EU moves a step closer to a single EU Patent - briefing

Why does Europe need an EU patent?

The EU patent would provide for a single patent title covering all EU Member States. Once granted, there would be no need to validate the patent in different countries. Discussions on the EU patent have a long history, but the patent has never been agreed by Member States.

An EU patent would make the existing European system much simpler – much less burdensome and expensive for inventors. It would end the complex validation requirements, and in particular the very expensive full translation requirements which exist in many Member States. An EU patent would thus stimulate research, development and investment in innovation helping to boost growth in the EU. An EU patent would also protect inventions better as under the current system, because of the prohibitive costs involved in the national validation of European patents, many inventors only patent their inventions in a handful of countries. This means inventions are less valuable and they are not protected in other countries allowing them to be copied easily, and diminishing the economic value of European inventions.

What is a patent?

A patent protects new inventions. It can cover how things work, what they do, what they are made of, and how they are made. It gives the owner the right to prevent others from making, using or selling the invention without permission.

An inventor - an individual or a company or an institution - can apply for a patent. To qualify as new, it is important that the invention is not already in use, nor in the public domain before the date on which the patent application is filed.

Patents encourage companies to make the necessary investment for innovation. There would be little incentive otherwise for individuals and companies to devote the necessary resources to research and development.

In general, the exclusive rights of a patent owner to exploit the invention commercially last for a maximum of 20 years, subject to the payment of regular renewal fees. Anyone else wishing to use the invention while it is still patented must request authorisation from the patent holder and may have to pay a licence fee. In return for this exclusive right, the details of how it works are published. In this way, the scientific or technical know-how that made the invention possible is made public allowing others to further their own research. As a general rule the patent renewal fees increase over time. This means that only the most commercially viable patents are maintained for the full period. At the end of the 20 years, the patent lapses.

As a hypothetical example, a company may patent a new chemical that acts as better lubricant than existing products on the market. The patent could include claims about the molecule or composition of the lubricant, how it can be made, and examples of where the lubricant can be applied, for example, in the engine of a car. Anyone wanting to reproduce the chemical would have to ask the company for a licence, normally in return for payment. However, researchers in the field would benefit from the technological knowledge disclosed, for example the process involved to make the chemical in the patent. This could bring about further research leading to more advanced lubricants which themselves could be patented.

How do you currently apply for a patent in Europe?

Today, inventions can be protected in Europe either by national patents or European patents granted centrally by the European Patent Office (EPO).

Member States have their own patent offices which deal with applications for national patents. The protection conferred by a national patent is limited to the territory of the State concerned.

If the applicant chooses to apply for a European patent, the application will be dealt with by the EPO, based in Munich. The EPO provides a single procedure for granting patents in Europe. It is an intergovernmental organisation comprising 37 members (27 EU Member States + 10 other European countries). It was established in 1973 following the signature of the European Patent Convention (EPC). On the basis of one single patent application processed in one of the three official languages of the EPO (English, French and German), inventors and businesses can obtain a European patent.

If the EPO grants a European patent, the full text of the patent, known as the specification, is published in the official language of the EPO chosen by the applicant as the language of the proceedings. At this stage, the applicant must also provide a translation of the part of the patent that defines the scope of protection - the claims – into the other two official EPO languages.

However, this is not enough for the European patent to take effect in most Contracting States to the EPC. The patent proprietor must choose the countries in which he/she wishes to have protection and validate his/her European patent in these states. A number of different validation requirements may apply. For example, the patent proprietor may have to pay a fee to the national patent office, to comply with various formal requirements and to provide a translation of the patent into the official language of the State.

What are the current costs involved to obtain a patent?

At present, for a patent to be effective in a Member State, it needs to be validated in that Member State (cf above). These validations are very expensive. The translation of patents is particularly costly, on average amounting to € 75 to € 85 per page. With a typical length of a patent being 20 pages, the costs for a single translation of a patent may be more than € 1500. Further costs are incurred by hiring local representatives acting as intermediaries between the patent proprietor and the national patent office in order to comply with all the requirements in a specific Member State and/or to certify the translation. Various official charges must also be paid to the national patent offices.

In total, the national validation costs can add up to about 40% of the overall costs of patenting in Europe. These costs particularly affect SMEs, young innovative companies (YICs), start-up companies and public research organisations, and they discourage access to the patent system.

What is the London Agreement?

The London Agreement is an intergovernmental and optional agreement aimed at reducing the translation costs of European patents. It entered into force on 1 May 2008. 14¹ EPC Contracting States have agreed to dispense entirely or partly with translation requirements. There are two situations for Member States having signed up to the London agreement: for countries which use one of the EPO languages as their own official language have completely dispensed with translation requirements. Once the EPO publishes the patent, no further validation or translation is necessary. For other countries, they designate one of the EPO languages and can require that the whole patent is translated into that language for national validation. They maintain the option of translating the claims into their own official language(s). However, the London Agreement does not apply in 17² EU Member States. These countries continue to require a translation of the entire patent into their official language(s). Although the London Agreement has reduced costs, it does not always or fully address the issue of validation requirements.

What is the history of the EU patent?

Efforts to create a common patent applicable across all European countries have been made since the 1960s but for a number of reasons have never been successful.

In 2000, the European Commission made a proposal to create a Community Patent through a Regulation [now EU patent under the Lisbon Treaty]. The aim was to provide for a single patent title applicable in all Member States. In 2003, Member States agreed a common political approach but failed to reach a final agreement, including over the details of the translation regime. Following a wide-scale consultation in 2006, the Commission produced a Communication in April 2007 which confirmed the commitment to the Community patent and re-launched negotiations in Member States.

Another element of the package on patent reforms discussed by Member States is the creation of a new patent court for current European patents and the future EU patent. In June 2009, the Council referred this issue to the European Court of Justice to check the compatibility of the envisaged new system with the EU Treaties. The judgment on this case is pending and expected before the end of the year.

In December 2009, Member States unanimously agreed on Conclusions for an enhanced patent system, including the main features of a future European patent court and provisions for the EU patent. The Conclusions pave the way for the creation of a single EU patent, via a Regulation, which would remove all validation requirements at national level.

But the conclusions excluded the translation regime. Instead, they affirmed the need for a new Regulation to cover the translation arrangements, which should come into force together with the Regulation on the EU patent. The translation arrangements are the last missing element needed for the final agreement on the creation of the single EU-wide patent.

What is the aim of today's proposal?

Applicants could file their patent application in any language. The EU patent would then be granted in one of the three official languages of the EPO (English, French or German). The applicant would be required to provide a translation of the claims [which define the scope of the invention] into the other two official EPO languages for the EU patent to be valid throughout the EU.

The translation of a full patent specification would only be required in the case of a legal dispute at the request and the choice of the alleged infringer into an official language of the Member State in which either the alleged infringement took place or in which the alleged infringer is domiciled. The patent proprietor would also need to provide a full translation of the EU patent into the language of proceedings at the request of a court. It is estimated that approximately only 1% of all patents are disputed.

How would the costs change with today's proposal on EU patent translations?

The creation of a single EU patent would remove all validation requirements. The EU patent would take effect in all EU Member States without any further translation once the EU patent was granted. Today, a patent validated in 13 Member States costs on average 20 000 euro, compared to around 1 850 euro in the United-States. The EU patent would cost on average 6 200 euro.

The EU patent would therefore bring significant cost reduction and simplification compared to the existing system. Translation costs which currently stand at 14 000 euro would be reduced to approximately 680 euro per patent.

Why is this particular solution proposed? Why not English only? Why not translations into all European languages?

The proposed language regime builds on the existing system of three EPO languages. Since the EU patents will effectively be European patents covering the whole territory of the EU, it makes sense for the same rules to apply as those in the European Patent Convention.

Other options have also been discussed and evaluated. In preparing this proposal, the Commission carried out an impact assessment that identified all major solutions and provided their cost-benefit analysis.

At first glance, the English-only option could appear more attractive. But it would result in difficulties for users accustomed to working in either German or French under the existing long-standing EPO regime. In 2009, 48% of patent applicants at the EPO from Europe applied for patents in German and French, and the patents were granted in those languages. By removing the flexibility of the current system for EU businesses, it could impact on the global competitiveness of European industry, especially for SMEs. The English-only option would also not be in line with the current working practices at the EPO.

All other options would result in higher costs for the users. If two further languages were added to the existing three, and translations were required not for the whole patent but only the claims, the costs for users would still double (to 1 360 euro per patent). Finally, the requirement to translate the claims of the EU patent into all EU official languages would put considerable financial costs on the users of the system, amounting to approximately 6 800 euro per patent for translations only.

How is this proposal different from the Commission proposal of 2000? What will the role of machine translations be?

Since 2000 when the Commission first proposed translation arrangements for the single EU-wide patent, this issue has been extensively debated. The current proposal builds on those discussions by foreseeing several accompanying measures to be established together with the creation of the EU patent.

Necessary arrangements would be made between the EU and the EPO to make high quality machine translations of patent applications and patent specifications available in all official languages of the EU without additional costs for the applicants. Such translations should be available on demand, online and free of charge on publication of the patent application. They would build on the existing machine translation programme of the EPO, which currently covers a limited number of EU languages and which would have to be rolled out in order to cover all official languages of the EU. This is important as it would allow the information in the patent to be disseminated widely across the EU – and would stimulate further research.

European patent applications can currently be filed in any language. Where the language of filing is not an official EPO language, a translation of the application into one of the official languages of the EPO must be provided, within a prescribed time period, so that the application can be processed by the EPO. Applicants filing in a language not in common with the official languages of the EPO are eligible for a partial reimbursement of the translation by way of a fee reduction. This would also apply to EU patents. However, with respect to applicants for EU patents based in EU Member States, necessary arrangements should be made to provide not only for a partial, but for a full reimbursement, of the translation costs up to fixed ceilings. This is important as it would mean inventors could deposit their patent in their own language and not face any significant translation costs.

How will the EU patent be enforced? What will be the role of the new European Patent Court?

Another important element in the overall reform of the patent system in Europe is the creation of the single European Patent Court. The current system entails multi-forum litigation since companies may have to litigate in parallel in all countries where the European patent is validated. This results in considerable costs, complexity and legal insecurity. With the single EU title, a common court is necessary. The Commission believes a common court should have jurisdiction both for existing European patents and for future EU patents.

It is envisaged that the Court would be established by the conclusion of an international agreement involving the EU, its Member States and other states of the EPC. The Council has referred the question on whether such an agreement is compatible with the EU Treaties to the Court of Justice of the European Union. The opinion of the Court is pending.

How many patents are granted a year? Which countries patent the most? And in what languages?

In 2009, the EPO granted 134 542 patents, of which 68 597 came from EPC countries and 65 945 from other parts of the world.

Last year, Germany filed the most applications to the EPO (25 107), followed by France (8929), the Netherlands (6 738), the UK (4 821) and Italy (3 881).

What happens next?

The proposal is now transmitted to the Council and the European Parliament for adoption. In order for this proposal to be adopted, the Council must act unanimously after consulting the European Parliament.