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1. SUMMARY: At a Competitiveness Council meeting in Brussels
December 4, EU industry ministers reached a political
agreement on a process to move toward setting up a single EU
patent to replace the multitude of national patents in force
across 27 member states. The ministers also reached a deal
on the establishment of an EU patent court system that would
set up a single European appeals courts for patent
infringement disputes. The agreement paves the way for
further discussion, under Spanish and later Presidencies,
towards a future patent system, but, given institutional and
procedural hurdles, such a system is likely still one or more
years away. END




2. The EU has long had a goal of creating a single EU patent
system under which, as in the United States, a patent could
be applied for and granted through a single office, valid in
all 27 member states. Such a system would, according to
Commission proponents, save firms at least 150 million

3. The EU has tried and failed to launch a common patent a
number of times. The first effort was the Community Patent
Convention (CPC) signed in Luxembourg, December, 1975, by the
nine EU states at the time, but never ratified. An Agreement
Related to Community Patents was signed by the EU 12, in
Luxembourg in December, 1989, but also was never ratified by
all signatories and thus never entered into force. A
political agreement on an approach to an EU patent was
achieved in 2003, but foundered in 2004 when the
Competitiveness Council failed to agree on details of the

4. Unable to reach agreement on a common patent, European
member states agreed to the European Patent Convention, which
created the European Patent Office (EPO). This differs from
a community-wide patent in that the EPC is a mutual
recognition of nationally agreed patents and includes non-EU
European states as signatories. The arrangement does not,
however, represent a centrally enforceable, European
Union-wide patent.




5. At a December 4 Competitiveness Council meeting, the
Swedish presidency was able to use new powers under the
Lisbon Treaty to gain get member states to agree to the basic
parameters of an approach to an EU common patent and
supporting institutions. The Commission will use this result
to draw up specific legislative proposals. Political
agreement on the key elements of the proposal should
facilitate adoption by the Council and European Parliament.

6. Article 118 of the Treaty on the Functioning of the
European Union (TFEU), which consolidates the Treaty of the
European Union with the Treaty of Lisbon, provides for the
creation of European intellectual property rights (IPR) and
the setting up of centralized, EU-wide arrangements for the
authorization, coordination, and supervision of IPR in the
EU. It also calls for establishment of language arrangements
for translations of European IPR, long an issue in the
creation of an EU patent. The entry into force of Lisbon on
December 1, then, provided additional clear legal support for
the patent.

7. The new political agreement on an Enhanced Patent System
in Europe calls for the creation of a European and EU Patents
Court (EEUPC), an EU patent (along with a separate regulation
governing translation arrangements for the EU patent), an
enhanced partnership with the EPO, and, as necessary,
amendments to the EPC. Under the agreement, the EEUPC would
be made up of a Court of First Instance, a Court of Appeals,
and a Registry. The EEUPC would be financed by court fees
and contributions from the EU member states at least during
the transition period (five years after entry into force).
The court would be composed of judges with patent litigation
experience at the national level. In addition, non-EU

BRUSSELS 00001673 002.2 OF 002

contracting members of the EPC could accede to the agreement
as well.




8. But hurdles remain. The European Union Court of Justice
(EUCJ) is currently considering whether a new European patent
court can be set up (presumably out of concern that such a
system could be contrary to the EUCJ's role as guardians of
the EU Treaties). Member states are not united in their
support for an EU-wide patent, with national patent offices
set to lose patent renewal fees and some competence under the
proposal. And, while the Lisbon Treaty offers legal support
for both a centralized approach to IPR and patent systems and
translation arrangements, the mechanics of both are unclear.




9. While the notion of an EU-wide patent has been around for
some time, this agreement should come as welcome news for
supporters of a strong internal market and a more robust EU
patent regime. With entry into force of a final regulation
two or three presidencies away, there is time yet for a
roadblock or two, with the EUCJ opinion the largest potential
deal maker or breaker. But political will for an agreement,
combined with the legal support of Lisbon, make an EU-wide
patent regime more likely than not in the near future.