Commissioner Charlie McCreevy: Intellectual Property Rights – Next Steps, Informal ECOFIN Council, IPR Conference

September 11, 2006

Helsinki, 8 September 2006

Informal ECOFIN Council – IPR Conference
Helsinki, 8 September 2006

Ladies and Gentlemen,

I am delighted to be here today to share with you some thoughts on what could be done during the next couple of years to create a better environment for IPR in Europe. I believe the time is right to make a serious attempt to improve the IPR system in Europe. The Finnish Presidency has rightfully singled out innovation as the key factor for Europe's future. A good IPR environment in turn is a key factor for innovation.

I will be making every effort to secure an advance on several fronts. Indeed, I see this conference as an important opportunity to outline these ideas to which I hope you will be able to subscribe to.

Let me therefore thank the Finnish Presidency and especially Minister Pekkarinen for inviting me to speak at this key event. Europe is not a world on its own. Interconnections and interdependence characterise our increasingly global economy.

This is true not only for goods, but also for ideas, for inventions and for creativity. Europe needs to play to its strengths. Building on excellence in education and research, it must put more effort into deploying its creativity and inventiveness in the search for new products and business models. Only by 'racing to the top' in terms of innovation and added-value will Europe will outrun the fast-growing economies emerging throughout the world.

A regulatory framework which stimulates and rewards innovation, which is affordable and easy to understand is of great importance in achieving this goal. Therefore we need to be sure that we frame our rules carefully and make them work for the benefit of all the players. Of equal importance, of course, is the correct application of the rules – and the legal certainty this brings.

It is D-day for Europe when it comes to intellectual property protection. Or – as the title of the conference put it – we are at the crossroads facing new IPR challenges. Looking outwards, we are facing continuous, and not always equal competition from the US and Japan, but also from emerging economic super-powers like China or India. Looking inwards, to measure the important challenges we are now facing, it is instructive to compare European trade marks' and patents' regulatory frameworks.

The Community Trade Mark has been in existence for 10 years now. It is a real success story which has exceeded all predictions. The Trade Mark is proof that Community IPR titles respond to the needs of business, especially when supported by an efficient organisation for processing applications.

I had the opportunity to visit the office for Community trade marks in Alicante some months ago and I was deeply impressed by the operation. The Community Design system, which is based on the same elements as the Community trade mark, is much younger (created in 2003) but it too has been enthusiastically embraced by the market.

Turning to patents, the situation is, unfortunately, rather different, not to say difficult. On one hand, the Community Patent, although very much favoured by business, is not yet a reality. On the other, the Munich system, a success with respect to the grant procedure, is incomplete, lacking a unified judicial system.

This current patchwork of solutions is clearly far from satisfactory. It may prevent patent holders from being able to enforce their rights. It certainly increases costs and no doubt discourages candidates, and in particular SMEs looking for efficient patent protection, from using the system.. It thereby gives less incentives for innovation than it could.

How can you on the one hand say we want the European economy to be the most competitive in the world when on the other hand we have a patent system that is outdated and expensive to enforce?

Against this background, the Commission launched a broad consultation on the future of patent policy in Europe. My aim was to collect views on what would be the best ways to take the patent system in Europe forward in the near future. I wanted to be sure that any possible initiative in the field of patents matched your needs and brought about a real step forward in the European IPR system.

The level of participation in the consultation exercise exceeded my most optimistic expectations. So I believe it's safe to say that I now know what you want. The challenge will be to deliver it.

The results of the consultation leave no doubt that there is an overwhelming desire for a patent system which is simpler, more cost-effective and which maintains the highest standards in the quality of its examination and grant procedures. What industry wants is a one-stop-shop. People don't care how this is achieved. But they want action.

I agree. I believe the time has come to make a concerted push to improve the patent system in Europe. In my view we should take a two pronged approach: Firstly, I want to bring fresh ideas to the table to advance the Community Patent. Secondly, in parallel, I want to involve the Community in the EPLA negotiations and bring them to finality.

It is clear from the consultation that stakeholders reject the current Community Patent deal on the table – the 2003 Common Political Approach. In their view, it does not offer what I just pointed out: a unitary, affordable and competitive patent offering greater legal certainty through a unified Community jurisdiction.

I want to work with the opportunity presented by the Finnish Presidency and its focus on innovation to move this debate along. Together with this Presidency, the upcoming German Presidency as well as the European Parliament I am willing to be imaginative.

In parallel to the Community Patent, industry calls for the Community’s involvement in the European Patent Litigation Agreement (EPLA). Hundreds of thousands of patents have already been granted by the European Patent Office. The jurisdiction is fragmented. The EPLA offers a unified jurisdiction for these patents. I believe this is a goal worth pursuing. It would offer valuable cost savings and increase certainty in regard to patent application.

To be effective, the EPLA needs Community involvement. It addresses shared responsibilities between Member States and the Community. With an active, constructive approach by the Commission, I believe we could provide a momentum to achieve a successful outcome.

The Community Patent and the EPLA are not mutually exclusive initiatives. They are both aiming for the same goal: a better, cheaper, more reliable patent system. That's why I want to pursue both. In terms of the jurisdictional arrangements the challenges are similar in both of them too: Find a unified system which gives clarity and reliability to industry while avoiding both overcentralisation and fragmentation.

The consultation that I launched threw up many other issues apart from patenting. For example the question of possible mediation mechanisms which could precede litigation, special needs of SMEs in the patent world, the issue of technology transfer. I will be responding to all these. I will discuss my ideas with my colleagues in the Commission and come forward with a Communication before the end of this year.

Last but not least: there can be no good and balanced IP system in the Single Market or in the global arena in the absence of modern and efficient rules on enforcement. The enforcement Directive entered into force in April this year and I can never insist enough on the importance of its transposition into the laws of all Member States.

It is imperative not only that we give ourselves the means to fight against counterfeiting and piracy but also that we set example to other countries. This we cannot do if the Directive is not operational and I urge all the Member States to transpose it as soon as possible.

The Competitiveness Council will be meeting in a couple of weeks' time. The key item on the agenda will be innovation. As I said at the start of my remarks, if Member States are serious about improving innovation in the EU then they must get serious about the current patent system in the EU.

I want to show that the fine language we produce in the EU on improved competitiveness does translate into real commitment and action. This is the challenge before us. Let's do it.

Item source: SPEECH/06/485 Date: 08/09/2006

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