EPO: Another step towards Unitary Patent System

EPO (European Patent Office), which is considered to be one of the most organized and efficient patent administrations, has been frontrunner in adopting and implementing a centralized mechanism, which has benefited significantly European industry and particularly SMEs. In this economic downturn, European Council has decided to take a step further towards an absolute Unitary Patent System to be implemented in Europe. Although this decision of unitary patent system was taken long back in March 2011 within purview of "enhanced co-operation" scheme to which all 25 member agreed, it did not took-off until now due to some pending issues on working of the system. On June 29, 2012, the Council has finally given its nod by closing all the pending issues and the proposed system will soon be in force.   

Before moving on to the newly proposed, and agreed, unitary patent system, lets have a brief look on the existing structure of patent prosecution and grant before EPO. Presently, as a regional organization, European Patent Office (EPO), which is a central European authority, grants European patents for the Contracting States to the European Patent Convention. This is, however, merely a unified grant procedure wherein although a single patent is granted in respect of all the designated member states in Europe, the granted patent is not, in effect, a single patent from the point of view of validation, enforcement and other post-grant aspects. Thus, apart from the procedural unification uptil grant of a common patent, all other aspects such as arrangements of validation, enforcement and litigation are technically unbundled and are dealt at the national level. The patents granted are, therefore, not European Union patents or even Europe-wide patents, but a bundle of national patents. This eventually results a proliferation of national proceedings, which is not only costly but also weakens legal certainty for users.

On June 29, 2012, after a long wait, European Council has reached a consensus to do away with this problem by implementing a unitary patent system with a new European Patent Court. Some of the major changes which will be affected along with the system are identified as below:

Presently, once a European patent is granted by the EPO, the Patentee has to get it validated in each EPO member state where he seeks patent protection. For this purpose, the majority of states require a full translation of the patent in their official language(s). The future unitary patent will be automatically valid throughout the territory of the EU member states in the EPO language in which it was granted. Please note, however, that his shall be applicable in respect of only those member states who have participated in the enhanced co-operation scheme and the Applicants will have the choice of having a unitary patent in respect of such member and European Patent in respect of other members. For information, the new procedure for “enhanced cooperation” was put in place by the Lisbon Treaty, which allows a smaller group of EU member states to take a proposal forward under certain conditions if a blockage persists. Members deciding not to join at the outset can do so later. This is one of the first times the mechanism (of enhanced cooperation) is used , as it was taken for the patent dossier in 2011, and 25 member states accepted the existing EPO language regime for the unitary patent.

According to Benoît Battistelli, President EPO, the issue of translation cost has been one of the main stumbling blocks in reaching the consensus. According to him, as long as a full or partial human translation of the Community or unitary patent in all EU languages was required, users saw the new system as far too expensive and unworkable. This was overcome in 2010 by a technical innovation (perhaps with help of GOOGLE) at EPO which reviewed its machine translation programme in September 2010 and decided to set up a new system, now operational, which offers free, high-quality translation, potentially in all EU languages, for purposes of public information.

Secondly, the major difference between the unitary patent and the existing European patent will be in the post-grant phase, wherein the patent proprietor is required to decide on the geographical coverage where protection is needed. As per the new system, after the patent is granted, the patent proprietor can opt for: (a) a European patent with individual territorial protection in the designated states; or (b) a unitary patent with unitary territorial protection in all the states participating in the enhanced co-operation scheme; or (c) a combination of both schemes and request a European patent in a selection of those EPO member states not belonging to the enhanced co-operation scheme and a unitary patent for those belonging to the scheme.

In addition, the introduction of a central European patent court will benefit innovators by bringing down patent litigation costs and increasing legal certainty. The seat of the Central Division of new European Paten Court has also bee an issue of debate and reason for delay in this process since at least 2011 end. Finally an agreement was reached, on June 29, 2012 at the highest level of European government, on the seat of the court’s Central Division.

Putting in force such a system would certainly result in a true supranational patent system in Europe, something that has been discussed for decades and eagerly awaited by European industry.

I believe that the time is ripe for at least the South-East Asian countries (if not all Asian countries) to come together, take a leap and implement a similar mechanism for administration of patents, if not to this extent initially then atleast by entering a bi-lateral treaty for setting up a regional office. India, being a major player in South-East Asia, not only in terms of innovations originating therefrom, but also in terms of patenting and marketing, must take the lead.