The Unified European Patent: What it Means for International Enterprises Seeking Protection on the Continent

On February 19, 24 members of the 27 European Union signed a unified patent court agreement in Brussels, Belgium. Bulgaria is expected to sign once it completes internal administrative procedures, but because the single patent will only need to be in English, German or French, only the countries of Poland and Spain have so far refused to join in the effort.

What does this all mean?

Efficient patent protection in Europe is a cost-intensive procedure. Overall, the acquisition of patent protection in all 27 European Union (EU) member states, including the costs of litigation, costs around 36,000.00 EUR (approx. US $48,000) today to book. This compares to an average price of a U.S. patent of 1850.00 EUR (US $2,500).

In light of these high costs, efforts have been made over the last 30 years to make patents uniformly applicable. Although the agreement for a European patent was signed in 1975, it hasn’t been close to reality until recently.

In December 2011, 25 of the 27 EU member states expressed support for the introduction of a single European patent, which seeks to boost the innovative capacity of European industry thanks to streamlining previously bureaucratic procedures and decreasing costs. Only Spain and Italy, feeling linguistically disadvantaged, refused to consent. As part of the “enhanced cooperation” for the participating 25 states, the EU created a limited community patent, an official European patent with unitary effectiveness. “Enhanced cooperation” can be used as a last resort under the EU Treaty and the Treaty on the Functioning of the European Union, if the EU as a whole cannot reach an agreement in a reasonable time, and provided that it involves at least nine member states.

25 EU Member States Agreed

In December 2012, members of the European Parliament (MEP) finally approved the so-called “EU patent package,” which defines the unitary patent, the language regime and the unified patent court. The new unified patent will be cheaper and more effective than current systems in protecting the inventions of individuals and firms. The new regime will provide automatic unitary patent protection in all 25 participating member states, cutting costs for EU firms and hence boosting their competitiveness. According to the European Commission, when the new system is up to speed, a EU patent may cost just €4,725, compared to an average of €36,000 needed today.

English, French and German are Primary Languages

Any inventor will be able to apply to the European Patent Organization (EPO, a non-EU body) for an EU unitary patent valid in all 25 participating EU member states. Patents will be made available in English, French and German. Patent applications, however, must be made in English, French or German. If the patent is filed in another language, the patent application must be accompanied by a translation into one of these three languages.

The European Parliament ensured that translation costs will be fully reimbursed for EU-based small and medium-sized enterprises, non-profit organizations, universities and public research organizations.

It also ensured that renewal fees, which account for a large share of total costs, will be set at a level that takes into account the special needs of small firms, so they can benefit fully from lower costs.

New Challenges for the Translation Industry

The international agreement creating a unified patent court will take effect on January 1, 2014, or after being ratified by 13 contracting states, as long as the United Kingdom, France and Germany are among them. The other two acts would apply from January 1, 2014, or from the date when the international agreement takes effect, whichever is later. For the present, Spain and Italy have decided to remain outside the new regime, but could decide to join in at any time.

For the translation industry, the new unified European patent results in a dramatic decrease of language diversification. For the EU countries of Europe, English, German and French will be the three main languages of patent communication, which will reduce translation and related costs for obtaining patent protection in the European Union by up to 80 percent, according to a European Commission press release.

Two factors make it rather likely that the overall amount of patent translations requested by multinational companies will remain more or less the same:

1. A huge reduction of costs by the unified European patent will encourage more companies to file their patents on a European or even worldwide level. Although the translation work for a single patent decrease, the overall number of filings is likely to increase substantially.

2. Macro economic trends show continued strong economic growth in Asia.  This trend has caused greater investment in research and development in Asia and a greater need to protect IP in Asia.  Thus there is a general shift of patent applications towards the Asian markets. According to World Intellectual Property Association (WIPO), China was the world leading country in patent applications (526,000) in 2011, followed by the United States, Japan, South Korea and Germany. Patents filed in China represent 6.9 percent of all patent applications in the world.  In fact, WIPO findings show that filings in China, Japan, and South Korea represent 49 percent of all patent applications in the world.

These trends will very likely continue and challenges patent professionals to partner with a global patent translation company to fully cover the desired languages and markets and ensure a true global consistency in patents.