Single EU patent court 'will increase costs for SMEs'
by Daniel Mason
03 May 2012
The planned creation of a single European patent court would fail in its main aim and make the enforcement of intellectual property rights more difficult and more costly for businesses, a committee in the United Kingdom's House of Commons has concluded.
Following decades of negotiations, a draft agreement on a single patent system was reached last December by 25 European Union member states - all except Italy and Spain, which rejected the planned English, French and German language regime for applications and challenges. The unified system would mean a patent filed in one of the participating countries would be valid throughout the region and there would be no need to pursue separate litigation cases in different member states.
During the negotiations last year, British minister Baroness Wilcox said the single patent system would save businesses in the UK up to £20m each year in translation costs alone. A single EU patent has long been championed as a vital tool in competing with China, India, and the United States in the field of innovation.
But according to a report published by the UK parliament's European scrutiny committee, there was "vehement opposition" to the draft agreement from patent experts, which said that small and medium sized enterprises would come up against a "convoluted, expensive, and protracted" litigation system that would prove "far more burdensome" than the one already in place. The committee also heard that very few SMEs needed patent protection across all 25 member states, meaning that the resulting savings would not be significant.
Conservative MP Bill Cash, chairman of the committee, said that although a single EU-wide patent had long been thought desirable, the latest proposals were not the right solution. Describing the plans as "rushed", he added: "They would increase costs for SMEs and hinder the enforcement of patents within the EU, particularly by giving additional jurisdiction to the Court of Justice of the EU and not allowing the invalidity of a patent to be a defence to infringement proceedings."
As a "damage limitation exercise" the UK government should ensure that the central division of the patent court sits in London, Cash said. The location of the court, which will have jurisdiction over the system, is the only outstanding issue to be resolved before a final agreement can be reached, with London, Munich and Paris vying to be host city. The committee said the location would be "crucial" as it would have "significant influence on the practice and procedures of the Court, as well as bring significant economic advantages". Regional and local divisions of the court will be located throughout the EU.
Guy Verhofstadt MEP, leader of the Alliance of Liberals and Democrats in the European Parliament, has advocated a compromise deal in which Brussels hosts the court until its permanent location is agreed.
Following decades of negotiations, a draft agreement on a single patent system was reached last December by 25 European Union member states - all except Italy and Spain, which rejected the planned English, French and German language regime for applications and challenges. The unified system would mean a patent filed in one of the participating countries would be valid throughout the region and there would be no need to pursue separate litigation cases in different member states.
During the negotiations last year, British minister Baroness Wilcox said the single patent system would save businesses in the UK up to £20m each year in translation costs alone. A single EU patent has long been championed as a vital tool in competing with China, India, and the United States in the field of innovation.
But according to a report published by the UK parliament's European scrutiny committee, there was "vehement opposition" to the draft agreement from patent experts, which said that small and medium sized enterprises would come up against a "convoluted, expensive, and protracted" litigation system that would prove "far more burdensome" than the one already in place. The committee also heard that very few SMEs needed patent protection across all 25 member states, meaning that the resulting savings would not be significant.
Conservative MP Bill Cash, chairman of the committee, said that although a single EU-wide patent had long been thought desirable, the latest proposals were not the right solution. Describing the plans as "rushed", he added: "They would increase costs for SMEs and hinder the enforcement of patents within the EU, particularly by giving additional jurisdiction to the Court of Justice of the EU and not allowing the invalidity of a patent to be a defence to infringement proceedings."
As a "damage limitation exercise" the UK government should ensure that the central division of the patent court sits in London, Cash said. The location of the court, which will have jurisdiction over the system, is the only outstanding issue to be resolved before a final agreement can be reached, with London, Munich and Paris vying to be host city. The committee said the location would be "crucial" as it would have "significant influence on the practice and procedures of the Court, as well as bring significant economic advantages". Regional and local divisions of the court will be located throughout the EU.
Guy Verhofstadt MEP, leader of the Alliance of Liberals and Democrats in the European Parliament, has advocated a compromise deal in which Brussels hosts the court until its permanent location is agreed.
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