Previous Alerts have reported on the efforts being made to establish a unitary patent protection and a unified patent litigation system in Europe. The EU moved one more step closer to that goal on June 29, 2012 with the adopting of an agreement that establishes a unified system of patent litigation. Years of negotiation resulted in a decision on where the central division of the European Unified Patent Court will be located.
Helle Thorning-Schmidt, the prime minister of Denmark, made the announcement at a summit of the European Union, and was quoted as remarking, "After 30 years of negotiations we have now an agreement on a European patent." Having a unified European patent means that companies can obtain a patent that is valid throughout the EU in one proceeding, instead of having to validate granted EU applications in 27 different member countries. Denmark played a key role in brokering the compromise, which came on the last day of a six-month EU presidency by Denmark. The Danish presidency had pressed very hard in the past six months to get an agreement on the patent issue during its term, and Denmark hailed the agreement as a "tangible success."
In what is obviously the result of compromise, the European Unified Patent Court will be composed of three divisions. Paris will get the "central division," which will be the headquarters, and will process about 60 percent of the workload. An office in London will handle patents for chemistry, pharmaceuticals and life sciences, and "human necessities," which is expected to account for about 30 percent of the workload. The remainder of the workload will be handled by an office in Munich, which will handle mechanical engineering patents and also handle administrative work for patent appeals. All cases not handled by London or Munich will go to Paris, and the first president of the court will be French. There will be an appeals court in Luxembourg.
The compromise on the location of the patent court's central division was proposed as a measure to achieve a decision during the summit. Deciding where the central division should be located was the last outstanding issue that had to be solved to come to an agreement on the unitary patent system.
The Unified Patent Court will have exclusive jurisdiction in actions relating to the validity or infringement of a European unitary patent. The goal of the unified system is to eliminate the possibility of multiple patent lawsuits concerning the same patent being brought in different member countries, and avoid the risk that court rulings on the same dispute might differ from one member country to another.
It is expected that the agreement will lead to considerably reduced costs for small and medium-size enterprises and give a boost to innovation by providing an affordable, high-quality patent in Europe with a single specialized jurisdiction.
Projections are that the new court system will reduce patent litigation costs for European companies by approximately €289 million ($360 million) each year. Obtaining a patent that would be valid in 13 member states today can cost up to €20,000 ($25,000); approximately €14,000 of that sum would be spent on translations alone. The unified system would eliminate much of that cost.
In addition to the Unified Patent Court's central division, the agreement provides for regional and local divisions. There is a regional court in Düsseldorf, where many technology patent lawsuits are being litigated. However, European officials could not immediately explain the relationship between the regional courts and the central division under the new patent system. The relative roles that the two levels of court play in the system will no doubt to be worked out over time.
There are two other elements to the unitary patent system: a regulation on the unitary patent itself and a regulation on translation arrangements for a unitary patent. Those regulations were agreed upon last December, and require translations from the official EPO language in which the patent was prosecuted into one of the remaining two official languages. Only the claims need to be translated into all three languages. Italy and Spain have declined to join in the unitary patent system, primarily because of the language issue.
The Unified Patent Court has been agreed upon under an intergovernmental treaty among European countries. The European Parliament will now vote in July on the unitary patent "package" and the Council will adopt the two regulations shortly thereafter. The Parliamentary vote is essentially ceremonial, since the body does not have the authority to overturn the Council agreement. Nevertheless, member countries will have to sign the Unified Patent Court agreement in the second half of 2012. At least 13 countries need to ratify the agreement for it to become effective.
If things go smoothly, the first patent with unitary patent protection could be delivered sometime in 2014.
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