09 March 2011
The intellectual property (IP) community will have to wait a little longer for its one-size-fits-all European patent, following a key ruling from the Court of Justice of the European Union (CJEU). The European Commission has built momentum in recent months with a new plan based on an obscure and little-used rule. It will now have to incorporate a solution to the constitutional problem flagged by the court, but IP experts remain positive about the prospects of the plan succeeding eventually.
The debate has a long history. Under current practices, companies looking to protect their IP across several EU states need distinct national-level patents. This has led to repeated calls over the years for an EU-level patent that gives protection across all member states, with supporters claiming this would reduce costs for smaller companies that rely on IP in, for example, the chemical and pharmaceutical sectors. But no one has yet been able to overcome the thorny issue of language. Critics of the approach say that it is unfair to hold the citizens of a state accountable to a patent that is not written in the first language of that state.
The EC 'enhanced cooperation' plan is for those in favour to group together without the dissenters, who would continue to operate under the old system of national patents. It was launched in December 2010 after prompting from 12 member states, but since then 13 more states have joined the cause, leaving only Spain and Italy outside the group. This has led to widespread media speculation that the EU patent might finally be in the bag.
The European Patent Office in The Hague: the enhanced cooperation plan would require the creation of new patent infrastructure
But the CJEU has now said that this is 'not compatible' with EU law. The plan would require a new court to deal with disputes relating to the European patent, and in its present form it does not include an appropriate mechanism by which that court could be challenged if it breached EU law. The ruling will add years to the process.
Alan Johnson, a partner specialising in IP at UK law firm Bristows, says that the 'constitutional' problem is probably negotiable, and importantly it is one that the legal community is already well aware of. 'It would have been very optimistic to think that court was going to give it a complete green light,' he says. 'It could have been much worse.'
But a more fundamental issue perhaps remains. Johnson says he is sceptical about the potential for an EU-level patent to help smaller companies. Larger companies, filing many patents in many regions, would probably benefit from the lower costs associated with the reduced complexity, he says. But smaller companies are far less likely to want protection beyond national borders. 'It's nice and tidy,' he says. 'But if I'm a metal-bashing company in Watford, why do I need patent in Lithuania?' Such companies may well choose to carry on as they did before.