The Community Patent is Dead, Long Live the EU Patent!

This article was included in our Summer 2010 edition of Inside IP magazine.

The negotiations for a single unitary patent for the whole European community, enforceable centrally by a single unified patent court, have been going on for several decades and progress has been slow.  The last proposal, the Community Patent Regulation proposal, stalled in 2004, although the debate resumed just a few years later.  It is commonly recognised that the benefit to businesses of a unitary patent and a single unified patent court would be significant, not least in terms of costs.  A unitary patent would also be an important element of the Internal Market of the EU and would make it easier to stop infringement products from entering the market. 

Significant progress, described by some as a “political breakthrough”, was made under the recent Swedish EU Presidency.  The EU Council agreed on a general approach to a Council Regulation on the new EU Patent in December 20091. The Community Patent, as it was formerly known, has been transformed into the EU Patent since, with the entry into force of the Lisbon Treaty, the European Union replaced and succeeded the European Community.  The EU Council also reached conclusions on a number of important aspects of the EU Patent and the unified court system2. The proposal for a Council Regulation has now been submitted to the European Parliament for consideration.

The fundamental concept underlying the currently proposed EU Patent system is that the EU accedes to the European Patent Convention (EPC) and that the European Patent Office (EPO) grants EU Patents.  An EU Patent would be a European Patent having unitary effect across the whole EU. 

The proposed regulations mainly include provisions on how the EU patent will be dealt with after grant.  For example, the proposed regulation sets out the effects of the EU Patent, the circumstances under which the EU patent will lapse, the grounds on which the EU patent can be revoked and also how the patent can be transferred and licensed.  The draft regulations also includes provisions prohibiting simultaneous protection of an invention by an EU Patent and a national patent.  Some of the other aspects that the Council agreed on include Enhanced Partnership between the national patent offices and the EPO, the distribution of renewal fees, and certain features of the unified patent litigation system. 

The proposal does not include an agreement on a translation regime.  Whereas all other aspects of the creation of the EU Patent can be decided upon by a qualified majority, the adoption of regulations on the language and translation arrangement requires unanimous agreement of the EU Council, according to the Lisbon Treaty.  The language and translation requirement will therefore be dealt with in a separate document.  Specification language has proved a sticky point for some of the member states in the past and the translation issue was one of the main reasons that the negotiations on the Community Patent Regulation Proposal stalled in 2004.  It is likely that the European Parliament will wait and consider both documents at the same time.

he exact level of renewal fees and their distribution will be decided by a Select Committee of the Administrative Council of the EPO once the regulations on the EU Patent enter into force.  The conclusions of the EU council include that the renewal fee should be paid to the EPO, which would retain 50% and distribute the remaining amount among the Member States in accordance with a set of rules to be agreed.  It is has been discussed that the level of the fee may be based on the level of the combined renewal fees for what is deemed to be an average European Patent at the time of the first decision of the Select Committee.  In 2008, the average patent was validated in 5 to 6 Contracting States and the level of the renewal fee may therefore be chosen to correspond to the combined renewal fee for 5 to 6 EPC Contracting States.  This will mean that if the Applicant seeks protection in 4 EU Member States or fewer, it may be more cost-effective to validate the European Patent only in the desired designated EPC Contracting States and/or file national applications as required. 

A unified patent litigation system would be established through an agreement including EU Member States and EPC Contracting States (such as Switzerland and Turkey) which are not members of the EU.  The European and EU Patent Court (EEUPC) would have exclusive jurisdiction in respect of civil litigation related to the infringement and validity of not only EU Patents but also European Patents.  The EEUPC would allow parallel litigation in different Contracting States of the EPC and Member States of the EU to be avoided. 

The EEUPC would be comprised of a Court of First Instance, a Court of Appeal and a Registry.  The European Court of Justice would only have a limited role.  According to the conclusions of the EU Council, the Court of First Instance would comprise a central division, as well as local and regional divisions in the Contracting States to the agreement.  All panels of the local and regional divisions should have at least one member that is not a national of the Contracting State in which the division of the court is located.

The European Court of Justice is currently considering the proposal for the EEUPC and will deliver an opinion on the compatibility of the proposal with the EC Treaty.  The opinion is not expected until summer 2010 at the earliest. 

The task of deciding on a translation regime remains.  A document with a proposal for a language solution was published by the Slovenian EU Presidency in February 20083.  A further document, published in April 2008, included additional details4.  The Slovenian Presidency developed the language solution with three objectives in mind:

1. to provide for maximum reduction of complexity and costs for companies, in the interest particularly of SMEs,

2. to foster the dissemination of patent information and technical knowledge in general in all Community languages, and

3. to ensure a fair balance between reduction of costs for patent holders andapplicants on the one hand and the legitimate interests of third parties in case of legal disputes on the other hand. 

Whereas these are all goals that the member states should be able to agree on, the exact implementation may prove more difficult.  The most popular solution discussed in the documents published in 2008 included a requirement that patent applications would have to be filed in one of the three EPO languages: French, German and English.  In order to facilitate access to the patent system for small and medium businesses in Member States that do not have a language in common with one of the EPO languages, applicants would be entitled to file applications in their own language with their national office and the national office would then take care of the translation of the application into one of the EPO languages designated by the applicant as language of proceedings.  The costs of the translations would be absorbed by the system.  The patent would be granted in the language of proceedings but machine translations into all languages, carried out centrally, would be generated for information purposes.  This solution has not been ruled out.  However, some countries that do not have English, German or French as an official language may resist.  For example, it has been suggested that legally binding translations into Spanish and Italian should also be required.  It is expected that further progress, or at least further debate, will take place on the language issue under the Spanish and Belgian Presidencies this year.

The revision of the EPC that would be required to accommodate the EU Patent also remains.  For example, parallel designation of EU member states and the EU in a European Patent application would have to be regulated in the EPC.  The EPC would have to be revised at a Diplomatic Conference and would have to be ratified by each of the thirty six EPC contracting states. 

Although the Council proposal represents a significant development, there is a long way to go before agreement on the EU Patent is reached and even longer before it could be implemented.  Moreover, if the past is anything to go by, it may prove difficult to reach an agreement on the translation requirement.  However, in view of the considerable benefits that would result from a unified patent system, there is no doubt that every effort will be made.

1. Council of the European Union, “Proposal for a Council Regulation on the Community patent – General Approach”, 16113/09 ADD 1, 27 November 2009)
2. Council of the European Union, “Conclusions on an enhanced patent system in Europe”, 4 December 2009
3. Council of the European Union, “Community patent: translation of claims and distribution of revenue from fees”, 6985/08, 28 February 2008
4. Council of the European Union, “Towards a Community patent – Translation arrangement and distribution of fees”, 8928/08, 28 April 2008

Olivia Johansson 14 Jun 2010

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