Unitary Patent: Size Matters?

Following up on our previous article, we review what obstacles the Unitary Patent had to face and may have to face in the future. Furthermore, we take a look at what the Unitary Patent system will probably mean for a small European country based on a formerly classified study from PricewaterhouseCoopers that provides an in-depth analysis of the topic, with disturbing implications.

Obstacles ahead
Unitary Patent: obstacles ahead

The difficulties

One of the biggest obstacles, which has been recently overcome, was the Spanish government’s claim against the Regulation. The Kingdom of Spain presented seven legal bases to annul the contested regulation. The most important were the breach of rule of law, the misuse of power through enhanced cooperation, the violation of uniformity, and the “jolly joker”, namely discrimination based on language.

Spain argued that the fact that EPO decisions are not subject to judicial review constitutes breach of the principle of rule of law. The fact that the Regulation governs such institutions and procedures that are not subject to the basic principles of European standards is against the principle of rule of law. The Court of Justice instead found that the legal institution is governed by the EPC. The regulation does not affect the still valid treaty, merely makes it possible to avoid the European Patent validation procedure.

European Court of Justice
The European Court of Justice

According to the Spanish government, the Council misuses his power invested in it by the Treaty of Lisbon. According to Spain, enhanced cooperation does not empower the Council to create such a framework that is not capable of providing unitary level of protection regarding IP matters. However, the Court claimed that according to its long standing practice, a law can only be annulled based on the misuse of power if objective, relevant and sufficient evidence supports that it was created contrary to the jurisdiction’s original intention. In this case, Spain did not prove that the Regulation was created in order to circumvent other binding European laws.

Spain’s last claim was rejected in a technically separate decision (C-147-13). The government of Spain claimed that the unified language regime discriminates against those entities that do not have the necessary means to understand the documents in English, French or German, thus have to pay for translations. The Court found that the aim, the method is legit, justified and proportional.

Philip II of Spain
Philip II of Spain

It is worth noting that a similar claim was brought before the Belgian Constitutional Court. The applicants claimed that the rules discriminated against those Belgian citizens who don’t speak French.

After overcoming a few obstacles, there are still some to arrive now. As UK conservatives led by David Cameron assured absolute majority in the House of Commons, the long discussed referendum and the Brexit may be at hand. The referendum will take place and it may come earlier than thought, namely next year. If the United Kingdom decides to leave, serious issues will emerge, one of them being the ratification of the Unitary Patent Court Agreement. As indicated above, in order the Agreement to come into force it must be ratified by Great Britain, but the country may not be an EU member at that time.

David Cameron and Angela Merkel

However, according to the World Intellectual Property Review, the Agreement must be ratified by those three countries that have the most European Patents. So the Netherlands can replace Great Britain if it comes to that. The Netherlands started a consultation on the ratification of the Agreement recently.

Italy seems to shifts its original adversary attitude after EPO’s president Mr. Battistelli used “his personal charm” to convince Italy.

Benoît Battistelli, President of the European Patent Office

So what does the Unitary Patent mean for a small country?

As the study suggests the Unified Patent System is not so advantageous for smaller non-innovative countries like Hungary, Poland, Romania or Latvia. According to the European Commission’s predictions, the current 600.000 European patent will double in number by the year of 2050. However, if we look at Hungary for example, European patent applications started by Hungarian inventors are only 0,06% of total applications. This means that hundreds of thousands of foreign patents will restrict the Hungarian inventors’ room like a mine field.

Patent Mines Danger
Danger! Patent mines!

This also means that non-innovative companies will have to invest a lot of money to explore and understand what earlier rights cannot be infringed during their activity. The study forecasts approximately 1 540 000 EUR expenses for that per year.

However – according to the study and to my opinion as well – economic loss can be compensated with non material leverages like showing strong support for a unified Europe.

Dr. Marton Csirik
Georg Pintz & Partners

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