A proposal on translation arrangements for a future EU Patent, the final element needed for a single EU Patent to become a reality, has been presented today by the European Commission. Today, obtaining a patent in Europe costs ten times more than one in the US.

The current European patent system, particularly in terms of translation requirements, is very expensive and complex. The EPO – an intergovernmental body which includes 37 countries (EU 27 + 10 other European countries) – examines applications for a patent and is responsible for granting a European Patent if the relevant conditions are met. But for the granted patent to be effective in a Member State, the inventor then has to request validation at national level. This implies translation and administrative costs.

Because of the costs involved, most of the inventors only patent their invention in a very limited number of Member States. A European Patent validated for example in 13 countries costs as much as € 20 000, of which nearly € 14 000 arises from translations alone. This makes a European Patent more than 10 times more expensive than an American patent which costs about € 1850.

Negotiations on the EU Patent

The Commission proposed a Regulation for a Community Patent in August 2000 (now referred to as the EU Patent under the Lisbon Treaty). In December 2009, Member States unanimously adopted conclusions on an enhanced patent system in Europe (see IP/09/1880). The package agreed covered the key elements to bring about a single EU Patent and establish a new patent court in the EU but excluded translation arrangements. On the new patent court, an opinion from the European Court of Justice on the compatibility of the draft Agreement with the EU Treaties is awaited later this year. Today’s proposal completes the necessary package by setting out the translation arrangements for EU Patents.

Translation arrangements for EU Patents

Under today’s proposal for a Council Regulation, processing costs for an EU Patent covering 27 Member States would be less than € 6200, of which only 10% would be due to translations.

The Commission’s proposal builds on the existing language regime of the EPO. The Commission proposes that EU Patents will be examined and granted in one of the official languages of the EPO - English, French or German. The granted patent will be published in this language which will be the authentic (i.e. legally binding) text. The publication will include translations of the claims into the other two EPO official languages. The claims are the section of the patent defining the scope of protection of the invention.

No further translations into other languages will be required from the patent proprietor except in the case of a legal dispute concerning the EU patent. In this case, the patent proprietor may be required to provide further translations at his or her own expense. For example, the proprietor may have to supply a copy of the patent into the language of an alleged infringer, or into the language of the court proceedings when this is different from the language of the patent.

The Commission’s proposal also sets out accompanying measures to be agreed in order to make the patent system more accessible to innovators. First, high quality machine translations of EU patents into all official languages of the EU should be made available. Inventors in Europe will therefore have better access to technical information on patents in their native language. In addition, in order to facilitate access to the EU patent for applicants from countries in the EU that have a language other than English, French or German among their official languages, inventors will have the possibility to file applications in their own language. The costs for the translation into the language of proceedings of the EPO (to be chosen from English, French or German by the applicant when they file the application) will be eligible for reimbursement.

(Source: European Commission)

Registrants who are part of a joint submission can decide to submit their Chemical Safety Report (CSR) jointly or separately. New Manual 19 ‘How to jointly submit Chemical Safety Reports’, outlines the principles which should be followed in that event.

However, there can be complexities related to the preparation of a joint CSR. For example, in practice it may be challenging to organise communication among the registrants in a way that all the necessary detailed information on uses and conditions of use are exchanged with the lead registrant. It may also be difficult to determine the responsibility for the declarations on implementation and the communication of risk management measures in part A of the joint CSR.

To support the registrants, ECHA has produced Data Submission Manual 19 ‘How to jointly submit Chemical Safety Reports’, describing how to prepare and submit a joint CSR in the IUCLID 5 registration dossier.

See also: http://echa.europa.eu/reachit/joint_submission_en.asp

(Source: ECHA)

The number of patent settlements in the pharmaceutical sector that are potentially problematic under the European Union’s antitrust rules fell to 10% of total patent settlements in the sector in the period July 2008 to December 2009 compared with 22% in the period covered in last year’s inquiry into the pharmaceutical sector (January 2000-June 2008).

“Patent settlements are an effective means to end patent-related disputes and litigation. Nobody disputes this. However, some of them may be anticompetitive. Our report appears to show the sector’s increased awareness of the potential competition concerns, but the Commission will remain attentive to ensure that the sale of safe, affordable medicines is not delayed by unfair practices. This is all the more important in times of crisis and of serious budgetary constraints,” said Joaquín Almunia, Commission Vice President in charge of Competition Policy.

The Commission today has adopted a Report on the monitoring of patent settlements in the pharmaceutical sector. The monitoring exercise was launched in January 2010 and collected data on settlement agreements between originator companies and generic ones for the period from 1 July 2008 to 31 December 2009 (see IP/10/12). The report follows the Commission’s competition inquiry into the pharmaceutical sector concluded in July 2009 (see IP/09/1098 and MEMO/09/321).

The survey discovered that 93 patent settlement agreements were concluded between originator and generic companies during the 18 months covered by the survey. This compares with 207 agreements concluded during the 7.5 years covered by the sector inquiry (January 2000 to June 2008).

However, the number of settlements that may be problematic from a competition perspective decreased significantly in importance and number. In the 7.5-year period covered by the sector inquiry, such settlements accounted for 45 out of 207 or 22 % of the settlements reported. By contrast, in the period July 2008 to end 2009, only 10 % or 9 out of 93 of the settlements fell into the category that might attract scrutiny. The direct value transfers involved in the settlements also decreased.

The settlements that may prove problematic are those that limit generic entry and foresee a value transfer from originator to a generic company. The value transfer can take different forms such as direct payments, but can also consist of other commercial advantages. The Commission would also frown at agreements that contain restrictions beyond the exclusionary zone of the patent, i.e. which would grant protection against

generic entry outside the time, product or geographic scope of the patent.

Not all settlements falling into the potentially problematic category warrant an immediate in depth antitrust investigation by the Commission. Each case will be assessed on its merits. When considering action the size of the markets concerned, the value transferred from originator to generic companies and the restriction on independent generic entry will be considered. In cases with a purely national dimension, the Commission may also share certain information with national competition authorities. The Commission already has two open investigations with respect to patent settlements (see MEMO/09/322, Servier and IP/10/8, Lundbeck).

The monitoring exercise has also showed the sector’s concern that the Commissions’ heightened focus would result in an increase in court litigation was largely unfounded as the number of settlement agreements has actually increased.

The Commission will repeat the monitoring exercise, which proved to be of limited burden for the companies concerned, in 2011.

(Source: European Commission)

The European Commission has adopted new competition rules for agreements between vehicle manufacturers and their authorised dealers, repairers and spare parts distributors. The new rules will increase competition in the market for repair and maintenance by improving access to technical information needed for the repairs and by making it easier to use alternative spare parts.

They will allow the Commission to tackle manufacturers’ abuse of warranties when they request that cars are serviced only in authorised garages. The new rules will also reduce distribution costs for new cars by eliminating overly restrictive rules.

“I strongly believe the new framework will bring tangible benefits for consumers by bringing down the cost of repairs and maintenance that represent an excessive share of the total cost of a car over its lifetime. It will also reduce the cost of distribution by doing away with overly restrictive rules,” said Vice-President of the Commission and Competition Commissioner Joaquin Almunia.

Today the Commission has adopted a new block exemption Regulation and Guidelines on the application of competition rules to the car sector. The new rules introduce a 30% market share threshold above which agreements between car manufacturers and authorised repairers will no longer be block exempted, aligning the rules with the general framework (Vertical restraints block exemption Regulation 330/2010 adopted on 20 April, see IP/10/445 and MEMO/10/138). This will make it easier for the Commission to tackle possible abuses to the detriment of consumers, such as the refusal to grant independent repairers access to technical information. It will increase competition between authorised and independent repairers.

The new rules will strengthen repairers’ access to alternative spare parts which can represent a big share of the repair bills. Car manufacturers will no longer be able to make the warranty conditional on having the oil changed or other car services only in authorised garages. Of course, manufacturers may request repairs covered by the warranty - and paid for by the manufacturer - be carried out within the authorised network. All this is important for consumers because repair bills account for an estimated 40% of the total cost of owning a car and costs have been rising in recent years.

Regarding the distribution of cars, the Commission’s evaluation has shown that car sales markets are highly competitive. Margins for vehicle manufacturers and dealers are slim, and for several years production over-capacities and technological improvement have led to consumer benefits in terms of falling real car prices and increasing choice. The financial crisis has added to the downward pressure on prices. In this context, the existing rules are clearly overly complicated and restrictive and have had the indirect effect of driving up distribution costs, which make up on average 30% of the price of a new car.

The Commission therefore proposes to simplify these rules and treat the distribution of cars like any other market. The current distribution model will continue to be exempted in most cases, but certain sector-specific clauses which have proven ineffective or counter-productive will not be carried forward. The new regime will give carmakers more flexibility to organise diverse networks in which multi-brand dealers co-exist alongside dealers fully committed to promoting the brands of a single manufacturer.

The new rules will come into force on 1 June 2010 as concerns the repair and maintenance markets, and on 1 June 2013 with regard to the vehicle sales markets and will be valid until 31 May 2023. The Commission will monitor developments and take appropriate remedial action if it detects problematic behaviour or changed competitive conditions, as it has done in the past.

In the past few years, the Commission has brought four cases against DaimlerChrysler, Fiat, Toyota and GM to ensure that they allow independent garages adequate access to repair information (see IP/07/1332). However, other potential problems involve access to spare parts and the refusal to honour warranties if consumers have work done outside the authorised repair networks. The Guidelines and block exemption adopted today give detailed clarification for stakeholders on how the Commission intends to apply the rules in these areas.

The new Block Exemption Regulation can be found at:

http://ec.europa.eu/competition/sectors/motor_vehicles/legislation/legislation.html

The detailed Guidelines will be published at the same address after the finalisation of the different linguistic versions.

For further information see also MEMO/10/217.

(Source: European Commission)

SEC is active worldwide in the manufacturing of household appliances, mobiles phones and communication systems, semiconductors and LCD display panels. In particular, SEC sells memory semiconductors; including Dynamic Random Access memory semiconductor chips (DRAM) and flash memories which are incorporated, inter alia, into digital cameras. SDIC specialises in the production of digital still cameras and is active worldwide.

The Proposed Transaction gives only rise to a structural vertical link between the parties in relation to two types of memory semiconductors: Dynamic Random Access Memory semiconductor chips (DRAM) and flash memories.

Following the market investigation, the Commission found that the new entity will not be in a position to limit access to these memory semiconductors for digital cameras competitors of SDIC given the presence of numerous alternatives in the memory semiconductors markets and the fact that memory semiconductors can be used in various applications outside cameras.

Therefore, the Commission found that the proposed transaction does not raise competition concerns.

More information on the case will be available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_5804

The consultation aims to gather feedback from stakeholders on the review of the European Standardisation System and to gather input on its possible development and strengthening for the benefit of all interested parties. European standards are aimed at enhancing SME competitiveness by facilitating access to the Single Market. The system is supported by national standards organisations and the participation of the industry.

The consultation will run from 23rd March until 21st May 2010.

Certain information exchange can be justified in order to allow insurers to accurately assess risks. Pooling is also important in order to ensure that all risks can be covered. These two types of agreements justify a block exemption. Other types of cooperation may also be legal but it will be for insurers to self-assess that they comply with the general competition rules.

“The block exemption continues to be justified for pools and certain types of information exchange necessary for the industry to be able to carry out its business. This is in the interest of consumers and of the economy as a whole. The Commission together with the national competition authorities will see to it that the industry does not use the exemption as a blanket protection and will enforce competition rules where and whenever necessary“, said Joaquín Almunia, Commission Vice-President in charge of Competition Policy.

After a detailed review of the functioning of the current BER adopted in 2003 and which expires at the end of March, the Commission has adopted new rules that continue to exempt two forms of cooperation specific to the insurance sector, namely agreements in relation to joint compilations, tables and studies and co(re)insurance pools. This new regulation will be valid until 31 March 2017.

Certain information exchange is important for the insurance sector because large amounts of data are required in order for companies to assess the costs of covering risks. Access to the data is also crucial to facilitate the entry of new or foreign market players. Key changes to the exemption for information exchange are:

- a new right of access to the results of the information exchange for customer and consumer organisations, except for public security reasons; and

- clarifications to the scope of the exchange of information covered by the BER.

The new BER also exempts, subject to certain strict conditions pools (common coverage of risks by insurance companies) which cover either “new” risks or fall below certain market share thresholds if they cover risks which are not “new”. This helps to ensure that all risks can be covered by insurance companies. The key changes to this exemption area

- a change to the approach to market share calculation in order to bring it into line with other general and sector-specific competition rules so that not only gross premium income earned within the pool by the participating undertakings, but also outside the pool will be taken into account;

- a broadening of the definition of “new risks” to cover risks the nature of which has changed so materially that it is not possible to know in advance what subscription capacity is necessary in order to cover such a risk.

The review of the previous BER showed that neither agreements on standard policy conditions nor agreements on security devices are specific to the insurance sector. They are therefore excluded from the new BER. The Commission, however, plans to address both of these types of agreements under the EU Guidelines on horizontal cooperation agreements, which are currently being reviewed.

The Commission will cooperate with national competition authorities, which have been closely involved in the BER review exercise, to ensure that insurance companies and in particular pools, assess correctly whether their agreements meet the exemption conditions and do not use the BER as a blanket protection.

Before the entry into force of Council Regulation 1/2003 on the application of the competition rules, companies had to notify agreements or concerted practices to the Commission to obtain clearance under the competition rules. As of 1 May 2004, Regulation 1/2003 abolished the notification system and introduced the principle that companies need to assess for themselves whether their agreements are compatible with the ban on restrictive business practices (Article 101 of the Treaty). This principle applies to all sectors, including the insurance sector. Sector specific rules are now rare and in order to determine whether the BER should be renewed, the Commission examined whether the insurance sector presents specificities that trigger an enhanced need for cooperation and if so, whether a specific legal instrument is necessary in order to protect or facilitate that cooperation.

(Source: European Commission)

The full text of the new Block Exemption Regulation as well as the explanatory accompanying Communication are available at:

http://ec.europa.eu/competition/sectors/financial_services/legislation.html

The European Parliament (EP) is calling on the European Commission to continue working on the ACTA. However, existing EU laws need to be respected. According to the EP, issues related to data protection and privacy shall be better safeguarded in ACTA and the “three strikes” rule shall be abandoned. In addition, the EP requests to be kept informed of the negotiations and to be granted access to the texts agreed upon. The EP reserves its right to take any suitable action, including bringing a case before the Court of Justice, to safeguard its prerogatives.

Earlier this year, the European Data Protection Supervisor also adopted an Opinion on this same Agreement, including recommendations on its content, concerning the application of a less intrusive means to fight piracy over the Internet than the “three strikes” rule, the safeguarding of data transfer in the context of the ACTA and the establishment of a public and transparent dialogue on the Agreement.

(Source: EC IPR Helpdesk)

ο The terms “EC Party,” “European Community,” “Commission of the European Communities” and “Treaty establishing the European Community” are to be modified into “EU Party,” “European Union,” “European Commission” and “Treaty on the Functioning of the European Union” respectively.

ο The three-year-cut is completed within 36 months (i.e. full three years) and the five-year-cut is completed within 60 months (i.e. full five years). (According to the previously agreed tariff reduction formula, the three-year-cut is made through three equal annual cuts, thus completed within 24 months. The five-year-cut is made through five equal annual cuts, thus completed within 48 months.)

ο In case of automobiles with large and medium sized engines which are subject to the three-year-cut, it is agreed to apply the non-linear frontloading tariff cuts (30%-30%-20%-20%).

Korea and the EU agreed to hold a chief negotiators’ meeting in early March in Paris to prepare for the formal signing of the Korea-EU FTA.

(Source: Korean Ministry of Foreign Affairs and Trade)

The application provides respondents with a modern, secure and efficient web-based workspace to submit their replies to the Commission. It is designed to accommodate the input of both large corporations and smaller companies, while improving and streamlining the Commission’s market investigations.

Companies requested to provide information will receive an email informing them of the launch of an investigation, inviting them to log on to eQuestionnaire using a unique access code. After first confirming their contact details and the receipt of the request for information, companies can fill in the questionnaire directly online or – if preferred – export the questionnaire to a text editor, complete the responses there and upload the replies into the application afterwards.

(Source: European Commission)

Further information under: http://ec.europa.eu/competition/mergers/equestionnaire_en.html