People all over the world thinks that providing patents to someone will help increase innovation but it is so not true. By giving patent to an inventor the innovation of other researchers gets hindered in some fields. Let us take the example of software patents. Software patents are just a piece of code which demands patent protection over algorithms which is just mathematic and over data processing ideas. It blocks the path for other computer engineers who would like to make more innovations using that source code. This is why software engineers are also against the policy of patenting softwares.

European Patent Convention (EPC) governs European patent system and to regulate European patent system EPC formed European Patent Office (EPO). EPO started granting patents on software in 80’s but the law in Europe prevents patentability of softwares as such. To this EPO made a statement saying that some software has technical effect, so the patents are being granted to only those softwares which have technical effect and thus, all softwares are not patentable. Due to this all major companies are trying to patents which have resulted in thousands of patents for software and that too when the source code of software is a subject of copyright. In 2005, if European Parliament (EP) had not rejected EPO’s derivative to legalize grant of patent for softwares then condition would have been worse.

Fact:Even after rejection of the derivative by EP, EPO is granting software patents which when challenged in the court, are freely invalidated.

Unified Central Court

Another change that EPO wanted was, to replace national patent courts by unified central court and this attempt of EPO has also failed because this would have been contrary to European Union (EU) treaties for member states which allow member states to build up their own patent court as their own, and EU will not be a part of it.

The above stated two failures highlighted that there was an issue inside the system and when it was searched then it became clear that EPO wanted to form a patent microcosm that will allow EPO to control the whole patent system in the form of a bubble. This will make EPO to grant more patents which in turn will make EPO wealthier.

The above stated policy have made Enlarged Board of Appeals (EBA) to state that it is time to re-strategize the EP system in the interest of European economy and society as a whole. EPA which is the highest internal quasi judicial body of EPO has also stated that to achieve this there is only one way and that is: Legislators should act.

Unitary Patent

EU has been working since decades now and they have taken many measures to reform patent system in Europe. A patent granted by the EPO is valid in all the countries of Europe where the inventor have asked for protection and when the application reaches different national patent offices, they have to be translated and a fee is taken up by the patent offices but when an invalidity lawsuit had to be filed against the same patent then a different case has to be filed in different jurisdictions.

To eliminate the above stated problems of filing documents in national language at patent office and filing different lawsuits in different countries, EU wanted to settle a new unitary effect. To do this EU wanted to form a unified patent court with the help of which a patent can be enforced in all the member states. But the agreement was not signed by the Member States so EU used a procedure which came to be known as Enhanced Cooperation, according to which an EU regulation has to be voted by European Parliament and countries of the council. Only Spain and Italy are not participating in this procedure.

Problems Faced by Unitary Patent

European Court of Justice (ECJ) sent back the project of Unitary Patent Jurisdiction (UPJ) out of the legal framework of EU.

Another problem that UPJ faced was the example of US where Court of Appeals for the Federal Circuit (CAFC) is known to act in pro-patent direction which leads to broadening of the scope of patentable subject matter and gives patentee those powers which are not entitled to him by the patent law. This act of CAFC has been criticized by economic and legal scholars and as well as US Supreme Court.

Thus ECJ suggested that whenever a patent jurisdiction is set up (like UPJ), their ruling should be subjected to an overview by independent courts which can check the conflicts between patent law and legal areas including competition law or fundamental rights and freedom.

EU should also make its patent policy clear and define properly what is patentable and what is not and what are the requirements for an invention to be patentable. It is important to have a good patent policy to encourage innovation because bad patent policy only leads to a derailed system. This all should not be kept in the hands of EPO who are trying to adopt a method of patent microcosm.

Problems associated

The proposed regulation by EU doesn’t create an Unitary Patent but just uses the old patent granted by the EPO and just puts a flag of being Unitary on it, which will mean that patent is valid in all member states and is enforceable at all member states through one court. And in this entire thing, EU will not be a part of the regulation.

Commission’s proposal of regulation had also not cleared the validity of its legal basis. This is the reason for  Spain and Italy for not involving in this Unitary Patent and has challenged to operate through enhanced operation procedure of ECJ.

Present Status

On 11th December, 2012 EP approved an EU patent package which is an agreement among 25 member states which will allow a new unitary patent valid in all signatory nations and the cases related to that will be overseen by unified central court.

Europe’s Commissioner for Internal Market and Services, Michel Barnier said that the first unitary patents are expected to be granted in April 2014.

The European Commission is hoping that unified patent will decrease the cost of protection of intellectual property in EU. Companies at present have to pay an average cost of €36,000 in taxes and fees if they have to patent their invention in Europe in every country.  And that is much higher than €2000 for USA and €600 for China. Under the new framework, a patent issued by the European Patent Office will be automatically valid in 25 countries, and its cost is expected to drop to an average €4725.

Conclusion

According to me this new Unitary Patent system has its pros and cons. The pros of this system is that the patent taken under this provision will be automatically valid in 25 countries and also the cost involved in this whole process will be much less than the current costs. For the cons I will state there are already two systems running in Europe for the protection of intellectual property and this unitary patent will be a third system. These will only hotchpotch the system and the inventors will be confused that what system they should go for and what will be the ill effects of not choosing one of the other two systems. For example a company can go for a national patent on minor changes of invention, which was made by itself or by any other firm. This unitary system will also lead to greater amounts of litigations.