The patent industry, frustrated with the lack of harmonisation in the EU, is promoting a plan (EPLA) for a new European Patent Court.
The patent industry and its supporters make a straight-foward argument: innovation is key to economic growth, and innovation means a strong and predictable patent system.
If this is such a simple truth, why is there so much resistance to the notion of a harmonised patent system in Europe? Why have small-and-medium IT businesses and IT professionals lobbied for six years to prevent such a system emerging in Europe? Surely these are exactly the people who should be clamouring for a new, cheaper patent system, akin to the Community Trademark system that has been delivering reliable trademarks for over a decade.
Are Europe's SMEs misguided, ignorant, or simply willfully working against economic growth?
The matter is, of course, more complex than the patent industry claims. The patent system has high costs, as well as potential benefits. It is these costs that matter, for since the 1950's the patent system has never actually been proven to work. The benefits are theoretical, but the costs are real.
Let's look at some of the main costs that the European Patent Court (an non-EU institution) would bring.
- First, European Patent Court judges - appointed by those who run the EPO - would implement the EPO's patent practice, and thus legalise software patents. Software patents were, as we know, rejected by the European Parliament in 2005. The principle that a parliamentary decision can be side-stepped by a diplomatic conference does not bode well for European democracy.
- Second, the new EPLA court would remove national courts' jurisdiction over patent litigation. This would raise costs for SMEs by 3-4 times (according to the EPO). EPLA makes life easier for large US patent holders but punishes Europe's SMEs in the process.
- Lastly, EPLA does not provide democratic or legislative oversight. Unlike the US 8th Circuit (CAFC) system, which is subject to the Supreme Court and to Congress, the European Patent Court would be wholly unregulated except by the very patent industry that is today lobbying for its creation.
We often hear the claim that US industry will not invest in the EU unless there is a strong IP regime. Typically these statements come from firms who use patents as instruments of monopoly control. Investment at the point of a gun, to the detriment of local industry, is not beneficial. It is a form of colonialism, as any Indian or Chinese will know.
I challenge the patent industry to produce a single independent study that demonstrates how EPLA would benefit Europe's SMEs.
There are problems in the patent industry, yes. These problems mainly stem from an unregulated rush towards ever broader patents. In the US, this is starting to bite into the performance of the pharmaceutical and IT sectors. It takes 10-15 years for the damage caused by bad patents to become visible.
Europe has, in fact, a history opportunity. By escaping the rhetoric of the US patent industry, and defining a sane EU patent system that works for local businesses - above all, SMEs - we can gain an advantage over US businesses who are starting to be severely hampered by a decade or more of bad patent policy.