Select Committee on European Scrutiny Thirty-Fifth Report


4 European Community Patent

(a)

(21539)

10786/00

COM(00) 412

(b)

(24501)


Draft Regulation on the Community Patent.



Draft Regulation on the Community Patent.

Legal baseArticle 308 EC; consultation; unanimity
DepartmentTrade and Industry
Basis of considerationMinister's letter of 21 October 2003
Previous Committee Report(a) HC 23-xxviii (1999-2000), paragraph 2 (1 November 2000), HC 152-xix (2001-02), paragraph 4 (13 February 2002)

(Both) HC 63-xxii (2002-03), paragraph 5 (21 May 2003)

To be discussed in Council11 November 2003 Competitiveness Council
Committee's assessmentLegally and politically important
Committee's decisionNot cleared; further information requested

Background

4.1 The previous Committee considered the draft Community Patent Regulation (document (a)) on 1 November 2000, when negotiations on the proposal had just begun. It noted that patents for each country in Europe were obtained by separate applications to individual national offices, or by an application to the European Patent Office (EPO), established under the European Patent Convention of 1973 (EPC) and based in Munich. A Community patent under the envisaged Regulation would offer a single unitary right in all Member States and, if declared invalid, would equally be invalidated in all Member States. The proposed Community Patent would offer an alternative route for patent protection in Europe, and would operate alongside the existing national and EPO patent systems.

4.2 We considered the draft Regulation (document (a)) on 13 February 2003. We noted that discussion of the proposal had concentrated on the language regime for applications, the role of national patent offices and the question of jurisdiction for national and Community courts. On 21 May 2003 we considered in some detail the amendments which had been made to reach the common approach agreed by the Council on 3 March 2003 (document (b)). We drew attention to the potentially burdensome nature of the envisaged language regime. We also questioned the practicality of the provisions of Articles 24a and 24b, which required an applicant who had been granted a patent to submit within two years a translation of the patent claims into each of the official languages of the Community, failing which the Community patent was to be 'deemed not to have taken effect'. This appeared to us to introduce a type of contingent invalidity of the Community patent for as long as two years, and we asked the Minister for her views on whether this was consistent with principles of legal certainty.

4.3 We also asked the Minister to explain more clearly what advantage was to be derived from a Community patent as compared with a patent under the EPC in which the applicant designated all Member States as the territory in which the patent is to apply. We also asked the Minister to inform us more fully of where negotiations now stand on this proposal, notably in relation to the question of a first instance Community jurisdiction for patent disputes and the possibility of a delay until 2010 for the introduction of such a jurisdiction.

The Minister's reply

4.4 In his letter of 21 October 2003 the Parliamentary Under- Secretary of State for Science and Innovation (Lord Sainsbury of Turville) addresses our questions and provides further information on the progress of negotiations, together with a copy of comments made by the Chartered Institute of Patent Agents (CIPA) and the Trade Marks Patents and Designs Federation (TMPDF). We note from these that our concerns over the language regime are shared by both bodies, with the latter stating that the penalty that the Community patent will be deemed to be void ab initio in circumstances where even one claim has not been translated into all Community languages is 'far too severe' and that restitution and correction must be allowed even if the deadline for translations has passed.

4.5 In relation to the language regime, the Minister explains that the period within which an applicant who has been granted a Community patent must submit a translation of the patent claim in all Community languages is currently under discussion. The Minister says that some are arguing for a period of three months (as is currently provided for under the EPC) whilst others (who would prefer no translations to be required) are pressing for two years. The Minister summarises the rival contentions as follows:

"it can be argued that a short time for filing translations makes it more difficult to ensure their accuracy, especially given the number of translations involved. The key issues are what effect the provision of translations should have on [the] enforcement of the patent in relation to injunctions and damages.

"While the grant of the patent does put third parties on notice that a patent exists, and most delegations agree that its scope should be defined by the text as granted by the European Patent Office, there may be a need to provide third parties with some protection in the event of an inaccurate or misleading translation, and during the period when translations have not been filed. A package balancing length of the time period with the legal effects may be the way forward, and the Commission has undertaken to draft a proposal. Other considerations affecting the time period include the time allowed to file oppositions to a patent before the European Patent Office (currently nine months from grant), and the desire for conversion to be available from Community patents to European patents for individual Member States, especially if some of the translations cannot be obtained in time."

4.6 In response to our question about the advantages of a Community patent over one granted under the EPC which would designate all Member States as territories in which the patent is to apply, the Minister replies that patent holders will make their choice according to the value of the invention, the market coverage required, and their own assessment of the benefits of one or other route. The Minister adds that the choice between a Community patent and one under the EPC does not have to be made until the time of grant and that conversion is still possible after grant. The Minister also provides a table showing a comparison between the two types of patent. In relation to languages, for example, a Community patent requires translations into all Community languages of all claims, whereas an application under the EPC requires a translation of the whole patent (i.e. description and claims) to be filed in the official language of each state in which protection is claimed. In relation to jurisdiction over disputes, the Community patent system would provide for one court, a Community patent court, to hear cases across the European Community, whereas under the EPC a number of national courts would have jurisdiction. A further difference is that fees for renewal are likely to be lower for the Community patent than the aggregate of fees to be paid in each EPC state in which protection is claimed.

4.7 In relation to the delay until 2010 for the introduction of a Community patent jurisdiction at first instance, the Minister comments that the common political approach reached by the Council on 3 March 2003 requires the Community court to be established at the latest by 2010. The Minister adds that this takes into account the need to agree new instruments conferring jurisdiction on the Court of Justice, and for their adoption at national level. The Minister also states that revision of the EPC and national ratification of those revisions are required before Community patents can be processed at the European Patent Office and that this is unlikely to be completed before 2005/6, so that there may well be few Community patent disputes to be considered by the courts during the transitional period before the Community patent court is in operation.

4.8 The Minister has also provided us with a copy of the most recent consolidated working text of the draft Regulation and has drawn our attention to a number of its provisions. As before, Article 1 provides that a Community patent to which the Regulation applies is a patent granted by the European Patent Office under the EPC where the application designates the Community as the territory in respect of which the patent is sought. The Minister explains that Article 2 will be amended to reflect the 'clear understanding' that the Regulation and the EPC will both apply to the Community patent.

4.9 The Minister explains that provision has been made in Article 9a for government use of patented inventions for defence and security purposes. The provision permits the application to Community patents of national law on patent use by governments, but 'only to the extent that the use is necessary for essential defence or national security'. The Minister adds that the question of whether the use of patents by publicly funded healthcare services should be addressed under this Article or under Article 21 (compulsory licences) is still under discussion.

4.10 In relation to the provisions on compulsory licences (Articles 21 and 22), the Minister explains that there is a general preference by Member States and interested circles that the grant of such licences should be a matter for the Community patent court. (Such licences would be granted in the case of a failure to exploit the patent on reasonable terms, to permit the use of a dependent patent,[8] to remedy an anti-competitive practice, or in cases of crisis or other situations of extreme urgency). The Minister states that in the case of anti-competitive behaviour the Government believes that the Commission and the competent authorities of the Member States ought to have a role so that their existing powers to order remedies under competition law might also apply to the Community patent. The Minister considers that this could be achieved by amending Article 21(3) to refer to the Commission and the competent authorities of the Member States, including their courts. (At present, the text refers to the Commission or the Community patent court). As an alternative, the Minister suggests that the paragraph might be deleted and wording inserted in Article 2 to make clear that the Regulation does not exclude the application of competition law by the competent authorities (including the Commission). The Minister adds that the interaction between the competition law regime and the Community patent law system 'is being considered urgently by the Commission and Member States' delegations'.

4.11 The Minister also explains that the current version of Article 31(3) of the draft Regulation requires the Community patent court to stay any proceedings for invalidity if opposition proceedings are pending before the European Patent Office. The Minister adds that it is generally agreed that the court should have a discretion to stay proceedings, and that the matter is best dealt with in the context of separate proposals on the court's jurisdiction and procedure.

Conclusion

4.12 We are grateful to the Minister for his explanations of the latest stage in these negotiations, and for answering the points we raised.

4.13 We remain concerned about the provisions of Article 24a relating to compulsory translations of claims for a Community patent. We agree with the Trade Marks Patents and Designs Federation that the penalty of invalidating a Community patent for failure to provide a translation of every claim in every Community language is too severe, and we remain concerned that these provisions would lead to patents being contingently invalid for up to two years with resulting legal uncertainty.

4.14 We therefore welcome the Minister's statement that the Commission will be producing revised proposals on this point, and we shall look forward to an account by the Minister of how the problems we identified have been dealt with. We also look forward to an account by the Minister of the consideration being given to the interaction between competition law and the Community patent law system.

4.15 We shall continue to hold the documents under scrutiny pending receipt of the further information requested.


8   i.e. a second patent which cannot be exploited without infringing the first patent. Back


 
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