By James DeGiulio --
On December 4, 2009, the European Competitiveness Council unanimously adopted a legislative package designed to create a single EU patent and EU patent court. In a press release issued by the Council of the EU, the Council concluded that enhancing the patent system in Europe is a necessary prerequisite for boosting growth through innovation and for helping European business. The EU patent reform package is designed to circumvent many of the impediments to innovation that European companies face, including the high prosecution costs of filing in multiple countries and the legal uncertainty of patents enforced by one country and not another. This uncertainty often leads to prolonged litigation disputes, as the average litigation case under the current fragmented system lasts for 2.8 years. Critics argue that brand pharmaceuticals take advantage of these time-consuming legal challenges to keep generics from entering the market.
Under the current system, the European Patent Office (EPO) serves as the primary examining body in Europe, but the issuance of patent rights are still handled by individual countries. Under the proposed reform package, rather than each country granting individual patents, the EPO would grant an "EU patent," which would have unitary effect in the 27 member states of the European Union. The European Commission has long argued that a fragmented patent system and the absence of a single European Patent have impeded the growth of technology companies in the EU. Indeed, according to the press release, patent protection in 13 EU states costs 11 times as much as patent protection in the United States. A similar EU patent plan was originally proposed by the European Commission in 2000 under the Lisbon strategy, but negotiations stalled in 2004 due to disagreements on language.
Language remains a sticky issue for the implementation of the EU patent. Under the present system, translation costs can be a major expense in protecting new technologies in Europe. Likewise, how to address translation costs for the EU patent remains unclear. The December legislative proposal sidestepped addressing these translation arrangements, instead suggesting that it should be handled in a separate regulation.
The second major reform, the proposed "European and EU Patents Court (EEUPC)," will have exclusive jurisdiction over infringement and validity issues concerning EU patents. The judges of the EEUPC would have a high degree of specialization in patent litigation and technical expertise. The new court would involve initial hearings at both local and centralized level, but establish one common appeal court. In the initial stages of the reform, parties will be able to continue to use national courts, allowing confidence to build up gradually in the new system. The Council estimated a unified court would save up to €289 million ($429 million) a year for European companies by eliminating parallel litigation in each separate member nation. More specific details on the proposed EEUPC can be found in the press release.
The reform proposal still needs to undergo an
official review by the European Council and the European Parliament before
being passed into law, since these changes will likely require amendments to the
European Patent Convention (EPC). In addition, the European Court of Justice has yet to
deliver an opinion on the compatibility of the patent court and draft agreement
with EU treaties. This opinion is expected at the earliest by summer 2010.
James DeGiulio has a doctorate in molecular biology and genetics from Northwestern University and is a third-year law student at the Northwestern University School of Law. Dr. DeGiulio was a member of MBHB's 2009 class of summer associates, and he can be contacted at email@example.com.