The role of the European Patent Office in the consolidation of the European patent system

Speech by Mr Benoît Battistelli, President of the European Patent Office to the
Annual Meeting of the German Association for the Protection of Intellectual Property (GRUR)

Berlin, Germany
16 September 2011

Ladies and gentlemen,

I am deeply honoured to have the possibility to convey to this audience of IP specialists some thoughts on the European patent landscape and the role that the European Patent Office will play in the consolidation of the European patent system.

Indeed, the GRUR association is one of the oldest and largest IP association in Europe, and, if I am well informed, you celebrate this year your 120th anniversary and amount a total of more than 5000 members. Congratulation for such an achievement!

This is why I am particularly proud to be the first EPO's President to have the opportunity to participate to the annual meeting of the GRUR. Coming now to the subject of my intervention, I think it is particularly important, in the current context of economic difficulties, while political leaders are looking for solutions, to remind the major role that innovation and industrial property can play.

Indeed, I am deeply convinced that one of the main assets of the European economy in the global competition is its innovative capacity.

In this regard, I consider that the EPO has a specific role to play in order to provide the European industry for a strong legal instrument which will permit to protect its innovation. The EPO has already some good records and can be considered as a European success but our usual competitors, and some new ones like China, are also moving forward and investing a lot in their patent system. Let's have a look at the European system.

What are the current forces of the European patent system? What are the needed improvements which could help the EPO to keep a leading position in the world and the European interests to be better represented?

These are the two aspects I would like to develop now.

THE EUROPEAN PATENT OFFICE AS A GLOBAL PLAYER

The European patent system was set up to best serve European interests in innovation and global competitiveness. This is an ongoing challenge which requires thorough monitoring of our procedures and smooth adjustment of the system to the challenging needs of European industry and society in general.

Before talking about the possible improvements, it is important to acknowledge the specific situation of the EPO among the patent offices in the world and to present a state of play the European Patent System.

State of play - last figures

First, the EPO is an international and independent organisation with 38 Member States, covering a market of 600 million inhabitants. We are self-financed through the fees paid by our users and our annual budget is more than 1,6 billion euros. 7000 people work at the EPO, which makes us the second largest public European organisation, after the European Community. From these 7000, 4000 are highly specialised engineers, representing a real high concentration of scientific and technical expertise.

This unique force in Europe allow us to deal with more than 200 000 patent applications a year. In this regard, 2010 was an exceptional year as we enjoyed a pick of applications (235 000, representing an increase of 11% compared to 2009) and the current forecasts indicate that we could reach 250 000 at the end of this year.

If I have a look now at the geographical origin of our applicants, the repartition is 60% from Non-European countries (US = 26%, JP = 18%, KR = 5%, CN = 5%) and 40% from European countries (DE = 14%, FR = 5%). It is also interesting to note that, in terms of filings, 4 German companies are among our top 10 applicants, Siemens being the n°1.

Another important trend observed these last years is the strong increase coming from Asian countries, in particular China.

Despite the growing workflow of patent applications, the EPO was able to manage the timeliness of its proceedings. Our granting rate is around 42% and the timeliness for granting is stable, about 43 months. More important is the fact that we are still able to produce our search reports with a written opinion on patentability, within 6 months in average from the filing date.

The other biggest patent offices in the world are very far to reach this performance.

This capacity to produce very quickly a sound search report, which is the corner stone of the patent proceeding, is one strong competitive advantage of the EPO which renders the European Patent system very attractive, not only for the European companies but for the non European as well.

More generally, the high quality of our products and services is something which must be maintained and even enhanced.

Quality as a priority

The EPO concentrates its forces to uphold and further improve its standing as one of the best patent granting authorities in the world, an assessment reflected again in a EU-commissioned study on the quality of the patent system in Europe, published in March of this year. In this study, companies assigned to the European patent system the highest overall rating.

Also of interest was the weighting users gave to substantive aspects of quality, as they rated compliance with the legal requirements far higher than any other criteria, including timeliness. A study of IAM - Intellectual Assessment Management - published in June reached the same conclusion and attributed to the EPO by far the best position as regards patent quality.

Indeed, high quality patents offering maximum legal certainty, and protecting the interests of both innovators and the public, are the cornerstone of a patent system which is fit for purpose. In my opinion, it is the best way to limit the growing workflow leading to backlogs. The Patent Offices have to play their role as quality filters, in order to grant protection only to those inventions which deserve it. Low quality encourages more filings.

An improvement of quality and a reduction of pendency times at the EPO constitutes one of the main benefits expected from the continued pursuit of the "Raising the Bar" initiative, which was launched more than three years ago.

At present, the EPO is beginning to harvest the first results of the Raising the Bar initiative. Before launching any other initiative of this kind, we will first analyze the first results. I also want to enhance the dialogue with the users before any decision and some actions, like a web platform will be launched soon.

However, I would like to remark that it is imperative for the EPO to strike a proper balance between the rights of applicants and those of third parties.

As even the most prolific applicants file fewer applications than the sum of their competitors, it is axiomatic that applicants will be third parties more often than right holders in the patent equation.

For users, it seems also that their main expectation concerning the work done by one Patent Office is to ensure the compliance with the legal requirements for patentability. This criteria is rated far higher than any other criteria; timeliness, apparently, is less of a concern. This is something we already experienced at the Office as only 6 to 7% of the total of our applications use our fast track proceeding called PACE.

Enhancing the quality of the search report is a key issue. This is also why efforts to complete the documentation are being complemented by activities to improve access to machine translation.

The need of examiners and the general public to access prior art in foreign languages is increasing. Similarly, examiners need to better understand the search and examination information shared among offices.

Consequently, there is an urgent need for the language barriers that exist between users with different languages including examiners of IP offices to be eliminated as quickly and efficiently as possible, because language barriers limit the extent to which IP offices and the general public can understand and utilize documents and information.

Therefore, I have made the development of "fit-for-purpose" Machine Translation technology one of my top priorities. In March 2011, the EPO and Google have signed a long term agreement to collaborate on MT of patents. All 28 European languages, as well as Chinese, Japanese, Korean and Russian, will be made available in phases, and the project is expected to be completed by the end of 2014.

Companies, inventors and scientists will thus be able to benefit on EPO's and Google's websites from free, real-time translation in the 3 official languages of the EPO from and to 32 languages, enabling faster and more cost-effective patent research.

This is just a concrete example of what can be done to improve to overhaul quality of the patent system.

Improving efficiency

If my primary aim is to uphold the standing of the EPO as one of the best patent granting authorities, it is also important to control our costs as I have no intention to raise substantially our fees for the coming years. This means that the Office must improve its efficiency.

When improving the performance of examiners and formalities officers we will have to ensure that these developments also offer real efficiency gains for applicants by reducing the administrative burden.

The Office's vocation remains to offer the best service possible, that is to say the best quality at the lowest cost in the service of the European economy.

There, IT systems are increasingly determining how well patent offices perform, and the EPO is no exception. Although the EPO has long enjoyed a solid reputation in terms of IT systems, it is not resting on its laurels.

By focussing on the efficiency case and progressively streamlining and further automating the patent grant process, the EPO will sustain its position in the world with respect to quality, speed and efficiency in granting patents.

The needs of our users are at the centre of a number of IT projects, which are currently defined and implemented under the umbrella of the IT roadmap adopted last June. They will for sure participated to the enhancement of our efficiency.

Representing the European standards

Thanks to its capacity to represent a benchmark in several areas of activities related to the patent, the EPO is able to export the European standards worldwide. It represents an important advantage for the European undertakings which are familiar with the European proceedings and are willing to export their innovation and protect their patent abroad.

To give you a concrete example: the tool used by the EPO to realise its own searches, called EPOQUE, is now utilised by more than 40 countries worldwide, like China, Brazil, Canada, Mexico or most European countries.

Another good example is the European classification defined by the EPO, called ECLA, which is becoming more and more a world standard.

In this regard, I am pleased to report that some good progress in establishing an appropriate infrastructure to facilitate greater integration of the global patent system is being achieved. Indeed, in October 2010, a major agreement between the USPTO and the EPO was reached on the principles of a new Cooperative Patent Classification (CPC).

The CPC is a joint classification system, co-managed by the USPTO and the EPO. It is based on ECLA and it will incorporate the best classification practices of the USPTO, thus moving matters forward significantly for the benefit of our users, the patent system worldwide and eventually the global economy.

This new common classification should be enforced on 1st January 2013. The Japanese Patent Office is currently studying the possibility to merge its classification with the new one.

Beside the bilateral cooperation activities, the EPO is also a member of the IP5, a forum composed of the five largest patent offices in the world (the EPO plus the Chinese, Japanese, Korean and US patent offices), representing 90% of the global patent activity.

The main goals of this forum are to eliminate unnecessary duplication of work among the offices, enhance patent examination efficiency and quality, and guarantee the stability of patent rights.

The EPO is putting all its efforts into making the global patent system more userfriendly, improving the quality and harmonising the patenting process as much as possible. In this important forum, the EPO is also able to represent European interests.

II.- THE NECESSARY COMPLETION OF THE EUROPEAN PATENT SYSTEM AS ECONOMIC IMPERATIVE

Having exposed the good records of the EPO and the on-going projects which should foster its quality and efficiency, one could question: do we really need something more in Europe? My answer is definitely in the affirmative. I will just insist today on two kinds of projects: the European Patent Network and the EU projects:

EPN

In order to steadily improve the efficiency of the European patent system, the European Patent Organisation established the so called "European Patent Network (EPN)", a co-operation framework between the EPO and the National Patent Offices of the EPC contracting states.

The basic understanding of the network is that each partner contributes its specific expertise, qualities and competences to overcome the common challenges we are facing in Europe.

Within the EPN, the EPO will maintain its central role throughout the entire grant procedure as head of the network. However, national patent offices will play an important role complementing that of the EPO, particularly in developing dynamic IP and innovation policies, and jointly exploring ways to enhance synergies and efficiencies between offices, as well as the quality of the European patent system.

This is why I have decided to review our cooperation with the European national patent offices, so that both levels, national and regional, will better complement themselves. The expected results is that the general efficiency of the European Patent system will be improved and its access facilitated.

I have also decided to reinforce our cooperation with the OHIM, in order to develop a common and comprehensive offer in different fields (IT tools, training, awareness), for the benefit of the European users. Indeed, a lot of you are dealing not only with patents but also with trademarks and design, and it appears as just a logical consequence that the two main European IP authorities look for synergies.

EU PROJECTS

The completion of the European patent system, with a unitary EU patent and a centralised, specialised European patent court is from my point of view an economic imperative.

What is the current situation outside Europe? Huge competing markets such as the US and Japan operate in a single language, under a single court jurisdiction and enjoy a unitary patent covering their territory.

The same is true for China which will become a more and more important player in IP matters. It modernises and improves its patent system. Already today Chinese enterprises deliver high-technology innovation. This is a development which reasonably can be expected to continue over the next 10, 20 years.

In contrast, a patent holder choosing to have Europe-wide protection ends up with a bundle of 38 national patents covering territories speaking 28 different languages and subject to 38 different court jurisdictions.

Taking into account this global background and a world of intensifying economic competition, Europe cannot afford to lose ground in a sector as vital for innovation as patent policy.

The patent system being an economic tool of fundamental importance, it is our duty to devise it in such a manner as to best serve European collective interests in innovation and global competitiveness.

This is why I strongly support the creation of a unitary patent protection and the establishment of an appropriate European patent litigation system and was pleased by the decision taken by 25 Member States of the EU Council end of June.

The proposals envisage a central role for the EPO: applicants will have to file an application for a European patent with the EPO the same way as they do today.

Once the European patent is granted, and the mention of the grant is published in the European Patent Bulletin, the patentee can request the EPO to register the unitary effect in the European Patent Register.

This solution is the easiest and most cost effective way to implement quickly the Unitary Patent as there will be no need to create a new patent office ex nihilo. It is also a direct recognition of the high quality of the work produced by the EPO.

The Office is envisaged to take over a number of additional administrative tasks with regard to the unitary patent. It will in particular be responsible for the requests for unitary patents, the translation system, for collecting and distributing the renewal fee payments and for the register for unitary patents.

I am confident that the EPO is best placed, as well as prepared, to smoothly carry out the additional tasks that it will be entrusted with and that the necessary implementation rules will be in place in time.

According to our own internal calculations, the simplification of proceedings and fees under the Unitary Patent should permit to reduce the total costs from 70%, compare to a similar geographical protection for a European Patent nowadays!

With the creation of unitary patent protection one of the initial goals of setting up a European patent system would eventually be achieved.

It is also important to remind that applicants would still have the freedom to chose that protective right which they think is most appropriate for their purposes.

The EPO is also highly interested in a well-functioning and efficient European patent court system as a decisive corollary of the European patent system.

Even if not in the centre of its competence, the EPO has always supported such project with its advise and assistance.

I hope a positive outcome could be reach soon and I am quite optimistic.


Ladies and gentlemen,

My aim as President of the European Patent Office is to maintain and where possible to improve the quality of the procedures before the EPO. Also in future the EPO should stay a global benchmark for patent quality. With the completion of the European patent system, thanks to a unitary patent and a centralised and specialised litigation system, European industry will have good chances to improve its standing in the global race for innovation.

It is of the highest interest for the German companies, which are among the most important users of EPO's services, to ensure that the European Patent system is well functioning and able to represent Europe at the global level.

Regarding the two EU projects, - the Unitary Patent and the European Patent Court - , your support is also vital.

Of course, one can always argue that they could be improved, and discuss endlessly all the details of these projects. I consider they already represent a major improvement and it is high time for a decision now.

All of you have certainly noticed that US President Obama will sign today the most important reform of the US patent system for the last 60 years. Other regions of the globe are also moving forward. In this competitive context, Europe can not afford another blockage situation and miss this political momentum, which has few chance to come again.

Ladies and gentlemen, let me thank you for your kind attention. I remain at your disposal should you wish to further discuss the topics that I have tackled during my address.

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