan. But the Greens/European Free Alliance blasted it for failing to offer legal certainty, with Austrian member Eva Lichtenberg saying it poses “the risk of endless legal proceedings. It is not what we need.”

The Council is expected to adopt the proposed compromise on 10 December, and Parliament may debate and vote on it the same week, JURI said. If the package clears the legislature, the two regulations could be adopted by 21 December, with an agreement for the patent court signed by governments on 18 February, the EC said. The package won’t become effective until EU countries ratify the international accord, it said. If that happens before 1 November 2013, the first unitary patent could be granted in April 2014, it said.

But JURI Chairman Klaus-Heiner Lehne, of Germany and the European People’s Party, warned, “Let’s wait for this to happen, before opening the champagne.”

The original EC proposal is here [pdf].

US Schedules Patent Assertion Entity Workshop

In separate patent news, the US Department of Justice (DOJ) and Federal Trade Commission (FTC) scheduled a joint public workshop on 10 December to explore the impact of patent assertion entity (PAE) activities on innovation and competition, and their impaction for antitrust enforcement and policy.

The workshop will examine the economic and legal implications of PAE activity – including purchasing patents from existing owners and trying to maximise revenues by licensing the intellectual property to or litigating against manufacturers already using the patented technology – as opposed to “non-practicing entity” activities such as developing and transferring technology. Supporters of the PAE business model say it makes it easier to transfer patent rights, reward inventors and fund ongoing research and development, DOJ said. Critics, however, say it hurts competition and innovation to the detriment of consumers and industry, it said.

Comments on PAE activities can be submitted to the DOJ and FTC until 10 March, at ATR.LPS-PAEPublicComments@usdoj.gov.