More Work On Draft Council Regulation On The EU Community...

Some more political issues appear to have been sorted out with this version.

Obviously a lot of work has been done in order to reach some rough consensus on money issues: As in the previous Draft, Recital 5b says that the EPO shall retain from each renewal fee paid for a Community patent an amount not exceeding 50 percent. This proportion may be revised according to rules laid down in the EPC. The remaining amount will be distributed among the national patent offices of the Member States in accordance with a distribution key. So far nothing has been changed.

Instead of fixing this distribution key once and for all or entrusting the Administrative Council of the European Patent Organisation (EPOrg), the drafters of this version have chosen to undertake an institutional approach with a Select Committee right from the start (Recital 5c):

'A Select Committee of the Administrative Council of the European Patent Organisation shall, once the Community patent Regulation enters into force, fix both the level of the renewal fees and the distribution key for their allocation. The Select Committee shall periodically review its decisions taking into account economic development and changes in patent activity.'

In order to have guidelines and safeguards for the deliberations in the Select Committee, the Draft provides that, when fixing the level of the renewal fees, it needs take into account that the renewal fees shall:

• facilitate the protection of innovation in Europe;
• foster the competitiveness of European business, especially SMEs, in the global economy;
• together with the fees due to be paid during the application phase, cover the costs associated with the granting and administration of the Community patent, thus contributing to the financial stability of the EPO, and
• reflect the size of the market covered by the Community patent, duly taking into account comparable patent systems.

And, with regard to fixing the distribution key, the Select Committee shall take into account that a basket of fair, equitable and relevant criteria shall be reflected. Amongst these criteria the following should be given particular importance:

• proportionality with regard to the level of patent activity;
• proportionality with regard to the size of the market;
• compensation for the lack of an official language in common with the EPO, and
• in cases of disproportionate low levels of patent activities, due account must be taken to the need to promote patent activity and facilitate innovation.

Ok, these indications might mean all or nothing - they appear to be the political price of reaching a compromise where many of the contracting parties are in constant fear of being ripped off by creating a powerful institution like the Select Committee.

Obviously the provisions for the grant of compulsory licences have been of some concern. Article 21 of the Draft has been amended in making clear that the planned unified EU Patents Court may grant a compulsory licence for lack or insufficiency of exploitation of a Community patent to any person filing an application four years or later after the patent application was filed and three years or later after the patent was granted if the patent proprietor has not exploited the patent in the Community on reasonable terms or has not made effective and serious preparations to do so, only unless he/she provides legitimate reasons to justify his/her inaction. Moreover, clarification has been made that in determining the lack or insufficiency of exploitation of the patent, no distinction shall be made between products originating within the Community and products imported to the Community from a member of the World Trade Organization. And, where a proprietor of a Community patent is granted a compulsory licence in respect of a first national patent or national or Community plant variety right, the owner of the first patent or plant variety right shall be entitled to a cross-licence on reasonable terms to use the patented invention of the dependent Community patent for the territory of the first patent or plant variety right.

Normally the grant of a compulsory licence is a quite rare event, I am inclined to assume. Does the rigour with which the drafters of this text seek to clarify a large number of details concerning the grant of compulsory licenses give us a hint that there might be some expectation of a more frequent use of such instrument in future?

On July 01, 2009, Sweden will take over EU Presidency from the Czech Republic. The corresponding statement looks a bit vague, if not meager:

'The Presidency will work towards making as much progress as possible in the negotiations on the Community patent and the European Patent Court. The creation of a cost-effective Community patent and a patent litigation system is important for the innovation climate in Europe and thus for EU competitiveness.'

'As much progress as possible'? - Ouch. We shall wait and see.