Copyright, Unitary Patent System Lead EU IP Priorities In 2016

Modernisation of EU copyright and intellectual property rights enforcement law tops Europe’s agenda in 2016. Trademark reform legislation approved last year takes effect this year, and a preliminary deal on trade secrets protection is expected to be finalised.

Work on the unitary patent system continues, and there’s an increased focus on the issue of patents versus plant breeders’ rights.

Copyright Reform the “Key Battle”

“Copyright underpins creativity and the cultural history in Europe,” and digital content is one of the main drivers of the growth of the digital economy, the European Commission (EC) said in a 5 May 2015 digital single market (DSM) strategy.

But barriers to cross-border access to copyright-protected content services and their portability remain common, especially for audiovisual programs, it said. In addition, innovation in research for non-commercial and commercial purposes based on text and data mining may be hindered by an unclear legal framework and different national approaches, it said. Europe needs an effective, balanced civil enforcement system against commercial-scale infringements, clearer rules on online intermediaries, and a more harmonised copyright regime, the Commission said.

The EC said it would propose legislation before the end of 2015 to narrow the differences between national copyright systems and enable wider online access to works by users across the EU, and would follow that this year with a proposal to modernise IPR enforcement. Concrete plans for updating EU IPR rules in 2016-2017, including a review of the IPR enforcement framework, were announced in a 28 October 2015 new single market strategy.

The review, expected to take place in the final quarter of this year, will respond to the increasingly cross-border nature of infringements, the EC said. It will be based on a “follow the money” approach to deprive commercial-scale violators of their revenues, and will focus on helping small and mid-sized enterprises enforce their IP rights.

On 9 December, the EC published “Towards a modern, more European copyright framework,” which proposed a regulation to make online content services legally acquired in a subscriber’s home country portable across borders. The communication also lays out a range of other issues the EC said it’s considering.

On the same day, the EC opened a consultation seeking views from interested parties on whether Europe’s IPR enforcement system is still effective. Comments are due by 1 April.

The European Parliament responded to the EC’s DSM proposal in an own-initiative resolution adopted on 19 January. The resolution, among other things, welcomed the Commission’s decision to update copyright rules but said any changes must be targeted and focus on remunerating artists while ensuring the protection of fundamental rights. Reform should strike the rights balance among all the interests,involved, it said.

European Digital Rights Executive Director Joe McNamee predicted that the “as-yet-ill-defined” follow-the-money approach “is likely to become interesting” this year. “The copyright reform is of course the key battle,” said European Consumer Organisation (BEUC) spokesman Johannes Kleis.

In April, the EU Collective Rights Management Directive will be adopted into UK law, said Intellectual Property Office Chief Executive John Alty. It “should provide benefits to UK right holders by driving higher standards in collecting societies not just in the UK, but across the EU,” he emailed. The IPO is also tracking developments in copyright reform and IP enforcement,

“Strengthening overseas protection of IP assets will increase exporter confidence and we are working hard to influence other governments and support businesses in overseas markets through our international network of IP attachés,” Alty said.

Plant Variety vs. Patent Rights

One slightly unusual issue this year is the interplay between plant variety rights and patents. Interest in the subject was sparked by rulings last year by the European Patent Office (EPO) Enlarged Board of Appeal upholding patents for plants or seeds obtained via conventional breeding methods (IPW, European Policy, 1 April 2015). The decisions riled several civil society groups.

The Netherlands, which holds the EU Presidency from 1 January-30 June 2016, said in its work programme that it will “address the imbalance between patent law and plant breeders’ rights, which is impeding open access to genetic sources. Such access is vital to plant breeding.”

EU patent laws bar patents on plant varieties and essentially biological processes, said Martin Ekvad, president of the Community Plant Variety Office (CPVO), which manages a system of plant variety rights for the 28 EU member states. In their two decisions, the EPO board said that while the broccoli and tomato varieties in question were produced through essentially biological processes, the product that was the end result of those processes was patentable, Ekvad said in an interview. Traditional plant breeders, however, consider the end result to be protected by plant variety rights, not patents, he said.

The decisions throw breeders’ position into question, said Ekvad. A European Parliament resolution adopted on 17 December 2015 on patents and plant breeders’ rights asked the EC to investigate the matter and to ensure the correct balance between the two systems, he said. The Dutch Presidency is planning a seminar on the issue this year, said Ekvad.

The EPO and CPVO are discussing an agreement for enhancing their exchange of information on the issue, said EPO Media Relations Director Rainer Osterwalder.

Movement on Patents, Trademarks and Trade Secrets

Work on establishing a European unitary patent system “is ongoing in the two preparatory committees,” and several countries are in the process of ratifying the Unified Patent Court (UPC) agreement, said an EU diplomatic source. The unitary patent is expected to become effective by year’s end, said an EC spokeswoman.

The EU patent system is the EPO’s main priority this year, said Osterwalder. Eight countries have ratified the agreement which sets up the UPC, and 13 signatures are needed, he said.

“We expect further progress on bringing the Unified Patent Court into being as details for the running of the court are finalised ahead of its anticipated opening in early 2017,” said the UK IPO’s Alty. Once the UPC comes in, so will the unitary patent, he said. Once that is introduced, it will be important for supplementary protection certificates to be available for pharmaceutical and plant protection products, and the IPO is looking forward to clarification from the EC on how the existing regulations will apply, he said.

In addition, businesses want a more harmonised and simpler way of protecting their rights worldwide, so a key challenge this year will be to ensure that efforts to improve the global IPR system for the benefit of businesses operating at international level continue to move forward, Alty told us. Talks on international patent harmonisation are ongoing in the World Intellectual Property Organization Group B+ (developed countries), which Alty chairs, and through the Patent Cooperation Treaty, he said.

A compromise between the European Parliament and Council led to the adoption in December of the EC’s trademark reform package. It encompasses a regulation that goes into force on 23 March 2016 and a directive effective 15 January 2016. The europarl service provides a brief description of the package.

The European Parliament and Council reached a provisional deal in December on protection of business know-how and trade secrets. The compromise needs approval from Parliament, which does not appear to have set a plenary vote yet.

Update of the IPR enforcement legal framework, in combination with the “follow-the-money” strategy, and implementation of the trademark package and trade secrets directive are the most important specific IP issues for the pharmaceutical industry this year, said European Federation of Pharmaceutical Industries and Associations (EFPIA) Communications Manager (External Affairs) Faraz Kermani. Pharma companies are also keeping a close eye on how the unitary patent system and UPC are developing, he said.

Other Issues

EU antitrust probes of various aspects of Google’s operations are still pending, with no indication of whether anything will be resolved in 2016. The EC is still investigating Google’s search engine, said a Commission spokesperson. Last year the EC also launched proceedings, which remain pending, into the search giant’s comparison shopping services and Android mobile operating system.

On designs, the IPO will continue to focus on improving the UK system and legal framework, said Alty. During 2016 it office is planning to reduce its fees to pass on to customers the savings it will reap from new digital processes, he said. The UK also intends to sign up to the Hague Agreement on industrial design registration to make it simpler for designers to get protection in multiple jurisdictions, he added.

EFPIA is monitoring several “important challenges” relating to enforcement of second medical use patents, said Kermani. New indications for existing medicines have considerable value for patients and healthcare, but these are only developed with “considerable investment by innovative companies.” An effective patent system is essential for incentivising this, but because of the problem of cross-label dispensing, additional mechanisms are needed to ensure that only the originator product is prescribed and dispensed for the patented use while allowing generic drugs to be distributed for other uses, he said.

Beyond the specific IP issues, the biggest challenge is that “IP for pharmaceuticals is questioned in Europe but mostly for the wrong/unrelated reasons,” Kermani emailed. “Continuing to show the value and the role of IP for pharmaceuticals and what it is actually delivering in terms of innovation and new medicines will be critical.”

The EPO will hold trilateral talks with the Japan and US patent offices in Washington, DC in February and announce its annual results on 3 March, Osterwalder said. Also in the pipeline is a conference on the unitary patent system in Munich in June, he said.