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EU Commission: unitary patent concerns; IP insurance and unitary SPCs

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IMG_8533-1The European Commission website provides something of a byzantine navigational challenge so IPcopy is extremely grateful to Martin Chatel for pointing us in the direction of the Commission staff working document “A Single Market Strategy for Europe – Analysis and Evidence” which discusses the unitary patent package.

The working document highlights (page 70) a Eurostat study that suggests SMEs are only responsible for around 17% of patent filings in Europe. The need for EU wide support for SMEs is flagged up but the document notes that the cost exposure for SMEs in respect of IP rights and litigation is significant, hits SMEs disproportionately and may act as a barrier to engaging with the patent system. The potentially high court fees and damages that SMEs could be exposed to within an action at the Unified Patent Court (UPC) are raised as a particular concern.

In order to address some of the above concerns the Commission suggests it will extend its efforts to help SMEs via a number of means including ensuring that COSME funds (Europe’s programme for small and medium-sized enterprises) will be used to help innovative European SMEs apply for EU IP titles including the unitary patent and facilitating the launch of a European commercial IP legal costs insurance market.

The reference to the insurance angle is an interesting one and the Commission document goes on to say that the potential IP litigation costs that SMEs may be exposed to can only be addressed by a functioning IP litigation insurance market. It is suggested that such a market has not grown so far due to the limited size of the market at national level. The implementation of the unitary patent however is seen as a trigger that could help such a market grow.

The working document also suggests that such insurance schemes could, in addition to providing comfort against legal costs, lead to more investment by financial institutions into start-ups and SMEs.

The working document also highlights a number of other concerns around the unitary patent system such as:

  • The absence of a unitary SPC title. SPCs are regarded as instrumental for industry sectors whose products are subject to regulated market authorizations;
  • what happens if a unitary patent request is rejected, the impact of national prior art and the possible acceptable conditions to convert such a unitary patent into a bundle of national patents;
  • double patenting issues between the unitary patent and national patents; and
  • possible issues stemming from the obligation to designate all participating Member States for the purpose of obtaining a unitary patent [this last point is, IPcopy believes, a reference to the “Malta problem“].

On the issue of SPCs, the working document suggests that the Commission is going to consider re-calibrating the SPC framework in Europe by looking at: a unitary SPC; targeted SPC manufacturing waivers for export purposes that could allow EU-based manufacturers of generic and biosimilar medicines to compete on equal footing with competitors from non-EU countries; and the scope of the patent “Bolar” exemption in the EU.

Mark Richardson 7 December 2015

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