Developments on the Community Patent Proposal - EU Committee of the American Chamber of Commerce

Brussels, November 12, 2001 – The EU Committee of the American Chamber of Commerce is a supporter of the European Commission's proposals of August 1, 2000 for a Community Patent. This would be a single (unitary) patent effective in all member states. This is to be contrasted with the two co-existing patent systems already available for EU states; the national system and the European Patent system. Both these systems result in separate patents in member states. This is expensive, largely due to the need for translations, and requires enforcement in each state separately, often leading to parallel litigation in different states.

For a Community Patent to be worthwhile for industry, it must have advantages over the present systems. Under the Commission's original proposals, the Community Patent would have the advantages of:-

• Achieving cost savings by limiting the need for translations; and


• Being litigated in a single central court.

However, political pressures have lead to compromises being suggested. A final decision looks likely to be taken at the Internal Market Council Meeting on 26 November 2001. If agreed, these compromises will undermine the usefulness of the Community Patent. On languages, a number of states are pressing for translations into all community languages. This would be prohibitively expensive – a problem which would only worsen as the Community enlarges. On the Court system, decentralization is being suggested with Germany suggesting that the Courts of all member states should have jurisdiction to decide cases, with a central appeal Court only. This proposal would lead to forum shopping – a race to the Courts of those countries perceived as more favorable to particular cases. It would also open up the unwelcome prospect of hugely important cases being determined on a Pan-European basis by Courts with little or no experience of patent disputes.

Further worrying suggestions have been to include a community "Utility Model" being introduced as part of a package with the Community Patent. The Utility Model would be a type of second class patent, giving the same monopoly rights to owners as a true patent for a 10 year period, but without any examination process to assess whether such a right is deserved. It would be open to potential abuse and at best create a great deal of legal uncertainty for industry.

In common with other industry groups, the EU Committee of the American Chamber of Commerce will not support a Community Patent unless it fulfils the needs of industry. Alan Johnson and Catherine Horrigan Co-chairs of the IP Sub-Committee say that: "The compromises contemplated appear politically motivated and do not take account of industry's views and needs."

The EU Committee urges national governments to agree a solution in the best interests of industry and to support the Commission. Its original proposal should be accepted and the Spanish proposal for a Utility Model rejected.