We will reject ‘white elephant’ patent system, bosses warn

European business organisations are doubtful that European Commission efforts to create a single patent regime will provide the cost-effectiveness and legal certainty they demand for the cross-border protection of their products.

Last-ditch attempts to push forward the community patent, with the aim of achieving its adoption in all 25 member states by 2009, look set to meet resistance at a Commission public hearing on the issue on Wednesday (12 July).

"The current status of these proposals does not give us a community patent that we want and need. If they are trying to create a white elephant, we are not going to accept it and we are not going to use it," said Elias Konteas, adviser for intellectual property issues at UNICE, the European employers' federation.

The Commission meeting with stakeholders on Wednesday follows a period of consultation launched at the beginning of this year. The proposal for a community patent has been blocked for years because of squabbles between member states over court jurisdictions and language issues.

Agreement on which languages should be used to draft patents is essential to create a low-cost, high-quality EU-wide patent ensuring maximum protection for businesses with minimum fuss. A Commission proposal that applications would only have to be translated into English, German and French met opposition from Spain, Portugal, Greece and Italy. Calls for patents to be published in English only were rejected by France and Germany.

Business wants to cut translation costs for companies and minimise the risk of legal complications arising from errors in translated texts. "What member states have done is to look after their interests without taking into account what European companies need to protect their innovations," said Konteas.

Areas that are especially reliant on patents, such as information and communications technology, pharmaceuticals and biotechnology, are particularly affected. Dirk Carrez, policy director at Europabio, the European association for biotech industries, said: "We need a community patent in one language and this is politically very difficult in Europe."

Companies currently have two choices when applying for patents. They can apply for a European patent at the Munich-based European Patent Office, an arm of the European Patent Organisation (EPO), an intergovernmental body with 31 members, or go directly to national administrations. In both cases, translations are necessary for patents to be valid under national jurisdictions. Patents are enforced on a country-by-country basis which leads to high litigation costs.

Unconvinced that a compromise agreement brokered by the Commission would be capable of solving industry's patent problems, UNICE is calling for improvements in the present twin-track system, to be achieved through ratification of two EPO agreements that address the language and litigation issues. The first, the so-called London agreement, which has to be agreed by at least eight EPO members, including France, Germany and the UK (the countries handling the highest number of patent applications), proposes that countries voluntarily waive translation requirements for patents. In this scenario, patents would be drafted in French, English and German. The second is the European Patent Litigation Agreement (EPLA), which aims to create a single European patent court. Both agreements are in limbo pending progress on the community patent.

But Vincent Tilman, an adviser at Eurochambres, the association of European chambers of commerce, cautioned that the EPLA route could prove costly, particularly for small- and medium-sized businesses (SMEs). "It could be quite interesting, but there are less expensive alternatives to a court system such as mediation and arbitration. Maybe they wouldn't solve all cases, but in addition to courts, we should have an alternative dispute resolution system," he said.

"We want the EU to go forward on a more harmonised system that is accessible to all companies, including SMEs, with rights that are defendable in court in a practical and real way. The EPLA system could make processes more costly."

Oliver Drewes, internal market spokesperson, said that the European commissioner concerned, Charlie McCreevy, was determined to break the deadlock on the patent once and for all. "He will not see this being handed over to the next mandate," he said.

• Denmark, Iceland and Norway yesterday (5 July) signed an agreement to create a common Nordic patent institute that will be based in Taastrup outside Copenhagen.

The three countries hope to take make it easier for businesses to apply for patents through the international Patent Co-operation Treaty system. By September it is expected that the institute will have been granted PCT powers.

Jesper Kongstad, director of the Danish Patent and Trademark Office, said: "It will be much easier, more effective and much cheaper for Nordic businesses to carry out their patent work and it will be of the highest international standards."

European business organisations are doubtful that European Commission efforts to create a single patent regime will provide the cost-effectiveness and legal certainty they demand for the cross-border protection of their products.