European Union governments have unanimously approved a roadmap for a single European patent regime. The system is seen as key to making patenting less expensive and more efficient for European inventors, but the devil, as always, is in the details, stakeholders say.

An enhanced patent system is vital for Europe’s internal market, competitiveness ministers said in conclusions [pdf] following their 3-4 December meeting in Brussels. They agreed on the main elements of a European and EU Patents Court (EEUPC) and an EU patent, including a separate regulation covering translation arrangements, closer cooperation between the European Patent Office (EPO) and national industrial property offices, and, possibly, amendments to the European Patent Convention (EPC). The proposals are subject to a pending opinion by the European Court of Justice on whether the plan complies with EU law, and final agreement by member countries.

Key Provisions

The plan gives the EEUPC exclusive jurisdiction over civil cases dealing with the infringement and validity of EU and European patents. The EEUPC will include a Court of First Instance with a central as well as local and regional divisions, an appeals court and a registry. Divisional judicial panels will consist of two qualified national judges and a third judge, of a different nationality, allocated from a pool of judges.

The proposal foresees proceedings of local and regional divisions generally being held in the language of the country in which they are established, although states could designate one or more of the official languages of the EPO.

Governments want the EEUPC to be paid for by the court fees it generates. Fees should be set by a committee based on a proposal by the Commission, and should be fixed at a level that balances fair access to justice, particularly for smaller enterprises, with adequate contribution by parties for costs the EEUPC incurs.

The proposal calls for the EU patent regulation to be accompanied by a separate rule governing translation arrangements. It allows the EPO to retain 50 percent of patent renewal fees, with the remainder distributed among member states according to a distribution key for patent-related purposes. The EPO must set the fees and allocation key with a view to boosting the innovation and competitiveness of European businesses.

Ministers agreed on an “enhanced partnership” between the EPO and national offices aimed at cutting duplication of effort. The EPO “would be expected to consider but not obliged to use” work provided by participating offices, and applicants would be allowed to file patents requests directly at the EPO. Enhanced partnerships should be based on a European search standard that contains criteria for ensuring quality, the council said.

For the EU patent to become operational, amendments to the European Patent Convention many be necessary, officials said. The EU and its members should put any necessary measures into force, including those for the accession of the EU to the EPC.

Industry Concerns

DIGITALEUROPE, which represents digital technology companies throughout Europe, is reviewing the Council conclusions but offered some preliminary comments.

The organisation is pleased with the “impressive progress” made so far but continues to worry about the quality and efficiency of the proposed patent litigation system, said Public Affairs Director Leo Baumann. Any new regime must bring significant improvements for users over today’s system, but it is not clear the proposal will live up to those expectations, he said. This bears a considerable risk considering that litigation decisions will in future have EU-wide effect, he said.

DIGITALEUROPE’s key concern is that the agreement allows local and regional patent litigation divisions in the Court of First Instance to use their own national languages instead of limiting the system to the EPO language regime, Baumann said. That will make the system costly and slow because of the need for translations and the resulting difficulties, he said. Moreover, the proposal calls for the European and EU patent courts to be self-financing, but costs set high enough to pay for numerous translations could hamper access by small and mid-sized businesses, he said.

The European Commission suggested the use of non-binding machine translations, a position DIGITALEUROPE supports, Baumann said. The council called for a separate regulation spelling out translation arrangements, but left it unclear how the actual regime will look, he said. The Commission will work to find solutions for the translation issues, a spokesman said.

The proposal for two national judges and a judge of another nationality on First Instance panels is also a concern, he said. Having all three from different countries ensures that national patent courts do not take diverging opinions, he said.

The conclusions call for the EU to accede to the European Patent Convention. But DIGITALEUROPE said EU members already belong to the EPC. Forcing the EU to accede to the treaty as well will lead to considerable delays because all EPC members will have to ratify it, Baumann said.

The main issue from the patent prosecution viewpoint is the language requirement, said Kilburn & Strode LLP Partner Nick Hedley, a patent attorney. On the one hand, countries are reluctant to allow patent rights that apply to their citizens to be granted with a specification and, especially, claims not in their native language. On the other hand, the cost of translation into all EU languages will make the system to expensive, he said.

All or Nothing

The Commission praised the “political breakthrough,” saying it will pave the way to resolving the outstanding issues blocking major reform of the EU patent system.

The matter is now in the hands of the European Court of Justice, which is expected to deliver, at the Council’s request, an opinion in 2010 on whether the proposal is compatible with the EU treaties, a council spokesman said.

The whole system must be seen as a package in which “nothing is agreed until everything is agreed,” he said. “The remarkable thing is that these principles were accepted by consensus (unanimity) by all 27 countries, after years of lengthy discussions.”

Under the newly signed Lisbon Treaty, the patent regulation must be adopted by the council and European Parliament under the procedure formerly known as “co-decision,” the Commission spokesman said. The language rules must be adopted unanimously by council members under a special legislative procedure following consultation with the Parliament, he said. EU accession to the envisaged mixed agreement to create the EU patent court parliamentary approval, he said.