By Daniel Hunter

UK small to medium-sized enterprises (SMEs) are expected to grow into Europe with the introduction of a new law which allows businesses to protect intellectual property across the entire EU, according to Andrew Walker, corporate partner at law firm HBJ Gateley.

The new legislation, which will come into force in January 2014, establishes a pan-EU patent law and specialised EU patent court which will help companies and inventors protect their patents across the EU while avoiding multiple litigation cases in differing legal jurisdictions.

It will replace the current system in which innovations have to be patented in each disparate legal jurisdiction, which can be extremely complex and incur significant costs.

Andrew said UK businesses with aspirations to grow across the EU or with technology which is patentable and used across the EU would be attracted by the prospect of quick and cost-effective patent protection throughout the whole EU area. According to HMRC, UK trade with the EU was worth £149.8 billion in 2012, compared with £158.2 billion in 2011.

“There’s never been an EU-wide patent before, so this represents a major change in how companies trading in the EU can protect and defend their IP," Andrew said.

“If you’ve invented a new mobile phone feature, for example, and wanted to launch it across a number of different countries in the EU and have patent protection in those countries, up until now you have had to register patents in every single country. That not only takes a lot of time but it can end up being very expensive, and it can also delay the process of protecting your intellectual property which could allow a competitor to beat you in the ‘race to register’.

“Under the new EU patent, UK SMEs are now in the much more favourable position of being able to protect their inventions across the EU in a single application. This will no doubt provide added reassurance to inventors and businesses in what is becoming an increasingly global market.”

Together with the recently introduced UK Patent Box legislation which, among other things, offers a hugely reduced (10%) corporate tax rate on profits from patents, UK-based companies are now in a much more favourable position when it comes to taking advantage of their in-house patent creations.

The change in legislation will also significantly streamline litigation for those companies which need to defend their patents across the EU, allowing a central court to make decisions applicable across all 25 European Union countries. However, Andrew warned any litigation process, whether centralised or not, is likely to be expensive and might still involve hiring more than one legal representative.

Andrew added: “Litigation is expensive whatever the circumstance. This legislation will make it easier and somewhat cheaper for companies which find themselves in court over EU patent issues and I’d always advise anyone who’s keen to defend their intellectual property to apply for the broadest protection possible.”

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