Inventing a reason to be cheerful

As far as business is concerned, the EU-wide patent system may not be the boon it’s cracked up to be

Richard Willoughby

The news late last year that the European Parliament had voted to pass legislation that will create a single EU patent regime was met with a big fanfare from MEPs and media commentators alike. For those seeking EU-wide patent protection it is undoubtedly a step forward. However, significant doubts remain and the 50-year saga of the regime’s creation is not over yet.

Notwithstanding the progress made in December, no unitary patents can be granted until the related court system is in place. This requires the signing of the Unified Patent Court Agreement, which should happen early this year, followed by its ratification. The European Commission has proposed a date of April 2014 for everything to be in force, but as the agreement requires ratification by 13 EU states – including the UK, France and Germany – this is highly optimistic.

In addition, nothing has been done so far regarding the infrastructure, logistics and staffing of the court system, nor has it been costed. It is hard to imagine ratification happening before concrete proposals have been agreed for all this, especially where costs are concerned.

A second major concern is the likely popularity – or otherwise – of the new system among small to medium-sized companies (SMEs) and large corporations alike, especially in its first decade or so. Many IP

experts believe the new system will not be as attractive to business as the EU hopes.

Much has been made of the suggestion that it will cut the cost of EU-wide protection by up to 80 per cent which, on the face of it, would obviously be a welcome change. However, this suggestion is based on the assumption that patentees want EU-wide protection. At the moment, that is the case only in a minority of situations and is very rare among SMEs in particular. SMEs and other entities that might produce and market products in only a few countries typically need protection in only those countries. In those circumstances, the unified system may not be cheaper than what they do now.

It also brings significant risk. With centralised validity challenges, EU-wide protection could be lost at a stroke. In some industries an individual patent may have enormous value. Why would a major multinational with such rights risk losing them for the whole of the EU in an untried court system? Answer: they won’t. Many will adopt a ‘wait and see’ approach, and the possibility that big users will opt out of the system is a genuine concern.

On the flipside, there are concerns that the system will make the enforcement of a large number of ‘weak’ patents easier.

The suggestion that the introduction of the EU patent has been worth the effort is therefore premature. Hopefully it will be, but that judgement cannot be made until we have seen the system in use for some time. During that time, every effort must be made to make the system work effectively and efficiently, but this work has not yet started. Until we know the system works, users would be well advised to consider all their options.