Industrial Propery Rights - Community Patent Background for the Competitiveness Council 26/27 Nov.

Brussels, 24 Nov 2003

The Council is expected to reach a political agreement on the proposal for a Regulation creating a Community Patent and also on a proposal for amendments to the European Patent Convention.

On the draft Regulation on Community Patent:

The aim of this proposal is to provide for the creation of a single industrial property right for the whole Community, to be granted by the European Patent Office (EPO) in Munich. It aims at eliminating the distortions of competition created by the territorial nature of national protection rights and ensuring the free movement of goods protected by patents.

Following an intensive work on this file by the Committee of Permanent Representatives (Coreper) many questions have been settled on the basis of the compromise solutions put forward by the Italian Presidency.

However a number of questions remain still outstanding and will need to be addressed by the Council:

• The need to specify in the text of the Regulation that this text does not exclude the application of Community competition law or national competition law as far as it concerns mergers.
• The provisions on the Government use of Community patents and the extent of the competence of national jurisdictions in this respect.
• The grounds justifying the granting of a compulsory licence by the Community Patent Court following to a request of a Member State. The Presidency compromise solution provides that the exploitation of a Community Patent may be authorised in cases where there is a crisis or other situations of extreme urgency.
• The maximum time limit for filing translations of the claims into all official Community languages. Delegations positions in this issue are shared ranging from 3 to 24 months.
• The solution to conflicts where the protection offered by the authentic version of a Community patent is narrower than the translation in the official language of the Member State where the conflict has arisen.

The Commission has announced that it will be presenting before the end of this year proposals for the creation of a judicial panel to decide in first instance on some actions in respect of Community patents.

On the proposed amendments to the European Patent Convention:

Alongside the Community Patent Regulation, amendments will have to be made to the European Patent Convention to enable the European Patent Office to play its part in the Community patent system. Once the Council has reached political agreement on these amendments, they should be presented to the Administrative Council of the European Patent Organisation at its meeting from 2 to 5 December 2003 with a view to the Administrative Council deciding to convene a revision conference in 2004.

There is a broad agreement on the draft amendments as they stand now however two main questions remain still open: first, the proposal for a special procedure for revising the Convention where this revision is for the purpose of bringing the relevant parts of the Convention into line with Community legislation in the field of patents and secondly the time limit within which a translation has to be filed in the language of a Member State where the proprietor requests conversion of a Community patent into a European patent designating that State.

The European Council has emphasised on several occasions that the Community patent must be an efficient and flexible instrument ­ obtainable by businesses at an affordable cost ­ which complies with the principles of legal certainty and non-discrimination between the Member States.

Agreement on March 2003 on a common general approach on the proposal was made possible by acceptance by one delegation which has previously resisted the common centralised jurisdictional system, as initially proposed by the Commission. During a transitional period however, the system should fall back on national expertise.

In the EU, patent protection for innovation is currently provided by two systems ­ national patent systems and the European patent system ­ of which neither is based on a Community legal instrument. The 1973 Munich Convention established a European Patent Organisation, laying down a single procedure for the granting of patents, which once granted become national patents subject to the national rules of contracting states. All of the EU's Member States are members of the Convention, which is governed by international law.

The proposal to create a Community patent system stems from the Commission's 1996 action plan for innovation and subsequent Green Paper on patents. The objective is to enable companies to transform their technological and scientific know­how into industrial and commercial success, thus stimulating private sector investment in research and development. Such investment is currently at a very low level as compared with the United States and Japan.

Companies would remain free to choose the type of protection best suited to their needs. Given that the EPO would be responsible for examining patent applications and granting Community patents, the new system would require the Community's accession to the Munich Convention as well as a revision of that Convention.

The proposal is based on article 308 (requiring unanimity in the Council and consultation of the European Parliament).

http:///ue.eu.int/pressData/en/intm/78001 .pdf