Agreement on central court paves way for unitary EU patent system

The decision was called an 'historic breakthrough' after 30 years of negotiations

Negotiations on the E.U.'s future unitary patent system were concluded on Friday by a decision on where the central division of the European Unified Patent Court will be located.

The central division will be in Paris, with a specialized branch in Munich handling cases involving mechanical engineering and an arm in London dealing with pharmaceuticals, the president of the European Council and the Danish prime minister announced Friday.

"After 30 years of negotiations we have now an agreement on a European patent," said Helle Thorning-Schmidt, the prime minister of Denmark, during a press conference at the summit of the Council. Having a European patent means that companies can apply for a patent valid throughout the E.U. in one place, instead of applying to 27 different places in all the member states, she explained.

Council President Herman van Rompuy, who co-hosted the press conference, called the decision an "historic breakthrough." The Council includes the heads of government of the E.U. member nations and the head of the European Commission, which is the executive and regulatory branch of the E.U.

Van Rompuy proposed the compromise on the location of the patent court's central division in order to achieve a decision during the summit. The initial plan was to have one location for the central division. The first president of the court will be French, Thorning-Schmidt said.

Deciding where the central division should be located was the last outstanding issue that had to be solved to come to an agreement on the unitary patent system.

"The Unified Patent Court will have exclusive competence in respect of actions relating to the validity or infringement of a European unitary patent," the Council said in a press release. It added that the system will eliminate the possibility that multiple patent lawsuits concerning the same patent will occur in different member states and avoid the risk that court rulings on the same dispute might differ from one member state to another.

In addition, the agreement reached Friday will lead to considerably reduced costs for small and medium-size enterprises and give a boost to innovation by providing an affordable, high-quality patent in Europe with a single specialized jurisdiction, the Council wrote.

The new court system will reduce patent litigation costs for European companies by at total of approximately €289 million (US$360 million) each year, the Council said. Obtaining a patent that would be valid in 13 member states today can cost up to €20,000 (US$25,000), and approximately €14,000 of that sum would be spent on translations alone, the Council said, adding that in comparison, it costs approximately €1,850 to obtain a U.S. patent.

London and Munich will have thematic patent clusters, according to a document published by the Council. London will handle patent cases that involve chemistry, pharmaceuticals and human necessities while Munich will handle cases involving mechanical engineering while Paris will handle all other patent cases, according to the document.

In addition to the Unified Patent Court's central division, the new patent system calls for regional and local divisions, a Council spokesman said. The regional court in Düsseldorf, where many technology patent lawsuits are being litigated, for instance, would like to have a major role in the Unified Patent Court system. However, European officials were not immediately clear about the relationship between the regional courts and the central division under the new patent system. The relative roles that the two levels of court play in the system may have to be worked out over time.

Meanwhile, there will be an appeals court in Luxembourg, the Council spokesman said.

The Danish presidency had pressed very hard in the past six months to get an agreement on the patent issue, Thorning-Schmidt said.

The Unified Patent Court is part of the unitary patent system that has two other elements: a regulation on the unitary patent itself and a regulation on translation arrangements for that patent, the Council said. Those regulations were agreed upon last December.

The Unified Patent Court has been agreed upon under a so-called intergovernmental treaty among European countries, according to the Council spokesman. Next, the European Parliament will vote on the unitary patent "package" in July and the Council will adopt the two regulations shortly thereafter, according to the press release.

The Parliamentary vote is essentially ceremonial, since the body does not have the authority to overturn the Council agreement. However, the member states will have to sign the Unified Patent Court agreement in the second half of 2012. If the agreement is ratified by a sufficient number of states -- at least 13 nations -- it will enter into force, the Council said. If all goes well, the first patent title with unitary patent protection could be delivered in 2014, the Council said.

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Loek Essers

IDG News Service

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