[Ecommerce] EU Com McCreevy's future of patent policy speech

[Michelle Childs]

Some people had trouble finding it on the site- here it is
Michelle

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Charlie McCreevy-European Commissioner for Internal Market and Services

Closing remarks at public hearing on future patent policy

Public Discussion on Future Patent Policy in Europe
Brussels, 12 July 2006


Ladies and Gentlemen,

Throughout the world, patent authorities have a difficult role. On the one
hand, they have to encourage everyone, individuals and companies alike, to
innovate and provide them with the opportunity to patent and then market
their invention with the certainty of securing a fair return on their
investment.

On the other hand, they have to ensure that patents are only granted to
inventions which are worthy of this temporary monopoly. They must not
over-step the line beyond which innovation is stifled rather than
promoted.

This is not an easy task. And there are many different opinions on how
best to achieve the right balance! The consultation launched by DG
Internal Market in January raised a number of issues for debate.

I am delighted that our initiative has met with an unprecedented level of
interest among all groups of stakeholders. We received a huge number of
replies, which will be vital in helping us to decide on the way forward.

But our task is all the more difficult as patents policy is decided in a
number of independent fora, thus giving many of you a headache and doing
European business no favours. Despite repeated calls for improvement,
little progress has been made in any of these fora over recent years.

This is why we launched this broad consultation, with the aim of
collecting your views on what would be the most effective and efficient
manner of taking the patent system in Europe forward in the near future.

Last year we also launched a study on patents' value. The aim of the study
is to complement the result of the consultation by obtaining a clearer
view on the economical and social value of patents for society in Europe.

We have planned these two actions since we want to make sure that any
possible initiative in the field of patents meets with your needs.

The importance of industrial property protection

In an increasingly global economy, Europe needs to play to its strengths.
Building on excellence in education and research, it must deploy its
creativity and inventiveness in the search for new processes, products and
business models which will assist it in maintaining its competitive edge
over the fast-growing emerging economies. The right regulatory framework,
one which stimulates and rewards innovation, is an important element in
the mix. Therefore we need to be sure that we frame our rules carefully
and make them work for the benefit of all the players. Of equal
importance, of course, is the correct application of the rules =96 and the
legal certainty this brings.

Industrial property protection was identified as the first of seven major
initiatives to be undertaken as part of the Commission's new industrial
policy, an indication of the importance the Commission attaches to the
subject. Judging by the level of attention that this consultation has
prompted we are not alone in this belief. Over the coming year, I intend
to accord particular attention to IPR and I will intensify my efforts to
improve the industrial property environment in Europe.

Our priorities become even more comprehensible with the results we
obtained with the patent value study. As Professor Gambardella will
shortly tell you, we have learnt some very interesting things.

In particular, one significant issue is the creation of new businesses. It
seems that many start-ups adopt business models that use patents as core
assets. Often a patent is the key element around which a start-up
organizes its entire business. Furthermore, an environment characterized
by strong intellectual property rights, seems to influence in a positive
manner the creation of new companies. New businesses are more likely to
start-up because they can specialize in developing the technology and
selling it to other firms, without incurring the much higher costs and
risks of investing in the large scale assets for production and
commercialisation.

Another important finding is the concept of =93sleeping=94 patents. As you =
are
aware, sleeping patents are unused patents that are simply left
unexploited by the patent holder.

If we want to improve the rate of utilization of patents, sleeping patents
are our natural goal. Apparently, small firms use 80% of their patents,
whereas large firms use slightly less than 60% of their patents. Since
large firms hold almost three-quarters of all the patents, in absolute
terms their sleeping patents make up a significant reserve of technologies
that could be potentially exploited possibly by other parties. Therefore,
we should pay particular attention to this area if we want to improve the
patent system in Europe.

The European patent system: Options for the future

Back to the consultation, I am of course aware that important decisions
will have to be taken on several difficult and controversial subjects.

It is now apparent that our priorities must focus on:

Simplifying the structure and procedures for patent grant and litigation;
Decreasing the cost of obtaining a patent, in particular with regard to
smaller businesses; and
Last but not least, maintaining and improving the quality of patents.
There is still widespread support from industry for a Community Patent =96
but not for the compromise which is stuck on the table of the Council at
the moment. There are hot debates about the number of languages patents
should be translated into and the regional distribution of courts. My
feeling is that businessmen, faced with a 21st century global economy,
scratch their heads in disbelief when they see us stuck in these
discussions. A vast majority of you =96 stakeholders =96 do not find the
proposed language regime, as well as the jurisdictional arrangements,
satisfactory. You do not want a Community Patent that does not offer clear
advantages over the existing system. What you want is a cheaper and more
reliable patent system. I have already said that I will go for one big,
last push on the Community Patent. I still have to decide when the time is
ripe.

The consultation also showed that there is clear support for the London
Protocol since it would make the existing European patent system more
attractive in terms of cost and efficiency. Even though the Protocol has
yet to be ratified by France in order to enter into force, there seem to
have been a couple of promising signs coming from Paris lately in favour
of the Protocol.

The European Patent Litigation Agreement is seen as a promising route
towards more unitary jurisdiction. Therefore, I will ask my services to
explore the possibilities of moving this project forward. However, you
should be aware that there are some institutional hurdles to be tackled if
the Community is to become involved in the EPLA initiative. Furthermore,
stakeholders differ on the degree of centralisation or the nature of the
local first instance courts.

These views seem to depend on the differing assessments of the costs and
benefits involved with more or less centralisation. It remains to be seen
how we can best guarantee simplicity, proximity and accessibility with
uniformity of interpretation and legal certainty.

Although the subject was not at the heart of my consultation, the quality
of patents in Europe, particularly in new technology sectors, is of
paramount importance to the users of the system. Any initiative aiming at
reduction of patenting costs must be accompanied by patent quality
enhancing solutions. We must make sure that patent applications are
properly searched and examined which is an increasing challenge as
technology development gears up everyday. Also, any future jurisdictional
arrangement must contain safeguards against Community-wide or even larger
enforcement of low quality patents, including protection against the
destructive practices of "patent trolls", especially dangerous for the ICT
industry.

Last, but certainly not least, we must make sure that small and medium
enterprises, the backbone of European economy, have access to the patent
system, unhindered by complex procedures and high costs. In that respect,
we will look carefully into the idea that many SMEs put forward in their
contributions: an alternative dispute resolution system, in the form of
mediation or arbitration, for certain patent cases.

Having said all that, there are also areas where stakeholders did not
express much enthusiasm for Community involvement. We will therefore
refrain from exploring initiatives for further harmonisation of patent
law, beyond what is already de facto achieved by the European Patent
Convention. Also, as I said before, there will be no new initiative in the
area of the computer-implemented inventions during my term as
Commissioner. The vote and the far-reaching debate which preceded it
demonstrated, in my opinion, that the time is not ripe for a meaningful
piece of legislation to be adopted on this issue.

Conclusion

This conference marks the formal end of a very fruitful consultation
period. On the basis of today's hearing and of the 2515 contributions we
received, we will consider the best way forward and what we can best do to
provide you with a sound patent system. The next step, of course, is to
announce the options that the Commission intends to pursue as a result of
this exercise. I don't expect to keep you waiting too long =96 I hope we
will have set a course by the end of the year. But I think we have already
begun our journey towards our destination. What we need is in
multi-stranded package and today=92s discussion has been yet another step
towards teasing out those strands.

In order to overcome very complex political issues and with a view to
promoting common European interests, it will be necessary to harness our
efforts. The Commission, the Union, cannot do this alone. But I will
endeavour to ensure that the policy the Commission adopts in response to
the consultation responds as comprehensively as possible to the needs of
all those who have an interest in the patent system.

Before I bid you good evening, I would like to thank all of you for coming
here today, many of you having flown in from all corners of Europe, and to
wish you, after all your hard work, a relaxing and enjoyable summer.

I thank you again for your contribution.



--
Michelle Childs -Head of European Affairs
Consumer Project on Technology in London
24, Highbury Crescent, London, N5 1RX,UK.
Tel:+44(0)207 226 6663 ex 252.
Mob:+44(0)790 386 4642. Fax: +44(0)207 354 0607
http://www.cptech.org

Consumer Project on Technology in Washington, DC
1621 Connecticut Ave, NW, Washington, DC 20009 USA .Tel.:
+1.202.332.2670,Fax: +1.202.332.2673

Consumer Project on Technology in Geneva
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