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EUROPEAN PATENT PROTECTION - ARE INNOVATING COMPANIES IN DANGER?

March 2009 - Intellectual Property. Legal Developments by Cruyplants Eloy Wagemans & Partners .

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In an economy based on knowledge and innovation, the exclusive ownership of a technology is of a major importance. Invention patents are typically a good way to give value to an innovation (a product, the use of a product, or a process) but they also generate unhealthy interest from competitors. It is therefore not surprising that invention patents are the heart of an increasing number of litigations with major financial implications.

Over the past 20 years, the number of patent filings (as well as the volume of information contained in applications) has increased in such a proportion that today patent systems are facing many difficulties. Most notably, delays in the grant processes have become significant and give rise to legal uncertainty.

The increased complexity of inventions as well as the emergence of new technological sectors has led companies to file very broad applications in order to make sure that they cover all the potential applications for their invention. Moreover, companies are themselves not keen to accelerate the decision-making process because it allows them to adapt their applications to changing circumstances. The main effect of this new strategic trend is to extend the examination period. This may create legal uncertainty as to the ownership and utilisation of the relevant inventions. It also has political implications.

The evolution of companies patent strategies has significantly increased the work of the European Patent Office – more than 140.000 applications filed in 2007 -, leading to backlogs and grant delays which become longer and longer: Currently it takes today more than 5 years for an inventor to know whether or not his invention will get a patent.

Considering that an application, once filed, confers exclusive rights on the applicant during the examination process, there is a high risk of abuse of the process. Indeed it can be very profitable to benefit from exclusive rights during 5 years, even though the relevant invention is not – at the end of the process – recognised as such.

The risk is that the European patent system ceases - at least in part - to act as a stimulator for innovation. Legal uncertainty is indeed one of the main obstacles to the development of innovating companies. Some fear that this legal uncertainty could lead to a fall in R&D investments and development and could jeopardize the ambitions of the European Union to promote innovation. This uncertainty may also generate commercial conflicts which can be extremely damaging for small and medium-size companies, compromising their development.

The current patent system should be reviewed in order to increase legal certainty and take into account the legitimate needs of innovating companies. Such review could consist in an adjustment of the price policy to discourage blocking and other strategies, a strengthening of the creative level which is requested by the EPO, an adaptation of the duration of the patents in certain technological areas, better means to allow investigators to definitively refuse non deliverable applications, as well as the introduction of a mechanism allowing creators to differ the filing or the publication of their applications when their inventions are not yet sufficiently defined.

Mélanie Van Ham

melanie.vanham@cew-law.be

www.cew-law.be    

For further reading see N. van Zeebroeck, « Développements et impact des stratégies de dépôt de brevets », CEB Working Paper n°08/041, 2008.