View from Brussels - Patent

London could lose out in EU patent deal

18 July 2012 by Pelle Neroth

It certainly seemed like a piece of good news after yet another summit devoted to the woes of the euro. EU president Herman Rompuy tweeted even before he left the meeting the news, which he later described as a "historic breakthrough". At the press conference, pleasant phrases like "innovation" and "economic growth" were conjured up.

The issue in question is the Unitary Patent, and Unified Patent Court, which will allow inventors to make a single filing to cover protection in 25 out of the 27 EU states. This gets complicated. There is already a "European Patent", a non EU construction which covers 38 EU as well as non EU states. The European Patent is about making one filing that creates a bundle of national patents, with litigation taking place in national courts.

Under the new patent, litigation will take place at one court. Actually three, after some late night horse trading among Europe's big trio. Paris for most patents, London for pharmaceutical patents and Munich for mechanical engineering patents. A unitary patent has been discussed for decades. It could regularise outcomes and save money on filing charges, say supporters. The British Pharmaceutical Industry Association and the CBI were cautiously positive about the move.
Others are less positive about the Unitary Patent. A recent Commons European Select Committee enquiry* concluded that Unitary Patents are good in theory but flawed in practice. It concluded that after hearing largely negative witness testimonies that argued that the new situation would be worse than the status quo.

A big complaint was the new concept of "bifurcation" in the new system, imported from German law, which separates the testing of validity and testing for breach of patent, unlike British law where validity and breach are determined at the same time.

Say you are small UK company with a trading presence on the internet. You are sued for breach of someone's patent in a court somewhere in Europe - one with judges inexperienced in patent issues.

The injunction will be granted and your company will be out of business before it goes to the appeals process in Paris and it is determined the challenge was not valid after all, three years later. Since the patentee can choose which EU country to sue in, he might choose the one mostly likely to grant an injunction, a process also known as "forum shopping". This will hurt the very SMEs the legislation was supposed to help.

The current European patent is better because, as a series of independent national patents, you avoid the long arm of the single, pan European injunction.

The European scrutiny committee felt that some of the disadvantages would be mitigated if London was awarded the court. London is Europe's leading centre of patent expertise, along with Munich. English is the language in which most international patents are filed and, amazingly, the UK does not have any European institutions.

Instead the main court - which will transact an estimated 70% of business - will go to Paris, a country where patent expertise lags the Netherlands. Germany and the UK. It will bring legal business to the French capital (at London's expense) and give the French judicial system a disproportionate influence on the new case law.

MPs for the scrutiny committee felt the Unitary Patent should be delayed for these reasons, plus the fact that procedures and pricing plans were very sketchy. But the European Parliament and Commission want to move on, perhaps because they want to show a victory for the concept of closer Europe in these difficult times. The EP even wants to reinstate the articles that make the ECJ the final court of appeal, which David Cameron had taken out for adding an extra layer of bureaucracy.

British MPs have concluded that, if the UP did go ahead, it would be better if Britain if remained inside a flawed construction than marginalised by being outside it. It is a Hobson's choice, like so much about the EU these days.


Pelle Neroth -- EU correspondent

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    Posted By: Pelle Neroth @ 18 July 2012 07:18 PM     Patent     Comments (0)  

Patents setback from ECJ

8 March 2011 by Pelle Neroth

Today was decision day for the EU patent. It was bad news for those who believe in European innovation. Still, it could have been worse.

The European Court of Justice (ECJ) ruled that the planned new EU patent court that was supposed to be a single Europe-wide forum for litigation in cases of patent infringement was unconstitutional.

The new IP body could be providing rulings that changed national laws, and also clash with the EU's current body of legislation, the ECJ has said. The ECJ also complained it would have had no overseeing rights over the patent court.

The commission now heads back to the drawing board.

Without a common patent court, the common EU patent idea is weakened, but the actual establishment of a EU patent is a separate legal issue - and the member states (minus Italy and Spain) have vowed to press head with it, despite the ECJ decision, it was announced on Tuesday.

What a European patent without a common litigation mechanism will mean remains to be seen, but the commission said today it is working on a compromise proposal that it hoped would retain some advantages of the original proposal. EU-based lawyers predicted it would be an uphill struggle.

Spain has its own beef with the patents plan: it opposes French and German being official languages of the new proposed patent, on top of English, and said it would be prepared to go to the ECJ separately. That is another threat to any compromise proposal.

At the moment, patent infringements are battled out individually and in national courts, creating large costs for small companies when infringements are taking place in several countries. It also gives rise to inconsistencies and confusions.

Perhaps the patent court as envisaged didn't go quite by the rules, but it reflected a determination of most member states and the commission to get European industry and innovation going again. That the ECJ blocked it was a reflection of its huge, mostly unseen, and, its critics poiint out, unaccountable powers.

Last week, it ruled that different car insurance prices for men and women was illegal - which infuriated risk analysts and brought the Luxembourg-based court to the rare attention of the tabloid reading public.

Pelle Neroth -- EU correspondent

Edited: 08 March 2011 at 05:54 PM by Pelle Neroth

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    Posted By: Pelle Neroth @ 08 March 2011 03:08 PM     Patent     Comments (0)  

Crucial ruling could sink long-mooted common patent

2 March 2011 by Pelle Neroth

Patents are good because they promote innovation, it is said. They incentivise the creation and commercialisation of ideas because they give innovators a 20 year period in which they exclusively can commercially profit from their ideas.

However, patenting and litigating against infringements in Europe has until now been extremely expensive: different language regimes, different court systems. Again, it's something regarded as having held Europe back compared to the States.

Something called the community patent - with EU wide effect, and written in French, English or German -- should have broken the impasse when voted through by the European parliament on 15 February.

About time, say its fans: a community patent has been discussed for decades. It could cut costs by 90%, to 10,000 euros, compared to the costs of patenting in each individual member state. More importantly, because suing against infringements is the expensive and complicated bit, the single European patent court would bring into being a common jurisdiction covering the whole of Europe.

You don't have to sue locally when some pirate in a dodgy legal system like Bulgaria or Romania infringes your patent. You do it in one place, from wherever the new EU patent court is based, and so that's much cheaper.

However, no sooner has it got off the ground than European Court of Justice intervened; and on 8 March it is going to rule on two arguments. One is that a patent courts may be un-European, may operate and effectively legislate outside the established European body of laws, for instance in bioethics.

Second, the ECJ may rule that imposing French, German and English on other countries contravenes their absolute EU linguistic rights for companies to be heard in their own language on issues relating to their own territory. The Italians and Spanish have been particularly vexed about their languages not being official, and are said to be feeling particularly prejudiced against.

Not to go into too much detail, the two rulings, expected on March 8, could lead to several outcomes. The least likely, according to informed opinion as that the ECJ will greenlight the deal; another outcome will put the ball back in the commission and the European Parliament's court.

That could pave the way for Spanish and Italian MEPs to build political momentum for an English language only regime: it's cheaper than adding their languages to the list of the requirements, yet it would deny French and German companies a competitive advantage of having their language used in patent courts. It would have the advantage of moderating some concerns about fairness, since English is after all the lingua franca.

For the Brits, this is not such a bad prospect. Having English only is their best outcome - even better, they would not have been seen to be pressing for it.

If the rulings go another way, however, and this is more likely, again not to go into too much detail, a 21 language solution may be the only way forward. That would be disastrously expensive, there would be no political will to pass it, and the community patent dream would be effectively dead. Don't these European judges realise that going down this route is putting Europe's science future at stake?

Pelle Neroth -- EU correspondent

Edited: 06 March 2011 at 04:57 AM by Pelle Neroth

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    Posted By: Pelle Neroth @ 02 March 2011 01:13 AM     Patent     Comments (0)  

Will the ECJ ban stem cell patents?

26 January 2011 by Pelle Neroth

Something the size of the full stop at the end of this sentence. That is what is engaging sections of European judicial opinion at the moment.

The blastocyst, the early form of embryo, is the product of procreation. It's not yet an embryo, let alone a foetus: it's a form of life, seven days after conception. But does it therefore have human rights and moral standing? It's important because blastocysts are comprised of stem cells, cells that can emerge into almost any other variety of cell: tooling and priming these embryonic stem cells could eventually lead to solutions to Parkinson's, multiple sclerosis and much else. A Harvard scientist calls stem cells "the magic seeds that could restore life".

However, the harvesting of these useful stem cells also means destruction of the blastocyst. So many European countries of a more religious persuasion have severely restricted research on stem cells, angering their medical research communities. They include Germany, Lithuania, Poland, Ireland and Italy. (Germany defers not just to religious sensitivities: it has its Nazi past to think about.)

Germany, for instance, allows the import only of old stem cell lines that were created before 2007. (Since stem cells divide indefinitely, a line, deriving from a single blastocyst, can last forever.) That's one controversy: the medical community in those countries wants access to newer, higher quality embryonic stem cell lines, and possibly create their own. They argue that spare blastocysts are created every time a pregnancy takes place through IVF treatment. In those instances, these spare blastocysts are just thrown away.

So why not put them to good use? But Catholics in those countries insist life begins at conception, and they oppose IVF as well: it's all become very politicised. Britain, with the most liberal, or godless, legislation in Europe along with Belgium and Sweden, currently benefits.
Now a case involving a German biotech entrepreneur and scientist is driving the controversy in a slightly different direction: research is one thing, now we are talking commercial exploitation.

In 1997, Oliver Brustle filed a patent for his process of developing "neural precursor" cells from stem cells for injection into the brain, to combat neural deficits. The patent was revoked by the German courts as unethical after a challenge from Greenpeace.

It's reached the European courts, and may be a test case for stem cell commercial exploitation - and the future of biotech - in Europe. Unlike rules on ethical research, which remains a national issue, ECJ rulings have to be applied in every member state, obviously including the UK.

Without patents, the entrepreneur Oliver Brustle says, how else would companies be incentivised to make research in this exciting area that could save numerous lives? He lost his case originally because the German courts applied the EU's biotech directive against him, which says you can neither patent the use of human embryos for commercial purposes, nor that the "human body or any of its developments" can be patented.

There is something atavistically discomforting about the notion of patenting the human body or its natural processes, but, as Dr Brustle argued, blastocysts should not be classified as embryos: at five days old, they do not even have the very beginnings of a brain. Greenpeace's argument is that, even though stem cells may be cultured in the lab, these cells had originally derived from the destruction of a blastocyst. They also argue, making rare cause with the Pope, that life begins at conception: blastocysts, therefore, are a form of life.

So, with the ECJ judgment reportedly due in a matter of months, it's right to ask. Would a ban on patents be good for European stem cell innovation and a triumph for humanistic and religious values? Or is it just another European own goal in the field of science? (The US permits patents.) Alexander Denoon, lawyer at life science specialists Lawford Davies Denoon in the UK, a country which has already allowed some patenting, admits several of his biotech clients are "nervous".

Pelle Neroth -- EU correspondent

Edited: 26 January 2011 at 09:10 PM by Pelle Neroth

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    Posted By: Pelle Neroth @ 26 January 2011 08:53 PM     Patent     Comments (0)  

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