International News, Autumn 2003 - Web Only Article
EU Council Regulations Bare Light on Patent Protection
By Jonas Ewert and Thomas Hauss (McDermott, Will & Emery, Düsseldorf)
In March 2003, the European Council of Ministers reached an agreement on a "common political approach" concerning the proposed Community Patent, which will soon be valid in all EU member states. The common political approach includes the main features of the system of jurisdiction including rules for establishing a centralized Community Patent Court (CPC), the rules on disputes, the language regimes, the costs, the role of national patent offices and the distribution of fees. However, it is not yet clear as to when patentees can apply for such a Community Patent. Those familiar with the industry predict within five years. The actual need for a global and European patent strategy still increases.
Generally, patents provide a financial reward for the invention and an incentive for promoting technological progress. However, the current patent regime in Europe is seen as a deterrent instead of encouraging inventors to apply for patents. After several decades of preparations, the European Union is now ready to implement a new type of patent together with a set of rules for patent application and litigation.
The current grievance is caused by several reasons. There are national patents and European Patents. The first are valid only in one country, the latter in all the countries that have signed the European Patent Convention (i.e., all member states of the European Union and some others such as Switzerland and Norway) and for which the applicant has chosen to pay the application fee. The application for a European Patent is expensive. For example, the costs for a patent valid in eight European countries are about five times higher than those for a U.S.-patent application. Further, the European Patent is not one single patent but a "bunch of national rights" governed by different laws in the different countries. An infringement of one European patent committed in Germany, France and the UK must be prosecuted before three different courts under three different jurisdictions with the risk of diverging judgments.
In pursuit of the rather ostentatious aim to make "Europe the most competitive economy in the world by 2010," the European Council of Ministers reached an agreement on a common approach concerning the Community Patent on March 3, 2003. This Community Patent shall be valid in all member states of the EU (after the envisaged enlargements these will be 25 countries), cheaper than a European Patent and governed by just one jurisdiction administered by a new Community Patent Court. Although the final version of the regulations has not yet been promulgated, it is generally expected that the new Community Patent regime will be introduced within the next few months. It is quite likely that existing European Patent applications that have not been granted as of the date when the Community Patent regulation comes into force may be converted to Community Patents.The application proceeding for the Community Patent will be much the same as for the European Patent. The European Patent Office in Munich, already in charge for the European Patent, will have the power to issue the Community Patent. The patentability will be governed by the same principles that are applicable for the European Patent; however, a considerable amount of time and costs will be saved by reducing the number of translations necessary for the patent application upon grant. The Community Patent has to be issued only in English, French or German and only the patent claims have to be translated into all official languages of the European Union. Although the applicable rules for translation of the Community Patent are not yet finalized, the commission assumes the new procedure will cut down the translation costs by two thirds (compared with the European Patent) and the costs in total from around US$50,000 to approximately US$25,000. Such saving might be pricey on some occasions: An infringer domiciled in a country with an official language into which the whole patent has not been translated will be deemed to have acted in good faith, if not proven otherwise. He or she cannot be charged with damages for patent infringement during the time that the patent translation was not yet published in the language of his domiciling country, although he or she might be subject to an action for injunction.
The legal effect of the Community Patent will be governed by a special regulation that has already been drafted. The substantive law that applies to Community Patents will be the same and, in most cases, will not depend on where an infringement happened or which forum was selected for the lawsuit. This will foster legal certainty in the long run. However, because there are no precedents on the new regulation, it will take the CPC some time to work out the baseline for the substantive Community Patent law from scratch.
The uniformity of the application of Community Patent law will be guaranteed (besides the competence of the European Patent Office) by the CPC to be established in Luxembourg. The CPC will be competent for all lawsuits connected with patents. The CPC will be attached to the European Court of First Instance, which will operate in those cases as "second instance."
The CPC is to be established at the latest by 2010. Community Patents will be available much sooner although a starting date has not yet been released. Applicants will still have the choice to apply only for a national patent in one or two countries either through local applications or through a limited grant of a European Patent as under the current regime, which will be less expensive than the application for a Community Patent. According to the European Council’s notice, even the European Patent will still be available because in non-EU member states as Norway and Switzerland the new Community Patent regime will not be applicable. Until the CPC is established and takes up jurisdiction, one national court appointed by each member state will be competent for cases falling within the future jurisdiction of the CPC.
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