A new system for filing and enforcing patents in Europe, which is expected to be implemented in 2016, may bring more intellectual property cases to the region rather than the U.S. or Asia, a law firm said.
About three-fourths of the companies that hold patents in Europe and responded to a poll by London-based Allen & Overy LLP said they expected the new unitary patent system and the Unified Patent Court would benefit them. About half plan to use the new system for some of their existing or future patents, according to the survey.
A single European court could provide an alternative to the U.S., where Congress and the courts are looking at ways to curb patent litigation and new procedures make it easier to challenge the validity of patents. Suits in the U.S. rose 12 percent last year to 6,092, and are concentrated in a few districts, which means an increasingly longer time to reach trial, according to a separate study by Lex Machina, a Menlo Park, California-based legal analysis company.
“Where companies have made up their minds, one thing that is clear is they are preparing to opt in their crown jewel patents, their most valuable ones,” said Nicola Dagg, global head of intellectual property litigation at the firm. “We see this as likely to be giving rise to a shift toward Europe and the UPC in Europe as a forum for patent disputes.”
The new system will enable applicants to seek a single patent in Europe instead of making applications to multiple countries. Disputes that arise will be adjudicated in a centralized court with jurisdiction in 25 countries.
The cost of litigation in Europe is at least five times lower than in the U.S. and the consumer market in Europe is almost double the size at about 600 million people, making it a more attractive venue, the firm said in the study.
The Allen & Overy survey was based on 152 online and telephone interviews with people who have responsibility for their company’s European patents between April 1 and May 16, the firm said.
The results also showed that many companies were uncertain about the new system and haven’t prepared for it. Only about four in 10 said they’d decided whether to use the new system or which patents they would opt in or out of it.
“A lot of them haven’t made up their minds,” Dagg said. “They say ‘when we come to these secondary patents, we haven’t yet carried out a cost-benefit analysis.’ ”
About two-thirds of the respondents said they weren’t clear on the costs or how the new court would work. The most frequently cited concern of those who have already decided to opt out was the “quality of judgments” by new courts of the UPC.