Cheaper Patents for Europe

The patent system in Europe comprises both a regime of national patent protection accessed via applications to patent offices of each individual member state and also a system of (potentially) Europe-wide protection administered by the European Patent Office (EPO).

The EPO administered system is governed by the rules of the European Patent Convention (EPC) to which more than 30 states are now members (including some states such as Switzerland that are not members of the European Community).

A patent applicant is able to designate in which EPC contracting states it desires its European Patent to go to grant. Following grant, the EPC then requires a translation of the patent into the official language of each designated EPC contracting state in order for the patent to enter into force in that contracting state. Following grant, the European Patent then becomes, in the main, a bundle of national patent rights that must be enforced in the national courts of each individual contracting state.

Although the advantages of multi-jurisdictional coverage via a single patent application filed at the EPO under the EPC are obvious, such protection under this regime is costly when compared to other jurisdictions worldwide.

If the average European Patent application (taken to grant in seven EPC contracting states) is compared to an application in the U.S. and Japan, then it is estimated to be five and three times more expensive respectively. A significant proportion (about a third) of the costs of such an average European Patent are estimated to be due to translation costs. This proportion increases as a proportion of the total patent cost if more than seven EPC contracting States are designated and the patent needs to be translated into further official languages.

A number of initiatives have been proposed in order to address such cost disparities. Amongst these is the Community Patent, which proposes a single unitary right with limited translation regime. This proposal has been bogged own in political wrangling over the translation regime, although the French Presidency later this year has signalled its intention to revive the proposal. Independent of this proposal is the London Agreement. This agreement modifies the EPC system for applying for European Patents. The agreement permits participating states to forego the right to have the entire European Patent translated into its own official language, selecting one of the official languages of the EPO instead (these being English, French or German). Under the London Agreement, the requirement to translate the claims of granted European patents into all three EPO official languages remains.

The London Agreement has been entered into by 11 EPC states, but before it could come into force it had to be ratified by eight of the signatories, and these had to include the UK, France and Germany. This has now been done and it is expected that the agreement will come into force in these countries in early 2008.

There are also reports that Latvia and Belgium are considering ratifying the agreement. Although to date only a minority of EPC contracting states have to date agreed to enter into the London Agreement, the anticipated cost savings are expected to be significant with savings on translation costs for "typical" European patents being in the region of 45%. Obviously, the greater the number of EPC contracting states that participate in the London Agreement, the greater will be the cost saving associated with obtaining a patent grant across those EPC contracting states. There is also the hope that as more countries contract into the London Agreement, patentees will be encouraged to take patents to grant in more EPC contracting states, increasing the coverage of the average European patent right.

A number of the provisions of the London Agreement are optional. However, it is envisaged that most, if not all, participating states will upon implementation require the option of the patentee producing both a translation of the claims of the European Patent on grant and the litigation translation. Hence, the London Agreement will probably mean that:

• where patents are prosecuted and granted in German or French, countries with English as their official language may not require translation into English (through the London Agreement). In such cases it is only the claims of these patents that will be publicly available in English; and
• those contracting EPC states that have no EPO official language as their official language, may designate one of these official languages. Then, if the European patent is not granted in this designated official language, these states can require a translation into this language. The London Agreement also provides that participating states may still require a translation of the claims into that country's official language under the EPC. Practically, this means that, for example, in Denmark, translations of granted European patents will be required in English, with claims also translated into Danish.

In summary, although the European Patent regime will undoubtedly become cheaper following the entry into force of the London Agreement, such a regime will still be more expensive than a Community Patent proposal as claims will still need to be translated into the official language of each designated EPC contracting state. However, this agreement does have the advantage over the Community Patent of now being a reality.

The London Agreement will lead to typically broader patent coverage and cheaper European Patents within Europe, its enactment is to be welcomed therefore as one of the most significant developments in the prosecution of European patents since the EPC itself was introduced in 1973.