Industriekoalition IP2Innovate fordert Patentrechtsreform zur Förderung von Innovation in Deutschland

IP2Innovate

IP2Innovate welcomes the Commission’s Digital Fitness Check and its commitment to delivering a simpler, more competitive Europe. As a coalition of small and large companies that create innovative products and services in Europe and that collectively hold thousands of European patents, IP2Innovate strongly supports efforts to reduce unnecessary regulatory burdens for companies while maintaining high standards of protection for fundamental rights, consumer safety and European values. A key obstacle to Europe’s digital competitiveness lies in the outdated framework governing the enforcement of patents. The Intellectual Property Rights Enforcement Directive (IPRED), adopted in 2004, requires remedies for patent infringement to be proportionate but does not set out clear criteria for how proportionality should be assessed in relation to today’s complex digital and connected technologies – such as AI systems, IoT devices, semiconductors, smart vehicles or critical infrastructure. As a result, the lack of clear rules on how to ensure remedies are proportionate in relation to complex products has led to the de facto automatic granting of injunctions in patent cases, which result in the removal of entire product lines from the market even when the patent infringement relates to a minor feature of a complex product that incorporates thousands of patented components1. For complex products automatic injunctions create excessive litigation risk, legal uncertainty and significant disruption to supply chains, investment and innovation, and force Europe’s digital innovators to pay excessively high licensing fees for patents to settle patent lawsuits. This situation is to the detriment of Europe’s industrial base and competitiveness. Modernising IPRED to clarify how courts should assess proportionality and consider alternative remedies where appropriate would directly support the Commission’s simplification agenda. While this would require targeted amendments to the IPRED, the overall effect would be a reduction in regulatory burdens through: • Reduced litigation risk and administrative burden, particularly for SMEs and companies developing complex digital products; • Improved legal certainty and predictability, enabling companies to invest with confidence; • Lower financial and operational disruption, safeguarding innovation, jobs and supply chains. Amending the IPRED to provide further specificity on proportionality in patent litigation would not impact a patent holder’s ability to enforce its patent rights, but would make sure such enforcement is appropriately balanced in the digital age. Additionally, amending the IPRED would help reduce the number of avoidable court cases by making appropriate settlements between patent owners and innovative product companies more likely. As a result, courts would face a lower workload and could handle the remaining cases more efficiently, ultimately strengthening trust in the European patent system. A clearer, more balanced framework would align Europe with other regions of the world, enhance Europe’s global competitiveness, and prevent distortive practices that extract value without contributing to innovation. This issue is particularly well‑suited to be addressed at EU level, as digital products and services circulate seamlessly across the entire Single Market. Divergent interpretations of IPRED’s proportionality requirement create fragmentation, legal uncertainty and opportunities for forum‑shopping. Because patent enforcement rules directly affect the functioning of the Single Market, action by individual Member States cannot entirely resolve these inconsistencies. Only EU‑level reform can ensure uniformity and promote a proportionate and consistent application of remedies across jurisdictions. Modernising IPRED therefore directly supports the Commission’s objective of “a more cost-effective and innovation-friendly implementation of European rules – all the while maintaining high standards and core objectives of the rules”. This is exactly what IP2Innovate is calling for with the modernisation of the IPRED to clarify how courts should assess proportionality and consider alternative remedies where appropriate. Experience shows that non-binding clarification is not sufficient to address this structural problem. The Commission’s 2017 guidance on IPRED did not materially change judicial practice or reduce the near-automatic granting of injunctions in patent cases. More than two decades after its adoption, IPRED requires targeted modernisation to ensure that Europe’s patent enforcement system supports – rather than hinders – the Union’s objectives of competitiveness, simplification and technological leadership. About IP2Innovate IP2Innovate is a coalition of small and large research-intensive companies that develop innovative products and services in Europe, collectively holding thousands of European patents, as well as industry associations representing more than 40 companies. The coalition works with policymakers, the legal profession and judicial authorities to promote a balanced and innovation-friendly European patent system that supports investment, competitiveness and the successful commercialisation of new technologies in Europe. 1. This conclusion has been confirmed by the recently published Commission’s study on the enforcement of intellectual property rights in the EU - Internal Market, Industry, Entrepreneurship and SMEs Contact: contact@ip2innovate.eu https://ip2innovate.eu/

Patrick Oliver

Thirty-five companies and four industry groups representing over 150 companies from different industry sectors, have written to European Internal Market Commissioner Thierry Breton, urging him to take action to clamp down on Patent Assertion Entities (PAEs) – otherwise known as “patent trolls”. “The experience of our member companies indicates that Europe’s patent system is not working properly and is undermining Europe’s ability to compete globally in the next frontier of technologies,” said Patrick Oliver, Executive Director of IP2Innovate, one of the industry groups that signed the letter. “The European Commission needs to take steps to stop PAEs from gaming the patent system. We are urging Commissioner Breton to draft a set of guidelines that address imbalances in the patent system – in particular guidelines that support the application of a proportionality requirement in patent enforcement by judges around Europe, as required by EU law,” Mr Oliver added. Many European courts issue automatic injunctions upon a finding of a patent infringement, without considering a remedy that could be more proportionate. So for example, an unintentional infringement of just one patent among many others could result in a popular product being withdrawn from the market. PAEs don’t invent, build or sell anything. They just buy up patents to assert them against innovative companies, including SMEs, and extract high settlement fees not based on the value of the underlying invention but rather based on the damage that would result from the removal of the entire product from the market. “As litigation by PAEs has slowed in the US we have witnessed its rise in Europe,” Mr Oliver said, adding: “It’s not just big firms that are targeted – SMEs are also picked on by PAEs. Unjustified product withdrawals can sink a company. They also deprive the public of consumer choice and the benefits of innovation.” Clear enforcement guidelines would help ensure Member States apply EU law properly. They would also bring more balance to the patent system and help avoid disproportionate outcomes and abusive litigation practices, Mr Oliver said. “We stand ready to work with the Commissioner and his team on specific solutions to prevent PAEs from further exploiting the legal system to the detriment of Europe’s digital economy,” he said. Notes to editors: 1. The letter to Commissioner Breton and full list of signatories can be found here. 2. IP2Innovate (IP2I) is a coalition of small and large companies that create innovative products and services in Europe and collectively hold thousands of European patents, as well as European industry groups that collectively represent 65 companies. Our members include: Adidas, Amadeus, Atos / Bull, Daimler, Dell, Freebox, Google, Intel, Microsoft, Nvidia, Proximus, SAP, Spotify & Wiko. IP2I is concerned about a number of imbalances in Europe’s patent legal system that are being exploited to the detriment of innovation and growth in Europe. The exploitation of these imbalances is in particular shown by the rise of litigation related activity by Patent Assertion Entities (PAEs) in Europe. 3. European Commission’s IP Package of 29 November 2017: In its IP Package of 29 November 2017, the Commission acknowledged that there are differences in the way Member States apply certain provisions of the EU Directive on IPR enforcement (IPRED) (such as those on injunctions) across the Single Market, thereby limiting the effectiveness of the Directive. The Commission therefore undertook to “work with Member States' national experts and judges on further, more targeted guidelines, to give more detailed and practical guidance on specific IPRED issues, based on best practices experience” (here, p. 29) with a view to improving the system of judicial enforcement in the EU. Two years after the publication of the IP Package, the thirty-four companies and four associations signatories to the letter to Commissioner Breton call on the European Commission to expand its work with Member States, judges and stakeholders to publish targeted guidelines to support the homogenous and effective application of the proportionality principle to patents. 4. For further information, please contact: Patrick Oliver Executive Director, IP2Innovate Email: contact@ip2innovate.eu Mobile: +32-477-597065

lessentiel.lu

Patent trolls irritates European companies who fear that these companies will develop under new Community rules.