MPs challenge EU-wide patent plans

Claims that British companies will benefit to the tune of £20 million a year from an EU-wide single patent were challenged by MPs today.

A report by the House of Commons European Scrutiny Committee said a draft deal made a year ago to provide a cheaper, more efficient one-stop shop for patent registration across Europe was likely to hinder, not help, small and medium-sized firms.

The report said evidence the committee gathered from the patent industry showed the sector "overwhelmingly" believed the Unified Patent Court (UPC) - to ensure a single level of protection for patents under the EU system - would actually increase litigation costs and be more "burdensome" than the existing UK system.

Agreement on a single patent was reached a year ago between 25 of the 27 EU countries: Italy and Spain opted out in protest at a decision to use only English, French and German for patent applications and legal challenges.

At the time, the Government welcomed the move on the basis of a report ordered by Prime Minister David Cameron, which championed a single EU patent to boost competition with key single markets such as the US, India and China.

After concluding the deal in Luxembourg in June 2011, UK intellectual property minister Baroness Wilcox said: "The creation of a single European patent and patent court is crucial for UK industry.

"A unitary patent and court system will save businesses time and money whether they are patent holders or those seeking to challenge patents.

"The savings to UK business are likely to be around £20 million per year in translations costs alone."

At the moment, UK businesses seeking to patent their ideas across Europe deal with national authorities separately, in all applicable national tongues.

But the Scrutiny Committee report said the evidence it heard from "patent professionals" questioned the benefits for SMEs.

Although the system - not in force until the terms of the patent court have been finalised - was aimed at granting a single patent covering 25 countries at an affordable cost, very few SMEs required protection in all 25 countries.

That meant any cost savings would be less than expected, and litigation at the European patent court was likely to be "convoluted, expensive and protracted".

The Committee said the Government must reflect the patent profession's concerns in final negotiations on the court, and push for Central Division of the UPC to be based in London to limit the most damaging effects of a single EU-wide patent.

Committee chairman Bill Cash said: "Although the theory of a single EU-wide patent - with a single court to administer it - has long been thought desirable, the practice has long been elusive.

"These latest proposals appear, regrettably, to be a further example of this.

"They would increase costs for SMEs and hinder the enforcement of patents within the EU, particularly by giving additional jurisdiction to the Court of Justice of the EU and not allowing the invalidity of a patent to be a defence to infringement proceedings.

"The negotiations have been rushed and effectively excluded the views of European patent professions."

He added: "We found the responses of the minister, Baroness Wilcox, oddly detached from the evidence we heard on these important points.

"This appears now to be a damage-limitation exercise but the UK Government must bring the practical concerns we heard to the table as negotiations conclude, and in particular ensure that the Central Division of the UPC sits in London."

Baroness Wilcox said: "We welcome this report from the European Scrutiny Committee and will respond in due course.

"We are in close and constant contact with patent professionals as well as industry representatives and fully understand the concerns.

"I did not agree to the proposals in December and I have continued to press our arguments not only on the location of the court but also on the key aspects of its design."

PA