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Brussels, 19 December 2001

Preparation of the Internal Market Council Brussels, 20th December 2001 Community Patent

The EU's Council of Internal Market Ministers will meet in Brussels at 10am on December 20th under the chairmanship of Belgian Minister for Economic Affairs Charles Picqué. The European Commission will be represented by Internal Market Commissioner Frits Bolkestein. The meeting has been convened at the request of the 14-15 December meeting of the European Council in Laeken, with a view to reach agreement "on a flexible instrument involving the least possible cost while complying with the principle of non-discrimination between Member States' undertakings and ensuring a high level of quality".

Following the mandate given by the Laeken European Council, the Council will try to reach political agreement on the proposal for a Council Regulation to create a Community Patent. The aim is to give inventors the option of obtaining, quickly and cheaply, a single patent legally valid throughout the European Union. The Lisbon and Feira European Councils identified a Community Patent as an essential component of Europe's efforts to boost competitiveness and build a knowledge-based economy in Europe by 2010. The Summits recommended that the Community Patent should be available by the end of 2001.

The Council will focus on the three key political issues identified in a Presidency document: the language and translation arrangements, the role of national patent offices, and the jurisdictional arrangements.

The European Council asked the Council to reach agreement on a flexible instrument involving the least possible cost. Commissioner Bolkestein will insist that to be viable, the Community Patent must be cheap, of good quality and legally certain. The Community Patent must be competitive in relation to the cost of patent protection in the US and Japan and affordable for EU industry (in particular SMEs). Since only 14% of EU companies currently consider it worthwhile to apply for patent protection, it is essential to make patent protection within the EU more accessible. The European Competitiveness Report for 2001 (see IP/01/1630) underlined that in areas such as biotechnology EU industry is significantly lagging behind the US. Patent protection which ensures returns on investments in technology is an important factor in improving industrial competitiveness.

Existing patent protection in Europe is costly and cumbersome. The reference in this respect is the cost for obtaining and maintaining an "average European Patent" (EP). An average European Patent (issued under the 1973 Munich Convention) designates 8 countries and must be translated into 5 languages to be valid in these 8 States, for which the cost relating to translation is €11,500 (38% of total cost).

The language regime is therefore important for the viability of the whole project and its attractiveness for users. A realistic cost evaluation for the Community Patent must be based upon the enlarged EU. Under the Commission proposal, translation costs for a Community Patent, after enlargement, would be around €732 or €2390, depending on whether the patent application would be filed immediately in a language of the European Patent Office (EPO i.e. English, French and German) or whether the application would have to be translated into an EPO language. Clearly, this model would imply a significant saving on translation costs. A main feature of the Commission proposal is that patent claims would have to be translated only into the three EPO languages.

Mr Bolkestein considers that, if the Council cannot agree on the basis of the Commission proposal, the target should be ambitious, namely to reduce the translation cost to at least 30% or less of its current value (about €3,450). This would reduce the overall cost related to the acquisition and the maintenance of an average Community patent (on the basis of the EPO figures) from €29,800 to €21,750, representing an overall reduction of about 27%. For the Commission this element is essential: the Community patent must cost significantly less than existing patent protection, otherwise the project will, in practice, be worthless.

As regards the role of national patent offices, the Commission considers any role should be limited to search activities and that the system established must ensure that the EPO and national patent offices provide an efficient high quality service. Effective arrangements should be put in place for setting quality standards and monitoring performance.

On the jurisdictional arrangements, in the Commission's view what is needed is a system which ensures maximum legal certainty and uniform case law. The appeal and first instance Court should therefore be as centralised as possible. In order to respond to objective criteria such as proximity to users and number of cases, use of existing facilities in Member States could be considered but the Court should remain a centralised Community Court.

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