Single Market Act – A European Patent

by Shane Fitzgerald

An effective patent regime is a key driver of innovation. But the current system of patent registration, protection, translation and litigation in the European Union is expensive and tortuously complex. Although a European Patent Office exists, individual patents still have to be validated and enforced separately in each jurisdiction. And, according to the European Commission, an EU patent validated in only 13 member states can cost up to €18,000, €10,000 of which relates to translation fees. That’s about 10 times higher than the cost of a patent for all of the US.

At the behest of businesses and researchers alike, the Commission has been making proposals for a single EU patent for over a decade, but there has been a long-running stalemate in the Council over issues of language and translation. The EU operates in 23 official languages, so it is understandable that some national sensitivities might arise, but, as Nikki Tait of the Financial Times notes, “[t]he EU’s paralysis around this subject is emblematic of its difficulties in overcoming narrow national interests to create a genuine single market and boost competitiveness.”

Now, finally, as part of the Single Market Act launched in April, the European Commission has presented proposals for a new regime that would apply in every country of the EU (apart from Spain and Italy, which are opposing the plan on grounds of language discrimination).

There are two aspects to the Commission plan – one relating to patent registration, the other to translation arrangements. If approved, advocates claim that the cost of filing patents in Europe could be reduced by up to 80%.

The Commission had also hoped to establish an EU-wide patent court to litigate the new patents, but this has run afoul of the European Court of Justice, which has ruled that such a move would be incompatible with European law.

Because of Spanish and Italian opposition, the Commission has resorted to the so-called ‘enhanced cooperation’procedure, which allows nine or more Member States to move forward on in a particular area as a last resort if no agreement can be reached by the EU as a whole within a reasonable period (the Commission’s efforts in corporate tax harmonisation are also being pursued via this avenue, see this blog for a view of those proposals).

Despite these caveats, the agreement on a unitary patent is a worthy achievement. Let us hope that it becomes emblematic of future successes in overcoming narrow national interests in order to boost competitiveness and create a genuine single market.