Issue 198 | May 17, 2004
European Community Patent and Software Patentability Update

On May 14, 2004 from the European Union issued press release entitled "Preparation of Competitiveness Council, Brussels, 17-18 May 2004" with the following updates on the Community Patent and Software Patentability Directives.

Proposal for a Directive on the Patentability of Computer Implemented Inventions

The [competitiveness configuration of the] Council of the European Union is expected to adopt without discussion, on the basis of an Irish Presidency [unpublished] compromise text supported by the Commission, a political agreement on the proposed Directive on the Patentability of Computer Implemented Inventions. The compromise text includes 21 amendments proposed by the European Parliament at its first reading in September 2003 but restores the overall balance between the interests of the rights holders and other parties (competitors and consumers) struck by the original Commission proposal presented in February 2002.

The proposed Directive aims to boost innovation by ensuring that those who invest in developing genuinely new products that depend on computer implemented technology could, like those who develop other products, get a fair reward. Such computer-implemented inventions account for about 15% of new patent applications. The proposal would achieve its aim without stifling competition or sealing off the software market to new initiatives and new inventions. It would prevent patents being granted for computer programs or business methods as such in the current situation of legal uncertainty that the proposal seeks to remedy, there is a need to eliminate the possibility that such patents could be granted.

[After the Council vote, the compromise text will go back to the European Parliament for a second reading which is unlikely to be scheduled until after the June EU elections and under the Dutch presidency. Germany may already be signaling its reluctance on this proposal.]

Proposed Community Patent Regulation

The Presidency will [also] seek to achieve a political agreement on the Regulation to establish a Community Patent and, if that is reached, approval of the proposal to revise the European Patent Convention in line with the Regulation.

An agreement on the broad outlines of the Regulation was reached in March 2003 and further progress was made towards overall agreement at the November 2003 Council. However, a small number of points remain outstanding, in particular on requirements for the translation of patents and on how infringements of patents which might arise as a result of mistranslations should be treated. These could not be resolved at the March 2004 Council and the Presidency will now make another attempt.

Mr. Bolkestein will again thank the Presidency for its unstinting efforts. He will remind Ministers that it is no good adopting Resolutions expressing the urgent need to boost EU competitiveness if they are not prepared to go the extra mile to achieve compromises that can achieve that in practice. European industry urgently needs more affordable patents covering the whole Union, if it is to compete better with the US and Japan.

Recent calculations show that the Community Patent will cost no more than a European patent covering five countries. That would represent a cost saving to around two-thirds (68%) of all applicants for European patents, at least 30 000 granted patents a year. For full EU coverage the Community patent would cost only 50% of a European patent for the 25 individual member states a saving of at least €30 000 per patent over 10 years.

In addition to the lower costs, Community Patent holders would benefit from far greater legal certainty, because disputes over interpretation would be heard before a single Community Patent Court with pan-EU jurisdiction. A European Patent can currently be challenged in each and every country in which it is valid, which can give rise not only to uncertainty and potentially divergent interpretations but also to higher costs.

[The leaders of more than 300 international companies have reportedly signed a petition led by EuropaBio, the European Association for Bioindustries, that hopes to trigger a vote in favor of this proposal. For further details of the benefits that would flow from the introduction of the Community patent and also of the linked proposal to create a pan-EU jurisdiction, see a new set of frequently asked questions at http://www.europa.eu.int/comm

Author's Links to More Information

For more on intellectual property in the EU, go to http://europa.eu.int/comm/internal_market/en/intprop/index.htm. For more on industrial property in the EU, go to http://europa.eu.int/comm/internal_market/indprop/index_en.htm. For more on the decision-making process in the European Union, go to http://europa.eu.int/institutions/decision-making/index_en.htm. And, for more of the latest information on multinational intellectual property issues, contact the author of this issue of the "APLF Updates," Bill Heinze (bill.heinze@tkhr.com), at Thomas, Kayden, Horstemeyer & Risley LLP in Atlanta, Georgia USA.

The information contained in this email is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.

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