London Agreement should pave the way for lower patent prices in Europe

Until recently, obtaining patent protection in Europe has required a disproportionately large investment from patent owners, compared to countries such as Japan and the United States. This disparity has received much attention from the European Commission, since an attractive patent system enabling the efficient protection of research and development is essential to ensure growth.

Although the European Patent Office issues patents, every patent must be validated and translated into the national languages of the European countries in which the patent owner requires protection. This has resulted in additional costs to the patent owner - translation may easily account for 40% or more of the overall costs of patenting.

In general, member states have acknowledged the need to make the European patent system more attractive, in part by implementing a cost reduction. Therefore, 13 states have joined the London Agreement, which came into force on 1st May. As a result, in those 13 countries (which include Denmark), the full patent text need no longer be translated into the relevant national languages, but rather only the patent claims. This will result in a considerable reduction in the costs to be borne by the patent owner. However, if the patent owner wishes to enforce its patent in the courts, a translation of the full patent text may still be required.

The high costs have meant that, to a great extent, patent owners have chosen to concentrate the geographical scope of protection in Germany, France and the United Kingdom – more than 80% of European patents are validated in those countries. Between 20% and 30% of European patents are validated in countries such as Belgium, the Netherlands, Spain, Sweden and Switzerland. Considerably fewer than 15% of European patents are validated in the remaining member states.

It remains to be seen whether the remaining member states will follow suit. The other key question is whether patent owners will choose to validate their patents in a larger number of countries, or whether those that validate in countries other than the three major jurisdictions (ie, Germany, France and the United Kingdom) will choose to allocate the saved costs to other activities.