European Patent System Too Costly, Parliament Told

by Ulrika Lomas, for LawAndTax-News.com, Brussels

03 February 2006

At a public hearing on intellectual property rights held on Tuesday by the European Parliament's Legal Affairs Committee, experts agreed that the current European patenting system is too costly for firms and could be hampering competition instead of boosting innovation.

A patent delivered by the European Patent Office or national offices can cost up to EUR100,000, twice as much as in Japan and three times as much as in the US.

The hearing was organised to facilitate debate in the Legal Affairs Committee on the fight against counterfeiting and on the long-running question of creating a Community patent system. At present, patents can be issued by the European Patent Office - a non-EU body - or national patent offices.

In practical terms, many small and medium-sized enterprises (SMEs) cannot afford the cost of obtaining and defending a patent and therefore have no access to the innovation market, leaving bigger firms with a monopoly.

Experts from the academic, industrial and professional worlds at Tuesday's hearing agreed on the general principle that patents are effective instruments to protect intellectual property (IP) rights but criticised the existing European patent system for lacking legal certainty.

Giuseppe Gargani, chair of the Legal Affairs Committee, explained that:

"Firms are interested in having standard legislation in Europe on patents ... to compete with other countries like the US".

He went on to add, however, that: "I think high fees are the main problem."

Meanwhile, Klaus-Dieter Langfinger, from European employers' association UNICE, stressed the correlation between protection of IP rights and economic growth.

Quoting a study by the World Economic Forum, he revealed that the 20 countries with the highest IP protection standards are among the 27 richest states in the world.

Additionally at the hearing, a discussion panel was devoted to the question of whether EU legislation is needed to harmonise national criminal law on the enforcement of IP rights.

Thomas Vinje, IP expert at the London law firm Clifford Chance, argued that: "Patent infringement should be excluded from the scope of any criminal enforcement directive".

He also suggested that criminal penalties should only apply to the fight against counterfeiting and piracy.

Reto Hilty, Director of the Max Planck Institute for Intellectual Property in Munich, agreed with Mr Vinje that new EU initiatives in this field were unnecessary.

He explained that "international agreements, such as TRIPS, already contain provisions against trademark and copyright pirating which are binding on the Member States and the EU".

The European Commission has just withdrawn, for technical reasons, a proposal on criminal sanctions for the enforcement of IP, but is expected to present a new text on the issue in the near future.

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