4 Intellectual property
| (32365)
18115/10
COM(10) 790
| Draft Council Decision authorising enhanced cooperation in the area of the creation of unitary patent protection
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| Legal base | Article 329(1) TFEU; unanimity; consent
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| Document originated | 14 December 2010
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| Deposited in Parliament | 21 December 2010
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 7 January 2011
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| Previous Committee Report | None; but see (31773) 11805/10: HC 428-ii (2010-11), chapter 2 (15 September 2010); and (31064) 13706/09: HC 5-i (2009-10), chapter 6 (19 November 2009)
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| To be discussed in Council | 10 March 2011
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| Committee's assessment | Legally important
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| Committee's decision | Do not clear; further information requested
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Background
4.1 Currently, the European Patent Office (EPO) is able to
search, examine and grant patents in a single procedure for up
to 37 European States, with the applicant choosing which, and
how many, of the 37 states they wish to have patents for. Once
granted these are treated as a bundle of separate national patents
(commonly referred to as "European patents") which may
require translation into the respective language of each state
designated, as well as separate renewal and litigation procedures.
The EPO is not an EU body, it being established by, and granting
patents under, an intergovernmental agreement, the European Patent
Convention (EPC).
4.2 Unlike the Community Trade Mark and Community
Design systems, there is no EU-wide unitary system for patent
protection, nor is there any system of mutual recognition: a patent
granted for any one State in the EU is only applicable across
the territory of that State. In March 2000 it was agreed under
the Lisbon Agenda that there was a need for a unitary patent which
provides protection across the entire EU, this then being referred
to as a Community patent to distinguish it from existing European
patents. Community patents would also be granted by the EPO, and
would exist alongside European patents as well as national patents
granted by national patent authorities of Member States. A Community
patent would therefore give applicants a third option for obtaining
patent protection within the EU which may be simpler and more
efficient than using European or national patents when patenting
across Europe.
4.3 Discussions on a Regulation for a Community
patent stalled in 2004, most notably due to disagreement on patent
languages and translations. However, following the Commission's
2007 Communication "Enhancing the Patent System in Europe,"
discussions improved, and in December 2009 political agreement
was reached in the European Council on an EU patent Regulation[40]
(following the entry into force of the Lisbon Treaty there is
no longer a 'European Community' and so the Community patent was
renamed the 'EU patent'). The Regulation text on which Agreement
was reached does not, however, solve the languages and translations
issue, and specifies that this will be provided for in separate
legislation. This is consistent with the second paragraph of Article
118 TFEU, which requires the EU to establish "language arrangements
for intellectual property rights" in the EU on the basis
of a unanimous decision of the Council after consulting the European
Parliament.
4.4 Translations represent a significant proportion
of the cost of patenting across Europe, and therefore agreeing
a business-friendly language solution is important. Translation
of the patent claims into all EU languages (then 12, now 23) was
rejected by industry in 2003 as too expensive, whilst translation
into only the working languages of the EPO (English, French and
German) was rejected by a significant minority of Member States
in 2009 as discriminatory.
4.5 The translation requirements for "European
patents" (currently granted by the EPO) were reduced to a
certain extent with the entry into force of the London Agreement
on 1 May 2008. European patents must be filed in English, French
or German, with around 80% being in English. The London Agreement
is an optional scheme which, at present, has been ratified by
14 EPC states, including ten EU Member States. In short, this
means that no translation of a European patent description is
required in order for the European patent to come into force in
France, Germany, Latvia, Lithuania, Luxembourg, Slovenia, and
the UK, Furthermore, under the Agreement, Denmark, Netherlands
and Sweden simply require the description to be in English rather
than translated into their official language. For all European
patents the claims must still be provided in English, French and
German, whilst for validation in the 17 EU Member States which
have not ratified the London Agreement, translation of the description
and claims into an official language of each country is still
required. The London Agreement is open for ratification by all
Member States and as such it is possible that the translation
requirements for European patents may be further reduced.
4.6 Accordingly, on 30 June 2010 the Commission
adopted a proposal for a Council Regulation on the translation
arrangements for the EU patent. This proposal echoed the 2009
three-language arrangement, but with additional elements relating
to the availability of quality machine translations and the reimbursement
of translation costs for applicants from EU states that have an
official language which is not English, French or German. Despite
compromises being offered the required unanimity was not achieved
at either the 11 October or 10 November Competitiveness Council.
Ultimately, at the 10 November Council, Spain, Italy and Poland
could not agree to the compromise being offered. It was therefore
concluded by the Belgian Presidency that the required unanimity
could not be achieved within a reasonable timescale.
The document
4.7 In advance of the 10 December Competitiveness
Council, 11 Member States, including the UK, wrote to the Commission
to request that they make a proposal to use enhanced cooperation
in an attempt to agree a language regime for the translation of
EU patents. Denmark, Estonia, Finland, France, Germany, Lithuania,
Luxembourg, the Netherlands, Poland, Slovenia, Sweden and the
United Kingdom are listed as requesting States on the draft Council
Decision.
4.8 The Commission's proposal for a decision
authorising enhanced cooperation was published on 14 December
2010, and the operative part consists of only two articles. Article
1 says that the named states are authorised to establish enhanced
cooperation between them in the area of the creation of unitary
patent protection, by applying the relevant provisions of the
Treaties, while Article 2 says that the Decision shall enter into
force on the day of its adoption.
4.9 The substance of the enhanced cooperation
is not set out in the Articles but will be the subject of implementing
proposals once the authorising Decision has been adopted by the
Council. However the recitals indicate (particularly in recital
7) that the translation arrangements should correspond to those
in the Commission's proposal of 30 June 2010 combined with elements
of compromise proposed by the Belgian Presidency in November that
had wide support in the Council.
4.10 Recital 14 clarifies that the possibility
of obtaining unitary patent protection on the territories of the
EU Member States participating in the enhanced cooperation does
not affect the availability or the conditions of patent protection
on the territories of non-participating EU Member States. However,
undertakings from non-participating EU Member States should have
the possibility to obtain unitary patent protection on the territories
of the participating Member States under the same conditions as
undertakings from participating Member States. Existing rules
of non-participating Member States determining the conditions
of obtaining patent protection on their territory remain unaffected.
The Government's view
4.11 In her Explanatory Memorandum of 7 January,
the Minister of State for Intellectual Property at the Department
for Business, Innovation and Skills (Baroness Wilcox) says that
inability to agree on the languages of the EU patent has been
a longstanding barrier to overall agreement on the patent. Translation
of a whole patent into a single language averages over £850,
and translation only of a patent's claims (which describe its
legal scope) averages over £200. As there are now 23 official
EU 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, explains the Minister, and which was then
roundly opposed by industry.
4.12 The Commission's proposal of July 2010,
as in August 2000, was for patents to be published in one of the
three working languages of the EPO (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, explains the Minister, aims to balance the need
for public information, with the need for low costs and legal
certainty given by a reduced language system. She says the Government
supports this approach, due to the significant cost savings over
current translation requirements for European patents, though
could support other efficient language regimes. Many other Member
States also support this. However, Spain, Italy and Poland argue
that the proposed language regime is discriminatory and that 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 an EU patent.
4.13 The Minister says that when the UK wrote
to the Commission to request enhanced cooperation, it included
in its letter a specific reference to the still awaited Opinion
of the Court of Justice of the EU on the European and EU Patents
Court, as that Opinion may have a material effect on the UK's
participation. This caveat was included in order to ensure that
if the Court of Justice concluded that it did not have sufficient
jurisdiction and required wider powers under Article 262 TFEU,
then the UK could withdraw from the request for enhanced cooperation
before it was presented to the Council for a vote.
4.14 She says that the UK's position on enhanced
cooperation in general is that any proposals will be examined
on a case-by-case basis to ensure that Treaty requirements are
rigorously applied, and that there are no (or minimal) impacts
on non-participating Member States. In the present case, it is
also important for any proposed package to achieve real benefits
for business, consumers and the economy.
4.15 The Minister concludes by reminding us that
the more countries that are involved in any agreement on a unitary
patent, the more extensive any benefits would be in terms of market
coverage for patent owners. Moreover the Treaty itself provides
an obligation under Article 328(1) TFEU that the Commission and
the participating Member States promote participation by as many
Member States as possible.
Conclusion
4.16 We thank the Minister for her Explanatory
Memorandum.
4.17 As with our predecessors, we see the
merit of the EU Patent, and of easing the translation burdens
associated with it. So we supported the Commission's proposal
for a three-language regime for EU patents, and, in light of the
seeming impossibility of achieving consensus, support this request
for enhanced cooperation.
4.18 We do, though, have two queries at this
stage. The Minister says that the UK will withdraw from the request
for enhanced cooperation if the Court of Justice finds that the
international agreement establishing the European and EU Patents
Court is incompatible with the Treaties. We understand that the
Court's opinion is expected to be published on 8 March, and the
Council is expected to adopt this Decision for enhanced cooperation
on 10 March.
4.19 Firstly, we ask the Minister to explain
the basis on which she contends that it is consistent with the
strict rules on enhanced cooperation for a requesting State to
withdraw its request—no provision for this is made in the
Treaties. We think that if the UK is not sure that it wants to
proceed on the basis of enhanced cooperation, rather than be counted
among the requesting Member States it should consider whether
to join at a later date, for which provision is made in Article
331 TFEU.
4.20 We question, secondly, why it is necessary
for the Council Decision to be taken two days after the Opinion
of the Court of Justice is published. The Opinion is relevant
to this proposal for enhanced cooperation, as the Government's
conditional stance on the proposal demonstrates. We would also
like sufficient time to scrutinise the Opinion before clearing
the Council's Decision to approve enhanced cooperation from scrutiny,
and would expect an Explanatory Memorandum on the Opinion when
the Minister deposits it. We would, therefore, be grateful if
the Minister would consider whether the Council Decision could
be postponed.
4.21 In the meantime the Council Decision
remains under scrutiny.
40 The previous Committee cleared this proposal from
scrutiny on 19 November 2009 (see headnote). Back
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