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)

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 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.

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)

The European ratification, which brings the membership for the WCT to 88 and for the WPPT to 86 countries, was welcomed by the WIPO Director General, who declared that it will positively influence the growth of creativity within the digital environment in Europe and beyond. All 27 EU Member States have now implemented the copyright directive incorporating the WIPO ‘Internet Treaties’, which establishes the basic standards of protection for copyright and related rights of digital material.

(Source: EC IPR Helpdesk)

Similar to the Community trade mark and Community design, an EU patent will allow people to apply for a patent from the European Patent Office that, if granted, shall be valid in the entire EU. Actions on infringement and validity of European and EU Patents will be the exclusive competence of the EEUPC. The next step will be for the European Parliament to take a position on the proposal. The European Court of Justice will also need to state its opinion on the new European Patent Court.

The EU Patent Regulation should be accompanied by a separate regulation which will govern the translation arrangements for the EU patent adopted by the Council with unanimity.

(Source: EC IPR Helpdesk)

Providers need to register and provide overall information on their products and services in their national language. Then, users of the online service can find specific solutions by selecting a certain country and language. The service is free of charge. Currently, this tool features more than 1,000 eBusiness solutions providers and 1,500 products, including open-source software solutions.

Link: “eBusiness Guide for SMEs” platform

(Source: EC IPR Helpdesk)

The Commission is aware that current licensing mechanisms are too complex and create challenges for efficient and transparent music licensing. This agreement should simplify the online distribution of digital music for customers in the internal market.

According to the joint statement, companies, labels, online music shops, consumer groups and manufacturers will pursue new licensing platforms including repertoires of several collecting societies. Participants agree that transparent, non-discriminative criteria are necessary for the selection of entities entrusted to deliver multi-territorial licenses. Participants also agree to create a common framework for the identification and exchange of rights ownership information to make it easier for commercial users to identify the relevant right owners. These core principles should simplify online licensing mechanisms, cut down costs for the industry, and reduce prices for consumers, who in turn will be more likely to choose a legal way to download music.

(Source: EC IPR Helpdesk)

In the context of a recent report by the Scientific Committee on Emerging and Newly Identified Health Risks (SCENIHR), as well as current discussions on nanomaterials in the EU legislative proposals relating to novel foods and cosmetics and the implementation of existing legislation such as REACH, the Commission is planning to organise a scientific hearing.

To prepare for this meeting and to obtain as much information as possible on the issue, a public consultation has been launched to identify any topics that have not been covered in the opinions from the relevant EU Risk Assessment committees and bodies, determine the main potential risks that could emerge from the use of nanomaterials in the future and detect the issues to be discussed at the hearing, including the provision of background information and comments on those issues.

Interested parties can send their comments before 19th June, via the Consultation Web site. The outcome of the consultation will be presented at the Scientific Hearing in September.

(Source: EC IPR Helpdesk)

The European Commission has published its preliminary report on the competition inquiry into the pharmaceutical sector, which finds that competition in this industry does not work as well as it should. According to the preliminary findings there is evidence that originator companies have engaged in practices with the objective of delaying or blocking market entry of competing medicines.

Competition Commissioner Neelie Kroes said: “Competition in the pharmaceuticals market is vital for people to get affordable and innovative medicines, and to make sure that taxpayers get the best value for money out of their healthcare system. These preliminary results show that market entry of generic companies and the development of new and more affordable medicines is sometimes blocked or delayed, at significant cost to healthcare systems, consumers and taxpayers. We now have a solid view of what is happening and why: the next step is to discuss our findings with the stakeholders and to draw the necessary conclusions. It is still early days, but the Commission will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached.”

Delays or blocks to market entry

The preliminary report shows that originator companies (that develop and sell new medicines) used a variety of methods with the objective of delaying or blocking market entry of generic companies (that sell medicines equivalent to original medicines once patents have expired) and other originator companies, and therefore maintain high income streams for the originator companies.

The preliminary report also found evidence that originator companies also practice defensive patenting strategies to fence off competition from other originator companies. This may obstruct innovation, lead to higher costs for competing pharmaceutical companies and delay consumers’ access to innovative medicines.

Stakeholders also made a significant number of comments on the regulatory framework. In particular, both generic companies and originator companies called for a single Community Patent and the creation of a unified and specialised patent judiciary in Europe. These calls are supported by the preliminary findings of the sector inquiry, that discovered 11% of contradictory final judgments in litigation cases and total direct costs associated with the patent litigation of €420 million. Such contradictions and the costs related to the litigation could be avoided, or as a strict minimum reduced, with a Community Patent and an unified specialised patent judiciary.

Background

The sector inquiry began in January 2008 (see IP/08/49 and MEMO/08/20) to examine the reasons why fewer new medicines were brought to market and why generic entry seemed to be delayed in some cases.

A sector inquiry is an information gathering exercise that provides the Commission with in-depth knowledge about markets, with a view to better identifying obstacles to competition. Essentially, the Commission opens a sector inquiry when it has concerns that competition may not be working as it should, but the reason for that is not clear.

For further information, see also MEMO/08/746.

The preliminary report and more information on the pharmaceutical sector inquiry will be available at:

http://ec.europa.eu/comm/competition/sectors/pharmaceuticals/inquiry/index.html

(Source: European Commission)