Could An Ancient Remedy Solve The Contemporary Debate Over Europe’s Patent System?

Perhaps the biggest lobbying effort in the history of the European Union came in the 2005 fight to change the European patent system to include computer-related inventions, which ended in failure. Now, industry lobbyists are looking for new ways to address the problems of the patent system as they see it.

Zuck writes: After the summer break, the period of relative quietness around the future of the patent system in Europe has come to an end. Commissioners Charles McCreevy [EU Commissioner for internal market and services] and Günter Verheugen [European Commission vice-president for enterprise and industry] have both reiterated a clear message: intellectual property is crucial to stimulate European innovation and competitiveness. This is true particularly for small and medium-sized companies with fewer ancillary advantages in a competitive market. The views and ideas on how to build a European patent system are diverse and sometimes contradictory, as the current debate in the European Parliament around the European Patent Litigation Agreement [a proposed new European arbitration system] demonstrates.

But a biggest challenge remains: how can a regulatory environment be created that is flexible and simple to implement for the benefit of businesses and consumers alike?

In this respect, sometimes ancient remedies prove to be the best solutions for modern times. This is the case for mediation as alternative dispute resolution mechanism in patent litigation.

Mediation – a voluntary process through which the parties meet and try to negotiate a resolution to their dispute by using an objective third-party facilitator – has been applied over the centuries to a wide range of disputes. Already common among ancient Greeks, it was then explored during the Roman civilisation and regarded by some cultures as a sacred process, with the figure of the mediator linked with that of the traditional wise man. In modern times the principle has been applied to a far less romantic area. But hard commercial issues still need resolution through mediation.

Take patents for instance: the European Commission’s recent consultation highlighted mediation as a key tool to unblock the often heated patent debate

Why is this crucial in particular for SMEs [small and medium-sized enterprises]? Litigation costs for innovative businesses are the key barrier preventing them from protecting their inventions, and contributing to overall innovation. Patent litigation can be cruel and costly, particularly in sectors such as IT, where ordinary courts need to deal with highly technical matters, issues with which they are often not familiar. SMEs are the ones suffering the most from current legal fragmentation of the patent system in Europe.

But cost cutting is not the only benefit of mediation over traditional litigation. There are others, and all relevant for small businesses, particularly the business of innovators.

Mediation allows for greater flexibility and is better tailored for the parties involved. This works by reducing the bureaucracy linked to court process and ensuring support from third parties who possess specific knowledge on the subject matter of the dispute. At the same time, since the mediator does not have any power to impose a settlement on the parties, they can keep the control of the dispute resolution process, including the selection of the mediator.
Moreover, mediation reduces the ability of firms to use the threat of litigation as an anti-competitive strategy. This has an ultimate benefit not only for SMEs but also for public interest overall.

Mediation helps also to preserve relationships between companies, a factor which is particularly relevant in some highly innovative areas such as IT, characterized by a high degree of interdependence among different players in the field.

Deciding the way forward for patent policy is not easy. While the Community Patent should remain the ultimate objective, more immediate measures must be put in place to help businesses – especially small companies – find the right incentives to innovate. In this respect mediation deserves pride of place in any remedies’ list.

Jonathan Zuck is the president of the Association for Competitive Technology (ACT), an international education and advocacy group for the technology industry. Focusing on the interests of small and mid-size entrepreneurial technology companies, ACT advocates for a “Healthy Tech Environment” that promotes innovation, competition and investment. ACT has been active on issues such as intellectual property, international trade, e-commerce, privacy, Internet policy and antitrust. ACT represents more than 3000 software developers, systems integrators, IT consulting and training firms, and e-businesses from around the world, including Microsoft.