Did EU Council Conclusions On IP Enforcement Overlook Patent Trolls?

A coalition of companies holding patents in Europe has welcomed conclusions released this week by the Council of the European Union on tougher enforcement of intellectual property rights. But the group raised concern that the conclusions failed to recognise the steady rise in the EU of patent-assertion entities, or patent trolls.

The European Council of ministers on 12 March adopted a set of conclusions on the enforcement of intellectual property rights in the European Union, aimed at improving protection in the digital era and promoting innovation (IPW, Europe, 12 March 2018). This includes a list of suggested actions, including possible changes to national laws and judicial systems, bolstering customs, agreements with industry, encouraging open source, strong representation at the World Intellectual Property Organization, and possibly setting up an IP watch list reminiscent of the one in the United States.

The full press release is reprinted below:

IP2I welcomes the recognition by the Council of the European Union in its Conclusions of 12 March 2018 that fair and effective judicial enforcement of IPR is a key lever to promote investment in innovation and growth.

However, IP2I believes the Council should have also recognised the importance of providing safeguards against practices designed to abuse specific measures, procedures and remedies of Europe’s patent legal system.

The recent ground breaking report by Darts-ip, the world’s leading authority in intellectual property case law data, demonstrates that Europe’s innovation ecosystem and Europe’s operating companies are under increasing attack from Patent Assertion Entities (PAEs), also commonly known as “non-practising entities” (NPEs) or “patent trolls.” There has been a 20% year-on-year jump in PAE litigation. US-based PAEs initiated most of those suits (60%) and targeted applications of information and communication technologies (ICT) (75%). As application of ICT is central to innovation and growth across many industries, the consequences of these attacks will be far-reaching. Most importantly, data shows that it is not just large companies who are affected — almost a quarter of the unique defendants are European SMEs. Germany is the preferred venue, with 20% of all German patent litigation having been brought by PAEs.

PAEs do not innovate and do not create and sell new products. Instead, they buy up patents and profit from asserting these patents against operating companies by exploiting imbalances in  Europe’s patent system. Such abusive litigation practices by PAEs are a drain on the resources of operating companies and hamper their ability to develop new products and bring them to market in Europe.

IP2I calls on the European Commission and Member States to ensure urgent and rigorous implementation of safeguards for all patents (not just Standard Essential Patents) to bring balance to Europe’s patent legal system so that it supports innovation and economic growth for the benefit of society and consumers and prevents abusive practices.

NOTES TO EDITORS:

1. IP2Innovate (IP2I) is a coalition of small and large companies that create innovative products and services in Europe and collectively hold thousands of European patents, as well as European industry groups that collectively represent 65 companies. IP2I members have directly experienced patent assertion entities that are adept at exploiting the rigidities of Europe’s patent systems on automatic permanent injunctions, inadequate fee shifting and poor- quality patents. IP2I advocates for a robust, balanced and flexible patent legal system in Europe that protects innovators against abuse, works in the public interest and rewards innovators fairly.