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EC proposes overhaul of patents and industrial rights

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The European Commission has proposed creating a single strategy for the protection of industrial property rights in Europe. The Commission wants to integrate its strategy for industrial property rights and encourage smaller businesses to protect rights.

Patents and trade marks are the most well-known industrial property rights, but the category also includes protections for industrial designs, geographical indications and plant variety rights.

"What all these rights have in common is that they enable holders to prevent unauthorised use of an intangible asset of potential commercial value, whether this is an idea behind an innovative product or process, or an indication to the consumer of origin," said the Commission's communication.

The most radical part of the Commission's plan is the previously announced desire to create a Europe-wide patents system. Internal markets commissioner Charlie McCreevy last year proposed uniting elements of the European Patent Office, which operates outside of EU government structures, and the Commission's own cross-border patent proposals.

"Europe requires strong industrial property rights to protect its innovations and remain competitive in the global knowledge-based economy," said the Communication adopted by the Commission. "In the EU, protection at Community level exists for most of the registered industrial property rights. However, pending an agreement on the Community patent, businesses do not have this possibility in patents … the Commission considers that progress in this matter is vital and reaffirms its intention to seek agreement as a question of priority on these proposals."

"Having now established momentum towards finding solutions on patents, this Communication turns towards developing a horizontal and integrated strategy across the spectrum of industrial property rights," it said.

The Commission has announced that it will conduct research into the quality of patents, trade marks and agricultural products and conduct a feasibility study into the application of geographical protection mechanisms to non-agricultural products.

The Commission said that its aim was to improve the protection of industrial property rights, and therefore the quality of the material that is protected.

"A high-quality system of industrial property rights should achieve the acknowledged objectives of encouraging innovation and diffusion of new technology and knowledge," it said. "High-quality rights only offering rewards to inventions that meet the legal requirements are essential to a well-functioning system, along with user-friendly access of information on these rights to businesses and society."

The Communication identifies that there is a possiblity that strong industrial rights protection could fall foul of competition law, but that such instances are likely to be rare.

"Only in exceptional circumstances may the "exercise" of a right constitute an infringement of EC competition rules, in particular if the company is dominant and its behaviour is likely to lead to elimination of competition in a relevant market," it said.

The Commission also said that it was harder for smaller companies to exploit any rights they had because of the high costs of doing so. It said that this was "undesirable and highlights the need for prompt policy actions".

The Commission said that it would investigate the best way to ensure that small and medium sized companies participate in rights protection, looking at subsidies for the first 10 patent applications, lowering all costs for those companies, offering targeted subsidies or decreasing taxation from income earned by the rights.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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