August 30, 2012 / 9:33 AM / 5 years ago

Painful birth for Europe's new one-stop patent

MUNICH (Reuters) - That Europe needs a common patent is patently obvious to Michael Setton, who runs a tiny technology firm in France making wireless sensors that track environmental and biomedical data.

Yet he and thousands of other inventors are still waiting to hear when they will finally be able to protect their inventions across the region at one go, cutting costs dramatically.

For now, Setton has given up and skipped the European market by going directly to the United States because his company, Sensaris, which has a staff of just five, cannot afford the expense of getting patents in each individual European country.

Two months ago, it seemed the issue had been fixed.

Even as Europe’s single currency system teetered, European Union leaders hailed an agreement, after more than 30 years of wrangling, to launch another pan-European project - a common patent and a single court in which to defend property rights.

But the June deal has been delayed by the European Parliament, whose members are angry at the exclusion of the European Court of Justice from the patent litigation process.

Benoit Battistelli, president of the Munich-based European Patent Office (EPO), which will administer the new unitary patent, is confident there will eventually be an accord.

“I don’t think so many years of discussion could fall down on such an issue, and I‘m convinced there is room to find a solution that is good for everybody,” he said in an interview.

“We have never been closer to a final decision, but the last few meters can be the most difficult.”

A spokesman for the European Commission said the EU’s executive was “working hard to reach a solution by the autumn”.

Even if there is a deal by the end of 2012, it will still be more than two years before inventors actually get the one-stop patent, which the EPO estimates will be 70 percent cheaper than the 30,000-35,000 euros ($38,000-44,000) it costs to protect an idea across the EU today.

“Some time in 2015 should be a reasonable time frame,” Battistelli said.

Europe’s splintered patent system has been blamed as one factor behind the region’s failure to match other regions in commercializing science. Currently, inventors can apply to the EPO for a patent but it has to be validated in each member state, and litigation is country by country.

At a time when competition in new inventions is increasing, not only from Silicon Valley but also from Asia, Battistelli is convinced a single patent is an important tool for innovation.

After all, intellectual property is at the heart of business, as shown by the global patent fight between Apple and Samsung Electronics over smartphones.

“It puts Europe on the same level as our main partners and competitors,” Battistelli said. “European companies will be in the same situation as American or Chinese companies in their own market, with a single patent-granting authority and a single litigation system.”

It also promises clarity over what qualifies for protection in controversial areas like genetic and stem-cell research.

BIG COST FOR SMALL FIRMS

The issue is acute for small firms. They lack the deep pockets of multinational technology or pharmaceutical corporations, and patents are vital for attracting investors.

“It is very important for small fish to be able to get patents because it gives value even before you have sales,” said Sensaris boss Setton. “When it comes to raising capital, investors are looking for intellectual property protection.”

Jonathan Zuck, president of the Association for Competitive Technology, representing 3,000 small and mid-sized technology firms on both sides of the Atlantic, said the current fragmented system made it around 10 times more expensive to get patent cover in Europe than in the United States.

And the upfront expense is only part of the story. With no centralized patent court, small firms also have to fight off litigants who can shop around to challenge patents in multiple jurisdictions, all potentially delivering different verdicts.

“The biggest issue for small businesses is getting the protection they need to stop their ideas being stolen, more often than not by large companies,” Zuck said.

But while the planned common patent will be a major step forward, it will be far from perfect.

Notably, a political compromise means the new patent court will be split into three, with its headquarters in Paris but London handling life science disputes and Munich engineering. That has raised fears of procedural delays and uncertainty.

What is more, Spain and Italy have so far refused to back a deal because the new regime stipulates the official languages for patents as English, French and German, so it will apply to 25 rather than 27 EU states initially. Italy may join later but it is not clear if Spain will.

Zuck said Madrid’s bid to preserve the language in the arcane world of patents was frustrating and baffling. “The message we get from our Spanish members is ‘Put your effort behind the next Don Quixote, rather than having patents in Spanish’,” he said.

($1 = 0.7958 euros)

Additional reporting by Chris Wickham in London; Editing by Will Waterman

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