Shelving of EU patent court draws ire

Decision sparks angry response from the European Commission, the Union's executive body and trade groups

Political naivety and national protectionism were blamed for quashing the latest attempt to forge a single patent regime for the European Union, according to members of Europe's business community.

On Monday, national governments shelved a compromise solution tabled by the European Commission that would have allowed the creation of a single patent court. The decision sparked an angry response from the European Commission, the Union's executive body, as well as from trade groups including UNICE, which represents Europe's biggest firms.

"It is unacceptable for the E.U. to be lagging behind its competitors in the patents field," said Jerome Chauvin, UNICE's head of legal affairs in a telephone interview. "It's frustrating to see the member states of the E.U. putting the same excuses on the table each time."

There have been numerous attempts to break the political deadlock in the debate on Europe's patent regime over the past 30 years. This time around the frustration is deeper because innovation and competitiveness are now supposed to be top political priorities, and no one disagrees that fixing the patent system is essential for improving Europe's ability to compete.

As Europe continues to squabble over what languages a single European patent should be translated into, and whether or not a pan-European patent court would be better or worse than the 25 national patent courts in the member states, China is plowing massive investment into research and development and will this year outspend Japan, the world's second biggest investor in R&D, according to a report released this week by the Organization for Economic Cooperation and Development (OECD).

"In Europe politics is at odds with economic reality," said Francisco Mingorance, a European affairs expert with the trade group, the Business Software Alliance.

"All the indicators show that the E.U. could be made a better place if it solved the problem with its patent regime. The problem is that the message doesn't appear to register with entrenched politicians," he added.

France and Spain were the main opponents of the Commission's plan to make the Union a signatory to the European Patent Litigation Agreement (EPLA), a plan by the European Patent Office (EPO) to create one patent court to handle all patent litigation in the 31 member countries of the EPO.

The French government opposes the move because the EPLA would be outside of E.U. jurisdiction and would therefore pose constitutional problems. It wants the E.U. to stick to its more ambitious, and difficult, aim of creating a single patent for all countries in the E.U..

In September it came up with an alternative to the EPLA plan that involved creating a single patent court under E.U. law, thus avoiding signing up to a non-E.U. agreement.

Other countries including Spain supported the French objection for differing reasons, including claims that the existing, fragmented system is cheaper for their local companies that mostly operate inside their home country.

Finland, currently holder of the six-month rotating presidency of the E.U., has been criticized for pushing for an agreement before preparing member states. "This time 'round the mess was made by the Finnish presidency," Mingorance said.

In their eagerness to claim credit for pushing the patents debate forward, the Finnish government "caught the Commission off guard and it failed to prepare other countries for the debate. They seem to have upset everybody," he added.

Consequently on Monday, each national government turned up at the meeting in Brussels with their original fixed positions regarding patents still in place. "The Finns didn't expect France and Spain to object. You could call it political naivety," Mingorance said.

Charlie McCreevy, the commissioner who has spent most of this year trying to break the patent deadlock, described the decision taken on Monday by government ministers as a setback, and France's alternative solution to patent litigation as ill-timed.

"The French proposal came in September. I'm not knocking new ideas and this one's interesting, but it's a pity I didn't hear about it before I started the consultation," he said in an interview Thursday at an intellectual property conference.

A year ago McCreevy said he would make one final effort to solve the problem of the E.U.'s fragmented patent regime, launching a consultation with industry, academia and the legal profession. The consultation ended in July with a hearing in Brussels at which the idea of signing up to the EPLA agreement was debated thoroughly.

The commissioner said that after the meeting of national government ministers on Monday he is "pessimistic" of making any meaningful progress in reforming the E.U.'s patent regime.

"I'm pessimistic because this EPLA idea was a genuine piece of lateral thinking to move the situation forward. I won't continue beating my head against a stone wall because it's not good for my head," he said.

During his speech to roughly 500 lawyers and businessmen and women, he urged companies to lobby their national governments, to try to persuade them to compromise their long-standing entrenched positions regarding patents in Europe.

He held out a small hope of moving forward in the first half of next year, when Germany takes over leadership of the E.U. "We'll revisit this under the German presidency and give people time to think," he said.

Copyright © 2006 IDG Communications, Inc.

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