DOCUMENT DE TRAVAIL DES SERVICES DE LA COMMISSION RÉSUMÉ DE L’ANALYSE D’IMPACT   Document accompagnant la  Proposition de   règlement du Parlement européen et du Conseil   mettant en œuvre la coopération renforcée dans le domaine de la création d’une protection par brevet unitaire  et la  Proposition de   règlement du Conseil  mettant en œuvre la coopération renforcée dans le domaine de la création d'une protection par brevet unitaire, en ce qui concerne les modalités applicables en matière de traduction   {COM(2011) 215 final} {COM(2011) 216 final} {SEC(2011) 482 final}
Date: 2011-04-13
Institutions: European Commission
Subjects: European Patent Office, European patent, approximation of laws, intellectual property, patent law

EUROPEAN COMMISSION 

Brussels, 13.4.2011  
SEC(2011) 483 final  

COMMISSION STAFF WORKING PAPER

SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying document to the

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL
implementing enhanced coop eration in the area of the creation of unitary patent
protection

and the  
Proposal for a 

COUNCIL REGULATION
implementing enhanced cooperation in the area of the creation of unitary patent 
protection with regard to the applicable translation arrangements  

{COM(2011) 215 final} 
{COM(2011) 216 final} 
{SEC(2011) 482 final} 

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1. 

INTRODUCTION 

Patents  are  an  important  enabler  for  economic  growth  through  innovation.  Investment  in 
research  (R&D)  accounts  for  1.9%  of  GDP  in  the  EU1  and  a  functioning  patent  system  is 
essential to translate that investment into economic growth.  

Today, however, patent protection in Europe is fragmented. The Europe 2020 Strategy2 and 
the  Single  Market  Act3  identified  the  creation  of  an  economy  based  on  knowledge  and 
innovation as a priority. Both initiatives are seeking to improve the framework conditions for 
business to innovate by creating unitary patent protection in the EU Member States (MS).  

In spite of broad recognition of the competitive disadvantage European business faces in the 
absence  of  unitary  patent  protection,  in  December  2010  the  Competitiveness  Council  could 
only confirm4 that there were insurmountable difficulties that made the establishment of such 
protection in the entire EU impossible to attain within a reasonable period. This statement was 
followed  by  a  request  from  12  MS  to  establish  enhanced  cooperation  in  the  area  of  unitary 
patent  protection.  The  Commission  subsequently  submitted  a  proposal5  to  the  Council  for 
authorising enhanced cooperation that was followed by the request of another 13 MS to join 
the  cooperation.  The  European  Parliament  gave  its  consent  to  the  launch  of  enhanced 
cooperation  on  15  February6  and  the  Competitiveness  Council  adopted  the  authorising 
decision on 10 March7. As a consequence, the impact assessment report (IA) has to take into 
account  the  conditions  set  by  the  Council's  authorising  decision.  Finally,  this  IA  does  not 
address  the  unified  patent  litigation  system  that  follows  a  parallel  work  stream  and  will  be 
subject  to  different  legal  instrument.  The  Impact  Assessment  Quality  Board  issued  a 
favourable opinion on 25 February 2011. 

2. 

CONTEXT – THE EXISTING PATENT SYSTEMS IN EUROPE 

In the EU, patent protection can be obtained either through the national patent offices of the 
MS that grant national patents or through the European Patent Office (EPO). 

If the applicant chooses to apply for a "European patent", the application is dealt with by the 
EPO  under  the  procedures  laid  down  in  the  European  Patent  Convention  (EPC)8.  The  EPC 
established centralised procedures for the search, examination and grant of European patents 
in English, French or German. But a patent that is granted and published, does not take effect 
automatically. It must first be validated in the States in which the patentee seeks protection, 
i.e. the European patent has to be "converted" to national patents. 

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8 

Eurostat, 2008 data. 
COM(2010) 2020. 
COM(2010) 608 final/2. 
Press release 17668/10. 
COM(2010) 790. 
P7_TA(2011)0054. 
Council Decision 2011/167/EU of 10 March 2011 authorising enhanced cooperation in the area of the 
creation of unitary patent protection (OJ. L 76, 22.3.2011, p. 53). 
http://www.epo.org/patents/law/legal-texts/html/epc/1973/e/ma1.html  

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3. 

PROBLEM DEFINITION 

The  procedure  for  searching,  examining  and  granting  European  patents  is  well-functioning 
and  widely  accepted  by  applicants  from  Europe  and  third  countries.  This  standardised 
procedure, however, is complemented by mandatory post-grant procedures that are complex, 
divergent  and  result  in  unnecessary  cost  for  business.  This  IA  looks  into  the  problems  and 
possible solutions with respect to the post-grant stage of patent protection. 

3.1. 

Problem 1: High costs related to the translation and publication of patents 

After  the  grant  of  European  patents  the  applicable  national  validation  requirements  include 
translation, publication fees and various formal filing requirements. Where the patent holder 
fails to observe any of the above, the European patent is deemed to be void ab initio in that 
State. The fees charged by patent agents add to these costs. 

Even if the London Agreement9 reduced the costs of validation requirements in some MS, the 
overall cost of validation in 3 MS (DE, FR, UK) equal € 680; it reaches € 12 500 in 13 MS 
and over € 32 000 if a patent is validated in the  whole EU. It is estimated the actual validation 
costs are around € 193 milli on per year in the EU. 

3.2. 

Problem 2: Differences in the maintenance of patents in the Member States 

Renewal fees have to be paid by the patentee each year in each country where the patent is 
validated.  If  he/she  does  not  pay  the  fees,  the  patent  lapses  and  becomes  part  of  the  public 
domain.  Renewal  fees  show  great  diversity  in  the  MS.  Moreover,  there  are  many  auxiliary 
provisions  in  the  national  law  that  make  the  maintenance  of  patents  in  several  MS 
unnecessarily  difficult.  The  deadlines  for  the  payment  of  the  fees  differ,  payment  by  bank 
transfer  is  still  not  possible  everywhere,  some  countries  make  the  appointment  of  a  patent 
attorney mandatory and communication with the national patent offices is often only possible 
in the local language. It is estimated that the accumulated cost of the technical assistance for 
payment can reach € 61-81.2 million over a 10-year period. 

3.3. 

Problem  3:  Administrative  complexity  of  registering  transfers,  licences  and 
other rights 

Patents can facilitate transactions in the markets for technology: they can be bought and sold 
as property titles or, more frequently, be subject to licensing agreements. Transfers and rights 
are  registered  in  the  national  patent  registers  of  the  countries  where  the  patent  is  validated. 
Such  registration  requires  appointing  a  professional  representative  in  more  than  half  of  the 
MS. Registering the transfer of a patent valid in 5 countries can cost € 2000-2500 in addition 
to  the  different  procedural  fees  charged  in  the  MS.  Moreover,  there  are  divergent 
requirements  as  regards  the  types  of  documents  to  be  submitted  to  the  patent  register, 
certificates, etc. 

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Agreement  on  the  application  of  Article  65  EPC  (London  Agreement)  adopted  in  October  2000  (OJ 
EPO 2001, 550). 

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3.4. 

Consequence: EU-wide patent protection is expensive 

As  a  consequence,  access  to  comprehensive  patent  protection  in  Europe  is  so  costly  and 
complex  that  it  is  inaccessible  to  many  inventors  and  companies.  In  particular,  SMEs often 
prefer an informal protection of their innovations (i.e. secrecy).  

But even when European patents are solicited and granted, they are usually validated only in a 
few countries selected by the patentee. Currently, a European patent is, on average, validated 
in 5 MS10. The number of validations has even decreased over the last 15 years11. Moreover, 
the  administrative  burden  and  complexity  of  maintaining  patents  and  registering  rights  and 
licences generate unnecessary costs for inventors and businesses, including the ones seeking 
patent information. 

The  fragmentation  of  patent  protection  also  renders  the  enforcement  of  patent  rights  more 
difficult. When goods  enter the  EU through a MS where a patent is not in force, the  patent 
holder may not rely on the EU Customs Code to withhold the goods suspected to be in breach 
of a patent12.  

The situation described above has major undesirable effects on the functioning of the internal 
market.  In  addition  to  maintaining  the  fragmentation  of  the  market,  it  also  has  a  negative 
impact on innovation, growth and the competitiveness of European business.  

4. 

SUBSIDIARITY  

The creation of European intellectual property rights to provide uniform protection throughout 
the  EU  and  associated  language  arrangements  is  provided  for  by  Article  118  TFEU.  The 
problems  outlined  above  can  only  be  addressed  at  EU  level  by  a  solution  that  drastically 
reduces  translation  and  administrative  requirements  compared  to  the  current  regime.  EU 
action is necessary, as without an EU legal instrument MS would not sufficiently be able to 
establish legal effects attached to patents that are uniform in several MS. Proportionality was 
taken into account in the analysis of the options. 

5. 

OBJECTIVES 

Following from the problem definition, the general objectives of this proposal are to enhance 
the functioning of the Single Market and foster growth and innovation. These objectives could 
be  achieved  by  increasing  SMEs'  access  to  patent  protection,  increasing  the  scope  of  patent 
validations and knowledge dissemination (specific objectives). 

The above objectives can only be reached by lowering the overall costs of patent protection in 
Europe,  in  particular  by  reducing  the  translation  and  publication  costs,  simplifying  the 
maintenance  of  patents  (renewal)  and  simplifying  the  registration  of  transfers,  licensing 
agreements and other rights.  

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12 

Study on the Cost of Patenting by Roland Berger Market Research, August 2004. 
Economic cost-benefit analysis of the Community patent by van Pottelsberghe, Danguy, 2009.  
Council Regulation (EC) No 1383/2003 (OJ L 196, 2.8.2003, p. 7–14).  

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6. 

POLICY OPTIONS AND ANALYSIS 

The policy options were measured against the following criteria: effectiveness, cost reduction, 
simplification  and  political  feasibility.  The  MS,  however,  that  requested  the  Commission  to 
propose enhanced cooperation in the area of unitary patent protection also indicated the scope 
and  the  objectives  of  such  cooperation.  These  preconditions  had  to  be  taken  into  account 
when considering the options.  

6.1. 

Option 1 (Base-line scenario) – the Commission takes no action 

Under  this  scenario,  the  current  patent  system  in  Europe  would  remain  intact.  The  only 
improvement  could  be  the  accession  of  more  MS  to  the  London  Agreement.  Accession  is, 
however, not only optional but lengthy and complex. This scenario is ineffective as it would 
not  address  the  shortcomings  of  the  current  European  patent  system.  It  would  not  result  in 
cost reduction or simplification as the problems of validation, renewal and registration would 
persist. Finally, this option is also not in line with the political engagement of the Commission 
and the Council to address the problems in the current patent system. 

6.2. 

Option  2  –  the  Commission  continues  to  work  with  the  other  institutions 
towards an EU patent covering 27 Member States 

Under this option, the Commission – together with the Council and the European Parliament – 
would continue to work towards an EU patent which covers all MS, i.e. would continue the 
discussions on the basis of the Commission's proposals on the Community patent13 and on the 
translation arrangements14. This option would fully achieve the objectives of the initiative. It 
would result in a major cost reduction, as translation costs would amount to € 680 in the entire 
EU with no additional cost of validation. The overall savings could reach € 159 million per 
year. From the elimination of the cost of technical assistance for the payment of renewal fees, 
a  saving  of  € 49-65.2  million  in  a  10-year  peri od  could  be  foreseen.  As  the  payment  and 
management  of  the  renewal,  as  well  as  the  registration  of  the  patents  and  the  related  rights 
would  be  managed  centrally,  this  option  would  achieve  major  simplification.  However,  this 
option  is  not  feasible  politically  as  the  Council  had  tried  and  failed  on  several  occasions  to 
reach a unanimous agreement on the indispensable translation arrangements. 

6.3. 

Option  3  -  the  Commission  presents  proposals  for  regulation  implementing 
enhanced cooperation 

Under  this  option,  the  Commission  would  present  the  proposals  necessary  for  the 
implementation  of  enhanced  cooperation  in  the  area  of  unitary  patent  protection.  Unitary 
patent  protection  would  cover  the  25  MS  that  wish  too  cooperate  in  this  framework.  They 
represent 79% of the territory of the EU and over 92% of the applications are filed from these 
countries.  The  unitary  patent  protection  would  be  optional  to  the  users  and  would  co-exist 
exist with the current European and national patent systems. The costs and the complexity of 
patent protection would be significantly reduced. All patent holders would equally enjoy the 
benefits of this option, no matter whether they are residents in countries inside or outside the 
enhanced cooperation. 

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COM(2000) 412. 
COM(2010) 350. 

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Although this option would not bring the full benefits of option 2, it would be effective and 
have a positive impact on users of the patent system in Europe. The payment and management 
of the renewal of the patents, as well as the registration of the patents and the related rights 
would be managed centrally by the EPO with respect to the territory of the participating MS. 
In a 10-year period, the cost savings from the fees of technical assistance for payments could 
reach € 5760-7680 per patent if 25 MS participat ed in the enhanced cooperation. In the non-
participating countries patents would still need to be managed one-by-one. 

6.3.1.  Sub-option 3.1 - the Commission proposes translation arrangements applicable in 
the  area  of  unitary  patent  protection  that  correspond  to  its  proposal  of  30  June 
2010 

Under this sub-option, the Commission would propose translation arrangements applicable in 
the area of unitary patent protection that are identical to its proposal for the translation regime 
for the EU patent. The patentee would supply to the EPO a translation of the claims into the 
two other official languages of the EPO. No additional translations would be required (except 
in  the  case  of  dispute).  The  average  cost  of  patents  for  the  area  of  enhanced  cooperation 
would  be  € 680.  The  cost  of  protection  for  the  whole  EU  could  be  15%  of  the  costs  today 
(with 25 participating MS). The overall savings could reach € 58.5 million per year. This sub-
option would be cost-effective and result in relevant simplification but did not find sufficient 
support in Council. The MS requesting the launch of enhanced cooperation wish to include in 
the implementing regulations some of the elements proposed by the Belgian Presidency on the 
translation  arrangements.  The  proposal  for  the  draft  Council  decision  authorising  the 
enhanced  cooperation  contains  already  a  number  of  substantive  elements  in  this  regard. 
Therefore, this option is politically not feasible. 

6.3.2.  Sub-option 3.2 – the Commission proposes translation arrangements applicable in 
the  area  of  unitary  patent  protection  based  on  its  proposal  of  30  June  2010  and 
incorporating elements of a compromise proposal discussed by the Council 

Under this sub-option, the above translation arrangements would be complemented by certain 
elements of a compromise proposed by the Belgian Presidency in 2010, as requested by the 
MS  demanding  the  Commission  to  provide  for  a  proposal  to  launch  enhanced  cooperation. 
The  main  set  of  linguistic  requirements  would  the  one  under  the  EPC.  In  addition, 
supplementary  translation  requirements  would  be  applicable  for  a  transitional  period  that 
would result in additional costs for patentees. Therefore, the total costs of translation during a 
transitional period may vary from approx. € 980 to  € 2380 per patent in the area of enhanced 
cooperation. When high-quality machine translations become available, the cost of translation 
would be reduced to € 680. The co st of protection for the whole EU could be 20% of the costs 
today (with 25 participating MS). The overall savings could reach € 50 million per year. This 
sub-option can be expected to get significant political support. 

7. 

COMPARING THE OPTIONS AND THEIR IMPACTS 

When  comparing  the  options,  option  2  has  the  highest  score  according  to  the  effectiveness, 
cost  reduction  and  simplification  criteria.  However  option  3  also  has  major  benefits  and 
results  in  important  savings  and  simplification  for  the  users  from  Europe  and  from  third 
countries. 

The creation of an EU patent (option 2) would have the most positive impact on the internal 
market, on the users of patent information and on consumers, as it would integrate the entirety 

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of the internal market in terms of patent protection. But option 3 would also increase the level 
of integration not only between the participating MS but also between participating and non-
participating  countries.  By  implementing  enhanced  cooperation,  the  overall  costs  and 
complexity  of  obtaining  patent  protection  throughout  the  EU  will  be  significantly  reduced, 
thus,  more  inventors  can  be  expected  to  seek  patent  protection  also  in  the  MS  that  do  not 
participate in the enhanced cooperation.  

Improved integration will have a positive impact on consumers' access to goods and services. 
A better integrated market will ensure better cross-border trade and will facilitate fight against 
counterfeited goods. The centralised registration and publication of patents by the EPO would 
facilitate the dissemination of knowledge and have a positive impact on innovation.  

Easier and cheaper access to patents in Europe is likely to result in an increased number of 
innovative SMEs. SMEs have a major role in job creation; they ensure 2/3 of private sector 
jobs15.  The  increase  in  the  number  of  new  business,  therefore,  can  be  expected  to  have  a 
positive impact on job creation. 

While it is clear that in economic terms an EU patent would the most effective, 10 years of 
negotiation  have  shown  that  this  option  is  politically  not  feasible.  The  analysis  of  option  3 
shows that its benefits would still be very important. Although the  translation  regime under 
sub-option  3.1  would  be  the  most  cost-effective,  sub-option  3.2  is  likely  to  have  the  widest 
support among the MS participating in enhanced cooperation. Therefore, option 3 with sub-
option 3.2 is the preferred option. 

8. 

MONITORING AND EVALUATION 

Five  years  after  the  start  of  application,  the  Commission  will  review  the  application  of  the 
legislation,  with  particular  attention  to  the  transitional  translation  arrangements.  The 
Commission  will  also  monitor  the  relevant  indexes  on  the  conditions  of  innovation,  the 
number of patents and their cost on an annual basis. 

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http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/index_en.htm  

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