Lisbon pledges under threat from row over patents

Date: 12/10/00

By Peter Chapman

EU LEADERS soaked up the plaudits when they posed for a celebratory photo-call at their Lisbon summit in the spring. But their optimism about the chances of progress on establishing Union-wide patent rules may have been premature.

In a striking display of support for business, heads of state and government attending the Union's first-ever 'dotcom summit' agreed to tear down the barriers which have prevented the EU from challenging the US as leader of the world's second industrial revolution.

They approved the European Commission's e-Europe initiative - a series of actions designed to boost the Union's ability to make the most of the information society. They also promised to dismantle the last bastions of monopoly in the EU's telecoms markets by opening up local networks to competition before the end of this year. Finally, they pledged to introduce a system by the end of 2001 under which companies or individuals could make a single application to a central EU agency for a patent to protect their inventions in all 15 member states.

This was music to the ears of European inventors and innovators. For years, they and their predecessors have cast an envious eye over the Atlantic to the US, where faster, simpler and cheaper systems for awarding patents are in place.

While Europe is strangling its inventors with red tape, plans to create the next generation of American multinationals are being hatched in the garages of Californian entrepreneurs and the laboratories of Massachusetts Institute of Technology scientists. In the US, you invent it, patent it and cash in - end of story. In Europe, you face a bureaucratic nightmare.

Under the current patchwork system in the EU, innovators have two options if they want to win protection for a new product: they can either apply to any one of the EU's 15 member states for a patent, or they can go to the Munich-based European Patent Office (EPO). Despite its name, the EPO does not in fact grant Union-wide patents. The agency - which is recognised by Cyprus, Liechtenstein, Monaco and Switzerland as well as EU member states - simply assesses applications instead of the national patent authority. Patents can then be granted for some, or all, EPO member countries, but it is left up to each national government to approve them and give them the same protection as that provided by state laws.

A key problem with this approach, say critics, is the lack of certainty. Patents may be legally challenged and overturned by national courts in one EPO member country while being accepted in another.

Another worry is the cost of obtaining protection, regardless of which route inventors decide to take. EU officials claim the average cost of applying to the EPO for a patent is €30,000 plus annual 'maintenance fees', which puts the price beyond the reach of many cash-strapped inventors.

All of this was supposed to change after Lisbon. But after just seven months, the Commission and industry onlookers fear the promise made by Union leaders to boost innovation and invention in Europe is in tatters, following fierce arguments between ministers last month over Internal Market Commissioner Frits Bolkestein's proposals for a Community patent.

Bolkestein has called for the new patents to be issued by the European Patent Office, drawing on the institution's undoubted expertise. But he was criticised for his proposal to use the EPO's three working languages - English, French and German - for patent applications. A host of member states, including Portugal and Greece, complained that the system would force their companies to apply for patents in a foreign language, adding to the already considerable cost involved.

Arguments also erupted over Bolkes-tein's plan to create a central tribunal linked to the European Court of Justice which would settle patent disputes. Again, critics such as Germany, Italy and Finland claimed it would be too costly for patent-holders to take their cases to an EU court and unnecessary when local ones could do the job.

Both complaints have been firmly rejected by industry groups such as the European employers' federation UNICE and by Bolkestein's officials.

Firstly, UNICE's patent expert Jerôme Chauvin dismisses as "nonsense" the claim that using three languages would be more costly and confusing than the present system. He insists the proposal would have the opposite effect, because inventors seeking patent protection in all 15 EU member states currently face a potential bill running into thousands of euro for translating their applications into all 11 official Union languages.

Secondly, supporters of the Bolkestein proposal claim that it is only by having an EU-level court that national differences in the interpretation of patent law can be eliminated and legal certainty guaranteed. "Such a centralised and specialised Community jurisdiction is essential to provide the legal certainty the Community patent requires," says Bolkestein.

Even more perplexing for Bolkestein and UNICE is the apparent reluctance of the French presidency to bridge the gaps between member states or put the issue onto the agenda for the current Intergovernmental Conference negotiations on changes to the EU treaty. This is crucial for the Bolkestein blueprint because the existing treaty must be amended to allow for the creation of an Union-level tribunal linked to the ECJ.

"The Community cannot afford to miss this chance. It needs an effective and workable Community patent now, not in ten years time," insists the Commissioner. Surprisingly, supporters of his approach are reluctant to condemn their fellow member states for prevarication. "It is a very complex issue," insisted one diplomat, dismissing claims that Paris was deliberately dragging its heels by failing to organise behind-the-scenes meetings to discuss the issue. Even the Dutch government, a keen supporter of compatriot Bolkestein's initiative, is "in no rush" to get the EU-wide patent in place, according to sources.

So does all this mean that the Commissioner's proposals are doomed, as some fear?

The first obstacle to be overcome is to get the issue onto the IGC agenda."It is something that could be decided between the Commission and Paris the day before Nice," said a senior Dutch diplomat. But if the issue is not even discussed at Nice, then Bolkestein's aides claim there will be no chance of meeting the 2001 deadline for introducing the new patent system.

Sweden is known to be eager to make progress on the dossier during its EU presidency, which begins in January. But without the treaty changes needed to make a new tribunal possible, the system which emerges will be very different from that envisaged by Bolkestein - and industry will be wondering whether the changes are worth the paper they are printed on. "They made a nice declaration in Lisbon, but it is empty shells," said UNICE'S Jerôme Chauvin.

Major feature. EU leaders soaked up the plaudits when they posed for a celebratory photo-call at their Lisbon summit in the spring of 2000. But their optimism about the chances of progress on establishing Union-wide patent rules may have been premature.