Communication from the Commission to the European Parliament and the Council - Enhancing the patent system in Europe -
Date: 2007-04-03
Institutions: European Commission
Subjects: European Patent Office, European patent, competitiveness, innovation, intellectual property, patent law

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 3.4.2007 
COM(2007) 165 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

- Enhancing the patent system in Europe - 

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1. 

INTRODUCTION 

A  key  element  of  the  renewed  Lisbon  Strategy  for  Growth  and  Jobs  is  to  improve  the  way 
intellectual property rights (IPRs) are handled in Europe, as intellectual property rights, and 
patents  in  particular,  are  linked  to  innovation,  which  in  turn  is  an  important  contributor  to 
competitiveness.  

Patents  are  a  driving  force  for  promoting  innovation,  growth  and  competitiveness.  A  recent 
Commission  study  on  the  value  of  patents1  which  was  based  upon  a  survey  of  10,000 
inventors  in  eight  Member  States2  assessed  inter  alia  the  monetary  value  of  patents,  the 
economic and  social impact  of patents, patent licensing, the use of patents  for  creating new 
firms  and  the  relationship  between  patents,  R&D,  and  innovation.  Although  there  are 
differences  between  Member  States  and  industry  sectors,  the  overall  "patent  premium"3  for 
the reviewed Member States amounts to 1% of  national GDP for the period 1994-1996 and 
had reached 1.16% of GDP during the period 2000-2002. 

It is suggested, moreover, that there is a correlation between the use of intellectual property 
rights  and  good  innovation  performance.  Under  this  assumption  countries  with  a  high 
innovation performance are in general characterised by high levels of patenting and the use of 
other rights, such as design and trademark rights.4 This correlation is confirmed at the sectoral 
level, with the sectors where more patents are issued tending to be more innovative.  

The  single  market  for  patents  is  still  incomplete.  Europe  has  not  yet  been  able  to  create  a 
single  and  affordable  Community-wide  patent  despite  repeated  calls  by  Heads  of  State  and 
Government.  Parallel  efforts  made  in  an  intergovernmental  framework  level  aimed  at 
improving  the  existing  European  patent  system  under  the  auspices  of  the  European  Patent 
Organisation (EPO) have also been delayed.  

The fragmented single market for patents has serious consequences for the competitiveness of 
Europe in relation to the challenges of the US, Japan and emerging economic powers such as 
China. The EU lags behind the US and Japan in terms of patent activity. Even in Europe, the 
US  and  Japan  patent  more  than  the  EU:  at  the  EPO  137  patents  per  million  population  are 
from the EU versus 143 patents from the US and 174 from Japan. The lack of critical patent 
mass at home translates in less patents that are filed in both the US, the EU and Japan, the so 
called triadic patents. Whereas Europe has 33 triadic patents per million population, the US 
has  48  and  Japan  has  102.  Therefore,  the  US  and  Japan  have  respectively  45%  and  209% 
more  triadic  patents  than  the  EU.5  This  is  of  particular  concern  since  triadic  patents  are  the 
most valuable ones and are considered the best patent indicator for innovation.6  

Recent studies have also shown that a European patent designating 13 countries is about 11 
times more expensive than a US patent and 13 times more expensive then a Japanese patent if 

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Gambardellea  et  al.,  Study  on  patents:"What  are  patents  actually  worth?  -  the  value  of  patents  for 
today's economy and society", available at  
http://ec.europa.eu/internal_market/indprop/docs/patent/studies/final_report_lot2_en.pdf. 
Denmark, France, Germany, Hungary, Italy, Netherlands, Spain, and UK. 
The  "patent  premium"  is  the  value  of  the  patented  invention  net  of  the  value  of  the  invention  if  the 
inventor had no patent on it. 
On the relationship between IP and innovation, see Annex III.  
MERIT  and  JRD,  European  Innovation  Scoreboard  2006  comparative  analysis  of  innovation 
performance, European Commission 2006, p. 35. 
Guedou, Le système de brevet en Europe, tresor-eco nr 9, janvier 2007, p. 3. 

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processing  and  translation  costs  are  considered.  For  the  total  costs  with  up  to  20  years  of 
protection,  European  patents  are  nearly  nine  times  more  expensive  then  Japanese  and  US 
patents. If the analysis focuses on patent claims, the cost differences increase further.7 

The  Commission  believes  that  in  today's  increasingly  competitive  global  economy,  it  is  not 
sustainable for the EU to lose ground in an area as crucial for innovation as patent policy. For 
this  reason,  and  in  a  renewed  effort  to  break  the  deadlock,  the  Commission  launched  in 
January 2006 a broad consultation on the future of patent policy in Europe. The objective of 
the consultation was to seek stakeholders' views on the existing patent system and on a patent 
system  for  Europe  truly  worthy  of  the  twenty-first  century.  The  consultation  met  with 
unprecedented  interest  among  European  users  of  the  patent  system,  tallying  2515  responses 
from business, including SMEs in virtually all sectors of the economy, Member States, as well 
as researchers and academics.8 

The  results  of  the  consultation  leave  no  doubt  as  to  the  urgent  need  for  action  to  provide  a 
simple,  cost-effective  and  high  quality  one-stop-shop  patent  system  in  Europe,  both  for 
examination and grant as well as post-grant procedures, including litigation.  

Many  stakeholders  continue  to  support  the  Community  Patent  as  the  approach  which  will 
yield  most  added-value  for  European  industry  under  the  Lisbon  strategy.  However  they 
criticise the Council's Common Political Approach adopted in 20039 on the grounds of high 
costs  of  translation  arrangements  as  well  as  the  excessive  centralisation  of  the  proposed 
jurisdictional system. 

As to reforms of the existing European patent system within the framework of the European 
Patent  Convention  (EPC),  numerous  stakeholders  support  a  rapid  ratification  of  the  London 
Agreement10 and adoption of the European Patent Litigation Agreement (EPLA). 

There  is  however,  for  the  time  being,  very  little  support  for  any  (further)  harmonisation  of 
substantive patent law or schemes involving mutual recognition of national patents.  

If  Europe  wants  to  be  at  the  forefront  of  innovation,  an  improved  patent  strategy  is 
indispensable. The first part of this Communication focuses on the creation of the Community 
patent and the establishment of an efficient EU-wide patent jurisdiction. The improvement of 

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be 

on 

can 

found 

patent 

information 

consultation 

the  Commission's 

Bruno  Van  Pottelsberghe  de  la  Potterie  and  Didier  François,  The  Cost  Factor  in  Patent  Systems, 
Université Libre de Bruxelles Working Paper WP-CEB 06-002, Brussels 2006, see pp. 17 et seq. 
Further 
http://ec.europa.eu/internal_market/indprop/patent/consultation_en.htm. 
Following the agreement in the Competitiveness Council of 3 March 2003, work continued at working 
party level to transpose the principles of the common political approach in the proposal for a Council 
Regulation  on  the  Community  patent.  On  this  basis,  the  Commission  presented  two  proposals 
concerning  the  establishment  of  a  Community  patent  jurisdiction  on  21  December  2003.  See 
http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#patent 
the  common  political 
approach, the progress in the Council working party on the Regulation and the text of the Commission 
proposals on the jurisdiction. 
Ten  EPC  contracting  states  (Denmark,  France,  Germany,  Liechtenstein,  Luxembourg,  Monaco, 
Netherlands, Sweden, Switzerland and United Kingdom) signed the Agreement dated 17 October 2000 
on the application of Article 65 EPC, known as the London Agreement and published in [2001] OJEPO 
549. This optional instrument aims to reduce the cost of translations for the European Patent. It would 
reduce translation costs for an average European patent by 31% to 46%, representing savings of around 
EUR 2,400 to 3,600 per patent (see Annex II). For further information on, for example, the state of play 
on  ratification  and  accession  to  the  London  Protocol  see:  http://patlaw-reform.european-patent-
office.org/london_agreement/status/index.en. 

for 

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the jurisdictional system for patents is considered by many stakeholders as the most important 
issue  to  be  tackled  as  a  first  step.  Work  on  a  EU-wide  patent  jurisdiction  scheme  may  help 
pave  the  way  for  progress  on  the  creation  of  an  affordable  and  legally-secure  Community 
patent. The Commission hopes that the suggestions made in this Communication will serve to 
restart negotiations which have been stalled since 2004. It aims at starting a debate using the 
momentum of the consultation and work towards consensus on the way forward. 

However, it is clear that other patent issues should also be addressed. In order to be effective, 
the patent system needs to be considered as a whole. The final chapter of this communication 
therefore  addresses  subjects  such  as  the  quality  and  costs  of  patents,  support  for  SMEs, 
knowledge  transfer,  and  enforcement  issues  including  alternative  dispute  resolution,  patent 
litigation insurance, and international aspects of enforcement. 

Further  to  requests  by  the  December  200611  and  March  200712  European  Councils,  the 
Commission intends to present a comprehensive IPR Strategy Communication by early 2008. 
The  IPR  Strategy  document  will  complement  the  present  Communication  and  address  the 
main  outstanding  non-legislative  and  horizontal  issues  in  all  fields  of  intellectual  property 
including trade marks, designs, copyright, geographical indications, patents and enforcement. 

2. 

THE  COMMUNIY  PATENT  AND  AN  INTEGRATED  JURISDICTIONAL 
SYSTEM FOR PATENTS  

2.1. 

COMMUNITY PATENT 

The Commission is of the opinion that the creation of a single Community patent continues to 
be a key objective for Europe. The Community patent remains the solution which would be 
both  the  most  affordable  and  legally  secure  answer  to  the  challenges  with  which  Europe  is 
confronted in the field of patents and innovation. Statistics show that in the context of overall 
costs  (translations,  registration  fees,  etc.)  the  Community  patent  is  far  more  attractive  than 
models under the present system of European patents.13 

The  Council's  Common  Political  Approach  of  2003  is  criticised  by  stakeholders  in  the 
consultation  mainly  on  two  grounds:  the  inadequate  jurisdictional  arrangements  and  an 
unsatisfactory  language  regime.  However,  the  Commission  believes  that  a  truly  competitive 
and attractive Community patent can be achieved provided there is political will to do so. 

Stakeholders in particular expressed difficulties with an overly centralised jurisdiction. These 
concerns should be taken into account in the work on the EU-wide patent jurisdiction system, 
which is dealt with in the next paragraphs. 

On translation costs the Commission notes that a large majority of stakeholders criticises the 
Council's  Common  Political  Approach  which  foresees  translation  of  all  the  claims  of  the 
Community  patent  into  all  official  EU  languages  (now  23  official  languages).  On  the  other 
hand, some stakeholders argued in favour of translations not only of claims but also for the 

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Presidency  Conclusions  of  the  Brussels  European  Council  (14/15  December  2006),  point  29, 
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/92202.pdf. 
Presidency Conclusions of the Brussels European Council (8/9 March 2007), point 13, 
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/93135.pdf. 
See Annex II. 

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descriptions.  Many  favour  the  Commission’s  initial  proposal  as  a  sound  basis  for  an 
agreement.  The  Commission  considers  that  it  should  be  possible  to  find  effective  solutions 
and will explore with the Member States how to improve the language regime with a view to 
reduce translation costs of the Community patent while increasing legal certainty for all, and 
in particular for the benefit of SMEs. Possible options could involve fee reductions for SME's 
or schemes allowing for flexibility in the translation requirements.14  

2.2. 

AN  INTEGRATED  JURISDICTIONAL  SYSTEM  FOR  PATENTS  IN  THE 
SINGLE MARKET 

2.2.1.  The deficiencies of patent litigation in Europe 

National  courts  are  increasingly  required  to  consider  issues  with  a  cross-border  dimension 
when  they  deal  with  patent  litigation.  The  globalisation  of  business  goes  hand  in  hand  with 
the  internationalisation  of  patent  litigation.  This  holds  true  in  particular  for  the  European 
single market. 

Since 1978 (and up to 2005), the EPO has granted almost 800.000 European patents of which 
many are still in force in Europe.15 The EPO administers a single procedure for the grant of 
patents. However, once a European Patent has been granted it becomes a national patent and 
is subject to the national rules of the contracting EPO states designated in the application. The 
European patent is not a unitary title; it is a bundle of national patents. There is at present no 
single jurisdiction for disputes on European Patents which raise issues which go beyond the 
borders  of  one  state.  Any  infringement,  invalidity  counterclaim  or  revocation  action  in 
relation  to  "bundled"  European  patents  may  be  subject  to  diverse  national  laws  and 
procedures. 

Consequently,  claimants  and  defendants  bear  the  risk  of  multiple  litigation  in  a  number  of 
Member  States  on  the  same  patent  issue.  To  enforce  a  European  patent  which  has  been 
granted  for  several  states,  the  patent  owner  may  sue  the  alleged  infringer  at  his  place  of 
domicile  or  may  need  to  initiate  several  parallel  infringement  actions  before  the  national 
courts in different countries. On the other hand, individual defendants might have to defend 
themselves  in  similar  actions  lodged  in  several  states,  which  is  particularly  risky  and 
cumbersome for SMEs. In order to obtain the revocation of a European patent, competitors or 
other interested persons must file revocation actions in all the states for which the European 
patent was granted. 

The  existing  system  with  the  danger  of  multiple  patent  litigation  has  several  consequences 
which weaken the patent system in Europe16 and make patents less attractive, in particular for 
SMEs. 

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Moreover, pilot projects on machine translations of patent claims such as the ones currently applied at 
the EPO and the French Institut National de la Propriété Industrielle (INPI) which may reduce upstream 
costs and merit further consideration. 
For  detailed  statistics  see  the  EPO  Annual  Report  2005  available  at  http://annual-report.european-
patent-office.org/2005/index.en.php. 
See  also  the  assessment  of  the  impact  of  the  European  Patent  Litigation  Agreement  on  litigation  of 
European patents,  
http://www.european-patent-office.org/epo/epla/pdf/impact_assessment_2006_02_v1.pdf. 

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First of all, it is costly for all parties involved. They must hire local attorneys and experts and 
pay  court  fees  in  all  the  countries  where  litigation  is  initiated.  This  is  not  necessarily  a 
problem  for  big  business.  However,  for  many  SMEs  and  individual  inventors  the  costs  of 
litigation can be prohibitive. They may have invested significant sums in obtaining a patent 
but then are simply not able to enforce it against infringements. This can empty the patent of 
any practical value. 

Moreover,  significant  variations  exist  between  the  different  national  court  systems  and  the 
way  the  courts  handle  patent  cases.  A  good  example  of  a  difference  in  national  patent 
litigation is that in Germany there is a separation between infringement and patent revocation 
actions, both at first instance and at appeal levels, whereas in other countries such as the UK, 
France  and  the  Netherlands  the  same  court  has  competence  to  hear  both  invalidity  and 
infringement actions. As a result, multiple patent litigation can entail variable or possibly even 
contradictory results in the different States.17  Despite  the  recent  harmonisation  of  measures, 
procedures and remedies in the field of IPR infringements under the Enforcement Directive,18 
there  are  still  important  differences  in  national  procedures  and  practices  due  to  non-
harmonised issues such as collecting factual evidence, cross-examinations, hearings, the role 
of experts, etc. 

Stakeholders have in particular pointed out differences which relate to the qualifications and 
experience of national judges. While in some countries there are a limited number of courts 
exclusively  dealing  with  patent  cases,  in  other  countries  such  specialisation  does  not  exist. 
The  consultation  has  suggested  that  these  differences  give  rise  to  forum  shopping.  Parties 
choose to initiate an action before one jurisdiction on the basis that they will be treated more 
favourably than in another. Differences in costs (see also paragraph 2.2.2) and in the speed of 
proceedings have a significant impact on the choice of forum.  

This entails the possibility of different application and interpretation of substantive patent law, 
enshrined in the EPC, relating to crucial items such as patentable subject-matter and scope of 
protection  conferred  by  a  European  patent.  In  addition,  there  are  difficulties  with  obtaining 
cross-border  injunctions.  Recent  jurisprudence  of  the  ECJ  restricts  the  possibilities  for 
national  courts  to  take  action  against  infringements  committed  by  a  number  of  companies 
belonging to the same group but established in various EU Member States.19  

Divergent decisions on the substance of the cases cause lack of legal certainty for all involved 
in patent proceedings. This uncertainty has an impact on crucial business decisions relating to 
investments, production and marketing of patented products which must often be made on the 
basis  of  complicated  assessments  regarding  the  likely  outcome  of  a  number  of  cases  dealt 
with in various jurisdictions. 

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The  Epilady  case  is  an  illustration  of  how  courts  in  different  EPC  states  have  come  to  conflicting 
outcomes on the same patent. As a result of different interpretations of patent claims, it was held to be 
infringed by the German, Dutch and Italian courts, but not by the British and Austrian courts. See for 
references and analysis of these cases J. Pagenberg in 24 IIC 314-345 (1993). 
Directive  2004/48/EC  of  the  European  Parliament  and  of  the  Council  of  29  April  2004  on  the 
enforcement of intellectual property rights, OJ L 195, 2.6.2004, p. 16. 
Case  C-4/03,  Gesellschaft  für  Antriebstechnik  mbH  &  Co.  KG  v  Lamellen  und  Kupplungsbau 
Beteilungs  KG;  Case  C-593/03,  Roche  Nederland  BV  and  Others  v  Frederick  Primus,  Milton 
Goldenberg, judgments of 13 July 2006 (unreported). 

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2.2.2.  National patent litigation systems in the EU: facts, figures and costs  

Patent litigation statistics 

One particular difficulty for an assessment of patent litigation activity at Member State level 
is  the  lack  of  published  statistical  data  that  can  be  compared.  However,  from  the  available 
information,  it  can  be  established  that  more  than  90%  of  current  patent  litigation  in  the 
Community  takes  place  before  the  tribunals  of  just  four  Member  States  (Germany,  France, 
UK  and  the  Netherlands).  Moreover  the  available  figures  for  2003  to  2006  show  that  an 
average of 1500 to 2000 patent infringement and invalidity actions per year are raised before 
first instance patent tribunals of which 60 to 70% concern European Patents. The Commission 
estimates  on  the  basis  of  own  research  that  20  to  25%  of  first  instance  decisions  by  patent 
tribunals are appealed. It should also be noted that as a result of low numbers of patent cases 
before many national tribunals there is a tendency towards the creation of specialised tribunals 
at  Member  State  level.  The  available  statistical  data  indicate  that  there  is  unlikely  to  be 
enough  cases  for  setting  up  two  court  systems  hearing  infringement  and  invalidity  actions 
concerning European and Community patents, particularly at the appellate level. 

Costs 

Patent litigation in the EU is unnecessarily costly for all parties involved. This is not as severe 
a  problem  for  big  business  as  for  SMEs  and  individual  inventors,  for  whom  the  costs  of 
litigation can be prohibitive. Moreover, studies in the US and the EU have demonstrated that 
SMEs  face  a  bigger  risk  of  being  involved  in  litigation.20  Potential  litigation  costs  can 
substantially increase  the  risk associated with  patenting R&D and thus also with innovation 
activity as such. Therefore, our patent strategy should involve a reduction of litigation costs 
for SMEs. 

Litigation  costs  vary  significantly  according  to  the  type  of  proceedings,  complexity  of  the 
case,  technical  field  and  amounts  in  dispute.  Litigation  costs  include  court  costs,  fees  of 
lawyers,  patent  attorneys  or  experts,  costs  of  witnesses,  technical  investigations,  and  costs 
related  to  appeals.  Translation  costs  must  be  added  for  proceedings  in  foreign  jurisdictions. 
The differences between the national court systems in Europe and the lack of reliable data on 
the  cost  of  litigation  (in  particular  lawyers’  fees)  in  most  countries  make  it  very  difficult  to 
assess  the  cost  of  patent  litigation.  The  cost  estimates  presented  in  Annex  IV  have  been 
generated  in  the  course  of  work  on  EPLA21  and  have  been  complemented  by  a  recently 
published  Commission  study  on  patent  litigation  insurance22.  The  estimates  are  based  on 
information received from practitioners. They relate to those Member States where currently 
most  patent  litigation  takes  place.  The  figures  vary  considerably  depending  on  the  Member 
State concerned. 

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Gambardellea  et  al.,  Study  on  patents:  "What  are  patents  actually  worth?  -  the  value  of  patents  for 
today's economy and society", available at 
http://ec.europa.eu/internal_market/indprop/docs/patent/studies/final_report_lot2_en.pdf (see page 71 of 
the technical report). 
EPO document WPL/11/05 Rev. 1 of 16.02.2006, Annex I;  
http://www.european-patent-office.org/epo/epla/pdf/impact_assessment_2006_02_v1.pdf.. 
Patent  Litigation  Insurance  –  A  Study  for  the  European  Commission  on  the  feasibility  of  possible 
insurance schemes against patent litigation risks, Appendices to the Final Report, June 2006, by CJA 
Consultants  Ltd,  European  Policy  Advisers,  Britain  and  Brussels,  Appendix  3:  Cost  of  Litigation  per 
Patent in Force in 2004 by Country, pp. 47 et seq. ,  
http://ec.europa.eu/internal_market/indprop/docs/patent/studies/pli_appendices_en.pdf. 

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In Germany, the overall cost for each party of a patent case with an average sum in dispute of 
around  250,000  €  is  estimated  to  lie  at  around  50,000  €  at  first  instance  and  90,000  €  at 
second instance for both validity and infringement. In France, the cost of an average patent 
litigation  case  in  the  above-mentioned  range  lies  between  50,000  €  and  200,000  €  at  first 
instance  and  between  40,000  €  and  150,000  €  at  second  instance.  In  the  Netherlands,  the 
estimated cost of an average patent case varies between 60,000 and 200,000 at first instance 
and between 40,000 € and 150,000 € at second instance. In the UK23 the cost of a similar case 
is assessed to range from 150,000 € (fast-track procedure) to 1,500,000 € at first instance and 
from 150,000 € to 1,000,000 € at second instance. This means that the accumulated costs of 
parallel litigation in these four Member States would vary between 310,000 € and 1,950,000 € 
at first instance and 320,000 € and 1,390,000 € at second instance.  

For the Member States referred to above, an assessment of the potential financial benefit of a 
unified  patent  jurisdiction  can  be  based  on  cost  calculations  related  to  a  multiple  patent 
dispute involving court cases in three of the jurisdictions concerned given that bundled patents 
are rarely litigated in more than three Member States. 

On the other hand, the estimated overall cost for litigation before one European Patent Court 
would  vary  between  97,000  €  and  415,000  €  at  first  instance  and  between  83,000  €  and 
220,000 € at second instance.24 Depending upon which three of the four Member States are 
considered  the  cost  of  an  average  case  heard  by  a  unified  patent  jurisdiction  is  estimated  at 
10 to  45%  less  than  the  cost  of  today’s  parallel  litigation  at  first  instance  and  11  to  43%  at 
second instance25. The savings should be even more important concerning the big patent cases 
since they are mainly litigated before courts in the UK where the litigation costs are highest in 
Europe. 

A  unified  patent  judiciary  should  therefore  result  in  significant  cost  savings  provided  it  is 
created in a cost-effective manner. 

2.2.3.  The way forward 

There was strong support in the consultation for a cost effective Community patent including 
sound litigation arrangements, while at the same time improving the current litigation system 
in  Europe.  In  October  2006,  the  European  Parliament  supported  this  line  and  urged  the 
Commission  to  explore  all  possible  ways  of  improving  the  patent  granting  and  litigation 
systems in the EU.26 This calls for a combined effort by Member States and the Community 
institutions. 

Recent  discussions  with  Member  States  show  that  opinions  differ  on  the  best  way  forward. 
Currently, there are two options which have been advanced in discussions (see below, under 

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Patent litigation costs in the UK are thus substantially higher than in Germany, France, the Netherlands 
and other Member States. Apart from higher lawyers and patent attorneys fees, according to the authors 
of the studies referred to above the high level of the UK figures seems to be related to special features 
of the common law system. Moreover there is a certain tendency for large international companies to 
take their important cases to UK, whereas SMEs tend to prefer the other three States for litigation of 
European patents. 
See document mentioned in footnote 16, Annex 2 
For details see the EPO document referred to above in note 16 
Resolution P6_TA(2006)0416, Future action in the field of patents  
http://www.europarl.europa.eu/registre/seance_pleniere/textes_adoptes/definitif/2006/10-
12/0416/P6_TA(2006)0416_EN.pdf 

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A  and  B).  Neither  of  these  seems  to  have  a  realistic  chance  of  making  progress  since 
discussion  of  the  two  options  have  thus  far  led  to  polarisation  of  the  positions  of  Member 
States. 

However  the  need  to  improve  the  existing  litigation  arrangements  has  not  been  questioned. 
There also appears to be an emerging consensus from debates in the Council and the patent 
consultation  on  a  number  of  principles  related  to  a  future  Europe-wide  patent  court  system 
(henceforth  also  "the  jurisdiction").  The  jurisdiction  should  be  efficient  and  cost-effective 
with a maximum of legal certainty in litigation over the validity and infringement of patents. 
It  should  also  provide  an  appropriate  degree  of  proximity  to  the  users  of  the  system.  The 
multinational  character  of  jurisdiction  should  be  reflected  in  its  composition  and  common 
rules of procedure.  

Work  should  therefore  be  undertaken,  as  a  first  step,  to  build  consensus  among  Member 
States  around  these  general  objectives  and  features  (see  below,  under  C).  The  Commission 
recognises  that  all  three  options  raise  specific  legal  issues  which  would  need  to  be 
appropriately addressed. Moreover, the final structure and details of any compromise must be 
in full compliance with EU-law. 

A - The EPLA  

The  draft  European  Patent  Litigation  Agreement  (EPLA)  aims  to  establish  a  uniform 
jurisdiction for European patents. Since 1999, a working party of the contracting states of the 
European  Patent  Organisation  has  been  working  on  the  draft  EPLA  which  proposes  the 
creation of a new international organisation, the European Patent Judiciary.27 

The intention is to create a unified system for litigation on European patents for those EPC 
contracting  parties  that  wish  to  join  the  system.  The  European  Patent  Judiciary  would 
comprise  a  Court  of  First  Instance,  a  Court  of  Appeal  and  a  Registry.  The  Court  of  First 
Instance would comprise a Central Division set up at the seat of the European Patent Court. 
However,  Regional  Divisions  of  the  Court  of  First  Instance  would  be  set  up  in  Contracting 
States. EPLA Contracting States could file a request for setting up a Regional Division that 
should  ensure  the  local  presence  in  the  first  instance  of  the  European  Patent  Court  (with  a 
maximum  of  three  first  instance  courts  per  country),  mainly  financed  by  the  Contracting 
States in question. The decisions of the Court of First Instance would be appealed to the Court 
of  Appeal.  The  Register  of  the  EPC  would  be  responsible  for  co-ordinating  the  division  of 
work in cases allocated to the Regional Divisions. 

The  European  Patent  Court  would  have  jurisdiction  for  infringement  actions  and  claims  or 
counterclaims  for  revocation  of  a  European  patent.  It  would  comprise  both  legally  and 
technically  qualified  judges.  Essentially,  the  European  Patent  Court  would  have  equivalent 
powers of a national patent judge within a national jurisdiction. The language regime would 
be based on the language regime of the EPO (English, French and German). 

Some Member States perceive the EPLA process as an avenue where progress could be made 
quickly.  These  countries  are  in  favour  of  an  active  participation  of  the  Community  in  the 
EPLA  process.  Involvement  of  the  Community  is  required  as  the  EPLA,  an  international 
treaty  with  the  participation  of  EPC  members  which  are  non-EU  countries,  touches  on 

27 

EN 

for  more 

See 
office.org/epo/epla/index.htm. 

information 

on 

the 

EPLA 

process: 

http://www.european-patent-

9 

   EN 

 
                                                 
subjects which are already covered by EC legislation (aquis communautaire).28 The Member 
States in favour of the EPLA process would thus want the Commission to ask for negotiating 
directives,  and  the  Council  to  grant  such  directives,  to  allow  the  Community  to  enter  into 
negotiations on EPLA. 

A number of Member States take the view that creating a new jurisdiction in parallel to the 
Community jurisdiction would be complicated and risk creating inconsistencies. In the case of 
the creation of the Community patent it would lead to duplication of EU-wide patent courts. 

B - A Community jurisdiction for European and Community patents 

Some  Member  States  consider  that,  rather  than  establishing  an  EPLA  court  for  European 
patents only, it would be preferable to set up a unified court structure which could deal with 
litigation on both European patents and future Community patents. They advocate the creation 
of  a  specific  Community  jurisdiction  for  patent  litigation  on  European  and  Community 
patents making use of the jurisdictional arrangements in the EC Treaty. 

According  to  the  proponents  of  this  proposal  an  international  agreement  involving  the 
Community  would  be  needed  in  order  to  confer  competence  on  the  Community  judicature 
over  European  patents.  Granting  such  jurisdiction  should  enable  to  guarantee  the  respect  of 
the  principles  of  the  Community  legal  order  in  litigation  relating  to  the  validity  and 
infringement of European patents and, once created, of Community patents. 

In addition, and on the basis of Article 225a EC, a specific judicial panel for patent litigation 
would be created. This would include first instance courts with specialised judges located in 
the Member States, with appeal to the Court of First Instance. There should be uniform rules 
of  procedure,  and  the  Community  judges  should  not  only  apply  Community  law  but  also 
relevant provisions of the European Patent Convention. 

A number of Member States, supported by some stakeholders, seem to have the view that a 
EU-wide patent court established within the Community framework would not be workable in 
practice. It is feared that procedures would turn out to be inefficient and inadequate and it is 
furthermore doubted whether it would be possible to appoint technically educated judges with 
no full legal qualifications. 

C - The Commission's compromise 

The Commission considers as the main difference between options A and B to be the fact that 
the  EPLA  option  is  developed  outside  the  Community  context,  and  that  the  present  EPLA 
draft only deals with European patent litigation. This would mean that a separate jurisdiction 
for future Community patents would be required.  

The Commission believes that consensus could be built on the basis of an integrated approach 
which combines features of both EPLA and a Community jurisdiction as initially proposed by 
the  Commission.  The  creation  of  a  Community  patent  should  not  be  put  in  jeopardy  nor 
should  there  be  duplication  with  two  competing  jurisdictions  on  patent  litigation  in  Europe. 

28 

E.g.  Directive  2004/48/EC  of  the  European  Parliament  and  of  the  Council  of  29  April  2004  on  the 
enforcement of intellectual property rights; Council Regulation (EC) No 44/2001 of 22 December 2000 
on  jurisdiction  and  the  recognition  and  enforcement  of  judgments  in  civil  and  commercial  matters 
(Brussels I). 

EN 

10 

   EN 

 
                                                 
This  way  forward  could  therefore  be  to  reflect  on  one  single  court  system  inspired  by  the 
principles  on  which  consensus  is  emerging,  and  addressing  the  respective  concerns  of 
Member States and stakeholders.  

This could be achieved by creating a unified and specialised patent judiciary with competence 
for  litigation  on  European  patents  and  future  Community  patents.  Such  a  judicial  system 
could  be  strongly  inspired  by  the  EPLA  model,  in  particular  as  regards  the  specificities  of 
patent litigation, but could allow for harmonious integration in the Community jurisdiction.  

The  patent  jurisdiction  should  ensure  an  appropriate  degree  of  proximity  to  the  parties  and 
relevant  circumstances  of  the  case.  It  should  comprise  a  limited  number  of  first  instance 
chambers  a  as  well  as  a  fully  centralised  appeal  court  which  would  ensure  uniformity  of 
interpretation.  The  chambers,  which  could  make  use  of  existing  national  structures,  should 
form  an  integral  part  of  the  single  jurisdictional  system.  In  the  context  of  this  single,  yet 
multinational system of litigation, the allocation of cases would be handled by the registry of 
the judiciary on the basis of clearly defined and transparent rules. These rules could be based 
on the Brussels I Regulation and other existing acquis communautaire. 

The jurisdiction would have competence for infringement and validity actions as well as for 
related  claims  such  as  damages  and  for  specific  proceedings  responding  to  the  needs  of 
stakeholders.  

The  appeal  court  and  the  first  instance  chambers  should  work  under  common  rules  of 
procedure  based  on  best  practices  in  the  Member  States.  This  would  be  by  using  the 
knowledge  and  experience  of  specialised  patent  tribunals  within  the  EU,  for  example,  on 
taking evidence, oral and written proceedings, injunctive relief and case management. In this 
context, present work on the draft EPLA provides useful elements. 

The  patent  jurisdiction  should  comprise  both  legally  and  technically  qualified  judges,  who 
should enjoy full judicial independence and may not be bound by any external instructions. 

Finally, the patent jurisdiction must respect the European Court of Justice as the final arbiter 
in  matters  of  EU  law,  including  questions  related  to  the  acquis  communautaire  and  to  the 
validity of future Community patents.  

The  Commission  believes  that  if  there  is  adequate  political  will,  the  current  differences 
between the Member States can be overcome and an appropriate architecture for a unified and 
integrated EU-wide patent jurisdiction could be established. 

3. 

SUPPORTING MEASURES TO IMPROVE THE PATENT SYSTEM 

High  quality  legislation  is  a  necessary  but  not  sufficient  condition  for  a  well-functioning 
patent  system.  Alongside  the  importance  of  quality  highlighted  by  the  2006  patent 
consultation,  companies'  strategic  use  and  enforcement  of  their  rights  need  to  be  improved. 
Furthermore, the consultation raised several issues where, in addition to legislative initiatives, 
non-legislative  concerted  actions  have  to  be  undertaken  or  intensified  in  order  to  bring  the 
Lisbon strategy forward. 

Many companies often still do not fully exploit the existing possibilities for protecting their 
intellectual  property,  which  may  impede  further  development  towards  a  knowledge  based 
economy. SMEs and universities are often not aware of how best to use their patent rights to 

EN 

11 

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protect and exploit their inventions. For this reason, measures to support use of IPR including 
patents  are  vital  along  with  affordable  and  effective  enforcement.  Only  then  can  the  IPR 
system  provide  the  degree  of  protection  needed  to  optimise  investment  in  innovation.  A 
number  of  the  supporting  measures  described  below  are  dealt  with  in  more  detail  in  the 
Commission's  recent  Communication  on  Innovation  strategy29  and  they  will  also  be  tackled 
by the forthcoming Communication on IPR strategy. 

3.1. 

QUALITY, COSTS AND EFFICIENCY OF THE PATENT SYSTEM 

Whereas the quality of European patents is generally perceived to be high compared to other 
regions  of  the  world  participants  in  the  2006  consultation  have  stressed  the  importance  of 
rigorous examination, prior art search and strict application of patentability criteria. However, 
concerns  have  been  raised  that  a  spiralling  demand  for  patents  could  result  in  increased 
granting of low quality patents. This is one of the reasons that could lead to the emergence of 
"patent thickets"30 and "patent trolls"31 in Europe. A high quality patent regime in the EU is 
an  essential  instrument  to  prevent  such  innovation  hampering  and  destructive  behaviour  in 
Europe. 

Alongside the issue of quality, efforts must continue to address both cost and time to delivery 
issues. As regards cost the gap in comparison with Japan and the USA must be significantly 
reduced,  notably  for  SMEs.  As  regards  time  to  delivery,  the  aim  should  be  to  bring  the 
average  time  it  takes  to  grant  or  to  refuse  a  European  patent  down  to  three  years  as  agreed 
between  EPC  states  at  the  1999  Paris  Intergovernmental  Conference32.  Timely  delivery  of 
examined rights is particularly important bearing in mind that demand for patents continues to 
rise. For example, the EPO reported a 7.2% rise in patent filings between 2004 and 2005 to 
almost  193,00033,  and  a  record  145,000  applications  were  received  under  the  Patent 
Cooperation  Treaty  in  2006,  representing  a  6.4%  growth  over  the  previous  year34.  Similar 
growth levels repeated over the coming years would double the total number of applications 
in about 10 years. 

With  the  increasing  demand  for  patents,  an  increasing  burden  on  examiners  as  well  as  the 
advances  in  technological  developments,  it  is  important  that  patent  offices  in  Europe  work 
together, for example, on the mutual exploitation of examination results and that they strive to 
maintain  a  high  quality  of  granted  patents.  The  Commission  therefore  welcomes  recent 
quality  improving  initiatives  such  as  the  Standard  for  the  European  Quality  Management 

29 

30 

31 

32 

33 
34 

Communication  from  the  Commission  to  the  Council,  the  European  Parliament,  the  European 
Economic and Social Committee and the Committee of the Regions, "Putting knowledge into practice: 
A broad-based innovation strategy for the EU", COM(2006) 502. 
A patent thicket refers to the potential problem that in view of the high number of patents necessary to 
produce  a  product,  innovatioin  in  the  sector  is  slowed  down  because  of  fear  of  hold-up  and  patent 
infringement litigation. 
This is a new method of gaining return form a patent. "Patent trolls" are patent owners (often investors 
who  buy  patents  cheaply  from  failed  companies)  who  use  these  rights  to  threaten  companies  with 
infringement  actions  and  interlocutory  injunctions,  forcing  them  into  financial  settlements  to  avoid 
expensive litigation. Such threats can potentially affect an entire industry sector. 
Report  of  the  Intergovernmental  Conference  of  the  contracting  states  of  the  European  Patent 
Organisation on the reform of the patent system in Europe, Paris, 24 and 25 June 1999 [1999] OJEPO 
545 available at http://www.european-patent-office.org/epo/pubs/oj_index_e.htm. 
EPO Annual Report 2005 at http://annual-report.european-patent-office.org/2005/review/index.en.php. 
WIPO Website at http://www.wipo.int/edocs/prdocs/en/2007/wipo_pr_2007_476.html. 

EN 

12 

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System produced by the Working Party set up the Administrative Council of the EPO. This 
provides an ideal avenue to maintain quality patent rights and tackle problem areas. 

3.2. 

SPECIFIC SUPPORT FOR SMEs 

There are indications that SMEs do not patent or use other IPR because they lack good quality 
advice,35 or because of the high cost of patenting. It is vital that SMEs are in a position where 
they have enough knowledge to make an informed decision, whether they opt for patenting or 
other forms of IPR protection. 

A  patent  strategy  for  Europe  must  therefore  include  awareness-raising  activity,  highlighting 
the advantages and benefits of the patent system, in particular for SMEs. As outlined in the 
Communication  on  Research  and  Innovation36,  the  Commission  will  promote  the  use  of 
intellectual property rights by identifying with stakeholders which actions can best be taken to 
support  SMEs.  It  is  a  matter  of  making  better  use  of  existing  support  services,  but  also  of 
designing new services that are more adapted to the actual needs of SMEs.. The Commission 
has just launched a project, under the PRO INNO Europe initiative, with the aim of spreading 
knowledge among SMEs of issues, with the focus notably on patenting. The Commission is 
also  launching  a  call  for  proposals  under  the  Competitiveness  and  Innovation  Framework 
Programme  (CIP)  to  implement  a  3-year  IPR  Awareness  and  Enforcement  Project  to  raise 
significantly  the  awareness  and  knowledge  of  IPR  issues  among  SMEs,  improving 
registration and enforcement of rights and combating counterfeiting. Regarding the cost issue, 
the  most  significant  progress  would  of  course  come  from  the  adoption  of  the  Community 
patent.37 

3.3. 

KNOWLEDGE TRANSFER 

It  is  generally  felt  that  Europe  is  lagging  behind  and  should  improve  its  performance  in 
knowledge  transfer.  In  particular  transnational  technology  transfer  between  enterprises  in 
different  European  countries  and  knowledge  transfer38  between  EU  public  research  base39 
(e.g. universities) and industry needs to improve.  

The  Commission  is  presenting  40  a  Communication  and  accompanying  (voluntary)  good 
practice  guidelines  on  improving  knowledge  transfer  between  public  research  centres  and 
industry across Europe. This will contribute to the removal of existing administrative barriers 

35 

36 

37 

38 

39 

40 

The most comprehensive data on the use of IPR by SME sis from the Community Innovation Survey 
(CIS). CIS-4 covering the period 2002 – 2004 shows that SMEs consistently report less use of formal IP 
and of non-formal appropriation methods than large firms. 
Implementing  the  Community  Lisbon  Programme:  More  Research  and  Innovation  –  Investing  for 
Growth and Employment: A Common Approach, COM(2005) 488 final. 
It is also important to note that the USA, Japan and Korea have adopted legislation which cut by half 
the costs of patenting for SMEs compared to large enterprises. 
Contract research, collaborative and co-operative research, licensing, pooling of resources, publications 
and exchanges of skilled researchers between the public and private sectors. 
Public  research  organisations  represent  about  one  third  of  the  total  R&D  activity  in  Europe.  Prior  to 
2003 enlargement, 80% of public R&D was spent in the 1500 research universities in Member States ( 
see  European  Commission  (2001),  "Benchmarking  Industry-Science  Relations  –  The  Role  of 
Framework  conditions",  Final  Report,  Vienna/Mannheim,  and  Mark O.  Sellenthin,  "Who  should own 
University  Research  –  An  exploratory  study  of  the  impact  of  patent  rights  regimes  in  Sweden  and 
Germany on the incentives to patent research results", June 2004.  
 Communication  from  the  Commission  to  the  Council,  the  European  Parliament,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  –  Improving  knowledge  transfer 
between research institutions and industry across Europe: embracing open innovation, COM(2007) 182 

EN 

13 

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and will provide guidance on how ownership and exploitation of R&D results and associated 
IPR  can  be  best  combined  with  the  fundamental  aims  of  public  research  organisations.  In 
particular,  it  will  propose  increased  interaction  between  public  sector  researchers  and 
industry, and better quality of knowledge transfer services in Europe. 

3.4. 

ENFORCEMENT OF PATENT RIGHTS 

An  appropriate  legal  framework  and  incentives  to  use  patents  need  to  be  complemented  by 
affordable  and  effective  enforcement.  Right  holders  often  do  not  have  enough  legal  and 
funding resources to enforce their patents against alleged infringements. Furthermore, in the 
global  economy,  it  is  crucial  that  businesses  in  Europe  can  adequately  enforce  their  rights 
outside  the  territory  of  the  EU.  On  the  other  hand,  SMEs,  in  particular,  find  difficulties  to 
continue their activities when they are unduly accused of infringing patents by big industries 
and are looking for easier and cheaper ways to defend themselves. 

3.4.1.  Alternative Dispute Resolution (ADR) 

Traditional litigation in cross-border patent disputes involves multiple procedures in multiple 
jurisdictions  and  carries  the  risk  of  lengthy  procedures,  inconsistent  outcomes  and  high 
litigation  costs.  An  EU-wide  patent  jurisdiction  as  explained  above  would  considerably 
improve the situation in Europe in all of these respects. 

Parties,  and  in  particular  SMEs,  are  continually  on  the  lookout  for  alternative,  cheaper  and 
more effective methods of resolving their patent and other IPR disputes. Efforts are therefore 
being made on the national and international basis to establish alternative dispute resolution 
(ADR) systems and encourage, if not require, parties to engage in mediation, conciliation or 
arbitration prior to seeking judicial remedies.  

In  their  replies  submitted  to  the  2006  patent  consultation,  many  stakeholders,  in  particular 
SMEs, brought up the issue of introducing ADR methods into the future patent landscape in 
Europe.  Suggestions  ranged  from  making  use  of  existing  systems  such  as  the  World 
Intellectual Property Organisation Arbitration and Mediation Centre to designing a sui generis 
Community alternative dispute resolution system.  

Whilst  the  Commission  has  already  made  in  October  2004  a  proposal  for  a  Directive  on 
certain  aspects  of  mediation  in  civil  and  commercial  matters41  it  will  further  examine  the 
usefulness and added value of ADR systems in the field of IPRs, and in particular for patent 
issues. The examination will focus on possible time and cost savings ADR may bring on the 
potential benefits in accommodating specific characteristics of intellectual property disputes, 
including patent disputes. 

3.4.2.  Patent litigation insurance  

One possible means of ensuring access to or an adequate defence in patent litigation for SMEs 
can  be  patent  litigation  insurance  (PLI).  However,  attempts  by  the  private  sector  to  provide 
insurance schemes have rarely been successful up to now. 

41 

COM (2004) 718 final, 22.10.2004. 

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14 

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The Commission services commissioned a study on PLI in 2001 and a follow-up study was 
published  in  June  2006.  A  public  consultation  on  the  recent  study  closed  on  31  December 
2006, receiving 28 responses which are currently being analysed. However, it can already be 
concluded  that  the  overall  reaction  from  stakeholders  in  relation  to  the  mandatory  system 
proposed in the follow-up study is sceptical. 

3.4.3. 

International aspects  

Enforcement of IPR remains a major problem at international level. Preliminary results from a 
major study being carried out by the OECD indicate that the value of counterfeit and pirated 
goods  traded  internationally  in  2004  was  €140  billion42.  Although  much  work  has  already 
been done to raise international standards to those prevailing in the EU, the Commission will 
continue to focus on the priority actions to protect rights holders, including patent holders, in 
territories outside the EU. 

The  German  presidency  of  the  G8  Group  of  Major  Industrialised  Economies  has  recently 
proposed a three-track approach to advance IPR enforcement at a global level. This approach 
consists  of  advancing  and,  if  possible,  finalising  in  2007  the  implementation  of  the  16  July 
2006 St. Petersburg Statement on Combating IPR Piracy and Counterfeiting43, involving the 
business communities of the G8 countries in enforcement efforts and engaging the O5 group 
of  emerging  economies  (Brazil,  China,  India,  Mexico  and  South  Africa)  in  a  "constructive 
dialogue" at the forthcoming Heiligendamm summit. 

Moreover  the  current  presidency  of  the  EU  has  made  transatlantic  relations  one  of  its  top 
priorities.  The  new  initiative  on  a  Transatlantic  Economic  Partnership  covers  inter  alia  IPR 
protection. It would build on existing initiatives such as the EU-US summit held in Vienna in 
June  2006  where  the  EU  and  US  launched  an  Action  Strategy  to  combat  piracy  and 
counterfeiting in third countries.  

The  Commission  shares  the  view  that  there  is  a  need  for  improving  regulatory  and  non-
regulatory  dialogues  with  the  Community's  international  partners,  including  co-ordinated 
efforts to protect intellectual property. Protection of IPRs and the fight against counterfeiting 
and product piracy must be stepped up internationally. 

4. 

CONCLUSION 

The Commission strongly believes that an improved patent system is vital if Europe is to fulfil 
its potential for innovation. For this reason, the Commission has set out its proposals for the 
way  forward  for  a  reform  of  the  patent  system  in  Europe  and  is  proposing  supporting 
measures  in  this  Communication.  The  purpose  of  this  Communication  is  to  revitalise  the 
debate  on  the  patent  system  in  Europe,  in  a  way  which  encourages  Member  States  to  work 
towards consensus and real progress on this issue. Making the Community patent a reality and 
at the same time improving the existing fragmented patent litigation system would make the 
patent system significantly more accessible and bring cost savings for all who have a stake in 
the patent system. In parallel supporting measures to maintain and, where necessary, improve 
the quality and efficiency of the current system, together with targeted measures to improve 

42 

43 

Report  by  John  Dryden,  Deputy  Director  Science  Technology  and  Industry  OECD,  to  Third  Global 
Congress on Combating Counterfeiting and Piracy, Geneva January 30 2007, figure originally quoted 
was US$176 billion. 
Statement on IPR Piracy and Counterfeiting available at http://en.g8russia.ru/docs/15.html. 

EN 

15 

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SME  access,  should  ensure  that  Europe's  patent  system  will  play  its  role  in  boosting 
innovation  and  competitiveness  in  Europe.  The  EU  must  also  engage  actively  with  its 
international partners to increase awareness of IP issues and proper and balanced enforcement 
of them. By providing the basis for Member States to agree concrete actions, the Commission 
aims to provide a solid basis for progress on patent reform in other areas, especially as regards 
the Community patent and the litigation system. 

The Commission will work with the Council and Parliament to build consensus on the way 
forward. When broad consensus is achieved, the Commission will take the necessary steps for 
implementing the agreed strategy and make relevant proposals.  

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ANNEX I 

Cost Structure of direct patent filings and maintenance, 2003 

Hypotheses 

Type of firm 

Median number of claims 

Time to grant (number of months) 

Designated countries for protection 

Number of translations3 

Procedural fees 

Filing 

Search 

Design. States (75 per country, up to 7) 

3rd year of application 

4th year of application 

Examination 

Granting  

Claim tax4 

Administrative cost 

Translation cost5 

Validation cost 

EPO-31 

EPO-132 

USPTO 

JPO 

EURO 

EURO 

US$ 

JP Yen 

all 

7 

31 

1 

0 

16000 

large 

23 

27 

1 

0 

225 

375 

all 

18 

44 

3 

2 

160 

690 

225 

380 

405 

all 

18 

44 

13 

8 

160 

690 

525 

380 

405 

1,430 

1,430 

150 

168,600 

715 

320 

250 

715 

320 

250 

1,300 

54 

300 

28,000 

3,400 

13,600 

95 

1,700 

TOTAL Procedural cost 

8,070 

20,175 

2,404 

212,600 

Procedural costs without translation 

Procedural costs with translation 

External services cost7 

EURO 

EURO 

EURO 

EURO 

4,670 

8,070 

6,575 

1,856 

1,541 

20,175 

1,856 

1,541 

12,500 

19,500 

8,000 

4,000 

EN 

17 

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After grant 

Maintaining costs 10 years (fees) 

2,975 

16,597 

2,269 

2,193 

Maintaining costs 20 years (fees) 

22,658 

89,508 

4,701 

11,800 

TOTAL filing process6 

20,570 

39,675 

9,856 

5,541 

TOTAL 10 years 

TOTAL 20 years 

23,545 

56,272 

12,125 

7,734 

43,228 

129,183 

14,556 

17,341 

Source: Van Pottelsberghe and François (see footnote 2). 

1. The three EPC member countries that are the most frequently designated are Germany, the United Kingdom 
and France. 

2.  According  to  the  EPO  annual  report  of  2003,  13  countries  that  are  effectively  designated  for  protection  by 
more  than  60  per  cent  of  the  patent  applications:  Germany,  United  Kingdom,  France,  Italy,  Spain,  The 
Netherlands, Sweden, Switzerland, Belgium, Austria, Denmark, Finland and Ireland. 

3.  Only  8  translations  would  be  required  for  an  effective  protection  in  13  countries,  as  some  countries  accept 
applications  written  in  English  or  share  a  common  language  with  other  countries  (The  Netherlands,  Belgium, 
Switzerland). 

4. The cost per claim is € 40 if more than 10 claims are included in an EPO patent application; US$ 18 if more 
than 20 claims are included in a USPTO patent application; and Yen 4000 for the claims  included in a patent 
application at the JPO. 

5.  It  is  assumed  that  translation  costs  are  of  €  1,700  per  language.  This  amount  includes  the  translation  and 
attorney's intermediation. 

6.  These  cost  estimates  for  the  EPO  correspond  to  the  cost  of  the  so-called  EP-direct  applications  (a  patent 
directly applied at the EPO). They should be considered as a lower bound of the average patent, as they do not 
include the costs associated with national priority applications (from an EPC member state or from abroad) or 
with PCT applications. 

7. There is no existing comparison of external services costs in the US, Japan and Europe. The Roland Berger 
(2005)  survey  provides  a  reliable  estimate  for  applications  at  the  EPO  (see  table  A1  in  the  appendix).  The 
assumption base is € 8,000 for a patent and € 1,500 per designated state (for the EPO). As the patents applied at 
the JPO are much smaller (7 claims against 18), half the base cost has been assumed, i.e. € 4,000. 

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ANNEX II 

TRANSLATION COST MODELS 

Model 

Translation costs 

Cost per patent44

(in euros) 

Percentage 
compared to 
current EP 
translation costs 

European patent (under current 
system for average EP) 

1244845 

100 % 

European patent system under 
London Agreement for average 
EP46 

Community Patent (under 
Common political approach of 
March 2003)49 

Community Patent (Commission 
proposal: translation of claims into 
the other two EPO languages) 

880047 (filed in 
DE or FR) 

880048 (filed in 
EN) 

714050 

71 % 

71 % 

57 % 

68051 

5 % 

44 

45 

46 

47 

48 

49 

50 
51 

Calculations  assume  that  an  average  patent  has  16  pages  of  descriptions  and  4  pages  of  claims,  with 
translation cost of € 76 per page for description and € 85 per page for claims (based on figures at time 
of Common political approach of March 2003; EPO study in August 2004 prepared by Roland Berger 
Market Research available at  
http://www.european-patent-office.org/epo/new/cost_anaylsis_2005_study_en.pdf,  see  pages  141  to 
150).  This assumes  that an average European Patent designates 13 States (the States designated by a 
majority of European patent applicants): DE (designated by 98 % of the EP), FR (93 %), UK (92 %), IT 
(76 %), ES (61 %), NL (59 %), SW (57 %), CH (55 %), BE (54 %), OS (53 %), DK (51 %), IE and FIN 
(50 %), with NL, SW and DK selecting English as preferred language under the London Agreement. An 
EP  covering  all  EU  Member  States  would  require  translation  into  21  other  languages  costing  32676 
euros. 
4 pages of claims x 85 euros x 8 languages (2 of the 3 EPO languages + IT, ES, NL, SW, DK, FIN) + 
16 pages of descriptions x 76 euros x 8 languages. 
Since IT, ES, BE, OS and FIN are not signatories to the London Agreement, they would still require a 
full  translation.  NL,  SW  and  DK  are  assumed  to  select  English  as  preferred  language  under  the 
Agreement.  
4 pages of claims x 85 euros x 8 languages + 16 of descriptions x 76 euros x 5 languages (IT, ES, FIN, 
EN, FR or DE). 
4 pages of claims x 85 euros x 8 languages + 16 of descriptions x 76 euros x 5 languages (IT, ES, FIN, 
FR, DE). 
From  1  January  2007,  the  Community  patent  would  cover  27  Member  States.  The  claims  would  be 
avalaible  in  all  official  Community  languages  (except,  under  the  current  transitional  period,  in  Irish). 
Therefore, each Community patent would require translation of the claims only into 21 languages.  
4 pages of claims x 85 euros x 21 languages. 
4 pages of claims x 85 euros x 2 languages.  

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ANNEX III - IPR AND INNOVATION PERFORMANCE 

Based on the Summary Innovation Index score and its growth rate, European countries can be 
divided in four groups or clusters52: 

•  Switzerland,  Finland,  Sweden,  Denmark  and  Germany  make  up  the  group  of 

“innovation leaders”. 

•  France, Ireland, United Kingdom, Netherlands, Belgium, Austria, and Iceland are 

all “innovation followers ”. 

•  Countries  “catching  up”  are  Slovenia,  Portugal,  Czech  Republic,  Lithuania, 

Latvia, Greece, Poland and Bulgaria. 

•  Countries  “trailing”  are  Estonia,  Spain,  Italy,  Malta,  Hungary,  Croatia  and 

Slovakia. 

Cyprus and Romania form a separate fifth cluster of fast growing, catching-up countries. This 
is not considered a real cluster as Cyprus is one of the smallest EU countries and Romania is 
starting from a very low level of innovation performance. Luxembourg, Norway and Turkey 
do not fit into any of these groups.

52 

European  Innovation  Scoreboard  2006  published  by  Pro  Inno  Europe,  an  initiative  of  DG  Enterprise 
and Industry (see http://www.proinno-europe.eu) 

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To  compare  innovation  performance  with  patenting  activity,  the  figure  below  shows  the 
aggregate value of patents in selected Member States as percentage of GDP over periods from 
1994 to 200253. In general, better innovation performance in a Member State correlates with 
greater patent value in that country. 

1.40%
1.44%

2.10%

2000-2002

1997-1999

1994-1996

Germany

Netherlands

EU8

Denmark

France

United Kingdom

Italy

Hungary

Spain

0.99%

1.16%

0.96%

1.03%

1.01%

0.73%

0.87%

0.81%

0.99%

0.63%

0.55%

0.43%

0.36%

0.25%

0.18%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.2%

53 

"Study on evaluating the knowledge economy what are patents actually worth? The value of patents for 
today's economy and society" – report from CERM Foundation (Italy) for DG Internal Market of the 
European Commission, available on:  
http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#studies 

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ANNEX IV 

Patent litigation costs in selected Member States  

Member State 

Cost of 1st Instance 

Cost of 2nd Instance 

(€) 

(€) 

UNITED 
KINGDOM * 

150,000 to 1,500,000 

150,000 to 1,000,000 

FRANCE 

50,000 to 200,000 

40,000 to 150,000 

NETHERLANDS 

60,000 to 200,000 

40,000 to 150,000 

GERMANY** 

50,000 

90,000 

The figures for France, the Netherlands and Germany relate to an average case with a sum in 
dispute of +/- 250,000 € 

*Average case. Sum in dispute > 1,000,000 € 

**Cost  for  both  validity  and  infringement.  In  Germany,  invalidity  and  infringement  actions 
are heard before separate courts. 

Source : EPO Doc. WPL/11/05 Rev. 1, 16.02.2006, p.14 et seq. (see footnote 9) 

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