European patent system on the way (perhaps)

Thirty years' gestation has failed to produce a common patent, the one-size fits-all patent discriminates against companies that invest most in R&D - and now changes in Italian patenting fees threaten to stifle innovation, says Bruno van Pottelsberghe, the 37-year-old newly appointed chief economist at the European Patent Office.

In his first interview since taking up the job he bemoaned the failure of European Union politicians to create a single EU-wide patent, called for patents to have variable lifespans and attacked a move by the Italian government to scrap some patent registration fees.

His comments coincided with the launch of a renewed, and final, effort by the European Commission to breath life into the Community patent project, which has been the aim of forward-looking politicians in Europe for decades.

In 2000 the Commission, the EU’s executive body, proposed legislation that would have paved the way for one single patent, with one litigation procedure involving one single patent court for the whole of the EU. But member states squabbled over what languages the Community patent should be translated into, and there has been gridlock ever since.

“The absence of a single Community patent is a major drawback. Without one there is no European market for technology,” van Pottelsberghe told Science|Business.

Insult and injury

Adding insult to injury, European companies pay for more for patents. Figures released by EPO in December show that while Japanese companies pay €5,460 for a Japanese patent and US companies €10,250 for a US grant, European companies pay a massive €24,100 for a European patent. Crucially, this is not because the fees are that much higher, but because of language translation costs.

But unilateral moves to reduce fees won’t help. Italy’s new patent rules took effect at the beginning of this month. Dropping the fees is intended to stimulate innovation. However, according to van Pottelsberghe it may have the opposite effect.

The Italian move is “extreme,” he said, adding that it could clog up the Italian patent system with dormant patents, thus obstructing new research. Apart from Italy now, all countries in Europe, the US and Japan have substantial renewal fees in order to prevent people applying for patents they have no intention of using.
 
“The zero renewal fee, which will stand for the patent life - 20 years, grants monopoly rights beyond the natural economic cycle of a technology, at the cost of consumers,” he said.

These are not the comments you would expect from someone whose days will largely be spent conducting statistical analyses of patent application trends and forecasting future demand for patents.

But then the EPO didn’t come up with the grand title of chief economist in order to attract a shy, retiring type. While the top economists at the United States patent and trademark office and the Japanese patent office are first and foremost statisticians, the EPO job is broader.

EPO ‘transforming itself’

According to van Pottelsberghe’s predecessor, Dominique Guellec, a senior economist at the Organisation for Economic Co-operation and Development, the position was created two years ago in recognition of the growing importance of patents both in the board rooms of companies as well as in the cabinets of European politicians trying to invigorate the continent’s moribund economy. “The EPO is transforming itself,” Guellec said.

While Guellec kept a low profile during his time at the EPO, van Pottelsberghe appears more forthright. “There is a lot of brainstorming going on internally at the EPO about how the intellectual property system in Europe works, which is a good step. There are many issues to be solved,” said van Pottelsberghe.

For example, the one size fits all patent, with its fixed lifespan of 20 years, is a problem, he said. “In a perfect world you might prefer 30 year-long patents for pharmaceuticals products and much shorter-term patents for the inventions where the research effort is smaller,” he said.

But he doesn’t expect a more tailor-made approach to patenting any time soon. “How would you define nanotechnologies which can be used in everything from make-up products to aerospace products? It’s not that easy,” Pottelsberghe said.

And the applications keep rising

Adding the voice of an economist to the internal debate over the future of the patents system was only part of the reason for creating the new role. The EPO also needs someone to track the ever-increasing number of patent applications and to forecast future trends in innovation in Europe.

Applications at many patent offices in Europe have doubled in the past ten years, and the average length of each submission has increased by 50 per cent.  Now the EPO receives around 160,000 applications and awards patents to around 60,000 inventions each year. “That’s a huge number of patents going into the market,” van Pottelsberghe said.

From an economic standpoint there is no optimal number of patents in circulation, “But too many patent applications does raise questions about how to treat them and how to avoid a backlog,” he said.

Looking back over the past century the number of applications in the United States has risen sharply every 15 to 20 years. “These rises are linked to sudden advances in science and technology. You can see when rail transport was invented, when the airline industry took off, the chemicals revolutions,” van Pottelsberghe said.

The cycle has sped up dramatically in recent years with the computer-related boom of the 1990s followed swiftly by the rise in biotech. “Next it will be nanotechnologies,” he said.

“When a new technology emerges it is important to evaluate the impact of patents on that field,” said Guellec, but he admitted that during his tenure at the EPO this was not being done.

“There are no serious studies yet on the impact of patents on fields such as software, where the debate in recent years has been more based on emotions than on evidence,” he said.

Working with the lawmakers

The EPO is a law enforcing body but it doesn’t write laws. Nevertheless, it is starting to work more closely with lawmakers in Brussels, van Pottelsberghe said. “There is a lot of interaction with the European Commission now,” he added.

So as the Commission renews its efforts to get a community patent established, van Pottelsberghe and his colleagues in Munich are cheering them on. “We can help but it’s not really our role,” he said.