Advocacy

Europe’s patent system is undermined by the lack of application of proportionality as required by EU law

To ensure the patent system supports innovation, growth and competitiveness, EU law, in particular the Intellectual Property Rights Enforcement Directive (IPRED), requires that remedies for patent infringement be proportionate

 

HOWEVER

Lack of proportionate remedies

Insufficient transparency

Injunctions are granted effectively automatically, without consideration of proportionality as is required by EU law.

An unintentional infringement by a manufacturer of a patent that relates to a minor feature of a complex product can result in the entire product range being immediately removed from the market.

Because of the threat of automatic injunctions, companies prefer to settle claims rather than face the risk of an entire existing product range being removed from the market.

SMEs are particularly vulnerable because they often do not have resources to defend themselves in court.

The scale of the problem faced by Europe’s patent system is only partially illustrated because of the limited availability of patent litigation data.

 

The system of automatic injunctions makes Europe attractive for PAEs

PAEs do not innovate and do not create and sell new products. They are financial vehicles that buy and assert patents against operating companies for the sole purpose of obtaining the highest possible payment. Sometimes they do so by abusing the imbalances in Europe’s patent system, in particular the threat of injunctions which are granted effectively automatically in Europe.

20k

PAEs appear as current owners of almost 20K patent applications at the EPO*

80%

Eight of the top ten most active PAEs in the EU are based in the U.S.**

74%

ICT accounts for 74% of the patents asserted by PAEs in the EU**

30%

In the UPC, NPE initiated infringement cases in the ICT sector account for almost 30% of the total number of infringement cases***

* Non-Practicing Entities in Europe: an Empirical Analysis of Patent Acquisitions at the European Patent Office, November 2021

** Clarivate report “2024 Non-Practicing Entity global litigation report - Analyzing NPE litigation behavior and outcomes from 2018-2023”, May 2024

*** The European Unified Patent Court and Non-Practicing Entities: A Year of Early Evidence, July 2024

Abuse of Europe’s patent system damages European innovators and Europe’s competitiveness

 Damages to individual companies

Excessive settlement fees

High defence costs

Significant business and sales disruptions

Disincentive for R&D investment

Bankruptcy of smaller companies

Reputational damage


Subsequent damages to European economy and society

Threat to Europe’s digital and green transition and competitiveness in critical technologies

Competitive disadvantage for Europe as a business location

Less choice and increased costs for consumers

Erosion of public confidence in the patent system

IP2I advocates for

01

Ensuring the effective and consistent application of the proportionality requirement in Europe

02

Ensuring the effective and consistent application of the proportionality requirement in EU Member States

03

Improving the transparency of patent litigation data in Europe

Position Papers

The following IP2I papers set out in more detail our concerns about the imbalances in Europe’s patent legal system and our proposed solutions:
17 December 2024

Supporting Europe’s Competitiveness and Innovation through a Balanced Patent System

26 September 2024

Congratulatory Letter to Executive Vice-President -designate Séjourné

29 February 2024

IP2I Recommendations for Improvements to the Public Availability of Information on Proceedings before the UPC

24 May 2022

IP2Innovate calls for preserving the increased transparency of patent litigation data in the UPC Rules of Procedure

19 January 2022

IP2Innovate calls for UPC judges to receive training to counter abusive patent litigation tactics

IP2I submission to German MoJ on 2nd draft reform of Patent Act

Feedback on the Commission’s roadmap for the IP Action Plan

Industry calls on new Commission to issue guidelines to support effective application of proportionality in patent enforcement

Infographic on IP2I priorities for the new European Commission

IP2I submission to German MoJ on draft reform of Patent Act

Infographic on promoting innovation in Germany through a balanced patent system

Industry calls for EU guidelines on the application of proportionality to patents to avoid abusive litigation

Supporting Innovation in Europe Through a Balanced Patent System, A Paper Responding to the European Commission’s IP Package of June 2018

Letter to European Commission Vice-President Ansip on the IP Package of 1 December 2017

13 December 2017

IP2Innovate calls for UPC judges to receive training to counter abusive patent litigation tactics

4 April 2017

IP2Innovate position paper” Promoting a robust, balanced and flexible European patent ecosystem"

IP2I letter to European Commission Vice-President Ansip on the increase of PAE activity in Europe

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