There is an urgent need for action to provide a simple, cost-effective and high-quality patent system for the European Union says a European Commission Communication issued this month.

Currently, a European patent designating 13 countries is 11 times more expensive than a US patent and costs 13 times more than one in Japan, because of expenses relating to translation and dispute settlements in the EU’s 27 different national legal systems, and this is proving a particular disincentive for small and medium-sized enterprises (SMEs).

“Patents are a driving force for promoting innovation, growth and competitiveness, but the single market for patents is still incomplete,” says European Internal Market and Services Commissioner Charlie McCreevy. “The EU simply must deliver, in particular on the Community patent and sound litigation arrangements because, in today’s increasingly competitive global economy, Europe cannot afford to lose ground in an area as crucial as patent policy. That is why I propose to have a fresh look at the various options and to work with the Council and the Parliament towards political consensus on real improvement of the patent system,” he adds.

There is widespread support for a simple EU-wide patent system that would save companies the cost and effort of having to apply to the various national regimes, but Members of the European Parliament (MEPs) and member states have been unable to reach consensus, mainly on what language the patent should be written in.

The Commission says it still believes that “a truly competitive and attractive Community patent can be achieved, provided there is political will to do so,” and it has pledged to take account of concerns about over-centralised EU jurisdiction. The way forward, it suggests, could be through the creation of a unified, specialised patent judiciary, with a number of tribunals set up to handle patent disputes such as infringement-related claims across the EU, while appeals would be heard by a single court, for example the European Court of First Instance. The final judgement on patent jurisdiction would be provided by the European Court of Justice.

The Communication aims to draw “operational conclusions” from last year’s public consultation on the patent system in Europe and also to speed up work in the Council in this area, and industry groups have broadly welcomed the initiative. “Companies have voiced what they need and it is now time for action. Member states cannot claim that R&D and innovation are key for economic growth and at the same time block progress on the patent agenda,” said Ernest-Antoine Seillière, president of BusinessEurope.

The European Association of Craft, Small and Medium-sized Enterprises (UEAPME) has particularly welcomed the proposal to translate the Community patent into one language only, which it says should be English. Translation requirements raise further administrative costs, which are often “unbearable” for SMEs and hamper their access to patents, says the group.

However, UEAPME also regrets that no progress has been made in two major areas – the introduction of reduced patent fees for SMEs and the creation of a patent litigation insurance system for such firms, which has already been under discussion for nearly 10 years and is “indispensable” for an efficient SME patent policy, it says.

– The Commission also plans to launch a separate, comprehensive Communication on Intellectual Property Rights (IPR) during 2008. By Lynne Taylor