Brussels Behind the Scenes: Looking after the little guy

Looking after the little guy

Innovators and entrepreneurs received some welcome news this week, as a plan that promises to slash costs and protect IP throughout most of the EU came closer to fruition. It has been a long time in the making.

Nearly fifty years ago, the idea of a single patent within the then European Communities was on the drawing board of officials and diplomats in Brussels. The concept was simple: if you were granted protection for your intellectual property in one EU member, you would get it everywhere else.

This week, the EU finally took a step towards fulfilling at least the fundamental principles of that project.

BRUSSELS BEHIND THE SCENES is a weekly newsletter which brings the untold stories about the characters driving the policies affecting our lives. Analysis not found anywhere else, The Brussels Times’ Sam Morgan helps you make sense of what is happening in Brussels. If you want to receive Brussels behind the scenes straight to your inbox every week, subscribe to the newsletter here.

The ‘unitary patent’, which was first proposed ten years ago, now has a firm start date on the agenda after Austria became the 13th country to ratify it, triggering a 12-month-long trial period.

Brexit and challenges by German courts had initially delayed it but the ball is now firmly rolling. Details about how the patent should work in practice and setting up the court that will preside over the instruments now need to be figured out.

By this time next year though, the system should be up and running.

The scheme will eventually apply in 25 out of the 27 member states. Spain is still opposed to the idea and Croatia is not taking part. Given that it only became an EU member after this whole process started, the Adriatic nation may yet join the vast majority.

In practice, the idea is to cut costs and boost innovation, by granting successful patent applicants the right to protection in all the EU members taking part in the scheme. National patents will still be valid and will still be issued.

A European patent already exists but differs from this scheme, as it has to be renewed and maintained in every country. That is off-putting for innovators or entrepreneurs that have a limited budget.

“Europe is home to some of the world's leading innovations. If we want to continue on this path we need to give our European companies, and in particular our SMEs, the right tools to protect their inventions and capitalise on their intellectual property,” said the EU’s industry chief, Thierry Breton.

The plan for an (almost)EU-wide patent slots logically into the very idea of a single market and it is a shame that it has taken so long for it to get onto the launchpad. It will still be some time yet until the scheme is firing on all cylinders, as only 17 countries have ratified it so far.

But the advantages are clearly on display already, with lower costs topping that list. According to the Commission a decade of patent renewals will be priced at less than €5,000, compared with the nearly €30,000 in costs under the current system. That is a benefit that SMEs will be hard-pressed to ignore.

Once the system is fully active, there will also be funding and discounts available to carry out translation. This was initially the bone of contention that soured Spain on the idea, as the government did not like that Spain was not one of the official languages.

Madrid’s opposition is now more focused on the fact the government sees little need to have parallel patent systems active at the same time. Spanish lawmakers have also pointed out that there will be nothing stopping Spaniards from applying for a unitary patent, it just won't be valid within Spain.

Booster dose for competition

Ever since the Covid-19 pandemic hit Europe hard in early 2020, not too many weeks have gone by without the EU approving some sort of government state aid scheme that aims to prop up SMEs and keep them afloat during the crisis.

According to the European Patent Office, the already-existing body that will oversee the unitary patent, this week’s announcement will do a lot to help in that regard.

“It will more effectively support growth and innovation, help more efficiently to tackle challenges like the Covid-pandemic, and foster economic growth to overcome the current crisis,” said EPO chief António Campinos.

Technology is still championed, rightly or wrongly, as the silver bullet that will defeat climate change. For innovators seeking to crack energy storage, carbon-capture or geo-engineering, the unitary patent is an option that could help make progress more likely.

This will all fit nicely within the EU’s quest for ‘strategic autonomy’, a hard-to-pin-down concept championed by French President Emmanuel Macron, which seeks to boost Europe’s standing in the world without narking off too many of its competitors at the same time.

If the unitary patent system takes off and the 25 participating countries - ideally 27, further down the line - embrace it properly, then a foreign direct investment dividend should be expected, the Commission insists.

That is because there will be more legal certainty about the validity of patents, as there will be a centralised system for dealing with disputes. This will go some way to rivalling the likes of the US and Japan.

Whether this will help Europe find its next Spotify or crack the microchip production market - plans for a European Chips Act will be published in February, Ursula von der Leyen revealed this week - is still an open question.

A simple concept such as a patent that is valid cross-borders may not end up adding billions to GDP, but if it helps save some money for individuals who have had an extremely tough couple of years, then it is still a scheme worth running.

With that in mind, let us hope that it will not be undermined or torpedoed by national interests, mismanagement or lack of resources. Any or all three of those are risks that good ideas have to contend with on a daily basis in the EU.

BRUSSELS BEHIND THE SCENES is a weekly newsletter which brings the untold stories about the characters driving the policies affecting our lives. Analysis not found anywhere else, The Brussels Times’ Sam Morgan helps you make sense of what is happening in Brussels. If you want to receive Brussels behind the scenes straight to your inbox every week, subscribe to the newsletter here.