On April 13, 2011, the European Commission adopted The Single Market Act. The “Single Market” of the European Union comprises 27 European countries where goods, services, capital and people can circulate freely.
The Single Market Act is a group of 12 initiatives intended to boost growth and enhance confidence in the Single Market. The initiatives address: improving access to finance for the more than 20 million European SMEs (Single Market Enterprises); facilitating the mobility of citizens by modernizing legislation on the recognition of professional qualifications awarded in another member country; improving consumer-business relations by facilitating alternative dispute resolution; boosting the free movement of services by standardizing at European level; improving transport and energy infrastructures; developing the “digital single market” through pan-European operation of electronic identification and signatures; facilitating social entrepreneurship by setting up a European framework for the development of ethical investment funds; developing a consistent tax treatment of different energy sources; enhancing social cohesion by improving the application of legislation on the movement of workers from one member country to another; improving the regulatory business environment by simplifying accounting rules; and modernizing public procurement legislation by making rules simpler and more flexible.
A key initiative is supporting research and innovation by establishing a unitary patent protection and a unified patent litigation system. Now, while it is possible to file and prosecute a single patent application at the European Patent Office (EPO), there is no “European patent.” Instead, following the grant of a European patent, the applicant has to request validation of the grant in each member country where the applicant wants patent protection. This imposes a significant financial and administrative burden for applicants wishing to validate a granted European patent in more than a few countries.
Some estimates put the cost of validating a European patent at $32,000 for validation in all of the 27 member countries. This can obviously put a real strain on the patent budget for any enterprise.
Under the Single Market Act, patent applicants can obtain European patents with unitary effect that ensure uniform protection for their invention in all 25 participating member countries. (Spain and Italy have not agreed to this change, but are able to alter that decision later.) Patent holders can request the unitary effect at the EPO once their European patent is granted. The EPO then registers the unitary effect and manages the maintenance of the patent (e.g., the payment of renewal fees) until it lapses. In addition, translation requirements are simplified. Applicants can file their patent application in any language, instead of only English, French, or German, which are the official languages of the EPO. (If in a different language, applicants also have to provide a translation to English, French or German.) Applicants who are resident in the EU will get compensation for these translation costs. The European patent will then be granted in one of the three official languages, and the applicant will be required to provide a translation of only the claims (which define the scope of the invention) into the other two official EPO languages.
The proposal for the unitary European patent now goes before the European Council and Parliament for further consideration and debate.
This development will make use of the European patent system more attractive, especially for U.S. applicants, by reducing costs. Currently, the selection of countries for validating a European patent is often driven by cost and translation requirements, rather than market coverage. The implementation of the unitary patent, even for only 25 member countries, may make those types of decisions a thing of the past.