COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT   Accompanying document to the  Proposal for a   Regulation of the European Parliament and the Council  implementing enhanced cooperation in the area of the creation of unitary patent protection  and  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) 483 final}
Date: 2011-04-13
Institutions: European Commission
Subjects: European Patent Office, European patent, approximation of laws, intellectual property, patent law

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EUROPEAN COMMISSION 

Brussels, 13.4.2011 
SEC(2011) 482 final 

COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying document to the 

Proposal for a  

REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL 

implementing enhanced cooperation in the area of the creation of unitary patent 
protection 

and 

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) 483 final} 

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Table of Content 

1. 

2. 

3. 

3.1. 

3.2. 

Introduction .................................................................................................................. 4 

Procedural issues and consultation of interested parties .............................................. 5 

Context ......................................................................................................................... 8 

The economic role of patents ....................................................................................... 8 

The existing patent systems in Europe....................................................................... 10 

3.2.1.  National patent systems.............................................................................................. 10 

3.2.2.  The existing European patent system......................................................................... 10 

3.2.3.  The Patent Co-operation Treaty (PCT) ...................................................................... 12 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

Problem definition...................................................................................................... 12 

Problem 1: High costs related to the translation and publication of patents.............. 14 

Problem 2: Differences in the maintenance of patents in the Member States ........... 18 

Problem 3: Administrative complexity of registering transfers, licences and other 
rights........................................................................................................................... 20 

Consequence: EU-wide patent protection is expensive ............................................. 21 

Overall impacts .......................................................................................................... 23 

4.5.1.  Fragmentation of the Single Market .......................................................................... 23 

4.5.2.  Hindrance to innovation............................................................................................. 23 

4.5.3.  Hindrance to growth and competitiveness ................................................................. 24 

5. 

6. 

7. 

7.1. 

7.2. 

7.3. 

Subsidiarity ................................................................................................................ 24 

Objectives................................................................................................................... 24 

Policy options and analysis ........................................................................................ 25 

Option 1 (Base-line scenario) – the Commission takes no action ............................. 26 

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

Option 3 - the Commission presents proposals for regulation implementing enhanced 
cooperation................................................................................................................. 29 

7.3.1.  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 .... 32 

7.3.2.  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 ........... 34 

8. 

Comparing the options and their impacts................................................................... 36 

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8.1. 

8.2. 

8.3. 

8.4. 

9. 

10. 

Impacts on patent holders........................................................................................... 36 

Impact on the internal market and on stakeholders (other than patentees) ................ 38 

Social and environmental impacts ............................................................................. 39 

Political feasibility ..................................................................................................... 40 

Monitoring and evaluation ......................................................................................... 41 

ANNEX...................................................................................................................... 42 

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Disclaimer:  This  report  commits  only  the  Commission's services involved in its preparation 
and does not prejudge the final form of any decision to be taken by the Commission. 

1. 

INTRODUCTION 

Patents are an important enabler for economic growth through innovation. Intangible assets1 
are  rapidly  becoming  the  economically  most  important  aspect  of  business  –  in  2009  they 
accounted for over 80% of the global market value of companies in the S&P 500 (a US list of 
500  large  publicly  traded  companies)2.  Investment  in  research  (R&D)  accounts  for  1.9%  of 
GDP in the EU3, and an effective patent system is essential to translate that investment into 
economic  growth.  An  increased  rate  of  innovation  brings  benefits  to  consumers  by 
introducing new products to the market and creating competition.  

Today  patent  protection  in  Europe  is  fragmented.  While  the  European  Patent  Office  (EPO) 
ensures uniformity in granting patents under the European Patent Convention (EPC), the need 
for  a  coherent  system  of  patent  protection  in  the  internal  market  has  been  apparent  for 
decades. Efforts made since the 1970s, however, have not led to success.  

The  Europe  2020  Strategy4  identified  the  creation  of  an  economy  based  on  knowledge  and 
innovation as a priority that is necessary to turn the EU into a smart, sustainable and inclusive 
economy  delivering  high  levels  of  employment,  productivity  and  social  cohesion.  It  also 
proposed a target of 3% of the EU's GDP to be invested in R&D by 2020. 

The Innovation Union, adopted in 2010 as a flagship initiative of the Europe 2020 Strategy, 
built  on  this  and  demanded  that  the  "remaining  barriers  for  entrepreneurs  to  bring  'ideas  to 
market'  must  be  removed.  As  an  immediate  step,  agreement  should  be  reached  on  the  EU 
patent before the end of the year"5. 

In  December  2010  the  Single  Market  Act6  also  highlighted  that  European  businesses, 
inventors and creators must be able to develop within the internal market that is as conducive 
as possible to innovation and creativity, in order to better face international competition. 

Both  the  Europe  2020  Strategy  and  the  Single  Market  Act  are  seeking  to  improve  the 
framework conditions for business to innovate by creating unitary patent protection in the EU 
Member States complemented by a unified European patent litigation system.  

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 had to 
confirm7  that  there  were  insurmountable  difficulties  that  made  the  establishment  of  such 
protection in the entire European Union impossible to attain within a reasonable period. This 
statement  was  followed  by  a  request  from  twelve  Member  States  to  establish  enhanced 
cooperation in the area of unitary patent protection. The Commission subsequently submitted 

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7 

Intangible assets are assets that are not physical in nature. Typical examples are: patents, trademarks, 
copyrights, goodwill, etc. 
http://www.oceantomo.com/productsandservices/investments/indexes/ot300  
Eurostat, 2008 data 
COM(2010) 2020 final 
COM(2010) 546 final 
COM(2010) 608 final/2 
See press release 17668/10 

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a  proposal8  to  the  Council  for  authorising  enhanced  cooperation  that  was  followed  by  the 
request of another 13 Member States to join the cooperation. The European Parliament gave 
its consent to the launch of enhanced cooperation  on 15  February9 and the Competitiveness 
Council  adopted  the  authorising  decision  on  10  March10.  As  a  consequence,  this  impact 
assessment  report  (IA)  has  to  take  into  account  the  conditions  already  set  by  the  Council's 
authorising decision.  

A possible future EU patent system has two main elements. The first one is the unitary patent 
protection that would allow for the grant of a European patent having unitary character, in the 
best-case  scenario,  in  all  Member  States  of  the  EU.  A  key  component  of  the  unitary  patent 
protection  is  the  translation  arrangements  that  are  given  special  attention  in  this  impact 
assessment  report.  This  IA,  therefore,  will  examine  the  problems  arising  from  the  current 
patent protection system in EU and ways to improve its accessibility and efficiency in order to 
promote innovation and growth11.  

The  second  element  of  the  possible  future  EU  patent  system  is  the  unified  patent  litigation 
system.  This  IA  report,  however,  does  not  examine  this  issue  as  it  follows  a  parallel  work 
stream  and  will  be  addressed  in  a  different  legal  instrument,  following  the  decision  of  the 
Court of Justice of the European Union12. 

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

The Commission presented its proposal for a Council Regulation on the Community patent13 
on 1 August 2000. It was based on Article 308 of the EC Treaty that required unanimity for its 
adoption in the Council, following the consultation of the European Parliament. The proposal 
covered  all  elements  necessary  for  the  creation  of  a  single  EU-wide  patent,  including  the 
translation  arrangements.  Whilst  the  Council  adopted  a  common  political  approach  on  the 
Community patent14 in March 2003, no further progress took place in the years that followed. 

In January 2006, the Commission launched a broad consultation on the future patent policy in 
Europe15.  More  than  2500  replies  were  received  from  a  variety  of  stakeholders,  including 
businesses in all sectors of the economy, business and SME associations, patent practitioners, 
public authorities and academics. Respondents were asking for a European patent system that 
provides  incentives  for  innovation,  ensures  the  diffusion  of  scientific  knowledge,  facilitates 
technology transfer, is available to all players in the market and is legally certain. The replies 
clearly  showed  stakeholders'  disappointment  with  the  lack  of  progress  in  the  Community 
patent project. In particular, nearly all respondents (the users of the patent system) rejected the 
translation  arrangements  included  in  the  Council's  2003  common  political  approach  which 

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COM(2010) 790 final 
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.  
The IA uses the term "unitary patent protection" in order to avoid pre-empting policy choices as regards 
the  ways  to  achieve  the  objectives.  In  references  to  historical  documents  and  external  contributions, 
however,  the  terms  "Community  patent"  and  "EU  patent"  will  be  used.  The  term  "European  patent" 
refers to any patent granted by the European Patent Office. 
A-1/09 
Proposal for a Council Regulation on the Community patent, COM(2000) 412 final 
Council document 6874/03 
The  consultation  document,  replies  from  stakeholders  and  a  report  on  the  preliminary  findings  of  the 
consultation are available at http://ec.europa.eu/internal_market/indprop/patent/consultation_en.htm.  

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laid down that the patent holder would have to supply a translation of the claims (having legal 
effect) into all official Community languages.  

Stakeholders  expressed  an  overall  support  for  a  "unitary,  affordable  and  competitive" 
Community  patent.  This  message  was  repeated  at  a  public  hearing  held  on  12  July  2006, 
where  a  large  variety  of  stakeholders  stated  their  support  for  the  creation  of  a  truly  unitary 
high  quality  patent.  They,  however,  underlined  that  political  compromises  should  not 
undermine  the  usefulness  of  the  project.  In  particular,  the  representatives  of  small  and 
medium-sized enterprises (SMEs) highlighted the importance of moderate patenting costs. 

The  Commission  adopted  the  Communication  "Enhancing  the  patent  system  in  Europe"  in 
April  200716.  The  document  outlined  the  way  forward  as  envisaged  by  the  Commission, 
including  the  creation  of  the  Community  patent  and  possible  solutions  for  the  translation 
arrangements.  Discussions  with  stakeholders  continued  on  the  basis  of  this  Communication 
throughout 2008. In October 2008, the Commission and the French Presidency of the Council 
organised a conference on Industrial Property Rights in Europe17 and a "European Parliament 
of  Enterprises"  debate  was  held.  An  overwhelming  majority  of  represented  entrepreneurs 
emphasised  that  the  continued  lack  of  a  single  EU-wide  patent  was  damaging  to  European 
businesses and called for the creation of the EU patent as soon as possible18. 

The  issue  of  unitary patent protection  was also addressed extensively in the consultation on 
the  Small  Business  Act  for  Europe  that  consisted  of  a  range  of  initiatives  targeted  to  help 
European SMEs19. Small and medium-sized businesses identified the high level of patent fees 
and the legal complexity of the patent system as major obstacles20. In their submissions to the 
consultation,  businesses  in  general  and  SME  representatives  in  particular  requested  a 
significant reduction of the costs of patenting for a future EU patent21. 

Recent  position  papers  from  various  stakeholders  refer  to  the  unitary  patent  protection. 
European  business  associations,  such  as  BusinessEurope,22 UEAPME23 and Eurochambres24 
confirm  that  businesses,  both  large  and  small,  request  a  simplified,  cost-effective  and 
accessible  EU  patent.  National  business  organisations  in  many  Member  States  and  across 
industry  sectors  raise  identical  issues25.  Stakeholders  underlined  that  any  solution  for  the 
unitary  patent  protection  should  build  on  the  existing  mechanisms  for  granting  patents  in 
Europe (see in chapter 3) and necessitate no revision of the European Patent Convention. 

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COM(2007)165 final 
Available at http://ec.europa.eu/internal_market/indprop/rights/index_en.htm 
Available at http://www.eurochambres.eu 
COM(2008) 394 final 
http://ec.europa.eu/enterprise/policies/sme/small-business-act/  
UEAPME  Expectations  on  the  Proposal  for  a  European  Small  Business  Act,  available  at 
www.ueapme.com.  Response  to  the  Consultation  on  a  Small  Business  Act  for  Europe,  available  at 
http://www.eurochambres.eu 
Views on key issues of the patent reform debate in Europe, available at http://www.businesseurope.eu 
Position  on  the  recent  policy  developments  on  the  European  Community  patent,  available  at 
http://www.ueapme.com 
Position paper on the European Patent System, available at http://www.eurochambres.eu 
Position papers from BDI (Bundesverband der Deutschen Industrie), DIHK (Deutscher Industrie- und 
Handelskammertag),  CBI  (Confederation  of  British  Industries),  CCIP  (Chambre  de  commerce  et 
d'industrie  de  Paris),  CGPME  (Confédération  générale  des  petites  et  moyennes  entreprises), 
Unioncamere,  DigitalEurope,  Orgalime,  ACT  (Association  for  Competitive  Technology),  Cefic  and 
others. 

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The Lisbon Treaty introduced a more specific legal base for an EU patent system. According 
to Article 118(1) of the Treaty on the Functioning of the European Union (TFEU), measures 
for the creation of European intellectual property rights are to be established by the European 
Parliament  and  the  Council  acting  under  the  ordinary  legislative  procedure.  Article  118(2), 
however,  sets  out  a  specific  rule  for  the  language  arrangements  for  European  intellectual 
property rights that are to be established under a special legislative procedure by the Council 
acting  unanimously  after  consulting  the  European  Parliament.  It  follows  that  the  translation 
arrangements for any EU patent system must be established by a separate legal instrument. 

In  December  2009,  the  Council  adopted  conclusions  on  an  "Enhanced  patent  system  for 
Europe"26  and  a  general  approach  on  the  proposal  for  a  Regulation  on  the  EU  Patent27. 
Translation arrangements, however, were not covered due to  the abovementioned  change in 
the legal base. 

On  30  June  2010  the  Commission  adopted  a  proposal  for  a  Council  Regulation  on  the 
translation  arrangements  for  the  EU  patent28.  The  proposal  was  accompanied  by  an  IA 
report29  analysing  various  options  for  the  possible  translation  arrangements.  The  IA  lead  to 
the conclusion that the preferable option remains the translation arrangements as set out in the 
revised  proposal  for  Community  Patent  Regulation  of  23  May  200830  that  provides  for  a 
simplified and cost-effective language regime. 

Regardless of the significant efforts made by the Belgian Presidency, it was recorded at the 
Competitiveness Council meeting of 10 November 2010 that no unanimous agreement could 
be  reached  on  the  translation  arrangements31.  On  10  December  2010  the  Competitiveness 
Council confirmed32 that there were insurmountable difficulties that  made the establishment 
of  unitary  patent  protection  in  the  entire  European  Union  impossible  to  attain  within  a 
reasonable period by applying the relevant provisions of the Treaties. 

On  the  basis  of  the  request  of  twelve  Member  States  (Denmark,  Estonia,  Finland,  France, 
Germany, Lithuania, Luxembourg, the Netherlands, Poland, Slovenia, Sweden and the United 
Kingdom)  the  Commission  submitted  a  proposal33  to  the  Council  for  authorising  enhanced 
cooperation in the area of unitary patent protection. All Member States submitted their request 
with the condition that the Commission's upcoming legislative proposals will follow the lines 
elaborated  during  the  recent  negotiations  in  the  Council.  The  requests  also  highlighted  that 
translation arrangements should rely on the existing EPO framework. Following the adoption 
of  the  proposal,  Belgium,  Austria,  Ireland,  Portugal,  Malta,  Bulgaria,  Romania,  the  Czech 
Republic,  Slovakia  Hungary,  Latvia,  Greece  and  Cyprus  also  requested  to  join  the 
cooperation. Altogether 25 Member States have indicated their intention to participate. 

In  response  to  the  requests  of  the  Member  States,  recital  7  of  the  Commission's  proposal 
makes  it  clear  that  unitary  patent  protection  throughout  the  territories  of  the  participating 

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Council document 17229/09 
Council document 16113/09 Add 1. The change in terminology (from the "Community" to "EU" patent) 
was induced by the entry into force of the Lisbon Treaty. 
COM(2010) 350 final 
SEC(2010) 796 
Council document 9465/08 
Press  Release  of  the  Extraordinary  Council  meeting  "Competitiveness  (Internal  Market,  Industry, 
Research and Space)", 16041/10, 10.11.2010. 
See press release 17668/10 
COM(2010) 790 final 

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Member States should be granted by the EPO. The translation arrangements should be simple, 
cost-effective  and  allow  for  the  filing  of  patent  applications  in  any  language  of  the  Union. 
Any applicant from the EU should have the right to file applications in their own language. 
However, there should be compensation of the costs related to the translation of applications 
to an official language of the EPO (English, French and German). Patents should be granted 
only  in  one  language  and,  other  than  the  translation  of  the  claims  in  the  two  other  EPO 
languages, no further translations should be required. Translations should not have legal effect 
and  serve  only  information  purposes.  In  the  case  of  a  dispute,  mandatory  translation 
obligations should apply to the patent proprietor.  

The  European  Parliament  gave  its  consent  to  the  launch  of  enhanced  cooperation  on  15 
February34 and the Competitiveness Council adopted the authorising decision on 10 March35. 

In January 2011 a Steering Group was formed to assist DG Internal Market and Services in 
assessing  the  impact  of  the  different  policy  options  that  have  been  put  forward  to  solve  the 
identified problems. The Steering Group was made up of representatives of the Legal Service, 
the Secretariat-General, DG Enterprise and Industry, DG Information Society and Media, DG 
Research  and  DG  Competition.  The  last  meeting  of  the  Steering  Group  was  convened  on  3 
February 2011. 

The impact assessment roadmap was published (2011/MARKT/037 and 2011/MARKT/038). 
The IA report was examined by the Impact Assessment Quality Board in written procedure; 
the Board issued a favourable opinion on 25 February 2011. Following the Board's opinion, a 
number of additional information/clarifications were included in the IA, notably: The report 
better explains why renewal fees are not determined by European legislation; it includes new 
calculation  of  per  capita  costs  and  cost  savings  when  25  Member  States  take  part  in  the 
enhanced  cooperation;  it  explains  better  why  the  large  market  size  can  result  in  increased 
patenting activity and how it improves the competitiveness of European business. 

3. 

CONTEXT 

3.1. 

The economic role of patents 

Today's economy is becoming increasingly knowledge-based. Innovation has a major impact 
on economic growth. The relation between patent rights and economic growth has not been 
researched  extensively,  however,  the  expected  return  from  R&D  is  considered  to  be  a  key 
driver of innovation efforts36.  

Patents are an important instrument of innovation policy37 and an effective means to increase 
R&D. They can stimulate innovation through providing a limited monopoly in return for the 
broad  dissemination  of  new  ideas.  A  well-designed  patent  policy  strikes  a  balance  between 

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36 

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P7_TA(2011)0054 
Council Decision 2011/167/EU. 
There  is  some  empirical  evidence  that  in  more  patent  intensive  industries  strengthening  patent  rights 
resulted  in  higher  growth.  See  Hu,  Albert  G.  Z.  and  Png,  Ivan  P.  L.,  Patent  Rights  and  Economic 
Growth:  Cross-Country  Evidence  (November  12,  2009).  CELS  2009  4th  Annual  Conference  on 
Empirical Legal Studies Paper 
Other instruments include the public research system or funding research performed by business. See 
Dominique Guellec and Bruno van Pottelsberghe de la Potterie: The Economics of the European Patent 
System, Oxford University Press, 2007. 

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the  incentive  for  inventors  and  the  generation  of  welfare  for  society38:  On  the  one  hand, 
patents guarantee inventors an exclusive right for the industrial application of their invention. 
This  protection  comes  with  a  number  of  limitations,  in  particular  as  regards  the  length 
(usually  20  years)  and  the  breadth  (scope)  of  the  patent  protection.  On  the  other  hand,  the 
publication  of  the  description  of  the  patented  invention  should  disseminate  knowledge  and 
facilitate follow-up inventions. 

Patents  mostly  generate  profits  if  the  inventions  are  economically  exploited  either  by  the 
patent  holder  or  by  the  licensee,  etc.  They  are,  therefore,  market-oriented  instruments  that 
allow customers and other market participants to determine the economic value of the patent 
and  of  the  patented  invention.  In  some  sectors  of  the  economy,  depending  on  the  dominant 
business model followed by companies, they are effective means to increase R&D.  

The patent system has a special importance for SMEs as patents can enhance market entry and 
firm creation. Studies highlight that start-ups often adopt business models that use patents as 
core assets39. While in some cases SMEs may also face barriers to market entry through the 
creation  of  patent  thickets  by  bigger  and  more  resourceful  companies, they still  profit 
from patent  systems  that  efficiently  grant  them  access  to enforceable  intellectual  property 
rights. In fact, where intellectual property rights are strong and well-enforced, new companies 
are more likely to develop new technologies and sell it to other firms without incurring high 
costs and risk. But a measurement carried out in eight EU Member States shows that currently 
only 4.8% of the patents are used to create start-ups and consequently new employment40, i.e. 
this opportunity is not exploited in Europe. Furthermore, particularly in the aftermath of the 
financial crisis, the possibility of using IP rights as security facilitates SMEs' access to bank 
loans41. 

The importance of and the demand for the European patent is illustrated by the fact that EU 
applications to the European Patent Office increased by an average of over 3% per year for 
the period 2000-200842. The total number of applications reached 146 644 in 2008. In 2009, 
however,  figures  show  a  relevant  decline  in  all  major  patent  offices,  except  in  the  US.  It 
seems clear that in 2009 the negative growth caused by the global economic crisis, led to a 
decrease  in  patent  filings43.  Finally,  there  are  approximately  130  000  national  patent 
applications annually in the EU, many of which are converted to European patent applications 
in the second step (see section 3.2). 

38 

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40 
41 

42 
43 

and 

and 

policy 

Trends 

OECD, 

society. 

economy 

challenges, 

The  key  issues  in  the  design  of  any  patent  regime  are  the  patent  subject  matter,  the  height  of  the 
inventive  step  and  the  breadth  of  the  patent.  Other  important  elements  are  the  amount  of  damages 
attributed by courts in case of infringements, the conditions for exemptions for research use, etc. See 
Patents 
2004. 
and 
innovation: 
http://www.oecd.org/dataoecd/48/12/24508541.pdf  
Study on evaluating the knowledge economy – what are patents actually worth? The value of patents for 
p.22. 
Final 
today's 
http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#studies  
See details in Annex I. 
OECD, Intellectual Assets and Value Creation: Synthesis Report, 2008, 
http://www.oecd.org/dataoecd/36/35/40637101.pdf  
Based on applications from the Member States; see overview in Annex II. 
The  total  number  of  patent  applications  filed  with  the  EPO  reached  134  542  in  2009.  As  regards  the 
number of granted patents,  differing  trends  could be  observed  in 2009. While  the Korean  Intellectual 
Property Office (KIPO) reported a 32% and the EPO a 13% decline, there was an increase of 9% and 
5% in the Japan Patent Office (JPO) and the United States Patent and Trademark Office (USPTO). Such 
trends, however, are only partly influenced by the number of applications; the differing grant rates and 
procedure durations also have an impact. See Annex III. 

report, 

2006, 

July 

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3.2. 

The existing patent systems in Europe 

The  decision  whether  to  file  a  patent  application  nationally,  regionally  or  internationally 
mainly depends on the market targeted by the applicant, the funds that are available for this 
purpose  and  their  proportion  to  the  expected  profits.  In  the  EU,  patent  protection  can  be 
obtained  either  through  the  national  patent  offices  of  the  Member  States  or  through  the 
European Patent Office. 

3.2.1.  National patent systems 

Each  Member  State  has  its  own  patent  office  which  deals  with  applications  for  national 
patents.  If  an  application  and  the  invention  to  which  it  relates  meet  the  requirements  of 
national patent law (in particular the patentability requirements44), a national patent is granted.  

The protection conferred by a national patent is limited to the territory of the State concerned. 
45%  of  European  inventors  and  businesses  choose  to  file  patent  applications  at  a  national 
patent office first in order to obtain an early priority45. This proportion is 55% among SMEs46. 
Following a novelty search and a preliminary examination carried out by the national office, 
the applicant decides whether to pursue or abandon the national patent application, apply for a 
European patent at the EPO, and/or file a patent application under the international Patent Co-
operation Treaty (PCT). The application is published 18 months after it is filed. If the national 
patent  application  is  pursued,  the  national  office  decides  on  the  grant  of  the  patent  or  the 
refusal  of  the  application  depending  on  the  results  of  its  examination.  Patents  are  then 
registered in the national patent register. 

3.2.2.  The existing European patent system 

If  the  applicant  chooses  to  apply  for  a  so-called  "European  patent",  the  application  will  be 
dealt  with  by  the  EPO  under  the  procedures  laid  down  in  the  European  Patent  Convention 
(EPC)47. The EPC was adopted in 1973 and entered into force in 1977. It does not form part 
of the EU legal order, but all EU Member States are Contracting States to the EPC48.  

The  EPC  established  centralised  procedures  for  the  search,  examination  and  grant  of 
European  patents.  On  the  basis  of  a  single  patent  application  processed  in  one  of  the  three 
official  languages  of  the  EPO  (English,  French  or  German),  inventors  and  businesses  can 
obtain a European patent for one or more Contracting States to the EPC.  

Any  patent  application  is  published  by  the  EPO  18  months  after  the  date  of  filing,  in  the 
official  language  of  the  EPO  in  which  the  application  is  processed  (the  language  of 

44 

45 

46 

47 
48 

Patentability requirements in Europe include: the patentable subject matter, novelty, inventive step and 
that the invention is susceptible to industrial application. 
Priority right is a time-limited right that is triggered by the first filing of a patent application. It allows 
the applicant to file a subsequent application in another country for the same invention from the time of 
the  first  filing  (the  priority  date).  N.B.  An  early  national  priority  also  gives  inventors  extra  time  to 
develop the idea and assess the feasibility of other (more expensive) options for protection.  
Study 
system 
http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#studies 
http://www.epo.org/patents/law/legal-texts/html/epc/1973/e/ma1.html  
Other larger Contracting States to the EPC include Croatia, Iceland, Norway, Switzerland and Turkey. 
The European Patent Organisation has 38 members altogether. 

Europe, 

quality 

patent 

2011. 

the 

the 

on 

of 

in 

EN 

10 

   EN 

                                                 
proceedings). The application (which comprises of the claims, description49 and drawings) is 
thus made available to the public, in electronic format on the European publication server50.  

Once the patent is granted, it is published by the EPO in the language of proceedings, together 
with a translation of the claims in the two other official languages51. The authentic text of the 
European patent is the text in the language of proceedings – both before the EPO and in any 
Contracting State to the EPC52. 

A European patent has the same legal effect as a national patent in the Contracting States to 
the  EPC  in  which  the  patent  proprietor  desires  protection  for  their  invention.  However,  the 
European patent does not take effect automatically in most Contracting States53. It must first 
be validated in the States in which the patentee wishes protection, i.e. the European patent has 
to be converted into a national patent54. Figure 1 below illustrates the application and renewal 
procedures for patent applications directly filed with the EPO. 

Figure 1 - Application and renewal procedures for patent applications directly filed with the EPO 

49 

50 

51 

52 
53 
54 

The claims define the matter for which protection is sought; they determine the extent of the protection 
conferred  by  the  patent  (Articles  84  and  69  EPC).  The  description  indicates  the  background  art, 
discloses the invention, describes at least one way to carrying it out and indicates the way in which the 
invention  is  industrially  applicable;  the  description  is  used  to  interpret  the  claims  (Rule  42  and 
Article 69 EPC). 
The European publication server is the EPO's internet-platform for obtaining on-line copies of European 
patent  applications  and  European  patents.  New  publications  are  uploaded  every  week.  See 
https://data.epo.org/publication-server/?lg=en. Other platforms maintained by EPO also enable on-line 
access to European patent documents; see esp@enet, epoline and Register Plus. 
On average, in 2009, a granted European patent was published 43.1 months after the application was 
received, 
2009. 
http://www.epo.org/about-us/office/annual-reports/2009.html  
See also Article 70(3) EPC. 
The exceptions are France, Germany, Luxembourg and the UK. 
The details of this transformation are explained in section 4.1. 

Annual 

Report 

EPO, 

see 

the 

of 

EN 

11 

   EN 

 
                                                 
Source: Harhoff, Hoisl, Reichl, van Pottelsberghe, 2009, "Patent validation at the country level: the role of fees 
and translation costs", Research Policy, November 2009. 

3.2.3.  The Patent Co-operation Treaty (PCT) 

The  PCT  is  an  international  treaty  that  entered  into  force  in  197855.  Filing  an  application 
under  the  PCT  is  another  method  of  protecting  patents  in  several  countries56.  While  an 
application  under  the  PCT  is  not  an  actual  patent  application,  it  extends  the  potential 
protection  given  by  the  priority  right57  to  a  period  of  30  months.  The  PCT  application  is 
searched by one of the International Search Authorities (i.e. patent offices designated by the 
World  Intellectual  Property  Organisation  -  WIPO58).  Once  the  search  and  the  optional 
preliminary examination are completed, the procedure continues before the national offices or 
the EPO that decide on granting the patent or refusing the application. Approximately half of 
the European patent applications are also PCT applications.  

55 
56 

57 
58 

http://www.wipo.int/pct/en/texts/articles/atoc.htm  
All  Member  States  of  the  EU  are  signatories  to  the  PCT,  it  has  142  contracting  states  altogether  (in 
2011). 
See footnote 45. The usual length of protection is 12 months. 
http://www.wipo.int/portal/index.html.en  

EN 

12 

   EN 

                                                 
4. 

PROBLEM DEFINITION 

Figure 2 – Problem tree 

Since  the  1970s  the  procedure  for  searching,  examining  and  granting  European  patents  is 
centralised in Europe under the EPC (see section 3.2). This procedure is well-functioning and 
widely accepted by applicants from Europe and other continents. This standardised procedure, 
however, is complemented by post-grant procedures that are necessary for the patent to take 
effect  in  the  individual  Contracting  States  to  the  EPC.  These  post-grant  procedures  are 
complex and divergent in Europe. They generate costs for inventors and businesses that deter 
them from seeking for patent protection in Europe. Therefore, also in line with the request of 
the  Member  States  asking  for  enhanced  cooperation,  this  IA  report  only  looks  into  the 
problems and possible solutions with respect to the post-grant stage of patent protection. 

The fragmentation of the patent protection in the EU has four main aspects: high costs related 
to  the  translation  and  publication  requirements,  diverging  rules  in  relation  to  renewal  fees, 
complex national provisions in relation to registering transfers, licences and other rights and 
the  legal  uncertainties  due  to  the  lack  of  a  unified  court  system.  This  chapter  will  explain 
economic  implication  and  consequences  of  the  first  three  problems  but  will  not  address  the 
problems related to litigation. 

EN 

13 

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4.1. 

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

After  the  grant  of  European  patents,  different  validation  requirements  apply  in  the  Member 
States. For example: 

–  the  patent  holder  must  file  with  the  national  patent  office  a  translation  of  the  European 

patent into the official language of the State where protection is desired; 

–  the patent holder must pay a publication fee to the national patent office; and 

–  the  patent  holder  must  comply  with  various  formal  requirements  relating  in  particular  to 

the number of copies to be filed, use of prescribed forms, and time periods. 

Where  the  patent  holder  fails  to  observe  any  of  the  above  validation  requirements  in  a 
particular State, the European patent is deemed to be void ab initio in that State.  

Direct and indirect translation costs can add up to about 40% of the overall costs of patenting 
in Europe. It has been estimated that a European patent validated in 13 countries is more than 
ten times more expensive than a patent in the US or Japan59. National laws of most Member 
States  require  that  the  patent  proprietor  supplies  translations  of  the  patent  into  the  official 
languages of the Member States in which protection is sought. The translations must be filed 
with  the  national  patent  offices,  which  shall  make  them  available  to  the  public.  Significant 
costs, red-tape and complexity accrue in this process: 

–  Costs  of  translations:  Specialised  translators  are  needed  to  translate  the  technical  text 
contained in patents. On average, EUR 85 is charged per page60. The number of pages to 
be translated depends on the specific patent: a patent of typical length contains 15 pages of 
description, 4 pages of claims and 1 page of drawings61. 

–  Fees charged by patent agents: Local patent agents often act as intermediaries between the 
patent  proprietor  and  the  national  patent  offices  where  the  translations  are  to  be  filed62. 
They  may  offer  to  arrange  for  translations  or  verify  translations  carried  out  by  external 
translators, or they may offer to ensure that formal requirements laid down by national law 
are complied with63. Fees must be paid by the patent proprietor for such services, and they 
vary  from  around  EUR  150  to  EUR  600  per  validation  of  a  patent  depending  on  the 
Member State64. 

59 

60 

61 

62 

63 

64 

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. 
https://dipot.ulb.ac.be:8443/dspace/bitstream/2013/6307/1/bvp-0063.pdf 
This estimation was taken as a basis by the Council in the common political approach of 3.3.2003. It is 
confirmed by data provided by translation service providers. 
Harhoff, Hoisl, Reichl, van Pottelsberghe, 2009, "Patent validation at the country level: the role of fees 
and translation costs" arrive at a actual mean number of 21,24 pages per patent. The "Study on the Cost 
of Patenting" carried out by Roland Berger Market Research finds an average of 23 pages, of which 4 
pages of claims. 
In some Member States, national law appears to still require that such formalities be carried out by a 
local patent agent.  
An  exhaustive  list  of  these  requirements  can  be  found  in  "National  law  relating  to  the  EPC",  14th 
edition, June 2009, pages 99-135. 
Interviews with patent agents and Roland Berger Study.  

EN 

14 

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–  Official fees charged by national patent offices for the publication of the translations: The 
figure below shows the publication fee (also known as "printing fee" in countries where the 
publication still consists in printing the patent on paper) for a European patent of typical 
length (20 pages)65.  

Figure 3 – Publication fee in the Member States for a typical European patent (in EUR) 

Publication Fees

400

350

300

250

200

150

100

50

0

FI

ES

AT

SE

EL

HU

MT

DK

PT

SK

RO

SI

CY

CZ

PL

LV

LT

EE

IE

BG

NL

BE

DE

FR

IT

LU

UK

Source: National Law relating to the EPC, 14th Edition, 2009. 

In  order  to  reduce  the  costs  induced  by  the  validation  requirements,  the  Agreement  on  the 
application  of  Article  65  EPC  (London  Agreement)  was  adopted  in  October  200066.  The 
London Agreement is an optional scheme, allowing for collective action to reduce patenting 
costs by dispensing with some or all translation requirements. It entered into force on 1 May 
2008. Today sixteen Member States are not parties to the London Agreement and thus require 
a  translation  of  the  entire  patent  into  their  official  language  (Austria,  Belgium,  Bulgaria, 
Cyprus,  Czech  Republic,  Estonia,  Finland,  Greece,  Ireland,  Italy,  Malta,  Poland,  Portugal, 
Romania,  Slovakia  and  Spain)67,  mainly  for  political  reasons.  Table  1  summarises  the 
translation requirements in the Member States. See Annex IV for more details on the London 
Agreement. 

65 

66 
67 

See "National law relating to the EPC", 14th edition. Further complexity is added by national provisions 
on (i) additional page fees for longer patents and (ii) special fee schedules where the patent proprietor 
files an electronic version of the patent. 
OJ EPO 2001, 550.  
It is to note that currently Ireland and Malta do not require a translation of a European patent into Irish 
and Maltese. For validation it suffices that the European patent is available in English. 

EN 

15 

   EN 

 
 
                                                 
Table 1 – Summary of the translation requirements in the Member States (2011) 

Requirement 

Member State 

No translation requirement for the description or 
claims 

Germany, France, Luxembourg, UK 

Translation of claims to official language of the MS 
but no translation requirement for the description 

Latvia, Lithuania, Slovenia 

Translation of claims to the official language and 
the description to English 

Denmark, Netherlands, Sweden, Hungary 

Translation of the claims and the description to the 
official language(s) of the MS 

Austria, Belgium, Bulgaria, Cyprus, Czech Republic, 
Estonia, Finland, Greece, Spain, Ireland, Italy, Malta, 
Poland, Portugal, Romania, Slovakia 

The  chart  below  illustrates  the  total  validation  costs  (including  direct  translation  costs  and 
estimated related costs such as patent agent fees and publication fees) for a European patent of 
typical length (granted by the EPO in German), in respectively three, 13 and 27 EU Member 
States: 

–  if the patent proprietor wishes protection in only three Member States – Germany, France 
and UK (which are parties to the London Agreement) – that overall validation costs equal 
the translation costs of the claims to French and English68, i.e. EUR 680;  

–  validation  costs  are  approximately  EUR  12  500  when  protection  is  sought  in  thirteen 

Member States (the ones in which most validations take place), and  

–  finally, validation costs are over EUR 32 000 if a patent is validated in the whole EU. 

Figure 4 – Example of total validation costs (in EUR) of a European patent of typical length 
in a selection of EU Member States 

Validation costs of a typical European patent, in EUR

s
t
s
o
C

35000

30000

25000

20000

15000

10000

5000

0

DE, FR, UK

AT, BE, DE, DK, FR,
IE, IT, LU, NL, ES, SK,
SE, UK

27 MS

Source: European Commission 

68 

There are no additional validation requirements or costs. 

EN 

16 

   EN 

 
                                                 
It is important to note that only around 1 000 patents out of approx. 50 000 annually validated 
patents (2%) are validated in all 27 Member States. Around 4 000 patents (8%) are validated 
in 13 Member States and 20 000 patents per year are validated in the largest 5 EU markets 
(40%).  Approximately  half  of  these  patents  are  only  validated  in  3  Member  States  –  an 
estimated 25 000 patents per year (50%). According to these figures, the estimated validation 
costs are around EUR 193 million per year.  

Table 2 – The annual validation costs in the EU (in EUR) 

Scope 

Patents per year  Cost per patent 

27 Member States 

13 Member States 

5 MS (DE, UK, FR, 
IT, ES) 

1000 

4000 

20000 

(in EUR) 

32 112 

12 507 

4718 

3 MS (DE, UK, FR) 

25000 

680 

Total 

Source: European Commission 

Total costs  
(in EUR) 

32 million 

50 million 

94 million 

17 million 

193 million 

Cost per capita 
(EUR/million) 

64.1 

33.3 

15 

3.2 

The charts below show that the per capita cost of obtaining patent protection in the EU shows 
a much steeper increase than the increase in the actual size of the market covered by patent 
protection. 

Figure 5 – Illustration of increase in market size and cost par patent per capita 

Population (million)

Cost per capita 

n
o

i
t
a
l

u
p
o
P

600

500

400

300

200

100

0

)
n
o

i
l
l
i

m

/

R
U
E

(

a
t
i

p
a
c

r
e
p

t
s
o
C

70

60

50

40

30

20

10

0

UK DE FR

UK, DE, FR, ES, IT

UK, DE, FR, ES, IT, AT,
BE, DK, IE, LU, NL, SK,
SE

27 M S

Member States

UK DE FR

UK, DE, FR, ES, IT

UK, DE, FR, ES, IT, AT,
BE, DK, IE, LU, NL, SK,
SE

27 M S

Member States

Source: European Commission 

A  further  shortcoming  of  the  current  translation  arrangements  for  European  patents  is  the 
practical difficulties in accessing the translations at some national patent offices. While some 
offices do make the translations available electronically69, others only provide access to paper 

69 

CDs and DVDs are still used for storing and copying information but their use will in future be limited 
to  static  data  collections.  The  introduction  of  online  publication  servers  constitutes  the  major  shift 

EN 

17 

   EN 

 
 
 
 
 
 
 
                                                 
copies  that  can  be  consulted  in  the  public  reading  rooms  of  the  national  patent  offices,  or 
copied  at  the  expense  of  interested  third  parties.  The  number  of  translations  consulted  in 
Member States where translations are only available in printed form is extremely low – less 
than 2% according to estimates70.  

Finally, the publication of the translations takes place very late in the "life cycle" of the patent 
– only months after grant and after the publication of the patent specifications by the EPO and 
hence  often  not  before  five  years  after  the  date  of  filing  of  the  patent  application.  Yet 
innovative businesses must keep abreast of the latest technological developments in their field 
by  monitoring  new  patent  applications  filed  by  their  competitors  –  which  are  published 
already 18 months after the date of filing (in the language of proceedings before the EPO) – 
not by reading the translations supplied several years later. In practice, third parties make little 
use of the translations filed at the national patent offices after the patent has been granted.  

4.2. 

Problem 2: Differences in the maintenance of patents in the Member States71 

Articles  86  and  141  of  the  EPC  lay  down  that  renewal  fees  for  the  European  patent 
application  has  to  be  paid  to  the  EPO  as  of  the  third  year  from  the  date  of  filing  the 
application.  The  fee  has  to  be  paid  each  subsequent  year,  until  the  European  patent  is 
published in the European Patent Bulletin. The national law of the countries where the patent 
is then validated may only impose renewal fees for the period after the publication. 

After grant, renewal fees have to be paid by the patent proprietor each year in each country 
where the patent is validated. If the patent holder does not pay the fees, the patent lapses and 
becomes part of the public domain. Renewal fees usually increase as time progresses and thus 
patentees only maintain patents if they generate (or are expected to generate) higher income 
than the costs of maintaining it. 50% of EPO patents lapse in the first 10 years after filing and 
about 8% are renewed until statutory term (20 years)72.  

The  level  of  renewal  fees  shows  great  diversity  in  the  Member  States.  For  example,  the 
cumulated renewal fees until the 10th year of protection are between EUR 476 (Slovenia) and 
HUF  871  000  (approx.  EUR  3  161)  in  Hungary.  The  cumulated  renewal  fees  until  the  20th 
year of the protection is between EUR 2 411 (Malta) and EUR 13 170 (Germany) in Europe73.  

While  the  divergent  fee  structures  may  be  explained  on  the  basis  of  policy  considerations, 
there are many auxiliary provisions in the national laws that make the maintenance of patents 
in  several  Member  States  unnecessarily  difficult.  The  due  date  of  the  payment  is  usually 
defined as the "anniversary date of the filing" (e.g. Czech Republic, Hungary) or "the last day 
of the month in which the date of filing occurred" (e.g. Austria, Finland, France), but the time 
period  during  which  the  payment  needs  to  be  made  shows  great  variety.  In  some  Member 
States, the payment can already be made at most 12 months before the due date (e.g. Czech 
Republic, Germany, Luxembourg or Slovenia), in others payments cannot be made more than 

which will shape patent information policy in the 21st century, radically reducing the interval between 
publication and distribution of information. 
Response  to  Written  Question  no  88618  of  14.3.2006  (JO  Question  écrites,  Assemblée  nationale,  25, 
20.06.2006,  p.6598).  See  also  Rapport  de  la  Mission  de  Concertation  sur  le  Brevet  Européen  "Les 
enjeux de l'Accord de Londres" (Rapport Vianès). 
Source of the data used in this section: National law relating to the EPC, EPO, June 2009. 
Dominique Guellec, Bruno van Pottelsberghe: The Economics of the European Patent System, Oxford 
University Press, 2007, p.148. 
See details on renewal fees in Annex V. 

70 

71 
72 

73 

EN 

18 

   EN 

                                                                                                                                                         
6 months before the due date (e.g. Malta, Portugal, Sweden). There are countries where the 
earliest possible date of payment is four (Ireland), three (e.g. Spain, UK), or two months (e.g. 
Lithuania, Hungary) before the due date.  

Figure 6 – Earliest date of paying the renewal fees before the due date (2009)74 

Earliest date of paying the renewal fees before the due date (in 
months)

e
t
a
d
e
u
d

Slovakia
Slovenia

Poland

Luxembourg

France

Germany
Czech Republic

Bulgaria 

UK

Spain 

Sweden

Portugal

Malta

Lithuania

Ireland

Hungary

Finland
Estonia

Belgium

Denmark

Cyprus

Austria

-14

-12

-10

-8

-6

-4

-2

0

months

Source: National law relating to the EPC, 14th edition, 2009. 

In  all  Member  States  there  is  a  period  of  grace  for  the  payment  of  the  renewal  fees  during 
which  the  patent  holders  can  still  pay  the  renewal  fees  (with  a  surcharge)  and  thus  not  lose 
their rights on the patent. This grace period is 6 months in all Member States, however, the 
surcharge  due  during  this  period  shows  once  again  great  variety.  In  a  few  countries  the 
surcharge is a fixed amount (EUR 50 in Germany, EUR 100 in Italy, EUR 14 in Luxembourg) 
while in most states it is a percentage of the renewal fee (between 10% and 100%).  

Payments can be made in cash, by bank transfer, postal money order or cheque, depending on 
the Member State. In some countries bank transfer is still not possible. In Italy payments have 
to be made at an Italian post office and the payment voucher has to be presented to the Italian 
Patent  and  Trademark  Office.  In  Luxembourg,  there  is  only  possibility  for  cash  payment, 
postal money order or post office transfer or payment.  

The above examples illustrate that there is a high number of requirements that inventors and 
businesses  need  to  observe  in  order  to  maintain  the  patent  protection  in  more  than  one 
Member State. While only Malta, Poland, Latvia, Cyprus, Romania and Greece requires the 
appointment  of  a  national  professional representative75  for  the  payment  of  renewal  fees,  the 
complexity  of  legal  and  administrative  requirements  and  the  need  to  communicate  with  the 

74 
75 

In Greece, Italy, the Netherlands and Romania there are no relevant provisions. 
In Romania if the patent holder resides outside Romania; in Greece if the patent holder does not have a 
residence or principal place of business in Greece. 

EN 

19 

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patent offices in the official language of the Member State can make it difficult or impossible 
for  foreign  patentees  to  manage  their  patent  without  local  representation.  If  companies 
providing technical assistance charge EUR 30-40 per patent per country for carrying out the 
payment of renewal fees76, renewing a European patent in five countries could cost EUR 150-
200  each  year  in  addition  to  the  renewal  fees. Where  patent  holders  are  required  to  appoint 
patent  attorneys,  the  fees  are  likely  to  be  much  higher.  Using  the  same  assumption  on  the 
number of patents as in Table 2, the accumulated costs for a European patent that is renewed 
for 10 years is shown in Table 3 below (calculated from the third year). 

Table 3 – Accumulated cost of technical assistance and renewal fees 

of 

Costs 
technical 
assistance  for  payment 
(10 years – in EUR) 

Patents per 
year 

Total  cost  of  technical 
assistance  for  10  years 
(in EUR) 

cost 

Total 
of 
renewal  fees  for  10 
years (in EUR) 

720-960  

25000 

18 million – 24 million 

73 million 

1200-1600 

20000 

24 million – 32 million 

91 million 

3120-4160  

6480-8640 

4000 

1000 

12,5 million – 16.6 million   56.8 million 

6.5 million – 8.6 million 

30.3 million 

61 million – 81.2 million 

251.1 million 

3 MS 
(DE, UK, FR) 
5MS  (DE,UK, 
FR, IT, ES) 

13 MS 

27 MS 

Total 

Source: European Commission 

4.3. 

Problem  3:  Administrative  complexity  of  registering  transfers,  licences  and 
other rights77 

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. Up till the grant of 
European patents, transfers, licences and other rights are registered centrally in the European 
Patent  Register  by  the  EPO.  After  grant,  however,  a  transfer  is  registered  in  the  European 
Patent  Register  only  during  the  opposition  period  or  during  opposition  proceedings78. 
Following  this  period,  all  registrations  take  place  in  the  national  patent  registers  of  those 
countries in which the patent has been validated.  

National patent registers must register any transfer of rights by transaction (e.g. sale, merger, 
transfer of title) or by operation of law (e.g. succession, insolvency, compulsory execution). 
They also register licence agreements, pledges, etc. When patents are validated in more than 
one  country,  any  changes  related  to  the  rights  on  the  patents  must  be  registered  in  each 
country in which the transaction or other change need to have legal effect.  

Registering transfers, licences or other rights require mandating a professional representative 
in  more  than  half  of  the  Member  States79.  According  to  an  example  given  by  professional 
representatives,  attorney  fees  for  transferring  a  patent  can  be  as  low  as  EUR  50,  but  the 

76 
77 
78 

79 

Example given by professional representatives. 
Source of data used in this section: National law relating to the EPC, EPO, June 2009 
Opposition  procedures  allow  for  challenging  the  validity  of  patents  by  anyone  on  the  grounds 
prescribed by Article 100 of the EPC. 
Exceptions are Denmark, France, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, UK and 
partially Hungary and Luxembourg. 

EN 

20 

   EN 

 
 
 
                                                 
associated communications with the owner can push this up to EUR 200. For rights held in 
other Member States than that of the owner, where an owner would have to cover the cost of 
an  attorney  able  to  act  in  the  local  language  and  may  have  associated  translation  costs,  a 
transfer can cost EUR 500 per Member State. So, registering the transfer of a patent valid in 
five Member States can cost EUR 2000-2500. In addition, there are different procedural fees 
in  the  different  Member  States.  For  example,  the  registration  of  a  transfer  costs  EUR  7  per 
patent in Luxembourg and EUR 136 in Greece. Some Member States (e.g. UK) do not apply 
procedural fees in these cases.  

Moreover,  there  are  different  requirements  in  the  Member  States  as  regards  the  types  of 
documents to be submitted to the patent register. Some require the submission of the original 
document  or  a  certified  copy  (e.g.  Austria,  Finland),  some  others  accept  simple  copies  e.g. 
Czech Republic, Bulgaria, France) or forms to be filled (e.g. UK). In some countries a special 
written request needs to be submitted (e.g. Slovakia, Poland, Latvia) and/or a proof of the fee 
payments (e.g. Belgium, Bulgaria). The diversity of administrative requirements does not only 
make the management of patents in several Member States very difficult for patent proprietors 
but the lack of Europe-wide transparency also makes it costly for third parties to keep track of 
the status of the patent and the rights attached. Due to lack of data on the number of patent 
transfers, licensing agreements, etc. the EU aggregated cost cannot be provided. 

4.4. 

Consequence: EU-wide patent protection is expensive 

As  a  consequence  of  the  problems  explained  above,  access  to  comprehensive  patent 
protection  in  Europe  is  so  costly  and  complex  that  it  is  inaccessible  to  many  inventors  and 
companies. There is some evidence that the costs associated with patent protection are so high 
that  SMEs often  prefer  informal  protection  of  their  innovations  (i.e.  secrecy).  For  bigger 
firms,  this size  effect  disappears.  With  the  existing  patent  system  in  Europe,  a critical  size 
appears to be necessary to become an active user of patents80. The cost of often several patent 
attorneys  to  manage  patents  in  the  European  system,  as  well  as  the  fees  for  patent 
applications,  validations  and  renewals  are  particularly  strong  motives  for  SMEs  for  not 
patenting innovations. In a recent study81 55.6% of micro enterprises, 32% of small and 26% 
of medium-sized enterprises mentioned the fact that they needed to pay patent attorney fees in 
several member States. As regards the applicable fees, respectively 39%, 60% and 47.4% of 
enterprises raised similar concerns.  

But even when European patents are solicited and granted, they are usually validated only in a 
few  countries  selected  by  the  patent  holder.  Currently,  a  European  patent  is,  on  average, 
validated  in  only  five  EU  Member  States82.  The  number  of  validations  has  even  decreased 
over the last 15 years, although the number of EPC Contracting States has increased from 17 
(in 1995) to 37 today83. There is no straightforward explanation for this slight decline since a 
number  of  factors  affect  the  patenting  strategy  for  a  company  and  decisions  are  taken  on  a 

80 

81 

82 

83 

of 

on 

the 

quality 

A.  Garcia  –  D.  Foray:  What  is  small?  Small  and  medium  enterprises  facing  patenting  activities, 
November 2010, IPTS Working Paper http://iri.jrc.ec.europa.eu/papers/2010_JRC61689_WP9.pdf 
Study 
system 
the 
http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#studies 
See,  for  example,  "Study  on  the  Cost  of  Patenting"  carried  out  by  Roland  Berger  Market  Research, 
August 2004. 
See "Economic cost-benefit analysis of the Community patent" – by van Pottelsberghe, Danguy, on the 
EPO.  
provided 
basis 
http://ec.europa.eu/internal_market/indprop/docs/patent/studies/compact-cost%20-benefit-study-
final_en.pdf  

Europe, 

patent 

2011. 

data 

the 

by 

of 

in 

EN 

21 

   EN 

                                                 
case-by-case basis. Possible explanations include a general rise in number of applications and 
granted patents (e.g. about 78 000 applications were received at the EPO in 1995 compared to 
more than 146 000 in 2008) resulting in larger company patent portfolios and therefore fewer 
validations in order not to increase the overall costs of their patent portfolio.  

Figure 7 below shows the approximate number of European patents that were validated in the 
Member  States  according  to  the  latest  available  data.  Most  validations  were  made  in 
Germany, France and the UK, followed by Ireland, Austria and Italy. 

Figure 7 – European patents validated in the Member States84 

Number of validations in the Member States

60000

50000

40000

30000

20000

10000

0

m

Bulgaria 
blic
any
Cyprus
Austria
Belgiu
ch Repu
erm
G
Cze

ce 
Denmark
Finland
Estonia
Hungary
nce
Irelan
Gree
Fra

d

Spain 
Romania
Portugal
Latvia 
Poland
Lithuania
embourg
Italy
kia
etherlands
nia
K
en U
Slova
wed
Slove
S

Lux

N

Source: European Commission 

The  decision  of  a  patent  proprietor  to  validate  a  European  patent  in  a  particular  country 
depends on several factors: high costs (arising from direct translation costs, publication fees, 
annual  renewal  fees)  have  a  strong  negative  impact85,  but  other  factors  such  as  a  country's 
GDP, size and state of development of its market, number of years of EPC membership, and 
distance to other countries also impact on the validation decision86. In practice, the European 
patent thus provides patent protection in only a few EU Member States.  

As explained above, the London Agreement lowers the costs relating to translations for patent 
proprietors,  but  it  does  not  overcome  the  fragmentation  caused  by  the  national  patent  right 
borders  created  by  the  European  patent  after  grant.  I.e.  the  Agreement  cuts  validation  costs 
entirely  in  four  Member  States  (DE,  FR,  LU  and  the  UK),  reduces  costs  in  seven  Member 
States where translations of the claims still have to be supplied (DK, HU, LT, LV, NL, SE, 
SI) and leaves validation requirements untouched in sixteen Member States.  

As  regards  to  the  maintenance  of  patents  and  the  registration  of  rights  and  licences,  the 
administrative  burden  and  complexity  seem  to  generate  unnecessary  costs  for  inventors  and 

84 
85 
86 

Malta is not included due to lack of information. 
See Annex VI for international comparison of overall patenting costs. 
These latter factors are constant over time and cannot serve as leverage for policy options. 

EN 

22 

   EN 

 
                                                 
businesses. For example, renewing a patent for 10 years in the five most validated Member 
States  is  estimated  to  cost  up  to  EUR  7  500.  This  amount  could  exceed  EUR  43  000  in  20 
years87.  

Finally,  the  fragmentation  of  patent  protection  also  renders  the  enforcement  of  patent  rights 
more  difficult.  When  goods  enter  the  EU  through  a  Member  State  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  patent88.  The  goods  have  to  be  released  by  the  customs 
authorities  and  thus  allowed  to  circulate  freely  within  the  internal  market,  possibly  also 
including the Member States where the patent is in force. The identification of the goods in 
breach of a patent is thus very difficult. 

4.5. 

Overall impacts 

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.  

4.5.1.  Fragmentation of the Single Market 

The lack of access to comprehensive patent protection in Europe means that patent protection 
stops at the national borders. In order to reduce legal complexity and costs, European patents 
are validated in only a few Member States. Therefore, business opportunities are lost as patent 
proprietors  tend  to  focus  on  some  national  markets  in  their  patent  protection  and  the 
production, licensing and marketing of their products. Business opportunities in other markets 
–  whether  smaller  or  more  distant  –  are  less  likely  to  be  pursued;  this  fails  to  fulfil  a  true 
internal market and this may also undermine the cohesion within the Union.  

4.5.2.  Hindrance to innovation 

Among  other  factors  in  commercial  decisions,  the  characteristics  of  a  market  in  terms  of 
patent  protection  can  lead  to  more  or  less  investments  in  R&D  and  technology  transfers. 
European inventors cannot enjoy the full benefits of the Single Market when they need to seek 
patent  protection  country-by-country.  This  situation  compares  negatively  with  other  major 
economies such as the United States, Japan or China. Seeking patent protection in economies 
with large consumer markets and unitary protection systems, such as the United States may 
prove  to  be  more  attractive  for  inventors.  This  situation  has  negative  impact  on  the 
competitiveness  of  the  Union  as  innovation-related  activities  generate  human  capital  that 
tends  to  be  more  mobile  than  in  other  areas.  The  current  less  advantageous  framework 
conditions for innovation makes the Union a less attractive place to create and innovate, for 
both European and non-European inventors.  

Finally,  the  decision  of  companies  (in  particular  SMEs)  not  to  patent  certain  inventions  but 
keep them in secret have a negative impact on the dissemination of knowledge. 

87 
88 

Estimated on the basis of renewal fees in DE, FR, UK, IE and AT. 
Council  Regulation  (EC)  No  1383/2003  concerning  customs  action  against  goods  suspected  of 
infringing certain intellectual property rights and the measures to be taken against goods found to have 
infringed such rights. OJ L 196, 2.8.2003, p. 7–14.  

EN 

23 

   EN 

                                                 
4.5.3.  Hindrance to growth and competitiveness  

Innovative  companies  are  at  a  disadvantage  as  third  parties  producing  and  selling  patented 
products in Member States where patent protection has not been secured, have a competitive 
advantage over patent proprietors who need to recoup R&D investments; the problem affects 
especially  innovative  SMEs  who  have  refrained  from  securing  patent  protection  throughout 
the Union due to the high costs associated with obtaining such protection. 

Obtaining a patent in 13 Member States today costs 10 times as much as obtaining a patent in 
the US (EUR 18 536 as opposed to EUR 1850)89. As it was presented in section 3.1, forming 
start-ups on the  basis of patents is uncommon in Europe. This reduced the potential for job 
creation and thus growth. 

Patents may create more value when they can be licensed out or sold for a bigger market and 
they  can  disseminate  knowledge  by  transferring  technology  more  effectively.  The  current 
fragmentation makes it more difficult to trade and can even deter the incentives to trade at all, 
due to a complexity of the assessment of individual national rights. 

Finally, the value of patents is weakened as patent proprietors cannot rely on the EU Customs 
Border Regulation (Regulation No. 1383/2003) to prevent infringing goods and products from 
third countries from entering the internal market through Member States in which there is no 
patent protection. 

To  conclude,  the  high  costs  of  obtaining  EU-wide  patent  protection  have  the  following 
effects: the costs deter SMEs from  patenting  inventions,  patents are validated only in a few 
EU  countries  and  the  knowledge  dissemination  remains  limited.  Consequently,  the  Single 
Market continues to be fragmented in terms of patent protection and access to certain products 
and services; finally both innovation and growth of European companies are hindered.  

5. 

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 Member States would not sufficiently 
be able to establish legal effects attached to patents that are uniform in several Member States.  

Proportionality is taken into account in the analysis of the options in chapters 7 and 8. 

6. 

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). 

89 

Calculation includes the procedural fees at the EPO and the validation costs. 

EN 

24 

   EN 

                                                 
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. These are the operational objectives of this exercise. 

Figure 8 - Objectives 

7. 

POLICY OPTIONS AND ANALYSIS 

This  chapter  examines  different  policy  options  that  could  be  chosen  in  order  to  solve  the 
problems  presented  in  chapter  4  without  prejudice  to  their  legal  feasibility.  However,  as 
explained in the Introduction and chapter 2, 25 Member States requested the Commission to 
propose enhanced cooperation in the area of unitary patent protection and indicated the scope 
and objectives of such cooperation. These preconditions need to be taken into account when 
considering the options.  

The policy options are discussed and measured against the following pre-defined criteria:  

Effectiveness: The extent to which the measure fulfils the objectives. 

Cost reduction: The estimated cost reduction for the users of the patent system, in particular, 
the  level  of  potential  cost  savings  per  patent  application  and,  more  generally,  for  the  whole 
patent system. 

Simplification:  The  extent  of  foreseeable  simplification  of  the  legal  and  administrative 
complexity the current patent system. 

Political  feasibility:  The  possibility  to  reach  an  agreement  on  each  of  the  options  must  be 
assessed.  Numerous  attempts  to  address  the  problems  identified  above  have  already  taken 
place  in  the  past.  The  assessment  of  the  past  failures  and  in  particular  the  reasons  for  these 
failures therefore require evaluating the political feasibility of each option. 

EN 

25 

   EN 

 
The IA report does not present and analyse options with respect to the level of annual renewal 
fees  for  the  patents  as  those  fees  should  not  be  determined  by  European  legislation.  The 
annual renewal fees should cover the costs generated at the EPO in the course of the grant and 
management  of  the  relevant  patents  and  thus  the  EPO  has  to  be  involved  in  the  decision-
making process so that the solution fits in its existing procedures and fee scheme. Moreover, 
the  level  of  the  renewal  fee  depends  on  a  number  of  factors  (costs,  number  of  participating 
countries,  etc.)  and  should  be  progressive  throughout  the  life  of  the  patent.  Should  the  fee 
level  be  determined  by  law,  the  change  of  these  conditions  would  entail  the  need  to  amend 
European  legislation  that  may  prove  to  be  time-consuming  and  burdensome.  As  a 
consequence,  while  the  options  analyse  those  cost  components  where  the  savings  can  be 
foreseen, meaningful aggregate figures including all costs elements cannot be presented. 

7.1. 

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

Description:  Under  this  scenario,  the  current  patent  system  in  Europe  would  remain  intact. 
The only improvement that could be envisaged would be that more EU Member States accede 
to  the  London  Agreement.  Accession  is,  however,  not  only  optional  but  also  a  lengthy  and 
complex  process  as  parliamentary  approval  procedures  must  take  place  in  each  country. 
Accession by all remaining 16 Member States is unlikely to happen, even in the long run as 
there are several Member States that have not yet expressed any intention to join. It is to note 
that the majority of the Member States which are not parties to the London Agreement have 
an official language that is not in common with any official language of the EPO. Therefore, 
even after accession, they may require a translation of the claims into their national language.  

Analysis:  Under  this  option,  the  shortcomings  of  the  current  European  patent  system  would 
not  be  addressed  and  the  costs  and  the  complexity  of  the  current  system  would  stay 
unchanged. It would also have a negative impact on the functioning of the internal market due 
to continuous fragmentation resulting from patent proprietors' validation practices. Therefore, 
this solution is not effective. 

In  terms  of  cost  reduction  and  simplification,  even  if  all  Member  States  acceded  to  the 
London Agreement, the eventual language arrangement for the European patent would remain 
complex  and  costly.  In  addition,  the  London  Agreement  fails  to  address  the  other 
shortcomings of the current European patent system, in particular the validation requirements 
in  the  Member  States  would  remain.  Also,  it  would  have  no  impact  on  the  cost  and 
complexity of the renewal of patents (problem 2) and the registration of rights (problem 3). 
Therefore, this option would provide no additional benefit to users of the patent system and 
the costs would remain as they were described in the problem definition (chapter 4). 

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: The Conclusions and General 
Approach  adopted  by  the  Council  on  4  December  2009,  the  Commission's  Europe  2020 
Strategy and the Single Market Act. 

Table 4 – Expected impact of option 1 

Policy Option 

Effectiveness 

Cost reduction 

Simplification 

Political feasibility 

Option 1 

0 

0 

0 

Low 

"0": no change 

"+": positive impact 

"-": negative impact 

EN 

26 

   EN 

7.2. 

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

Description: Under this option, the Commission – together with the Council and the European 
Parliament – would continue to work towards an EU patent which covers all Member States. 
In  practice,  this  solution  requires  the  continuation  of  the  discussions  in  the  Council  on  the 
basis of the Commission's proposal for a Regulation on the Community patent of 200090 and 
the proposal for a Council regulation on the translation arrangements applicable to EU patent 
of 201091.  

Under this option, the EU patent would be granted by the EPO on the basis of the EPC. The 
EU patent would be of autonomous nature and provide uniform protection throughout the EU. 
The procedure up to the grant of the patent would be the same as the procedure for granting 
European  patents  under  the  EPC.  An  EU  patent  would  be  granted  in  English,  French  or 
German by the EPO. At the time when the EU patent is granted, the patent proprietor would 
supply to the EPO a translation of the claims into the two other official languages of the EPO. 
After the grant of the EU patent, its legal effects would extend to all Member States. There 
would be no additional validation requirements. Moreover, the renewal fees would be paid at 
the EPO and the patent would be registered in a single European register of EU patents.  

Analysis:  Under  this  option,  the  objective  of  a  simpler  and  more  cost-effective  European 
patent system would be fully achieved. An EU patent covering all Member States would be 
the most effective solution.  

Doing  away  with  all  translations  after  grant  and  associated  validation  requirements  would 
result in very significant cost reductions and simplification for all users of the patent system. 
The translation costs under this option would amount to approximately EUR 680 per patent92. 
This  corresponds  to  the  current  average  cost  of  the  translation  of  the  claims  into  the  two 
official languages of the EPO other than the language of proceedings and would equal the cost 
of validation in Germany, France and the UK under the London Agreement.  

Under  this  option,  the  translation  costs  amounting  to  EUR  680  would  therefore  replace  all 
other translation and validation costs (excluding attorney fees). Namely, instead of more than 
EUR 32 000 in validation costs for the coverage of the whole EU or EUR 4700 for the five 
largest Member States, the costs for the EU patent would be reduced to EUR 680, i.e. 2% of 
the current validation cost for the EU-27. This option would also ensure that the EU 27 patent 
is competitive even to the most limited European patents. The per capita cost would be very 
low: EUR 1.36/million habitants. Since studies have shown that the price elasticity is -0.4; i.e. 
a  cost  reduction  of  10%  would  lead  to  an  increase  of  about  4%  in  patent  filings,  the  cost 
reduction under this option can be expected to lead to greater demand for patenting93. 

90 
91 
92 

93 

COM(2000)412 final 
COM(2010)350 final 
4  pages  of  claims  x  85  EUR/page  x  2  languages  =  EUR  680,  calculated  on  the  basis  of  the 
Commission's 2010 proposal on the translation arrangements for the EU patent, COM(2010)350 final. 
Patent fees for a sustainable EU (Community) patent system by Bruno Van Pottelsberghe and Jérôme 
Danguy, see http://ec.europa.eu/internal_market/indprop/patent/index_en.htm 

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27 

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As explained in section 4.1, the annual validation costs in the EU are estimated to reach EUR 
193 million per year94. If the validation cost for the EU patent is presumed at the minimum 
EUR 680, one may assume that: (i) those patents that are currently validated in more than 3 
Member States with much higher costs would all become EU patents which cover the territory 
of the EU; (ii) from the 25 000 patents per year that currently are validated in only 3 Member 
States (for identical costs, i.e. EUR 680), the majority would also become EU patents (except 
for  specific  marketing  decisions  or  different  coverage  desired,  for  example,  covering  only 
Germany and Switzerland). Consequently, the total costs for the users would be equal whether 
all  European  patents  would  become  EU  patents  or  part  of  them  would  remain  European 
patents limited to three Member States.  

Table 5 – Estimated costs of the EU 27 patent 

Scope 

Patents per year 

Cost per patent (in EUR)  Total costs (in EUR) 

EU 27 patent 100% 

50000 

or 

EU 27 patent 75% 

European patent 25% 

37 500 

12 500 

Total 

Source: European Commission 

680 

680 

680 

34 million 

25.5 million 

8.5 million 

34 million 

The cost savings for the users of the patent system (patentees) would thus be EUR 159 million 
per annum. 

In order to ensure sufficient flexibility, annual renewal fees for an EU 27 patent would not be 
determined  by  EU  legislation  but  would  be  subject  to  further  negotiations  in  the 
implementation phase. Thus the potential costs savings in the renewal fees compared to the 
present  system  cannot  be  calculated  in  this  respect.  The  same  applies  to  the  cost  savings 
deriving from the single centralised procedure with respect to professional representation for 
the registration of transfers or licensing agreements. As there is no information available on 
the  number  or  scope  of  the  registration  of  rights  in  the  national  patent  registers,  there  is  no 
possibility to calculate the overall costs and savings. 

As  section  4.2  explains,  the  technical  assistance  provided  by  companies  for  the  payment  of 
fees cost EUR 30-40 per patent per country. If renewal fees were to be paid to the EPO, these 
the cost of technical assistance would be EUR 240-320, if any, for the patent that is renewed 
for  10  years  (calculated  from  the  third  year).  This  means  a  potential  saving  of  EUR  6450-
8600 per patent over a 10-year period. Based on the assumptions used in Table 3, the overall 
amount of these fees would be EUR 12 million-16 million in 10 years. This could mean an 
overall saving of EUR 49-65.2 million in a 10-year period compared to the present system. 

As the payment and management of the renewal of the patents, as well as the registration of 
the patents and the related rights and licences would be managed centrally, this option would 
achieve  the  greatest  simplification.  While  today  the  administration  of  patents  needs  to  be 

94 

In  order  to  calculate  the  potential  cost  savings for  the  users  of  the patent  system,  it  was  necessary  to 
make certain assumptions and due to the complexity of the current system, some approximations of the 
data used. 

EN 

28 

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carried out country-by-country, under this option, a single central procedure at the EPO would 
replace all.  

As regards the political feasibility of this option, the translation arrangements (which require 
unanimity in the Council - Article 118(2) TFEU) pose the biggest obstacle. The Council had 
tried and failed on several occasions to reach a unanimous agreement. As explained in chapter 
2,  the  Competitiveness  Council  confirmed  on  10  November  2010  that  no  unanimous 
agreement could be reached on the translation arrangements and on 10 December 2010 that 
insurmountable  difficulties  existed,  making  a  decision  requiring  unanimity  impossible  now 
and  in  the  foreseeable  future.  Therefore,  despite  all  the  benefits  of  this  option,  it  is  not 
achievable politically and thus the problems of the EU patent system could not be addressed 
through this option. 

Table 6 – Expected impact of option 2 

Policy Option 

Effectiveness 

Cost reduction 

Simplification 

Political feasibility 

Option 2 

+++ 

+++ 

+++ 

Not possible 

"0": no change 

"+": positive impact 

"-": negative impact 

7.3. 

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

Description: Under this option, the Commission would present the proposals necessary for the 
implementation of enhanced cooperation in the area of unitary patent protection. The area of 
unitary  patent  protection  would  include  the  territories  of  the  Member  States  that  wish  too 
cooperate in this framework. So far the Commission has received requests from 25 Member 
States  wishing  to  participate  in  enhanced  cooperation  and  adopted  a  proposal  for  a  Council 
decision  authorising  enhanced  cooperation  in  the  area  of  unitary  patent  protection  in 
December 2010, in response to these requests (see details in chapter 2).  

In this framework, the unitary patent protection would be optional to the users of the patent 
system and would co-exist with current system. The unitary patent protection would provide 
European  patents  granted  by  the  EPO  with  unitary  effect  for  the  territories  of  the  Member 
States participating in the enhanced cooperation.  

Consequently,  until  grant,  applicants  would  have  the  choice  between  (i)  a  European  patent 
valid  in  the  territories  of  the  participating  Member  States  for  which  this  patent  would  have 
unitary  character,  (ii)  a  European  patent  valid  in  the  territories  of  the  participating  Member 
States for which this patent would have unitary character but also designating selected other 
Contracting States of the EPC (especially the Member States not participating in the enhanced 
cooperation),  or  (iii)  a  European  patent  designating  only  selected  Contracting  States  to  the 
EPC  (no  matter  whether  they  take  part  in  the  enhanced  cooperation  or  not).  The  unitary 
protection for European patents granted by the EPO would come into effect in the territories 
of  the  participating  Member  States  without  any  validation  with  the  national  patent  offices. 
Moreover, the renewal fees would be paid at the EPO and the patent would be registered in a 
single European register with regard to the territories of the participating Member States. 

EN 

29 

   EN 

The  options  as  regards  the  applicable  translation  arrangements  are  described  under  sub-
options 3.1 and 3.295. Both sub-options have the following common elements: 

A) Any translation to be filed at the time of grant shall be filed centrally at the EPO, which 
shall  be  in  charge  of  the  electronic  publication  of  the  patent.  Article  14  of  the  EPC  applies 
with respect to the languages of filing. 

B) The development of automatic machine translation (AMT) programs for patent documents 
is essential in order to improve the dissemination of technological information for researchers 
throughout the EU. A project in this field is underway at the EPO. The availability of a fully-
fledged AMT system promises significant improvements for users monitoring the content of 
new patent applications in foreign languages.  

C) In the case of a dispute relating to a European patent with unitary effect, the patentee will 
provide, at his/her expense and at the request of an alleged infringer, a full translation of the 
patent  into  an  official  language  of  the  participating  Member  State  in  which  the  alleged 
infringement took place or in which the alleged infringer is domiciled.  

D) An application for a European patent may be filed in any language96. Where the language 
of  filing  is  not  an  official  EPO  language,  a  translation  of  the  application  must  be  provided, 
within  a  prescribed  time  period,  so  that  the  application  can  be  processed  by  the  EPO.  If  a 
natural  or  legal  person  having  his/her  residence  or  principal  place  of  business  within  a 
participating Member State that does not have as an official language among the language of 
proceedings before the EPO files an application for a patent in the official language of their 
Member  State,  the  cost  of  translation  shall  be  borne  by  the  system,  should  he/she  chose  to 
obtain unitary effect to their European patent. 

Analysis: This option would allow for the creation of unitary patent protection limited to the 
territories  of  the  Member  States  that  participate  in  enhanced  cooperation.  Enhanced 
cooperation remains open to all Member States which may join any time, provided that they 
meet the conditions of the established cooperation. The Member States that expressed a wish 
to participate in enhanced cooperation make up 79% of the total EU population. In terms of 
patenting  activity  in  the  EU,  applicants  from  the  participating  Member  States  have  filed 
approximately  92%  of  applications  from  the  EU  with  the  EPO  in  2009.  All  Member  States 
with  the  highest  per  capita  number  of  applications  would  take  part  in  the  enhanced 
cooperation97. Accordingly, the proposed enhanced cooperation would cover a market with a 
substantial  size  in  which  patent  holders  would  get  protection  without  any  validation  with 
national patent offices and without the transactional costs. While this solution would not be as 
effective as option 2, it can be assumed that such a substantial market under a unitary patent 
protection system would be more attractive to the users than the current regime, including the 
area covered by the London Agreement.  

Unitary  patent  protection  would  cover  a  market  that  is  much  larger  than  any  market  of  a 
single  Member  State,  resulting  in  reduced  costs  of  protection  relative  to  the  size  of  the 
economy  (see  Tables  2  and  8).  Enhanced  cooperation  of  25  Member  States,  in  particular, 
would cover 79% of the EU's population (394.7 million people) that is close to the double of 

95 

96 
97 

These  translation  arrangements  do  not  affect  the  language  regime  applicable  in  the  patent  litigation 
system. The latter will be determined by the legal instrument regulating the patent litigation system. 
This is prescribed by Article 5 of the Patent law Treaty 2000. See also Article 14(2) EPC. 
See the detailed figures in Annex VII. 

EN 

30 

   EN 

                                                 
the  population  of  the  three  most  validated  Member  States  (UK,  DE,  FR  –  208.5  million 
people). But even  when  comparing  the figures to the population in the five largest Member 
States  (DE,  FR,  UK,  IT,  ES  –  314.8  million  people),  the  population  of  25  Member  States 
participating in enhanced cooperation is 80 million higher. 

The effect of relative patenting costs on the demand for patent protection was investigated in a 
recent  study  performed  for  the  Commission98.  When  comparing  patent  costs,  taking  into 
account the market size and the number of claims in an average patent for a given territory, 
the  study  showed  that  very  high  costs  in  Europe  induce  a  much  smaller  demand  for  patent 
applications  filed  at  the  EPO.  The  study  also  shows  that  the  London  Agreement  has  a 
substantial  impact  on  reducing  costs,  but  a  European  patent  remains  several  times  more 
expensive than a US patent. 

By providing for unitary patent protection covering a sizeable area of the Union, the cost per 
claim per capita for patent protection would decrease. Studies have shown the price elasticity 
to be -0.4; a cost reduction of 10% would lead to an increase in patent filing of about 4%. By 
reducing  the  cost  of  patent  protection  per  capita,  an  enlarged  territory  for  patent  protection 
should therefore lead to greater demand for patenting99. 

Option 3 would create an area where the costs and the complexity of patent protection would 
be  significantly  reduced.  The  level  of  such  cost  reduction  and  simplification  would  largely 
depend  on  the  number  of  Member  States  that  participate  in  enhanced  cooperation.  It  is 
important to highlight, that 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. 

The costs of translation in the area of enhanced cooperation would be constant and they would 
not change with respect to the number of Member States that participate. The larger area is 
covered by enhanced cooperation, the more significant the cost savings are. Two scenarios are 
analysed under sub-options 3.1 and 3.2 to demonstrate the potential cost savings. 

The payment and management of the renewal of the patents, as well as the registration of the 
patents  and  the  related  rights  and  licences  would  be  managed  centrally  by  the  EPO  with 
respect  to  the  territory  of  the  participating  Member  States.  In  addition  to  the  single  central 
procedure  at  the  EPO,  all  registrations  and  the  payment  of  renewal  fees  would  need  to  be 
carried out country-by-country with respect to those Member States that do not participate in 
the enhanced cooperation.  

Following the same logic as in option 2 and assuming that all European patents with unitary 
effect will be renewed for 10 years in the area of enhanced cooperation, the cost savings from 
the  fees  of  technical  assistance  for  payments  could  reach  EUR  3600-4800  per  patent,  if  16 
Member States took part in the enhanced cooperation and EUR 5040-6720 per patent, if 22 
Member  States  participated.  In  the  case  of  participation  by  25  Member  States,  a  saving  of 
EUR 5760-7680 can be foreseen. In the non-participating countries the fees would need to be 
paid  respectively  and  thus  maintaining  patent  protection  in  all  Member  States  would  have 
additional costs. 

98 

99 

Economic  Cost-Benefit  Analysis  of  the  Community  Patent  by  Bruno  van  Pottelsberghe  and  Jérôme 
Danguy, see http://ec.europa.eu/internal_market/indprop/patent/index_en.htm 
Patent fees for a sustainable EU (Community) patent system by Bruno Van Pottelsberghe and Jérôme 
Danguy, see http://ec.europa.eu/internal_market/indprop/patent/index_en.htm 

EN 

31 

   EN 

                                                 
As  regards  the  costs  deriving  from  attorney  fees  paid  by  patent  holders  when  they  register 
transfers or licensing agreements, there would be clear costs savings deriving from the single 
centralised  procedure  with  respect  to  the  territories  of  the  Member  States  participating  in 
enhanced cooperation. But just as in option 2, as there is no information available either on 
the  number  or  scope  of  the  registration  of  rights  in  the  national  patent  registers,  there  is  no 
possibility to calculate the overall costs and savings. 

Although  this  option  would  not  bring  the  full  benefits  of  option  2,  it  would  still  have  a 
positive impact on users of the patent system in Europe.  

7.3.1.  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 

Description: 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  patent100.  The  patentee  of  the  European  patent  granted  by  the 
EPO will supply to the EPO a translation of the claims into the two other official languages of 
the  EPO.  No  additional  translations  would  be  required  for  the  unitary  patent  protection  that 
would  take  effect  automatically  in  the  territories  of  the  Member  States  participating  in 
enhanced cooperation. 

The only exception to  these limited translation requirements  would  be  the  case  of  a  dispute 
concerning  the  patent  (see  in  section  7.3).  It  is  estimated  that  less  than  1%  of  all  patents 
become subject to litigation during their term101. 

Analysis: The IA carried out by the Commission on the translation arrangements for the EU 
patent  is  to  a  large  extent  applicable  under  sub-option  3.1.  The  main  difference  is  that  a 
unitary patent under enhanced cooperation would not cover all 27 Member States. This sub-
option implies very limited translation costs and no additional validation costs. The average 
cost of patents for the area of enhanced cooperation would be EUR 680.  

In  this  option,  the  potential  savings  would  depend  on  the  number  of  Member  States 
participating  in  enhanced  cooperation.  The  table  below  shows  comparison  under  this  sub-
option, for 16, 22 and 25 Member States. 

100 
101 

EN 

COM(2010)350 final 
Prof. D. Harhoff, Ph.D.: Economic Cost-Benefit Analysis of a Unified and Integrated European Patent 
Litigation 
14. 
p. 
http://ec.europa.eu/internal_market/indprop/docs/patent/studies/litigation_system_en.pdf  

System, 

report 

2009, 

final 

32 

   EN 

                                                 
Table 7 – Comparison of patenting costs under sub-option 3.1 

European 
patent 27 MS 

European 
patent  5  MS 
(DE,  FR,  UK, 
IT, ES) 

Enhanced 
cooperation 
16  MS  +  11 
other MS 

Enhanced 
cooperation  22 
MS  +  5  other 
MS 

Enhanced 
cooperation  25 
MS  +  2  other 
MS 

Translation 

Publication 

Representation 

23 375 

3 910 

2987 

5750 

308 

500 

12 665 

1485 

2750 

8 755 

588 

1250 

Total 

32 112 

4 718 

16 900 

10 593 

3 910 

308 

500 

4 718 

Source: European Commission 

Therefore, under this sub-option, obtaining patent protection for the entire territory of the EU, 
if only the 16 Member States joined the enhanced cooperation, would cost 53% of the current 
cost.  Presuming  that  22  Member  States  take  part  in  the  enhanced  cooperation,  patent 
protection  would  cost  only  33%  of  what  it  costs  today  and  only  15%  of  today's  cost  if  25 
Member  States  participate.  Taking  into  account  the  current  validation  pattern  for  the  27 
Member States (see Table 3), the annual savings at EU level could reach EUR 38.5 million in 
the case of 16 Member States, EUR 45 million in the case of 22 Member States and EUR 58.5 
million in the case of 25 participating countries102.  

Table 8 – Per capita cost of patent protection under sub-option 3.1 (EUR/million habitants) 

16 participating MS 

22 participating MS 

25 participating MS 

Territories of participating MS 

2.1 

Territories of 27 MS 

33.7  

1.79 

21.1 

1.72 

9.4 

This sub-option would be cost-effective and result in relevant simplification for the users of 
the  patent  system.  However,  while  the  Commission's  proposal  was  welcomed  by  a  large 
majority  of  the  Member  States,  it  did  not  find  unanimous  support.  Several  Member  States 
have indicated the need for additional elements. The Member States requesting the launch of 
enhanced  cooperation  have  requested  to  include  in  the  implementing  regulations  of  the 
enhanced cooperation some of the elements proposed by the Belgian Presidency in relation to 
the translation arrangements, moreover the proposal of the Commission on the draft Council 
decision  authorising  the  enhanced  cooperation  contains  already  a  number  of  substantive 
elements in this regard (see sub-option 3.2). The conditions set by the requests of the Member 
States  that  they  addressed  to  the  Commission  to  launch  enhanced  cooperation  exclude  the 
possibility of choosing this sub-option. 

Table 9 – Expected impact of option 3.1 

Policy Option 

Effectiveness 

Cost reduction 

Simplification 

Political feasibility 

Option 3.1 

++ 

++ 

++ 

Not possible 

"0": no change 

"+": positive impact 

"-": negative impact 

102 

A change in the validation pattern can result in a change in the aggregate savings. 

EN 

33 

   EN 

 
 
                                                 
7.3.2.  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 

Description: Under this sub-option, the translation arrangements under sub-option 3.1 would 
be complemented by certain elements of a compromise proposed by the Belgian Presidency 
and discussed by the Council in October-November 2010. These arrangements gained support 
from 25 Member States in the Council and were reflected in their request to the Commission 
to  provide  for  a  proposal  to  launch  enhanced  cooperation.  The  main  set  of  linguistic 
requirements would be the language regime applicable under the EPC to all European patents. 
In addition, supplementary translation requirements without legal value would be applicable 
to the unitary patent protection for a transitional period:  

(i) a full translation of a European patent that was granted in French or German and for which 
unitary  protection  is  sought  to  English  (language  customary  in  the  field  of  international 
research); and  

(ii) a full translation of a European patent that was granted in English and for which unitary 
protection  is  sought  to  an  official  language  of  the  Member  States  participating  in  enhanced 
cooperation, at the choice of the patent holder.  

However,  the  transitional  period  would  be  set  to  a  limited  period  of  time  which  would  be 
based  on  the  time  which  is  likely  to  be  necessary  to  develop  high-quality  machine 
translations.  It  is  foreseen  that  the  machine  translation  project  of  the  EPO  would  be  further 
developed to include all languages of the Contracting States to the EPC. The EPO launched a 
specialised machine translation programme for patent documents in 2004, currently ensuring 
the  availability  of  customised  translations  of  patent  specifications  in  a  limited  number  of 
languages.  In  October  2010,  the  EPO  extended  its  machine  translation  programme  with  a 
view to making available machine translations for the languages of all the Contracting States 
to the EPC, which include all official EU languages, from and to English, by 2014. The EPO's 
Administrative Council agreed to dedicate EUR 10 million to the programme over this period 
of  4  years.  Once  high-quality  machine  translations  would  be  available,  and  subject  to 
evaluation,  additional  manual  translations  would  not  be  necessary  anymore.  The  maximum 
period for these arrangements is 12 years but the status of the machine translation project will 
be  assessed  periodically  and  the  Commission  will  propose  to  end  the  transitional 
arrangements before, if the conditions are fulfilled. 

Analysis:  Under  this  sub-option,  additional  translation  requirements  during  a  transitional 
period would result in additional costs to the users of the patent system. Whereas under sub-
option  3.1  the  translation  costs  would  be  limited  to  EUR  680  per  patent,  additional  manual 
translations during a transitional period would add an estimated cost between EUR 300 and 
EUR  1700,  depending  on  the  language  in  which  the  patent  was  granted  and  the  other 
languages chosen for the translation. For example, if a patent is granted in French or German, 
the  translation  requirement  would  include:  (i)  translation  of  patent  claims  into  two  other 
official  languages  of  the  EPO,  and  (ii)  during  a  transitional  period,  additional  translation  of 
the patent description into English. The estimated costs under these translation requirements 
would therefore amount to EUR 2040 (EUR 680 of claims in two languages + EUR 1360 for 
description in English).  

But if a patent is granted in English, the following scenarios during a transitional period are 
possible  depending  on  the  choice  of  the  patent  holder:  (i)  If  the  patent  were  already  be 

EN 

34 

   EN 

available in English with the claims in French and German, the patent holder could choose to 
translate only the patent description in French or German. The additional costs would thus be 
EUR  1360  for  translating  the  description  only.  (ii)  If  the  patent  holder  chooses  to  fully 
translate  the  patent  in  any  official  language  of  the  Member  States  participating  in  enhanced 
cooperation which is not French or German, in addition to the cost of translating the claims 
into  French  and  German,  the  additional  costs  would  be  the  maximum  of  a  full  translation 
which is estimated at EUR 1700. However, in practice, this cost would often be much lower 
as 45% of all patent applications at the EPO are first filed in a national patent office. In these 
cases  the  initial  patent  applications  are  already  available  in  national  languages.  Therefore, 
once  a  patent  is  granted  by  the  EPO,  this  initial  application  may  be  transformed  into  a  full 
translation of a patent upon its grant. The costs, therefore, would be much lower, around EUR 
300 per patent (i.e. the cost of necessary adaptation, if any). 

Therefore,  the  total  costs  of  translation  during  a  transitional  period  may  vary  from 
approximately EUR 980 to EUR 2380 per patent in the area of enhanced cooperation. After 
the  expiry  of  this  transitional  period,  when  high-quality  machine  translations  become 
available,  the  total  costs  of  translation  would  be  again  reduced  to  EUR  680  as  under  sub-
option 3.1. During the transitional period, the costs under sub-option 3.2 would therefore be 
higher than under sub-option 3.1.  

Table 9 – Comparison of patenting costs under sub-option 3.2103 

European 
patent 27 MS 

European 
patent  5  MS 
(DE,  FR,  UK, 
IT, ES) 

Enhanced 
cooperation  16 
MS  +  11  other 
MS 

Enhanced 
cooperation 
22  MS  +  5 
other MS 

Enhanced 
cooperation 
25  MS  +  2 
other MS 

Translation 

Publication 

Representation 

Total 

23 375 

2 987 

5 750 

32 112 

Source: European Commission 

3 910 

308 

500 

4 718 

14 365 

1485 

2750 

18 600 

10 455 

588 

1 250 

12 293 

5 610 

308 

500 

6 418 

Under this sub-option, obtaining patent protection for the entire territory of the EU, if only 16 
Member States joined the enhanced cooperation, would cost 58% of the price patentees have 
to  pay  today.  Presuming  that  22  Member  States  take  part  in  the  enhanced  cooperation, 
obtaining  patent  protection  would  cost  38%  of  what  it  costs  today  and  only  20%  of  today's 
cost if 25 Member States participate. Taking into account the current validation pattern for the 
27 Member States (see Table 3), the annual savings at EU level could reach EUR 30 million 
in the case of 16 Member States and EUR 36 million in the case of 22 Member States taking 
part  in  enhanced  cooperation.  In  the  case  of  25  participating  countries,  this  amount  would 
reach EUR 50 million104.  

The  table  below  shows  the  per  capita  cost  of  obtaining  unitary  patent  protection  in  the 
territory of the participating Member States and the cost of obtaining patent protection in the 
entire EU under sub-option 3.2. 

103 

104 

Calculation with EUR 2380 translation cost in the participating Member States (during the transitional 
period) 
A change in the validation pattern can result in a change in the aggregate savings. 

EN 

35 

   EN 

 
                                                 
Table 10 – Per capita cost of patent protection under sub-option 3.2 (EUR/million habitants) 

16 participating MS 

22 participating MS 

25 participating MS 

Territories of participating MS 

7.3 

Territories of 27 MS 

37.1 

6.3 

24.5 

6 

12.8 

This sub-option would thus be less cost-effective than sub-option 3.1 during the transitional 
period  but  in  the  long  run  it  could  bring  about  the  same  savings.  The  same  applies  for 
simplification. However, as more Member States are likely to join the enhanced cooperation 
than under sub-option 3.1, the actual savings can be higher in the end. 

As regards the political feasibility, the principles of the transitional period were proposed by 
the  Belgian  Presidency  and  welcomed  by  a  large  majority  of  Member  States.  Consequently 
this sub-option can be expected to gain more political support. 

Table 11 – Expected impact of sub-option 3.2 

Policy Option 

Effectiveness 

Cost reduction 

Simplification 

Political feasibility 

Option 3.2 

++ 

+ (transitional 
period) 

+ (transitional 
period) 

High 

"0": no change 

"+": positive impact 

"-": negative impact 

++ (long term) 

++ (long term) 

8. 

COMPARING THE OPTIONS AND THEIR IMPACTS 

8.1. 

Impacts on patent holders 

The table below provides a summary of expected impacts of the options on the main users of 
the patent system. 

Table 12 – Comparing the impacts of the options 

Policy Option 

Effectiveness 

Cost reduction 

Simplification 

Option 1 

Option 2 

Option 3.1 

Option 3.2 

0 

+++ 

++ 

++ 

0 

+++ 

++ 

0 

+++ 

++ 

+ (transitional period) 

+ (transitional period) 

++ (long term) 

++ (long term) 

"0": no change 

"+": positive impact 

"-": negative impact 

In terms of effectiveness, options 2, 3.1 and 3.2 would be suitable to improve the conditions 
of patent protection in Europe compared to the current situation. All three options would bring 
about  significant  positive  changes  with  respect  to  the  reduction  of  translation  costs,  the 
simplification  of  patent  maintenance  and  the  registration  of  transfers  and  licensing 
agreements. The most effective solution would be the creation of an EU 27 patent that would 

EN 

36 

   EN 

 
diminish the need for any additional procedure in the EU. Sub-options 3.1 and 3.2 are equally 
effective means to achieve the objectives of the initiative. Option 1 is not effective; it hampers 
the competitiveness of the EU. 

As regards cost reduction, once again option 2 would bring about the most important savings 
as EU patent protection would potentially be available for only EUR 680 (excluding attorney 
fees). However, sections 7.3.1 and 7.3.2 show that enhanced cooperation could also result in 
significant  savings.  The  amount  of  these  savings  would  depend  on  the  number  of  Member 
States taking part in the enhanced cooperation. The following chart compares the per capita 
cost of the patent protection under several scenarios. The first four columns indicate the cost 
of obtaining patent protection in 3, 5, 13 and 27 Member States under the baseline scenario 
(see  Table  2  for  exact  figures).  The  fifth  column  shows  that  the  lowest  per  capita  cost  of 
patent  protection  would  be  ensured  by  option  1,  i.e.  the  EU  patent.  The  last  four  columns 
show  the  cost  of  patent  protection  under  enhanced  cooperation  between  25  Member  States. 
The  sixth  and  seventh  columns  represent  the  per  capita  cost  of  patent  protection  in  25 
countries  while  the  last  columns  indicate  the  per  capital  cost  of  patent  protection  in  25+2 
Member States (see Tables 8 and 10 for exact figures). As explained in section 7.3.1, due to 
the  significant  increase  in  the  size  of  the  market,  and  the  major  reduction  in  the  costs  of 
patenting compared to the baseline scenario (option 1), it can be expected that patentees will 
seek Europe-wide patent protection also under option 3. Figure 9 also shows that, even during 
the transitional period (sub-option 3.2) the cost of Europe-wide patent protection will be much 
closer  to  the  EU-patent  scenario  than  to  the  baseline  scenario.  Finally,  it  is  important  to 
underline that even if unitary patent protection during the transitional period will be somewhat 
more  costly than patent protection today in 3 Member States (UK, DE and FR), there are a 
number  of  advantages  that  can  be  expected  to  lead  to  a  major  shift  towards  the  new 
instrument.  In  particular,  the  fact  that  size  of  the  market  covered  by  the  protection  will  be 
doubled (see details in section 7.3), combined with a reduction in administrative burden and 
an  increase  in  the  transparency  and  accessibility  of  patent  information  can  make  the  new 
instrument very attractive to business. 

Figure 9 – Comparing the per capita cost of the options 

Comparison of per capita cost per patent

s
t
n
a
t
i

b
a
h

n
o

i
l
l
i

/

m
R
U
E

70

60

50

40

30

20

10

0

UK DE FR

UK, DE, FR, ES,
IT

UK, DE, FR, ES,
IT, A T, B E, DK,
IE, LU, NL, SK,
SE

27 M S
(baseline)

27 M S (EU
patent)

25 participating
M S (sub-o ptio n
3.1)

25 participating
M S (sub-o ptio n
3.2)

25+2 M S (sub-
o ptio n 3.1)

25+2 M S (sub-
o ptio n 3.2)

EN 

37 

   EN 

 
 
Source: European Commission 

As  regards  simplification,  an  EU  27  patent  could  ensure  that  a  single  centralised  procedure 
applies  to  the  registration  of  patents,  the  payment  of  renewal  fees  and  the  registration  of 
transfers  and  other  rights.  Enhanced  cooperation  is  the  second  best  option.  The  level  of 
simplification compared to the baseline scenario depends on the number of the Member States 
joining the enhanced cooperation.  

While option 2 would create a level-playing field across the EU also in a legal sense, in the 
case of enhanced cooperation too, the users of the patent system would equally benefit from 
unitary patent protection, no matter whether they reside in a country that does not take part in 
the  enhanced  cooperation.  Inventors  could  seek  unitary  patent  protection  under  the  same 
conditions regardless of their country of residence. Therefore, all inventors will benefit from 
the  cost  reduction  and  the  simplification  brought  about  by  the  enhanced  cooperation.  This 
measure can be expected to have a major positive impact on the patenting activity of SMEs 
and an overall increase in the number of patents throughout Europe. 

It is to note that inventors from third countries would benefit for unitary patent protection the 
same  way  as  European  patentees.  Approximately  half  of  the  European  patent  applications 
come  from  outside  the  EU  (see  Annex  II).  These  applicants  would  also  benefit  from  the 
simplification and cost reduction under options 2 and 3. 

8.2. 

Impact on the internal market and on stakeholders (other than patentees) 

Option 2, the creation of an EU patent 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 
of the internal market in terms of patent protection. But enhanced cooperation in the area of 
the unitary patent protection (option 3) would also increase the level of integration not only 
between the participating Member States but also between participating and non-participating 
countries, compared to the baseline scenario. Due to the costs and complexity inherent in the 
current  system,  European  patents  are  validated  in  only  a  few  Member  States  today  (see 
chapter  4).  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 by means of a European patent also in the 
Member States that do not participate in the enhanced cooperation. This is even more likely as 
such  EU-wide  coverage  would  facilitate  the  protection  of  inventions  against  products  from 
third  countries  that  infringe  their  patents  when  entering  the  internal  market.  Therefore,  an 
increase  in  patenting  activity  can  be  expected  also  in  those  Member  States  that  do  not  take 
part in the enhanced cooperation. 

This  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 e.g. counterfeited goods that, inter alia, pose a threat to the health and safety of 
consumers.  

The simplified management of European patents with unitary effect will entail the reduction 
of  the  tasks  of  the  national  patent  offices  with  respect  to  the  validation  and  renewal  of 
European patents. The role of the national patent offices with respect to the national patents 
will remain unchanged. 

As  regards  the  users  of  patent  information,  the  centralised  registration  and  publication  of 
European patents having a unitary effect by the EPO would facilitate and make cheaper the 

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access  to  the  published  patents.  Therefore,  the  dissemination  of  knowledge  would  improve 
that  should  have  a  positive  impact  on  innovation  in  Europe105.  Users  of  patent  information 
from third countries would equally benefit from the centralisation of patent information. 

Unitary patent protection will have a positive impact on the competitiveness of the Union and 
will  make  it  a  more  attractive  place  to  create  and  innovate,  for  both  European  and  non-
European  inventors.  Europe  will  compare  better  with  other  major  economies  such  as  the 
United  States,  Japan  or  China.  Seeking  patent  protection  in  economies  with  large  consumer 
markets  and  unitary  protection  systems  is  more  attractive  for  inventors.  While  the 
geographical distance from these markets will keep them hard to access for European SMEs, 
the  creation  of  unitary  patent  protection  in  Europe  will  provide  these  companies  with  an 
opportunity to develop and market their inventions on a sizeable market and thereby increase 
the international competitiveness of European economy.  

8.3. 

Social and environmental impacts 

As explained in section 3.1, patents can be used to create start-ups, although this is currently 
not common in Europe. Easier and cheaper access to patents is likely to result in an increased 
number of innovative SMEs. SMEs have a major role in job creation; they ensure two thirds 
of private sector jobs in Europe106. The increase in the number of new business, therefore, can 
be  expected  to  have  a  positive  impact  on  job  creation  both  in  participating  and  non-
participating Member States.  

Nonetheless,  these  positive  impacts  on  European  economy  come  at  a  price.  The  reduced 
translation  requirements  will  have  an  unfavourable  impact  on  translators  working  on 
European  patents  in  those  participating  countries  where  the  official  language(s)  is  not 
common with the EPO's official languages. However, it is important to note that this change 
has  already  taken  place  in  the countries  that  joined  the  London  Agreement  and  to  a  limited 
extent in those the translation of claims is still required107. Another important element of the 
cost savings for inventors derives from the reduced costs of professional representation. These 
fees  charged  by  patent  attorneys  should  be  lower  than  today  due  to  the  single  centralised 
procedure replacing country-by-country representation. 

In terms of impact on the environment, the options are neutral. 

105 
106 
107 

The positive impact would further increase when high-quality machine translations become available. 
http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/index_en.htm  
The development of high-quality machine translations will also affect this group. 

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Table 13 – Summary of the impacts on stakeholders 

Policy 
Option 

Impact on 

Patentees 
(large 
companies)* 

Patentees 
(SMEs)* 

Patent 
information 
users 

Consumers 

Employment 

Translators, 
patent attorneys 

Option 1 

0 

Option 2 

+++ 

Option 3.1 

Option 3.2 

++ 

++ 

0 

+++ 

++ 

+ (transitional 
period) 

++ (long term) 

0 

+++ 

++ 

++ 

0 

+++ 

++ 

++ 

0 

++ 

+ 

+ 

0 

--- 

-- 

- (transitional 
period) 

-- (long term) 

"0": no change 

"+": positive impact 

"-": negative impact 

* Impacts are the same for patentees residing in participating and non-participating Member States. 

8.4. 

Political feasibility 

As regards political feasibility, while it is clear that in economic terms an EU 27 patent would 
the most effective, it would bring about the highest benefits in terms of the cost reduction and 
simplification, this option is not feasible. This option has been a preferred solution for more 
than 10 years and has not become a reality. The latest failure of the Council to agree on the 
translation  arrangements  applicable  to  EU  patens  showed  that  reaching  a  unanimous 
agreement  remains  politically  unfeasible.  At  present,  option  1  (base-line  scenario)  also  has 
low  political  feasibility  as  it  would  also  run  contrary  to  the  political  engagement  of  the 
Commission and the Council to address the problems of the patent system in Europe. 

Table 14 – Comparing the political feasibility of the options 

Policy Option 

Political feasibility 

Option 1 

Low 

Option 2 

Not possible 

Option 3.1 

Not possible 

Option 3.2 

High 

The analysis of option 3 shows that although it is not the best option in economic terms, its 
benefits  would  still  be  very  important.  The  sub-options  analysed  provided  insight  to  the 
possible  translation  arrangements  in  the  framework  of  enhanced  cooperation.  Although  the 
translation regime under sub-option 3.1 would be the most cost-effective, it is not politically 
feasible in the short term, for the reasons explained in section 7.3.1. Sub-option 3.2 is likely to 
have  the  widest  support  among  the  Member  States  participating  in  enhanced  cooperation. 
Finally,  after  the  transitional  period,  the  comparative  value  of  this  sub-option  will  increase 
significantly. Therefore, option 3 with sub-option 3.2 is the preferred option. 

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The options have no impact on the EU budget. 

9. 

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 
legislation  on  the  translation  arrangements  should  provide  for  a  regular  review  of  the 
necessity of the transitional measures. 

The  creation  of  unitary  patent  protection  aims  to  improve  the  conditions  for  innovation  in 
Europe.  Innovation  activity  is  measured  by  INNO-Metrics,  comprising  the  European 
Innovation Scoreboard and Eurobarometer. The relevant indexes need to be monitored on an 
annual basis.  

A  European  patent  with  unitary  effect  would  coexist  with  national  patents.  The  relative 
patenting levels between these types of rights should be monitored to ensure that they provide 
adequate  solutions  for  innovators.  This  can  be  achieved  by  analysing  patenting  statistics 
published by patent offices in Europe in their annual reports.  

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Annex I 

10. 

ANNEX 

The proportion of patents used to create start-ups in eight Member States 

Source: Study on evaluating the knowledge economy – what are patents actually worth? The value of patents for 
today's economy and society, 2006. 

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Annex II 

Number of patent applications to the EPO in 2009 

Residence of 
applicants 

Number of 
applications 

Residence of 
applicants 

Number of 
applications 

1504 

1630 

17 

5864 

46 

136 

25107 

1488 

34 

1258 

1447 

8929 

4821 

103 

21 

114 

490 

47 

3881 

222 

13 

293 

49 

Austria 

Belgium 

Bulgaria 

Switzerland 

Cyprus 

Czech Republic 

Germany 

Denmark 

Estonia 

Spain 

Finland 

France 

UK 

Greece  

Croatia 

Hungary 

Ireland 

Iceland 

Italy 

Lichtenstein 

Lithuania 

Luxembourg 

Latvia 

Source: EPO 

EU Member States 

Monaco 

FYROM 

Malta 

Netherlands 

Norway 

Poland 

Portugal 

Romania 

Sweden 

Slovenia 

Slovakia 

San Marino 

Turkey 

Australia 

Canada 

China 

Israel 

Japan 

Korea 

Taiwan 

US 

Other 

Total 

10 

0 

62 

6738 

489 

173 

107 

13 

3147 

119 

25 

9 

191 

845 

2044 

1631 

1095 

19933 

4193 

1006 

32966 

2232 

134.542 

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Annex III 

Domestic and foreign application filed to the European Patent Office (EPO), Japanese 
Patent Office (JPO), Korean Intellectual Property Office (KIPO) and US Patent and 
Trademark Office (USPTO) in 2008/2009 

Source: Four Office Statistics Report – 2009 edition 

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Patents granted by the EPO, JPO, KIPO and USPTO in 2008/2009 

Source: Four Office Statistics Report – 2009 edition 

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Annex IV 

The London Agreement  

In October 2000 an Intergovernmental Conference of the EPC Contracting States adopted the 
Agreement on the application of Article 65 EPC (London Agreement) in order to reduce the 
costs  induced  by  the  validation  requirements108.  The  London  Agreement  is  an  optional 
scheme, allowing for collective action to reduce patenting costs by dispensing with some or 
all translation requirements. It entered into force on 1 May 2008109. Currently the following 
Member  States  take  part  in  the  agreement:  Germany,  Denmark,  France,  Hungary, 
Luxembourg, Latvia, Lithuania, the Netherlands, Sweden, Slovenia and the UK. 

Contracting  States  with  an  official  language  in  common  with  one  of  the  EPO  official 
languages  who  are  party  to  the  London  Agreement  are  required  to  dispense  entirely  with 
translation  requirements  (Article  1(1)).  Within  the  EU,  this  applies  to  France,  Germany, 
Luxembourg and the United Kingdom. 

Contracting  States  not  having  an  official  language  in  common  with  one  the  EPO  official 
languages  may  require  a  translation  of  the  claims  into  their  official  language  and  nominate 
one of the official languages of the EPO into which the description should be translated if this 
is not the language of proceedings at the EPO (Article 1(2) and (3)). Within the EU, Denmark, 
Latvia, Lithuania, the Netherlands, Slovenia and Sweden require translation of the claims into 
their official language. Of these countries, Denmark, the Netherlands, Sweden and Hungary 
have nominated English for translations of the description, therefore requiring this translation 
if the patent has been granted in French or German. 

Today  sixteen  Member  States  are  not  parties  to  the  London  Agreement  and  thus  require  a 
translation  of  the  entire  patent  into  their  official  language(s)  (Austria,  Belgium,  Bulgaria, 
Cyprus,  Czech  Republic,  Estonia,  Finland,  Greece,  Ireland,  Italy,  Malta,  Poland,  Portugal, 
Romania, Slovakia and Spain)110, mainly for political reasons. 

108 
109 
110 

OJ EPO 2001, 550.  
Other States parties to the Agreement are Switzerland/Lichtenstein, Croatia, Iceland and FYROM.  
It is to note that currently Ireland and Malta do not require a translation of a European patent into Irish 
and Maltese, it suffices that the European patent is available in English. 

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Figure 10 – Translation requirements under the London Agreement in the Member States111 

111 

Source: van Pottelsberghe / Meijer, 20008, The London Agreement and the cost of patenting in Europe, 
Bruegel  Working  Paper,  2008/05  and  reproduced  in  "Economic  Cost-Benefit  Analysis  of  the 
Community  Patent"  by  van  Pottelsberghe  /  Danguy,  study  on  behalf  of  the  European  Commission; 
updated on the basis of www.epo.org/patents/law/legal-texts/london-agreement/status.html  

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Annex V 

Cumulated renewal fees in the Member States in EUR* 

Member State 

TOTAL 6 
years  

TOTAL 10 
years  

TOTAL 20 
years  

Austria 
Belgium 
Bulgaria  
Cyprus 
Czech Republic  
Germany 
Denmark 
Estonia  
Finland 
France 
Greece  
Hungary 
Ireland 
Italy 
Lithuania 
Luxembourg 
Latvia  
Malta 
Netherlands 
Poland  
Portugal 
Romania 
Slovenia 
Slovakia 
Spain  
Sweden  
UK 
TOTAL 

520

235

230

1830

775

971

12380 

4340 

6493 

247,75

760,33

4262,96 

247

360

329

352

645

180

140

839

398

150

431

172

507

209,64

300

360

100

690

156

364

184,71

345

144
8836,1

699

1420

1611

1023

1765

782

655

3161

1138

870

1124

557

1470

605,62

1540

893

825

1690

476

1010

760,39

1186

720
30317,34

5862 

13170 

6684 

5312 

8005 

5572 

5915 

8328 

4628 

6620 

4404 

2537 

5215 

2410,89 

11040 

3793 

5475 

5920 

5172 

5156,5 

4902,97 

5036 

3964 
162598,32 

* Figures are approximate for Member States with national currency other than the euro 

Source: National Law relating to the EPC, 14th Edition, 2009

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Annex VI 

International comparison of patenting costs 

Source: Study on evaluating the knowledge economy – what are patents actually worth? The value of patents for 
today's economy and society, 2006. 

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Annex VII 

The proportion of European patent applications compared to the population of the 
Member States 

Member 
State 

Application/ 
Population (million) 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech R. 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
UK 

180
151
2
57
13
269
25
270
138
306
9
11
110
64
22
4
584
150
407
4
10
1
5
58
27
337
78

Source: European Commission – calculated on the basis of EPO data (2009) 

Most applications/population 

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