Tuesday, October 13, 2009

Fight for the right?

1:41 AM Posted by: Slamun Atlanta 0 comments

The European Commission is so certain that litigation costs adversely affect the take-up of patent rights that it has proposed that anyone applying for a European patent should be required to have compulsory patent litigation insurance. A study for the Commission determined the average amount spent by each party in a patent infringement action in a number of EU countries. Considering both the first instance trial and the cost of an appeal, the most expensive country was the UK, where on average each party spent N980,000. In Germany, where there has to be both an infringement action and a separate nullity action, the costs to have both issues tried and then reviewed on appeal are about N730,000 for each party. The party spend in France, by contrast, are of the order of N125,000 each. However, the same study worked out a litigation ratio for each country and determined that the number of patents that are the subject of proceedings remains very low. The number of European patents in force in various countries was determined and divided by the number of patent infringement actions started per annum to determine a litigation ratio indicating the incidence of patent litigation. So in France, where 250,000 European patents are currently in force and 50 patent actions are started a year, the litigation ratio is 1:5,000. Only 50 per cent of patent actions in France proceed to trial and judgment, so a similar calculation gives a first judgment ratio of 1:10,000. The comparable figures for
the United Kingdom are a litigation ratio of 1:2,000 and a ratio to first judgment of 1:8,000. Thus in most countries across Europe very few patents are the subject of litigation. Even where an action is started, at least half are settled before trial. In the United Kingdom, only about 20 actions a year go to trial, which is one-sixth of those started. It is accepted that the cost of patent litigation in all European countries is significant. However, the level of expense incurred in litigation in the UK is generally higher than that seen in other European countries. This difference in cost arises out of differences in process.

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