by Elaine Wu
Office of International Relations, U.S. Patent
and Trademark Office
Fifty years ago, the predecessor to what is now known as the
European Union arose from the ashes of World War II as an economic,
social, and political alliance of European countries representing
one of the largest and most important markets in the world.
In May 2004, the European Union will expand to include 10 new
nations, with two more expected to join in 2007. By the end
of the decade, the population of the European Union could increase
by more than 100 million to half a billion people, becoming
one of the world's largest and most competitive marketplaces.
Among the many goals and challenges of this integration of European
countries is the creation of an open, competitive, and unified
Europe that delivers new opportunities for business. During
the past several decades, Europe's leaders have placed great
emphasis on intellectual property rights protection as a way
to nurture innovation and creativity and attract investment.
The Council of the European Union agreed in March 2003 on a
common political approach to establishing a community patent.
The community patent would give inventors the option of filing
one application to receive a single patent that is legally valid
throughout the European Union. The agreement would also provide
a new centralized community tribunal to oversee community patent
disputes. While the community patent will not likely go into
effect until 2010, this agreement paves the way toward it becoming
a reality.
Problems with the Present Patent System
The current patent regime in Europe is unsatisfactory to many
users for two primary reasons: exorbitant expense and legal
uncertainty. Obtaining a patent in Europe is costly and can
be prohibitively so for individuals and small companies.
Under the current rules, one of the common routes for obtaining
a patent in Europe is the European Patent Office (EPO), under
the provisions of the European Patent Convention. The EPO, established
in the 1970s, is a vast trilingual patent office in Munich,
Germany.
Applications filed at the EPO must be submitted either in one
of three working languages (English, French, German) or in the
official language of an EPO member state in which the applicant
has a residence or principal place of business. The application
will then be examined, granted, and published in one of these
languages. A translation into one of the three working languages
is necessary if the application is submitted in another official
language.
When the patent is granted, the owner must file, with the patent
office in the respective language of each country where protection
is sought, a copy of the patent specification (the description
and operation of the invention and drawings) and a copy of the
patent claims (the scope of the invention) in the two other
EPO languages. Thus, rather than being a single patent with
European-wide validity, as its name would suggest, the European
patent is treated as a bundle of national patents. This cumbersome
process can make obtaining a European patent very expensive.
Under the current system, obtaining a patent valid in eight
EU states costs in excess of $50,000, which is three to five
times higher than the cost of Japanese and U.S. patents. Moving
to the community patent system has the potential of reducing
the costs of obtaining a patent, which will be valid in up to
25 countries.
Another drawback to a European patent is legal uncertainty.
At present, there is no central court of appeal in Europe responsible
for patent validity or patent cases. Each of the EPO's 15 member
nations has its own judicial system. Therefore, in theory, there
could be 15 different legal proceedings, with different procedural
outcomes and different decisions, which fosters a great deal
of legal uncertainty as to a patent's status. The practical
effect is that patent applicants often find patent litigation
in Europe complex, confusing, and costly. As a result, many
American companies may hesitate to apply for patents and market
their products in the European Union.
Proposed Community Patent
The community patent would remedy the problems of cost and legal
uncertainty associated with the present system. According to
the proceedings of the March 2003 Competitive Council meeting,
a community patent would lower the costs to the inventor by
issuing a single patent that is legally valid throughout the
European Union through a process that would significantly reduce
the costs of translations.
Under the proposal, the EPO would administer the community patent
system. Once the system is implemented, a single patent that
is legally valid throughout the European Union can be obtained
by filing one application with the EPO. The application must
still be filed in one of the three standard languages. However,
the cost of translating an application into a standard language
would not come directly from the applicant, but from revenues
generated by the new system, resulting in savings for innovators.
Once the community patent is granted, only patent claims, and
not the specifications, are required to be translated into the
languages of the countries in which patent protection is sought.
The translations will be filed with the EPO, and while the costs
are borne by the patent owner, he can decide on the number and
length of the claims to be included. Limiting required translations
to claims and offering filers the flexibility to determine the
number and breadth of the claims to be translated increases
an applicant's control over these costs.
The community patent system also establishes a single community
court to rule on community patent disputes. In order to ensure
the conformity of case law in specific areas, member states
can, however, designate a limited number of national courts
with jurisdiction limited to claims and infringement proceedings.
The proposal envisions that the Community Patent Court (CPC)
will litigate community patents. The CPC will be attached to
the European Court of Justice, in Luxembourg, and will have
exclusive jurisdiction in actions and claims of patent validity
or infringement proceedings, and other patent related claims.
A community patent may also be the subject of proceedings of
claims for damages. The CPC will be established by 2010 at the
latest, until which time the jurisdiction will remain with member
state courts.
The chambers of the CPC will sit in sections of three judges,
with judges appointed on the basis of their expertise and taking
into account their linguistic skills. The judges will be appointed
by a unanimous decision of the Council of the European Union
for fixed terms, and will be chosen from candidates exhibiting
a high level of legal expertise in patent law. Proceedings at
the CPC will be conducted in the official language of the member
state where the defendant is domiciled, or in one to be chosen
by the defendant in the case where a member state has two or
more official languages.
The Council of the European Union is now due to agree upon and
adopt the text of the proposed regulation on the community patent.
In the meantime, the European Commission is scheduled to present
proposals for the Council of the European Union to confer jurisdiction
on the European Court of Justice, to rule on issues arising
from community patents and to establish a specialized court
to do so. For its part, the council will soon be proposing to
the EPO that a diplomatic conference be convened to revise procedures
so that it will be able to issue community patents.
The creation of a community patent has the potential to reduce
the costs to American innovators of EU-wide patent protection
while guaranteeing a higher level of protection and legal certainty
for investors. As the European Union enlarges, the community
patent offers incentives for American investment in Europe,
particularly for small U.S. businesses that are often the innovators
of high technology in the new economy. Dynamic and competitive
international markets foster American commerce abroad, fueling
the U.S. economy and creating jobs for Americans.
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