QUESTIONNAIRE ON THE PATENT SYSTEM IN EUROPE. 1.1 Do you agree that these are the basic features required of the patent system?

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1 QUESTIONNAIRE ON THE PATENT SYSTEM IN EUROPE Section Do you agree that these are the basic features required of the patent system? - We agree that clear substantive rules on patentability should be maintained and that all the interests should be balanced including the interests of third parties such as competitors, the economic freedom of which should be limited only with respect to truly valid patents. - We agree that patents should be granted through a transparent, cost-effective and accessible process. - We support proceedings for the resolution of disputes which should be reasonable in terms of time and costs, taking into consideration the necessity that all parties have a fair possibility to defend their reasons and interests. We doubt that there could be any ideal Court proceedings which is predictable, rapid and inexpensive. It is to be recognized that patents are a complex matter for which there is the need of equitable and cost-effective litigation proceedings. - We agree that other public policy interests should be considered in shaping the patent system. This is particularly so in connection with the rights of competitors who should be considered as passive users of the system with a strong and legitimate interest in maintaining the freedom of economic activities exception made for truly valid patents. 1.3 How can the Community better take into account the broader public interest in developing its policy on patents? It is important to underline that, unlike trademarks and designs, which do not prevent third parties to make the same kind of product under a different trademark or design, patents are an impediment to the manufacture and trade and therefore can prevent third parties from entering into the market. In this connection, attention should be given to avoid unjustified monopolies. If the political objective of a Community patent is to be pursued, the balance of interests should be sought through a careful adjustment of the rights attached to the Community patent. Such rights should not extended beyond the patent owner needs and interests. In many cases, according to the European patent experience, protection in 25 countries, i.e. the entire European Union, exceeds the patent owner needs. The system should allow the maximum competition avoiding to exclude without real reasons (but only as a matter of principle) third parties from the markets of those European countries where the patent owner has no interest and no activity. A judicial system based on specialised Courts in each country competent to deal with Community patents would further permit the creation of a more fair and acceptable Community patent system. 1

2 Section By comparison with the common political approach, are there any alternative or additional features that you believe an effective Community patent system should offer? Based on our comments under 1.1 and on the fact that the above common political approach did not find any implementation due to substantial disagreements among the Member States and to the opposition from other stakeholders, including big industry on one side and national level SMESs on the other, an alternative should be found. In order to be realistic and practical, the Community Patent should be born without the strict need of unitary character in the whole European Union. As mentioned, patents, unlikely trademarks and designs, are an extremely powerful, but legal, instrument for restraining competition so that their grant and the exercise of the corresponding exclusive rights should be allowed in such a way to avoid any disproportionate expansion of the exclusivity beyond the real needs of the patent owner and beyond the interest of the working community. It should be underlined that validations of European granted patents do not depend on costs but on the patent owner s interests as proven by the fact that validations in Austria are only half of validations in Germany notwithstanding the fact that there is no additional cost for translation. Similar situation for Belgium with respect to France or Ireland with respect to United Kingdom. Taking into consideration the great success of the European patent system and the fact that the average number of countries in which the granted patent is finally validated (about five/six) the unitary principle of the Community patent will have the effect of extending the protection to a much wider number of countries in Europe than those which represent a real interest for the patent owner so that a prospective local industrial activity and development would be prevented without any reasonable justification and in spite of the much more important principle of freedom of economic activity. The common political approach of March 2003 does not meet the need for a balance of rights: its linguistic regime discriminates among the countries and transfers the costs for translation of the patent specification into national languages from the patent owner to all third parties interested in the same innovation (multiplying such costs) while its centralized jurisdictional regime (in contradiction with the subsidiarity principle without precedents and real justifications in a territory of 25 countries and nearly 500 millions people) would certainly involve substantial difficulties in shaping and working and would be likely to require high costs particularly for those SMEs engaged in defending themselves from charges of patent infringement. Alternatively, once a patent is granted by EPO, the owner should be free to select the countries where he desires to validate the European patent (by filing the translation of the specification and claims) and at the same time to declare that for the selected countries the patent should be considered a Community patent. The above Community patent (even if restricted to certain member countries only) will benefit of a less expensive maintenance fee and of a common jurisdiction in all selected states. The Court having jurisdiction shall decide on infringements committed or threatened to be committed within the territory of any of the above Member States. As to the Court itself, the system of Community Courts, as applied in the Community Trademark Regulation and in the Community Design Regulation, should apply. In fact, there is no reason why that system which has been devised for trademarks and designs (the latter in force since a little more than three years) should be considered as ineffective and unsuitable for patents. In 2

3 addition, it appears surprising and unrealistic to centralize in one Court all legal actions concerning patents owned by owners who could come from any of the 25 Member States, this being a concentration without examples and precedents in any other country or region of the world. It is to be understood that reduction of costs shall not be regarded as the only target to be reached with a Community Patent system, since it might bring forward much relevant problems in terms of equity and unfair use of IPs tools. A balance between monopoly (as a reward for the innovation efforts) of the patent owner and the freedom and right certainty of third parties, shall be pursued: a fair positive cost of the patent system to be borne by the patent applicant may well contribute to this balance effort. Section What advantages and disadvantages do you think that pan-european litigation arrangements as set out in the draft EPLA would have for those who use and are affected by patents? As mentioned, we consider the EPLA proposal under which all validity and infringement actions of European patents would be heard before a sole European Patent Court unrealistic and ineffective. EPO, in a discussion paper prepared by the Presidency in December 2005 (European patent system Views on strategy), suggests that There are approximately 700,000 European patents which could be litigated through the EPLA. It is difficult to understand how a single Court could cope with such a number of cases and it is difficult to understand why hundreds of patent owners and defendants living and working in different 25 countries should find simple and inexpensive to litigate before said central Court which would normally be quite apart from their own locations; this situation is not much modified by the possibility that the European Patent Court may have the power to institute (and/or to cancel) regional divisions and by the fact, the feasibility of which appears to be more than dubious, that part of the proceedings could be conducted in a national Court designated by the contracting state. 3.2 Given the possible coexistence of three patent systems in Europe (the national, the Community and the European patent), what in your view would be the ideal patent litigation scheme in Europe? The only practical litigation scheme in Europe which perhaps would not be ideal but would be balanced and acceptable by all parties (patent owners, competitors and passive users of the system) would be the attribution of jurisdiction for patents, including a possible European patent, to the Community Patent Courts of First and Second Instance. The ECJ would finally guarantee the uniform application of the substantial provisions and their interpretation. Section What aspects of patent law do you feel give rise to barriers to free movement or distortion of competition because of differences in law or its application in practice between Member States? We do not see major aspects of the patent law which give rise to barriers to the free movement or distortion of competition because of differences in law or its application in practice between Member States. On one hand, the patent laws of the EPC member countries have been 3

4 harmonized long time ago and the only possible differences concern aspects of the application of similar rules. However, the same problem applies within a single member country or within the EPO when some provisions, for which interpretation by Courts is not unanimous, can be considered in different ways by different officers. It is even more so in connection with interpretations by Courts where in the same country different Courts or different degrees of Courts give different decisions. The above question rather implies an assumption which is radically wrong. The assumption is that national patents (or national validations of European patents) could constitute a barrier to the free movement of goods inasmuch as the patent rights could cover only specific Member States (the protection having not been obtained in all of them). This would mean that a product manufactured in a country where the protection has not been sought could not freely circulate in those countries where instead the patent owner has secured protection. But this situation is not a limitation to the free circulation of goods or a distortion of competition. Rather it allows the maximum competition in those countries where the protection has not been sought and there is no exclusive right with corresponding benefits for the consumers in those countries. On the contrary, an overall protection in all member countries would prevent any economic activity and competition even in those countries where the patent owner would not be active. 4.2 To what extent is your business affected by such differences? Not applicable in view of the answer given under What are your views on the value-added and feasibility of the different options (1) (3) outlined above? Option 1 might be a useful development. It would be enough for the European Union to issue a Directive concerning patentability criteria which should reflect those of the European Patent Convention which have been already introduced into the national legislations of the member countries. This could be done however only when there is a wide consensus on such criteria, particularly considering the recent failure of the proposed directive on computer-implemented inventions. On the other hand, mutual recognition by Patent Offices of the patents granted by another EU member state appears extremely difficult just because an agreed quality standard framework is unlikely to be put in place between 25 countries. 4.4 Are there any alternative proposals that the Commission might consider? The alternative proposal to be considered is the application of the same jurisdiction system of Community trademarks and Community designs with local Community national Courts of First and Second Instance. Section How important is the patent system in Europe compared to other areas of legislation affecting your business? 4

5 Not applicable since our activity is obviously not connected with the development of inventions which could be patented, but only with the protection of patents owned by third parties. 5.2 Compared to the other areas of intellectual property such as trade marks, designs, plant variety rights, copyright and related rights, how important is the patent system in Europe? Same as above. 5.3 How important to you is the patent system in Europe compared to the patent system worldwide? To us the patent system in Europe is important for the development of national and European economy with respect to the economy of third countries. However, we should remind that innovation and patents are the result of the attention, efforts and funds dedicated to research and development. On the contrary, the making of patenting too much easy and cheap would not per se foster innovation but only encourage the patenting of minor inventions or even of technology which should not patented at all giving rise to undue barriers. Possible advantages for SMEs could be envisaged in introducing in the European patent fee system the difference between large and small entities like in the U.S. March 29,