Select Committee on European Scrutiny Nineteenth Report


EUROPEAN COMMUNITY PATENT


(21539)

10786/00

COM(00) 412


Draft Regulation on the Community patent.

Legal base:Article 308; consultation; unanimity
Department:Trade and Industry
Basis of consideration:Ministers' letters of 22 November 2001 and 31 January 2002
Previous Committee Report:HC 23-xxviii (1999-2000), paragraph 2 (1 November 2000)
To be discussed in Council:No date set
Committee's assessment:Legally and politically important
Committee's decision:Not cleared; further information requested


Background

  4.1  On 1 November 2000, we considered this draft Regulation on the basis of an Explanatory Memorandum from the then Minister for Competition and Consumer Affairs at the Department of Trade and Industry (Dr Howells). As background, he explained that, at present, patents for each country in Europe are obtained by separate applications to individual national offices, or by an application to the European Patent Office (EPO) established under the European Patent Organisation in 1973 and based in Munich.

  4.2  A single application to the EPO provides, when granted, patent protection for each country chosen by the applicant. Each patent granted by the EPO takes effect as if it had been granted by each of the national authorities in the Munich Convention countries designated by the applicant. In contrast to the bundle of individual, national rights available through the EPO, a Community patent would offer a single, unitary right across all 15 EU Member States which, if successfully challenged, would also fall in all 15. The proposed Community patent would offer an alternative route for patent protection in Europe, alongside the existing national and EPO systems.

The proposed Regulation

  4.3  The Minister went on to describe the basic elements of the Regulation as follows:

"Applications for Community patents will be administered by the EPO, who will grant Community-wide rights. The Regulation does not affect the current processes of the EPO up to patent grant. Once granted, Community patents are subject to this Regulation; prior to grant, the applicable law is the European Patent Convention.

"Applications may be made and processed in any of English, French or German. Translations into other languages will be limited to translating patent claims (which define the scope of the patent rights) into the others of English, French or German[10]. Translations of the complete technical descriptions will not be required.

"A specialised Community intellectual property court acting at first and second instance will have exclusive competence to deal with actions for revocation, invalidity and infringement as well as declarations of non-infringement, actions relating to use or prior user rights and requests for limitation. It will grant provisional measures, sanctions and remedies.

"National courts retain competence for other matters within their territory, including rights to employee inventions which are subject to the law of the state of the employee's principal activity, and for criminal actions. The Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (1968) applies."

  4.4  The Minister added that the maximum duration of the Community patent is set at 20 years, as with national and EPO patents. Article 10 establishes that rights are exhausted after the product covered by the patent has been placed on the market in the Community by the patent owner or with his consent.

  4.5  The Minister commented that the proposals for limiting translations would reduce costs significantly and contribute to English becoming the common language of patents in Europe. Both developments would be welcome to UK industry.

  4.6  The Lisbon European Council set a target date of the end of 2001, by which time it wanted a Community patent to be available. The Minister described this as ambitious. Negotiations on the text had only recently begun.

  4.7  In our conclusion, we recognised the value of a Community patent and that there was firm support for it from the business community. We, therefore, welcomed the proposal in principle but drew attention, in particular, to problems relating to the cost of translations. We noted, for instance, that under Article 44 (3), in an action for damages, an alleged infringer may, in certain circumstances, plead ignorance if a translation of the patent has not been made public in the Member State in which he has his residence or business. We asked the Minister to inform us of the reactions to the proposal of industry and the legal profession in this country, and to keep us informed of developments in the negotiations.

The Ministers' letters

  4.8  On 22 November, the Secretary of State for Trade and Industry (Ms Patricia Hewitt) sent us a document summarising substantive comments received from the UK legal profession and UK industry. Under the heading "General Comments", she says:

"All respondents re-emphasised the need for a Community Patent system which provides legal certainty and a cost effective linguistic regime. All were in favour of the centralised court of first instance and, while a single language regime (English only) was the most preferred, the three-language regime proposed in the regulation was acceptable.

"All interests responding emphasised the need to ensure choice for the applicant between the Community Patent route and European Patent route. The applicant should have the right to request that an application that designates all the members of the European Community may be granted as a European patent or as a Community Patent.

"There is a need to ensure that Community Patents will be compatible with the Supplementary Protection Certificate (SPC) Regulations which concern the extension of the period of patent protection for pharmaceutical and plant protection substances."

  4.9  Commenting specifically on the individual Articles, the Minister said that with regard to Article 44 "the onus to prove ignorance of the patent should be placed upon the infringer".

  4.10  The Minister also attached a copy of the Common Approach which had been agreed at the Internal Market, Consumer Affairs and Tourism Council (IMCT) on 31 May 2001. This was intended to form the basis for subsequent negotiations. The Minister did not respond to our comment on Article 44(3), nor did she comment on the text of the Common Approach. She did, however, refer to the Presidency being mandated to ask the Administrative Council of the European Patent Organisation to convene a Diplomatic Conference in June 2001. Its task would be to revise the 1973 European Patent Convention to accommodate the Community patent, on the understanding that negotiations would not begin before a negotiating mandate had been decided by the Council.

  4.11  In a letter dated 31 January, the Parliamentary Under-Secretary of State for Competition, Consumers and Markets (Miss Melanie Johnson) notes that the date the Diplomatic Conference is expected to convene is10 June 2002, not 2001. She writes to update us on the proposal, following the IMCT Councils in November and December and the European Council at Laeken later in December. The Minister takes the opportunity to address our concerns regarding Article 44(3), as well as expanding on some aspects of the Common Approach in the light of subsequent negotiations. We reproduce the attachment to her letter in full, as follows:

"Developments on the Regulation since the Committee reported (November 2000)

"1)  As far as the proposed regulation is concerned, very little discussion or detailed scrutiny has taken place since the Committee reported in November 2000. Instead, effort has been expended almost totally on seeking unanimous agreement on three key issues;

"a) The Language regime: A majority of Member States (MS) (Sweden, Denmark, Netherlands, Germany, United Kingdom, France, Ireland, Luxembourg, Austria) can agree with the Commission proposal to use the existing European Patent Office (EPO) three-language regime (English/French/German). A community patent application would be granted in one of the official EPO languages and a translation of the claims in the other two EPO languages would also be required. While this was acceptable to those MS which have an EPO language (UK, Germany, Austria, France, Belgium, Ireland, Luxembourg) as well as to some MS (Netherlands, Sweden, Denmark) who were prepared to use one of these languages (English), such a proposal was not acceptable to other MS (Portugal, Spain, Greece, Italy, Finland) who argue for a maximalist approach requiring all EU official languages. It was against this background that the Common Approach of 31 May 2000 was agreed. It refers to the language regime in general terms only and states that any solution on languages must be based on the principle of non-discrimination (see paragraph 5).

"b) The role of National Patent Offices (NPOs): Some states (UK, Finland, Sweden, Denmark, Netherlands, Spain) want a role for NPOs to assist the European Patent Office (EPO) in ensuring efficient and timely delivery of Community Patents, some states (Belgium, France with support of Germany, Italy) do not want NPO involvement as they consider this will affect the quality and standards of the granted patents; and

"c) Jurisdiction: Most states want community wide jurisdiction at first instance, a small number (Germany with the support of France) want national jurisdiction to apply at first instance and community jurisdiction to apply at second instance or appeal.

"The Laeken European Council

"2)  The Community Patent dossier was referred to the European Council at Laeken in December 2001 following the failure to take matters forward at the November 2001 IMCTC. The Council agreed that negotiations should continue to focus on the need to provide a community patent that would be affordable and which would be used by industry.

"Extraordinary IMCTC on the Community Patent — December 2001

"3)  An extraordinary IMCTC was convened on 20 December 2001 to discuss the Community Patent dossier in restricted session. No agreement was reached but a basis for further negotiations was supported by 12 MS including United Kingdom (Germany, France and Portugal were against). This basis represents substantial progress on an affordable language regime as it proposes that:

"a) the patent is granted in only one of the EPO languages and translated into the language of the applicant, but only if this is NOT an EPO language (thus, a translation of the claims into the other two EPO languages would not be required); and

"b) a technical summary or abstract of the patent is translated into all official languages of the EU for information purposes.

"It also offers progress on allowing the resources available in some National Patent Offices to be involved in the efficient delivery of the Community Patent. Assuming all MS can eventually agree, this basis for negotiation goes further on languages than the common approach agreed at the May 2001 IMCTC.

"The Common Approach of 3l May 2001

"4)  The discussions which have taken place since November 2001 have prompted us to offer further explanation on two aspects of the Common Approach of 31 May 2001:

"a) applications processed in the language of the national patent office could only be done so up until the search report was completed, then this report and the application itself would have to be translated into one of the official EPO languages in order to be processed further. The EPO must grant Community patents and will only do so on one of its three official languages with a translation of the patent claims in to the other two EPO languages;

"b) the general principles referred to in the paragraph on languages are those in the first paragraph of the text, i.e., 'respect for the community legal order, legal security... and non-discrimination between community citizens'. This wording was chosen to indicate that citizens of the EU who do not speak/use an EPO language will not be at a disadvantage when compared to those citizens who speak/use an official EPO language. Some MS considered that this meant translations of the patent should be available in all official EU languages. Other MS, including the United Kingdom, interpreted this to mean that, as the current EPO regime is accepted by all EU MS, it is not discriminatory.

"Article 44(3) and the need for Translations to claim Damages

"5)  The Committee expressed concern that Article 44(3), which relates to the period for which damages for infringement can be claimed, would require translations to be made available to ensure effective enforcement of the Community patents. Under this article, a patent holder would be able to claim damages from an alleged infringer if he can show that the infringer should have known, or had reasonable grounds to know, that the patent was being infringed. If one were unable to show such grounds, damages would be calculated from the time when the infringer was notified of the availability of a translation of the patent in the official language of the Member State in which he has his place of residence/business.

"6)  A patent holder upon deciding to litigate would be able to bring court proceedings in the community patent court and then make available a translation of the patent. The decision to provide a translation need not be made until the decision has been made to claim against the infringer. The patent holder may be able to prove that the infringer was aware of the patent, or should have been aware of the patent, before the translation was available, e.g., through sight of a drawing or chemical formula from a specification which does not require translation.

"7)  The proposed system offers a clear advantage over the current system in Europe because a translation would only be required when litigation with a potential damage award was in prospect. There would be a significant saving for industry as, currently, only a small proportion of granted patent applications are the subject of litigation. In the years 1998, 1999 and 2000, only 172, 86 and 105 cases respectively concerning such matters were lodged with the Patents Court in England and Wales. These figures include registered designs cases as well as patent cases and concern other matters, such as validity, as well as infringement.

"8)  No specific comment or criticism of this article on the point raised by the Committee was received from UK Industry during the consultation, In light of the previous paragraph, the overall cost saving to industry of the proposed language regime for all community patent applications would outweigh the reduction in its ability to claim damages until a translation is notified in the small proportion of cases that are being litigated."

Conclusion

  4.12  We thank the Minister for the full account she has given us in her letter of 31 January of the current state of play in the protracted negotiations on this proposal. We note her view that the basis for further negotiations proposed on 20 December represents substantial progress towards an affordable language regime and welcome this development.

  4.13  We ask the Government to continue to keep us informed and to ensure that we are given sufficient time to complete scrutiny before any final text is put to the Council for agreement. Meanwhile, we shall keep the document under scrutiny.


10  That is, for instance, into French or German if the claim is made in English. Back


 
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