EC launches proposals to cut EU patenting costs from €32,000 to €680
This article was originally published in Scrip
The European Commission has launched its proposals for a new unitary patent that is expected to reduce the cost of obtaining patents in the EU by around 80%. The plans will be discussed under an "enhanced co-operation" procedure that will see Italy and Spain left on the sidelines unless they drop their opposition to the proposed translation arrangements.
At present, the European patent system is very fragmented and costly, and there is general agreement that it hinders innovation and fails to offer effective protection for companies (particularly small businesses), individuals and research centres.
Michel Barnier, the commissioner for the internal market and services, said the EU patent would mean "a big reduction in terms of costs and red tape, and provide a stimulus for European innovation". The commission estimates the cost of obtaining a unitary patent will eventually fall to €680, compared with the €32,000 it currently costs to gain protection in all 27 EU member states. Of these costs, about €23,000 is attributable to translation fees. By comparison, taking out a US patent costs on average just €1,850.
European patents are currently granted by the European Patent Office, but once granted they become a collection of national patents that are subject to the rules of each country designated in the application. Any litigation over issues such as patent infringement, counterclaim or revocation are subject to national laws and procedures, which means claimants and defendants may have to litigate separately in different countries over the same issue.
Under the commission's proposals, launched on 13 April, the future unitary patent would be granted by the EPO, and would be automatically valid in all the participating EU member states. Applications could be submitted in any official language of the EU but would be examined and granted in one of the three EPO languages (English, French and German), with the claims being translated into the other two.
For applicants in the EU who filed an application in a non-EPO language, the costs of translation would be reimbursed. For a transitional period of 12 years, unitary patents granted in French or German would have to be translated into English, while those granted in English would need to be translated into another official EU language.
The aim is to have the first EU patents issued in 2014. They would be underpinned by a new European and EU Patents Court system, which is the subject of a separate proposal.
hold-ups
However, talks have been held up by a number of issues, most notably the failure of EU member states to reach agreement over which languages should be used in the new system. Italy and Spain oppose the proposed arrangements, saying they are discriminatory, and after protracted negotiations and attempts at compromise, the other 25 member states have decided to press ahead without the two countries under an enhanced co-operation procedure.
Moreover, the Court of Justice of the EU recently said that the patents court proposal was incompatible with the EU treaties because it would deprive the CJEU and national courts of their powers to apply EU law (scripintelligence.com, 11 March 2011). The commission and the member states are currently looking at what can be done to address the CJEU's concerns and take the patent court proposal forward.
In the meantime, the patent and language proposals will now be sent to the Council of Ministers and the European Parliament for consideration. A qualified majority of the 25 participating member states and the parliament must vote in favour of the patent, while for the translation arrangements the member states must reach unanimous agreement after consulting the parliament.
Although Italy and Spain will not be taking part in the procedures, Mr Barnier said he hoped that "in time, all member states will choose to participate in this enhanced co-operation".
Single Market Act
The patent plan is part of a wider effort to consolidate and strengthen the EU single market through an overarching "Single Market Act". This, says the commission, is intended to make the EU a "highly competitive social market economy".
The act, which was launched on the same day as the patent proposals, will cover a range of issues such as funding innovation, giving small businesses better access to the capital markets, reducing regulatory burdens, improving worker mobility and cross-border services, modernising public procurement, and strengthening electronic communications networks.
A public consultation on the proposed act closed at the end of February, and the commission will now make proposals on each area, the aim being to gain final approval from the parliament and council by the end of 2012. One of the main benchmarks for measuring the success or otherwise of these actions will be "trends in the cost of issuing a patent", the commission says.
Before€32,000?????????????????????????????????????????????
After€680?
Translation +€23,000???????????????????????????????????
Go-between agents +€4,000??????
National patent offices€5,000????????
The EPO and the current patent system The EPO, an intergovernmental organisation comprising 38 members (the 27 EU countries and 11 other European states), was established in 1973 following the signature of the European Patent Convention (EPC). In 2009, the EPO received 134,542 patent applications, of which 68,597 came from EPC countries and 65,945 from other parts of the world. By far the largest number of applications came from Germany (25,107), followed by France (8,929), the Netherlands (6,738), the UK (4,821) and Italy (3,881). In the same year, the EPO granted 51,969 patents. At present, for a European patent to be effective in a member state, it needs to be validated in that country, which can be expensive. The translation of patents is particularly costly, amounting to €75-85 per page on average. The typical length of a patent is 20 pages, so the costs of a single translation of a patent may be more than €1,500. Further costs are incurred by hiring local representatives acting as intermediaries between the patent proprietor and the national patent office in order to comply with all the requirements in a specific member state and/or to certify the translation. Various other fees must also be paid to the national patent offices. The validation costs for a European patent in 13 member states are approximately €12,500, and approximately €32,000 for all 27 countries. Furthermore, in order to maintain patent protection, the patent holder has to pay renewal fees each year in every country where the patent has been validated. Also, if he/she wishes to transfer the patent, or to allow someone to use the patented invention through a licensing agreement, these transactions need to be registered by the national patent offices on a country-by-country basis. This makes the management of patents complex and costly in Europe. |