Europe Reaches Agreement on System for Patents

BRUSSELS — It only took four decades of wrangling.

On Tuesday, the European Parliament adopted a uniform patent system for Europe. If it goes into affect as expected by early 2014, it would try to remedy the country-by-country approach whose time and costs have long been an impediment to innovation across the European Union.

Achieving the new, unified system could conceivably provide encouragement for another, far more ambitious project that European leaders will be grappling with at their summit meeting this week: a uniform system of banking regulation and supervision for the euro area. But the long, tortuous route to the patent agreement might also serve as a cautionary tale.

The banking union already has bogged down in national battles that some experts warn could drag the process out for years — particularly if changes to the Union’s treaties are needed to endow the central bank with new and wide-ranging supervisory powers, or to set up a joint financial backstop to ensure the orderly winding up of failing banks.

“What’s clear is that the E.U. continues to operate on a hopelessly optimistic time scale,” wrote Mats Persson, the director of Open Europe, a research group, in a briefing note on Tuesday. Mr. Persson was referring to the time it would take to set up a “proper safety net” for Europe’s banks, including a bank resolution fund.

In the case of the patent, decades of discussions resulted in an unsatisfactory compromise, according to Bruno van Pottelsberghe, the dean of the Solvay Brussels School of Economics & Management. The new system will “still be a mess” and “we should not expect any of a change in Europe’s innovative performance,” Mr. van Pottelsberghe said.

Meeting in Strasbourg on Tuesday, the European Parliament voted 484 to 164 to pass the key plank of the new patent system. Nation-by-nation vetting of the new system will formally start in February, when governments are expected to sign a treaty creating special patent courts.

The system would supplement the current patchwork of patent rules in the Union; under the current system, a ruling in one of 27 countries has no automatic bearing on another. The patchwork approach has made protecting inventions and innovations in Europe 15 times more expensive than in the United States, harming competitiveness, according to the European Commission, the executive arm of the European Union.

The cost of patent protection should initially drop to around €6,500, or $8,450, from around €36,000, or $46,790, the commission says. That is largely because the new so-called unitary patents granted by the European Patent Office in Munich would no longer need to be validated in all of the countries where protection is sought. Nor would it need to be translated into all local languages. Instead, English, German or French would suffice.

Benoît Battistelli, the president of the European Patent Office office, said the decision on Tuesday would “equip the European economy with a truly supranational patent system.”

Yet the long, tangled history of working toward a common patent — repeatedly shelved after bumping up against national interests and amid squabbling over languages — is a timely reminder of how much easier it is to make commitments to a unified Europe than to put unity into practice.

In the case of the banking rules, also known as banking union, E.U. governments still must overcome differences over its most fundamental element: a single banking supervisor operating under the aegis of the European Central Bank.

European finance ministers are expected to work through the night on Wednesday in Brussels debating whether a new supervisor would oversee all 6,000 lenders in the euro area. France, Germany, Sweden, Hungary and Britain are among countries with concerns about the plan. The timing for an agreement “is likely to slip, as member states remain far apart on a number of key substantive issues,” Mujtaba Rahman, an analyst for the Eurasia Group, wrote in a briefing note Tuesday.

On Thursday, the finance ministers will give way to the European Union’s 27 leaders, gathering for their year-end summit meeting. When the leaders met in June, their joint decisions were cast as the starting point for tighter economic and monetary union in Europe. A central pillar of that agreement was a banking union, which would end the so-called doom loop in which frail banks endanger national finances and cause countries to need bailouts.