6 Intellectual Property
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13706/09
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| Draft Revised Council Regulation on the Community patent
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| Legal base | Art. 118 TfEU; ordinary legislative procedure.
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| Deposited in Parliament | 29 October 2009
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 19 November 2009
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| Previous Committee Report | None
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| To be discussed in Council | 4 December 09
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| Committee's assessment | Legally and Politically important
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| Committee's decision | Cleared
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Background
6.1 In contrast to the existing Community Trade Mark and Community
design regimes, there is at present no single, centrally enforceable,
European Union-wide patent. Nor is there any system of automatic
mutual recognition. As a general rule, a patent granted for any
one state in the EU is only valid for the territory of that state.
However, the European Patent Office (EPO) provides a legal framework
for the granting of 'European patents', which allows it to grant
patents for up to 36 European states via a single, harmonized
procedure. A single patent application, in one language, may be
filed at the European Patent Office at Munich, at its branches
at The Hague or Berlin or at a national patent office of a Contracting
State, if the national law of the State so permits. However, after
grant, a European patent is not a unitary right, but a group of
essentially independent nationally-enforceable, nationally-revocable
patents. The applicant chooses which, and how many, of the 36
states he wishes to have patents for. 'European patents' require
translation into the respective language of designated each state,
as well as separate renewal and litigation procedures. The EPO
is not an EU body and was established in 1973 by inter-governmental
agreement.
6.2 In March 2000 the Lisbon Agenda identified a
need for a unitary patent which provides unified patent protection
across the entire EU. The patent would create unitary Community
rights and was referred to as a Community patent to distinguish
it from existing European patents. Community patents would also
be granted by the EPO.
6.3 Previous discussions with a view to adoption
of a Regulation for a Community patent were suspended in 2004,
mainly due to disagreement on patent languages and translations.
Our predecessor Committee did not regard this and other related
residual problems as a major issue for the United Kingdom and
cleared the original and all subsequent revised texts of the proposal
from scrutiny in 2003. It also welcomed and cleared the Commission's
later discussion document "Enhancing the Patent System in
Europe" (8302/07) in 2007. The Commission Communication revived
discussions on the introduction of a Community Patent.
The Document
6.4 The previous text to have cleared scrutiny was
the revised Greek Presidency text of 16 April 2003 (reference
8539/03). This text has now been replaced by a further revised
proposal prepared by the Swedish Presidency. The proposed Community
Patent would create a single Community-wide Patent conferring
simultaneous, unitary rights in all Member States and, if declared
invalid, would equally be invalidated in all Member States. The
proposed Community Patent would, as envisaged under the Lisbon
Agenda, operate alongside the existing national and EPO patent
systems and offer an alternative route for patent protection in
Europe.
6.5 The numbering of the articles in the revised
proposal corresponds to that in previous versions of the Regulation,
which means that where Articles have been removed there will be
gaps in the numbering.
6.6 Article 1 establishes that all patents granted
by the EPO which have effect throughout the Community shall be
Community patents. Article 2 makes clear that Community patents
can only be granted, transferred, declared invalid or lapse in
respect of the whole of the Community.
6.7 Articles 4 to 6 specify who can apply for and
own a Community patent.
6.8 Articles 7 to 13a set out the effects of a Community
patent. Articles 7 and 8 allow the proprietor of the patent to
prevent all third parties from using it directly or indirectly
without his consent. Article 9 describes certain acts which do
not infringe the rights described in Articles 7 and 8. These include
acts done privately for non-commercial purposes, experimental
purposes, and those in accordance with specified EC Directives.
Article 9a allows for national governments to make non-commercial
use of Community patents in situations of essential defence or
national security. Article 10 establishes that Community patent
rights are exhausted for products placed on the market in the
Community by the patent owner or with his consent. Article 11
provides that compensation may be claimed from third parties who
have made use of an invention protected by a Community patent
between the publication of the patent application and the grant
of the patent. Article 12 establishes that a person who made use
of an invention in good faith prior to an application for a patent
may continue that use. Article 13 establishes that in the case
of a patent for a process an infringing product shall, in the
absence of proof to the contrary, be deemed to have been obtained
by the patented process. Article 13a allows conversion of a Community
patent application into a European patent application, on request,
at any time before grant of the patent.
6.9 Articles 14 to 24 concern the treatment of the
Community patent as a piece of property, such as transfer, licensing
and similar transactions. Article 20 allows a patent proprietor
to pay reduced renewal fees in return for allowing any person
to use the patented invention as a licensee, in return for adequate
compensation, such licenses are called licenses of right. Article
21 and 22 allow the European and Community Patent Court (ECPC)
to grant compulsory licences, that is licenses without the consent
of the proprietor of a patent. These may be granted in times of
crisis or to avoid abuses of patent rights, when a patent is not
being exploited or when it prevents the exploitation of another
patented invention. Member States are not to be permitted to grant
licences of right or compulsory licences in respect of Community
patents.
6.10 Articles 25 to 27a cover the renewal, surrender,
lapse and re-establishment of the Community patent. The maximum
duration of the Community patent is set at 20 years, as with national
and European patents.
6.11 Articles 28 to 29a deal with the grounds for
and effects of a Community patent being declared invalid, and
the request for limitation of the patent by amendment of the claims.
The grounds for invalidity include where the subject matter of
the patent was not patentable according to the European Patent
Convention, for example if the new invention is not new or inventive.
6.12 Article 54 prohibits the simultaneous protection
of the same invention by both Community patent and national patent.
6.13 Articles 56 to 63 contain the final provisions
of the Regulation. Article 56 requires the EPO to keep a register
of Community patents which must be available for public inspection.
Article 57 requires the EPO to publish a bulletin containing entries
made in the Register of Community patents. Article 62 requires
the Commission to publish a report on the implementation of the
Regulation every five years from its entry into force. Article
63 governs the entry into force of the Regulation, which shall
be on the sixtieth day following its publication in the Official
Journal of the European Communities.
6.14 The latest text of the proposal also contains
a number of amendments designed to address those concerns which
led to the suspension of negotiations in 2004. Subparagraph (b.1)
of Article 9 has been amended to include specific reference to
Directives 2001/82/EC and 2001/83/EC, which provide exemptions
to patent infringement during pharmaceutical trials and testing
which is necessary for regulatory approval. Similarly, subparagraph
(j) has been added to provide for Directive 98/44/EC, which addresses
the patentability of biotechnological inventions. These amendments
reflect the implementation of these Directives into national patent
law in recent years.
6.15 Articles 24a — 24b have been deleted.
These Articles previously governed the translation of the Community
patent. They stated that, on grant of a Community patent, translations
of the patent claims into all official languages of the Community
must be submitted, unless a Member State agreed to dispense with
a translation into its language. The proposal for translation
into all EU official languages (then 12, now 23), was one of the
main reasons that industry rejected the deal presented in 2003
and why those negotiations stalled. During the French Presidency
in 2008, it was proposed that the number of translations should
be limited further. Translation of the patent claims would be
required in only the three official languages of the European
Patent Convention (English, French and German), with machine translations
being used for other languages if necessary. Machine translations
would enable wide public awareness of the content of patents,
but would not be legally binding. In order to expedite agreement
of the Community patent Regulation, these Articles have now been
removed from the current Regulation text, and it is proposed that
whatever language regime is agreed will instead be provided for
amendments to the European Patent Convention, or a separate legal
instrument.
6.16 Articles 30 — 53i have been deleted. These
Articles previously provided for litigation of Community patents
and conferred exclusive jurisdiction to the ECJ. In response to
the Commission's communication "Enhancing the Patent System
in Europe", current proposals are moving towards a more limited
role for the ECJ restricted to ensuring the primacy of EC law,
with exclusive jurisdiction over Community patents being conferred
to a proposed separate ECPC, to be established by international
treaty. This court would be able to hear litigation on both Community
and European patents so as to provide consistent decisions across
Europe.
6.17 The Community Patent Regulation would not enter
into force, until the ECPC has been established, to ensure that
when the first Community patents are granted there will already
be a specialist court available to deal with disputes. The ECJ
has been asked for its opinion on whether the establishment of
the court is compatible with the EC Treaty, and is expected to
deliver its opinion in 2010. Until it has done so, detailed discussion
of the ECPC treaty has been put on hold.
6.18 Article 60 has been deleted. This Article previously
related to Community patent fees and in particular the distribution
of renewal fees. There are still some outstanding issues to be
resolved regarding these provisions, and so, again, these Articles
have been removed from the current Regulation text, and it is
proposed that renewal fees may instead be provided for in amendments
to the European Patent Convention.
6.19 Applications for Community patents will be administered
by the EPO. The Regulation will not affect or replace the other
patent regimes and processes administered by the EPO.
The Government's View
6.20 In his Explanatory Memorandum of 18 November
2009 the Minister of State at the Department for Business, Innovation
and Skills (David Lammy) reaffirms the Government's previous support
for the proposal and summarises the Government's position with
reference to a number of central issues:
Translations
"Inability to agree on the languages of the
Community patent has been a longstanding barrier to overall agreement.
Translation of a whole patent into a single language averages
over 1000 Euros, and translation only of a patent's claims (which
describe its legal scope) averages over 250 Euros. As there are
now 23 EU official languages, even translations limited to a patent's
claims, covering all EU official languages, would be very expensive.
This would have been the consequence of the deal presented in
2003, and rejected in 2004, which was roundly opposed by industry.
"The proposal currently under discussion, but
now removed from the Regulation for later agreement in a separate
instrument, is for patents to be published in one of three languages
— English, French and German — and for a patent's
claims to be published in all three of these languages. Machine
translations of the full patent would be available in all 23 EU
languages, and a special translation system with a focus on technical
language is being constructed for this purpose. This approach
aims to balance the need for public information, with the need
for low costs and legal certainty given by a reduced language
system. The UK Government support this, due to the significant
cost savings over current translation requirements for European
patents, though could support other efficient language regimes.
Many other Member States could also support this.
"However, a number of Member States argue that
the current language regime is discriminatory and favours a small
number of languages. They also believe that this will disadvantage
the general public in those states whose languages are not represented,
as they will not be able to understand what is covered by a Community
patent.
Court jurisdiction
"The UK Government support the role of the ECJ
being limited to ensuring primacy of EC law. Initial discussions
on the ECPC international treaty have raised a number of issues
on the organisation and operation of the court. There are still
some issues yet to resolve, and although these do not have a direct
impact on the Community patent Regulation, they will necessarily
have an impact on the litigation of Community patents granted
under the Regulation.
Fees
"One of the UK Government's main concerns over
the Community patent was that the overall fees (application and
renewal) received by the EPO cover their costs in delivering Community
patents. Current fee proposals are to be provided for in amendments
to the European Patent Convention, and Council Conclusions (also
tabled for agreement at the Competitiveness Council on 4 December
2009) include that the overall fee regime will sufficiently cover
the EPO's costs. Whilst application fees are expected to be similar
to those for a European patent, the Council Conclusions state
that the level of renewal fees should be fixed with the aim of
facilitating innovation and fostering the competitiveness of European
business. It should also reflect the size of the market covered
by the Community patent and be similar to the level of the renewal
fees for what is deemed to be an average European Patent. Although
the Council Conclusions do not define an "average European
patent", it is generally taken to mean one which covers seven
European states. Therefore, for obtaining and renewing patent
protection in more than seven EU states, a Community patent should
cost less, in terms of fees, than a European patent. Current renewal
fee distribution proposals include the EPO receiving 50%, with
the remaining 50% being distributed among the Member States. Although
the distribution of these fees is yet to be discussed, it is expected
that the UK's share will be less than that for an average European
patent. However, until the exact distribution of the renewal fees
is discussed it is not possible to ascertain its impact on revenue.
Licensing
"The possibility of the Community court ruling
on compulsory licences and licences of right (Articles 20-22)
rather than the Commission was specifically sought by major representative
bodies (Chartered Institute of Patent Agents; Trade Marks, Designs
and Patents Federation; UNICE; Association of the British Pharmaceutical
Industry). Note that these provisions of the Regulation need to
be without prejudice to Member States' and the Commission's powers
under EC Competition law.
Competence
"Although the Government is broadly supportive
of the Regulation, we would prefer that all other aspects of the
proposed European patent reform (i.e. the ECPC and any necessary
amendments to the European Patent Convention) are agreed at the
same time as the Regulation. It may be perceived that there is
a risk that agreement on the Regulation at this stage could be
used to support arguments to the effect that agreement is to confer
exclusive competence on the Community."
6.21 The Minister also informs us that the proposal
is scheduled for discussion and timetabled for agreement of a
general approach at the 4 December 2009 Competitiveness Council.
If agreement is not reached in December then the Spanish and Belgian
Presidencies of 2010 are expected to continue discussions on the
Regulation.
Conclusion
6.22 We thank the Minister for this detailed summary
and comments on the proposal for the creation of a Community Patent.
When our predecessor committee cleared the previous text of the
proposal, it had no outstanding questions or residual concerns.
As none of the proposed amendments critically affects the substance
of the proposed measure which, moreover, will not replace existing
patent regimes in Member States but is designed to offer a unitary
Community regime as an alternative route for patent protection,
we see no reason to revise or rethink the position of our predecessor
committee. Accordingly, we clear the proposal from scrutiny.
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