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Slashing the Cost of Innovation: A Patently Good Development

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Scottish engineer James Watt did many wonderful things, but coming up with the first steam engine was not one of them. The earliest-known version was described as early as the first century AD by Hero of Alexandria. However, it wasn't until the industrial revolution that steam engines came into general use.

In the past great ideas were not always developed by the people who first thought of them and it could take a long time before inventions took off. For example, the first windmills were documented in 1185, mechanical clocks in 1283, firearms in 1331 and spectacles in 1285, but they did not become commonly used until much later. It was only in the 19th century that the rate of innovation accelerated rapidly as inventors were finally able to reap the benefits of what they had come up with through developments such as the patent.

The EU could now be set to experience a significant breakthrough when it comes to patents. If the European Parliament approves a proposal for a new EU unitary patent this week, it could slash the cost of patents, thereby boosting innovation and kick-starting the economy. A European patent valid throughout the EU is desperately needed as there are many problems with the current system.

The patent remains an essential part of a modern economy as it is the driving force behind innovation. But for it to be really efficient, a patent regime needs to be both cheap and easily enforceable. European patents currently fail on both counts.

European patents are granted by the European Patent Convention, a non-EU body, however
they have to be validated in each country where protection is sought. This costly process, partly due to the translations involved, can make EU-wide patents 13 times more expensive than in the US. In addition there is currently no unified litigation system so companies often have to fight parallel lawsuits in several countries with the risk of different outcomes.

The unitary patent could reduce current patenting costs by up to 80% and could potentially make it cheaper than applying for an American one. Litigation would also become easier as decisions by the new patent court would apply in all participating EU countries.

But if it such a good idea why has it taken so long? The idea was pitched in the 1970s but talks foundered over the language issue. To cut costs, the number of languages used needs to be brought down to a minimum, but which should be included and which excluded? In the latest proposal patents would be in just English, French and German, so Spain and Italy have opted out for the time being. If approved, the patent would go ahead in 25 member states under the enhanced cooperation procedure. This means not all member states would be obliged to take part but would still have the right to do so later.

The European Parliament played a crucial part in negotiating the new patent as it amended the proposal to include a compensation scheme for translation costs to be reimbursed to small and medium-sized companies, non-profit organisations and universities applying for a patent in a language other than the three official ones.

This week the Parliament will play a vital role once more when it votes on the plans. The new EU patent could provide Europe's economy with a boost at a time when a boost is desperately needed.

The photo shows nominees for the European Inventor Award 2012: Dr Mark van Loosdrecht and Dr Merle Krista de Kreuk © European Patent Organisation 2012