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Patents: Commission sets out next steps for creation of unified patent litigation system

Commission Européenne - IP/09/460   24/03/2009

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IP/09/460

Brussels, 24 March 2009

Patents: Commission sets out next steps for creation of unified patent litigation system

The European Commission has adopted a Recommendation to the Council that would provide the Commission with negotiating directives for the conclusion of an agreement creating a Unified Patent Litigation System (UPLS). The UPLS would increase legal certainty, reduce costs and improve access to patent litigation for businesses, in particular SMEs. The court structure to be established in the framework of the UPLS would have jurisdiction both for existing European patents and for future Community patents. This constitutes a further significant step in the pursuit of the EU's patent reform agenda.

Internal Market and Services Commissioner Charlie McCreevy said: "European businesses find the current patent litigation system complex, slow and costly. Once agreed, a unified system with a dedicated unified patent court would make patent litigation more predictable, faster and less expensive, helping to stimulate innovation, competitiveness, growth and job creation in Europe."

Unified Patent Litigation System

Since 2007 Member State experts and interested parties have been discussing the idea of creating a Unified Patent Litigation System (UPLS), which was first suggested in a Commission Communication adopted on 3 April 2007 (IP/07/463). The court structure to be established would have jurisdiction concerning the infringement and validity of European and Community patents. It would appear that there is now emerging broad consensus on the main features and the basic tasks of such a UPLS involving a largely decentralised first instance, a single appeal instance and a role of the European Court of Justice (ECJ) aimed at providing a consistent interpretation and application of Community law.

The UPLS should be created by the conclusion of an agreement in accordance with the procedure foreseen by Article 300 EC involving the Community, its Member States and other Contracting States of the European Patent Convention (EPC). The participation of the Community in the agreement is notably required since it would cover areas for which the Community has exclusive competence to conclude agreements with third countries.

Further to the progress achieved since 2007 and against the background of the current economic downturn, the Commission remains firmly committed to a comprehensive patent reform package involving both a unified patent litigation system and a cost-effective single patent. The draft agreement would provide patentees with a more predictable, rapid and less expensive way to settle disputes in relation to their patents and is thereby expected to further growth, competitiveness and employment. It would render the patent system more affordable, in particular for SMEs. The creation of a single specialist court responsible for decisions on the European and the Community patent would increase legal certainty and promote a uniform application and interpretation of patent law at EU level and in the context of the EPC.

The Recommendation suggests negotiating directives under which the ECJ would rule on preliminary questions asked by the UPLS court structure on the interpretation of EC law and on the validity and interpretation of acts of Community institutions. Moreover, the Commission would ensure that the rules of the draft Agreement are consistent with the creation of a Community patent.

As a next step the ECJ will be asked for an opinion on the compatibility of the draft agreement with the EC Treaty in accordance with Article 300 (6) EC. In parallel, outstanding issues concerning other components of the patent reform package such as the Regulation on the Community patent and the relationship between the EU and the EPO will likewise have to be addressed.

Background

The current fragmentation of the patent system in Europe and in particular the lack of a unitary title and the absence of a unified patent litigation system renders access to the patent system complex and costly and hampers effective enforcement of patents, especially for SMEs.

Innovators wishing to protect their invention in various Member States of the Community can currently achieve this protection through separate national patents or through a European patent. European patents are granted by the European Patent Office (EPO) established by the EPC and which has currently 35 contracting parties. Besides the EU Member States these include amongst others Switzerland, Croatia, Iceland, Liechtenstein and Norway.

This system entails multi-forum litigation since companies may have to litigate in parallel in all countries where the patent is validated. Stakeholders have repeatedly reported that this involves considerable cost, complexity and legal insecurity resulting from the risk of contradicting court decisions in different Member States. Moreover, stakeholders have regularly claimed that the current litigation system leads to legal insecurity, in particular as regards patent issues with a cross-border dimension. At present patent litigation is unnecessarily costly and risky for all parties involved. The risks associated with patent litigation together with the lack of a unitary title hamper in particular access to the patent system for SMEs and individual inventors and are a draw-back for European innovation and competitiveness.

A recent economic cost-benefit analysis (Harhoff, 2009) came to the conclusion that there would be substantial financial and other benefits for litigants and the overall European economy by avoiding duplication of patent infringement and revocation actions. It is predicted that by 2013 the creation of the UPLS would result in total private cost savings between 148 and 289 million euro per annum. Moreover the UPLS would reduce legal uncertainty. Finally, by providing fast and low-cost revocation proceedings it would increase patent quality and tackle potential patent abuses.

The Recommendation is available at:

http://ec.europa.eu/internal_market/indprop/patent/index_en.htm


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