Europe’s patent system is undermined by imbalances

Injunctions are granted automatically contrary to EU law
Granting an injunction before determining a patent’s validity is unfair 
Unfunded shell companies can avoid fee shifting
Lack of information on court proceedings makes it difficult to detect harmful practices
Low quality patents facilitate harmful practices
Key Imbalances

Significant litigation activity by Patent Assertion Entities (PAEs) demonstrates that Europe’s patent system is being exploited

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. They do so by exploiting the imbalances in Europe’s patent system.
There has been a 20% your-on-year jump in PAE patent litigation
60% of PAE litigation in Europe is initiated by US-based PAEs
Almost a quarter of companies targeted by PAEs are SME’s
20% of patent litigation in Germany is brought by PAEs
Data from Darts-IP Report, NPE Litigation in the European Union: Facts and Figures, 19 February 2018

This is only the tip of the iceberg!
The available data does not relate to threats of litigation and claims for payment made by PAEs against European innovators prior to the commencement of formal legal proceedings. These threats are designed to force innovators to pay settlements to PAEs precisely to avoid lengthy and costly legal proceedings, but they are not available in the public domain and are impossible to track.

Imbalances exploited by PAEs are damaging European innovators

 Damages to individual companies
High settlement fees
High defence costs
Removal of products from the market
Disincentive for R&D investment
Reputational damage

Damage to Europe’s digital economy
Less choice and increased costs for consumers
Erosion of public confidence in the patent system

IP2I advocates for


End the granting of automatic injunctions

Grant proportionate and equitable remedies on a case-by-case basis after consideration of all the facts of the case

Close the injunction gap

Coordinate the timing of decisions on infringement or the start of an injunction with decisions on validity of a patent

Require bonds from underfunded shells

Ensure shell companies can pay required fees if they lose: require bonds from underfunded shells 

Increase transparency

Require all patent litigation filings and court judgements to be publicly available

Improve patent quality

Improve the quality of patents granted

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:
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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