IP in business transactions: Germany overview
A guide to intellectual property law in Germany. The IP in business transactions Q&A gives an overview of maintaining an IP portfolio, exploiting an IP portfolio through assignment and licensing, taking security over IPRs, IP and M&A transactions, and the impact of IP on key areas such as competition law, employees and tax.
To compare answers across multiple jurisdictions, visit the IP in business transactions Country Q&A tool.
This Q&A is part of the multi-jurisdictional guide to IP law. For a full list of jurisdictional Q&As visit www.practicallaw.com/ip-mjg.
Overview of main IPRs
Patents protect inventions (that is, a practical teaching that provides a solution to a problem based on technical considerations). The exclusionary right conferred by a patent comes into existence through registration, that is, the grant of the patent by either:
Any third party is prohibited from exploiting a patented product or method. Generally, protection lasts for up to 20 years starting on the day following the filing of the patent application. For the pharmaceutical sector, supplementary protection certificates (SPCs) can be issued which extend the effective protection of products already on the market by a maximum of five years.
Trade marks protect any signs that are capable of distinguishing the goods or services of one undertaking from those of other undertakings. Any third party is prohibited from using the trade mark or a similar sign for the same or similar goods and services if this results in a danger of confusion.
Generally, trade mark protection requires registration of the sign with either:
Protection of a registered trade marks lasts for ten years from the application date and can be renewed indefinitely. Protection can also accrue without registration in case the sign has acquired secondary meaning as a trade mark.
Protection is provided for literary, scientific and artistic works if they constitute personal intellectual creations. Databases and computer programs can also be protected. Protection lasts for 70 years after the end of the year in which the author died. It is not possible to register copyright.
A design right protects the appearance of a product if it is novel and has individual character. Designs can be protected by registration with either:
DPMA for registered German designs.
OHIM for registered Community designs.
No registration is necessary for unregistered Community designs.
Registered designs can be protected for a period of up to 25 years from the date of application. Unregistered design rights are protected for three years from the date on which the design was first made available to the public within the EU.
The protection of know-how is provided by statutory provisions (such as the Act against Unfair Competition) that mainly prohibit any use wrongly gained as a consequence of breaching the confidentiality of know-how in the specific way prohibited by the statutory provisions.
Utility models provide protection for technical inventions (except for a manufacturing or a processing method). A utility model confers the same legal protection as a patent (see above, Patents). The maximum term of protection is limited to ten years. Novelty and inventive step are not examined for registration of a utility model.
Protection is provided for the topography of microelectronic semi-conductor products, independently utilisable parts of such topographies, as well as representations (such as lay-outs or masks) for the manufacture of the topography that have an individual character. The DPMA registers topographies without examination of their individual character. The period of protection expires ten years after the end of the year following the year in which protection was commenced.
For further information about the main IPRs, see Main IPRs: Germany.
As a rule, professional service providers should be used to conduct clearance searches before an application to register an IPR. After registration to maintain IPRs and monitor possible infringement, professional watch services should be used.
The following websites provide search facilities:
Annual fees must be paid which increase up to EUR1,940 for the 20th year (as at 1 March 2012, US$1 was about EUR0.7). For SPCs, increasing renewal fees must be paid (beginning at EUR2,650).
Within five years after registration, the trade mark must be used for the goods or services it has been registered for, or it is vulnerable to cancellation. Maintenance of a registered trade mark requires payment of renewal fees every ten years (EUR750 for up to three classes of goods and services and EUR260 for each further class).
To maintain an unregistered trademark, the secondary meaning must be upheld through use in the course of business.
Renewal fees of between EUR90 to EUR180 must be paid every five years from the day of application. There is no use requirement.
The secrecy of the know-how must be preserved by organisation and technical measures.
Maintenance fees of between EUR210 to EUR530 must be paid to maintain protection of the utility model.
A business can take several steps to avoid infringing another party's IPR, including:
Developing an IPR strategy and policy.
Use of service providers for clearance searches and watch services (see Question 2).
Monitoring the market.
Training in IP issues and guidelines for employees.
Obtaining freedom to operate analyses from IP specialists.
The main steps in an IP audit are:
Requesting a list of all IPRs owned by a company.
Identifying which IPRs are actually used by a company.
Conducting searches to verify the status and details of registration (see Question 2).
Verifying the chain of title.
Verifying that all renewal fees have been paid.
Assessing validity of the IPRs.
Confirming that registered trade marks have been used for the relevant goods or services.
Reviewing any agreements relating to the IPRs, such as licence agreements, encumbrances (pledges) and co-existence agreements.
Verifying that inventions of employees have been properly handled.
Except for copyright, all IPRs including the respective applications can be assigned. Future rights can be assigned if sufficiently specified. Due to the territorial nature of IPRs, assignment takes effect for the whole of Germany.
Patents and inventions can be assigned in whole or in part. In the latter case, both parties jointly own the right and title in and to the patent. For European patents, only the application can be assigned as a whole or in part. Once granted, the European patent is a bundle of national patents which have to be assigned separately for each designated state.
Registered and unregistered trade marks can be assigned in whole or in part (that is, for some of the goods or services). Any goodwill transfers automatically.
Copyright cannot be assigned but only licensed in whole or in part.
The same principles as for patents apply to utility models (see above, Patents).
The assignment of German IPRs does not require a specific form. Assignment can be agreed orally. The assignment should (but does not need to) be registered since the registration has a legitimising effect.
The following assignments must be in writing and signed by the parties:
European patent application.
Community trade mark.
Where a trade mark is divided, the split has to be notified to the DPMA.
The main terms that should be included in an assignment of IPRs include:
Scope of assignment (in whole or in part).
Undertaking to assign.
Assignment with effect in rem.
Acceptance of the assignment.
Obligation of the assignor to hand over all documents relating to the IPR.
Obligation of the assignor to assist in the recording of the assignment.
Assignment of any claims for past damages.
Assurance that the assignor is entitled to assign the IPR.
Generally, licences can be granted under all IPRs in whole or in part, in terms of scope, time and territory. For example, the licence to an IPR can be granted for use in relation to a particular product or product category only, or for a certain territory (even within Germany) or time period only. Licences can either be:
Exclusive licences (that is to the exclusion of the IPR holder himself).
Non-exclusive licences (which includes a sole licence meaning that only one licence is granted while the licensor reserves the right to exploit the IPR.
For some IPRs, certain aspects of licensing must be considered:
Patents are often licensed for a certain field of use only (for example, for a certain indication in the pharmaceutical area, or for specific technical or economic areas, such as in the automotive sector). Other technical fields of use can be licensed separately, provided the respective patent provides protection for such other fields.
In many cases, licences are granted for certain products, meaning that the products branded with the trade mark must comply with the specifications or (quality) requirements stipulated in the licence agreement. Under German law, no requirement to explicitly license goodwill exists. As a rule, licensing a trade mark to a third party will fulfil the use requirement for the benefit of the trade mark owner, provided the licensee actually uses the trade mark within the scope of the licence.
Generally, the scope of a licence will be interpreted narrowly, in such a way that it is only granted to the extent it is absolutely necessary to achieve the purpose of the underlying agreement (Übertragungszwecklehre). This concept is particularly strictly applied with respect to copyright licences (right of use/Nutzungsrecht), with the effect that, generally, every type of use for which a licence is granted, should be (and often is) explicitly mentioned in the agreement (for example, copying, publishing, making available to the public over the internet, and so on). Exclusive licences are of particular importance for copyright as copyright cannot be transferred under German law.
Licences for confidential information (know-how) are often combined with licences for patents. It is important to clearly identify the respective information.
Formal licences for trade names or company names are not possible under German law, but the respective company can enter into an obligation not to sue a third party, provided the name is not misleading.
Licences of patents do not have to be granted in a particular form (for example, in writing) to be valid. Registration of the licence in the patent register is not a condition for its validity, or for previous licence protection (Sukzessionsschutz) (that is, the principle that even if a patent is assigned or licensed to a third party, any subsequent act will not affect any licence previously granted).
The same principles as for patents apply. However, the registration of licences of Community trade marks (but not of German trade marks) in the trade mark register is necessary for the licensee to be able to enforce the licence against third parties, including previous licence protection.
A written form requirement only applies if the licence will cover types of use which at the time of grant of the licence are unknown, for example, types of use induced or enabled by future technical developments.
No formalities or registration are required for a valid licence of either German design rights or Community design rights licensed under German law. However, registration of licences of Community design rights is required to make the licence effective against third parties, as is the case with Community trade marks.
No formal requirements apply for know-how licences.
No particular requirements apply to licences for other IPRs.
The most important terms are the ones that define the terms of the grant of the licence, for example:
The scope of the licence in terms of:
subject matter (for example, restriction as to a particular field of use);
The right to grant sub-licences.
The right to transfer the licence.
In addition, the following terms should be included:
An obligation to maintain and defend the IPR.
A provision on who must/can enforce the IPR in cases of infringements, including provision on allocation of costs and proceeds, if any.
A provision on royalties, including a tax clause and modes of payment.
Liability (or exclusion of liability) in cases of invalidity and/or infringement of third parties' IPRs.
Security is commonly taken over all registered IPRs. In particular financial institutions try to obtain securities not only to individual, selected IPRs of the creditor, but to the full portfolio of its IPRs. This is because IPRs are rarely enforced selectively (that is, independently from collateral to other assets of the creditor).
Pledges over IPRs are rarely enforced according to the statutes. As a rule, pledged assets have to be enforced by way of a public auctioning procedure which is quite costly and has the disadvantage that only the individual assets are turned into money, but not the whole company (that is, all assets of the creditor (which is more favourable in terms of the remuneration to be obtained)). Therefore, in cases of insolvency of the creditor, the insolvency administrator sells the assets of the creditor as a going concern (together with the pledged IPRs) and gives the holder of the security a certain share in the purchase price, in return for releasing the pledge.
The two main security interests taken over IPRs are a pledge over an IPR and assignment of a pledge for collateral. The latter is most predominant in practice (except for copyright which cannot be assigned (see Question 6)).
There are no formal requirements for pledges or collateral assignments.
Both pledges and collateral assignments are taken over trade marks. For national trade marks, no formal requirements apply. For Community trade marks, the security agreement must be in writing to be valid. It is advisable to register the security in the trade mark register for Community trade marks, as this is a requirement for the security to have an effect against third parties, and therefore registration may be required to prevent a bona fide acquisition by a third party without security. Although this question is disputed among scholars, in any event registration is advisable.
Copyright is not transferable and cannot be pledged or assigned as collateral. Instead the right of use can be pledged.
No formal requirements exist with respect to national German design rights. For Community design rights, the situation is the same as for Community trade marks (see above, Trade marks).
For both a share sale and an asset sale, due diligence will be carried out in relation to:
Identifying the existing portfolio of IPRs.
Whether IPRs are actually used/sufficient to protect the business of the target against competition.
The existence and content of inbound and outbound licences.
Infringements or potential infringements of IPRs of the target by third parties or of IPRs of third parties by the target.
Compliance with the Act on Employee Inventions (AEI).
Any apparent invalidity risks (in particular, pending proceedings against IPRs, payment of annual or renewal fees and actual use of the trade marks).
Any agreements on joint ownership.
Creation of IPRs under research and development (R&D) agreements with third parties and/or with public subsidies.
Chain of title to IPRs.
See also Question 5.
For both a share sale and an asset sale, the seller will give warranties regarding:
Title to the IPR portfolio of the target.
Best knowledge that the IPRs of the target are not infringed and that the target does not infringe IPRs of third parties.
Compliance with the AEI and adequate remuneration up to the closing date (or date near by).
Best knowledge that IPRs are not subject to cancellation and that none or only some listed proceedings are pending.
IPRs are not encumbered and no licences exist.
Portfolio of IPRs and of inbound and outbound licences to be listed and to be warranted as true and correct.
Additional representations in carve-out types of transactions.
No separate transfer is necessary as ownership of the IPRs by the target remains unchanged.
All IPRs must be assigned individually in accordance with the applicable statutory laws in all countries concerned. The sale and transfer agreements should provide for a clause obligating the seller to take all acts necessary to perfect the transfer (for example, to give the appropriate declarations regarding patent offices).
Joint ventures (JVs) are sometimes used for high-end development projects with high R&D and IPR costs (for example, the development of battery technology for e-mobility systems in the automotive industry).
More frequently, co-operation agreements are entered into which encompass joint development and exploitation activities (such as manufacturing by one partner and distribution by the other). These agreements may, however, under German law, also be seen as founding a civil partnership (BGB- Gesellschaft).
In either case applicable competition provisions must be complied with(see Question 18). Agreements should include IPR-related provisions dealing with:
Licences regarding pre-existing background IPRs of the parties required for the project.
Ownership of IPRs developed in the course of the project (joint or individual according to the contribution of either party).
Exploitation of IPRs generated in the course of the project (for example, field of use delimitations).
Licences of IPRs owned by either party which are required for exploitation of the results of the JV/co-operation agreement.
Liability in case of infringement of IPRs owned by third parties.
Consequences of a dissolution of the joint venture.
Due to the nature of IPRs, which confer an exclusionary right, the exploitation of IPRs must comply with national competition law as well as European competition legislation (which applies where trade between member states is affected).
National competition law corresponds to Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and prohibits:
Agreements between two or more companies which restrict competition, subject to some limited exceptions (section 1, Act against Restraints of Competition (ARC)).
Companies who hinder another undertaking in an unfair manner in business activities which are usually open to similar undertakings, or treat it differently from similar undertakings without any objective justification, if the company is either:
in a dominant position in the market; or
has superior market power in relation to small- and medium-sized competitors, (sections 19 and 20, ARC).
Agreements between small- or medium-sized enterprises, whose subject matter is the rationalisation of economic activities through co-operation among enterprises, are exempted from the first prohibition rule provided that both:
They do not affect trade between member states.
Competition on the market is not significantly affected (section 3, ARC).
Restrictive provisions in technology transfer agreements
Competition law aims to prevent competitors from using technology transfer agreements (such as licensing agreements) for anti-competitive purposes, that is, to:
Share out markets between themselves.
Exclude competing technologies from the market.
Provisions which may have one of these effects are void and unenforceable and may even render the entire agreement void. Companies can be fined by the German competition authority up to a maximum of 10% of the total turnover they achieved in the last business year.
Examples of provisions which may be found to have an anti-competitive effect include:
Resale price maintenance (fixing of sales prices).
Allocation of markets or customers.
Restriction of a licensee to exploit its own technology or carry out further research and development.
These clauses may render the entire agreement void and therefore must be either removed from the agreement or amended in a way that puts them in line with the exceptions under the competition law (see Question 20).
Patent settlement agreements
Clauses in patent settlement agreements may be problematic, if they either:
Contain restrictions beyond the exclusionary scope of the patent, meaning that they would reach beyond its geographic scope, its period of protection or its material scope.
Are based on a patent for which the patent holder knows that it does not meet the patentability criteria.
In the pharmaceutical industry problems may be created by settlements that lead to a delay of a generic entry in return for a value transfer by the originator company to the generic company.
Abuse of patents
Owners of IPRs have a wide discretion whether and to whom they may grant licences under their IPRs. However, if access to a market is dependant on the use of an IPR, for instance if a product for compliance with a technical standard must use a patent (a so-called essential patent), competition law may require the owner of the essential IPR to licence it on fair, reasonable and non-discriminatory (FRAND) terms to any interested party. Industry standards often restrict access to the market for products and technologies that do not comply with the standard and therefore eliminate competition in terms of the technological format. Therefore, non-compliance with the licensing obligation can result in discrimination that restricts competition downstream.
This issue has been raised in several patent disputes relating to infringement of essential patents in particular in the telecommunications and consumer electronics industries. In these cases, the alleged infringer can use the defence that the patentee did not comply with the obligation to grant a licence on FRAND terms. The alleged infringer must then make an offer to the patent owner to take a licence on FRAND terms. The patent owner should grant the requested licence if the offer is in line with FRAND conditions and complies with further requirements established in case law. If the patent owner rejects the licensing offer, the action will be dismissed. However, there are still many open issues surrounding the competition law defence in patent disputes. Obtaining legal advice from IP and competition law specialists is therefore recommended.
The most important exemptions available from competition law restrains are the block exemptions under EU law. Transactions complying with their requirements are deemed to be in a safe harbour and are exempt from both applicable EU and national competition law. The block exemptions are:
Regulation (EC) 772/2004 on the application of Article 101(3) of the TFEU (formerly Article 81(3) of the EC Treaty) to categories of technology transfer agreements (Technology Transfer Block Exemption Regulation), dealing with technology licences.
Regulation (EU) 1217/2010 on the application of Article 101(3) of the TFEU to certain categories of research and development agreements (Research and Development Block Exemption), dealing with research and development agreements.
Regulation (EU) 330/2010 on the application of Article 101(3) of the TFEU to categories of vertical agreements and concerted practices (Vertical Restraints Block Exemption).
These Regulations together with the related guidelines issued by the European Commission, give guidance for drafting respective agreements. They apply to domestic cases irrespective of whether these cases may affect the trade between member states of the EU. The rules are complex and can only very roughly be outlined here.
Technology Transfer Block Exemption Regulation
The Technology Transfer Block Exemption Regulation applies to technology transfer agreements between two companies (not for patent pools or other agreements between more than two parties) which enable the manufacturing of certain products (contract products). Application also depends on the market shares of the parties:
If they are competitors, their joint market shares on the relevant technology and product market must not exceed 20%.
If they are not competitors, their individual market shares on the relevant technology and product markets must not exceed 30%.
The Technology Transfer Block Exemption Regulation also lists a number of:
Anti-competitive provisions which are not exempted from the general prohibition on anti-competitive agreements but do not affect the rest of the agreement, which can still benefit from the block exemption.
Hard-core restrictions (such as price fixing) which are not exempted and in addition take the entire agreement outside the protection of the block exemption.
Research and Development Block Exemption
The Research and Development Block Exemption governs, generally speaking, R&D agreements between two or more parties for joint R&D (with or without joint exploitation of the results). Where the parties are competitors, the Research and Development Block Exemption only applies where either:
The parties' market share on the relevant product and technology markets does not exceed 25%.
For paid-for research and development, the combined market share of the financing party and all the parties with which the financing party has entered into R&D agreements for the same contract products or contract technologies, does not exceed 25% on the relevant product and technology markets.
All parties must have full access to the final results of the joint R&D or paid-for research and development, including any resulting IPRs and know-how, for the purposes of further R&D and exploitation. Limitations are, however, possible regarding the rights of exploitation and with respect to research institutes, academic bodies, or other undertakings which supply R&D as a commercial service without normally being active in the exploitation of results.
Similar to the Technology Transfer Block Exemption Regulation, clauses are listed which are not exempt from competition law and which therefore must not be agreed to.
Vertical Restraints Block Exemption
The Vertical Restraints Block Exemption is less important for the exploitation of IPRs. It applies to agreements that fulfil both of the following conditions:
Under which the parties buy, sell or resell certain goods or services (for example, distribution, franchising, supply and agency agreements) between non-competitors.
Where the IPR provisions are not the primary object of the agreement.
For the block exemption to apply to a respective agreement, the market share of the supplier or, as the case may be, the buyer must not exceed 30% and the agreement must not contain a hard-core restriction.
Agreements falling outside a block exemption
If an agreement is outside of the block exemptions, an individual assessment will be required to establish whether either:
The agreement does not restrict competition.
Any restriction can be justified on efficiency grounds, subject to further preconditions being fulfilled.
Advertising laws prohibit the use of third party trade marks for unfair advertising. While a third party trade mark may be used in comparative advertising, provided that the comparison is objectively based on material, relevant, verifiable and representative features of the goods or service, a trade mark cannot be used:
In a confusing manner.
To take unfair advantage of the reputation of the third party trade mark.
To impair the reputation of the third party trade mark.
To offer goods or services as imitations of goods and services bearing a protected trade mark.
Employees and consultants
Generally, inventions are owned by the inventor. For inventions made by an employee in the course of employment, the AEI provides a mandatory mechanism for the notification, transfer and subsequent compensation of employee inventions. Due to the amendment to the AEI, inventions notified to the employer before 1 October 2009 are subject to a different regime than inventions notified after this date. The obligations include:
Under both the old and the new regime, the employee must notify the employer about any invention made in the course of the employment.
Under the old regime, the rights in and to the invention do not pass to the employer unless the employer laid claim to the invention by means of a communication in writing (including handwritten signature) received by the employee within four months after notification of the invention. Failure to properly lay claim to the invention can lead to the rights remaining with the employee, even if the company applies for a patent in the meantime.
Under the new regime, unless the employer specifically states in writing within four months after notification that he does not wish to claim the invention, the rights in and to the invention automatically pass to the employer, in which case he alone is authorised to exploit and patent the invention.
The employer must pay statutory compensation to the employee for the invention. Calculation of the amount due is based on complex guidelines.
German copyright law does not recognise a "work made for hire" doctrine. The owner of the copyright is the author, this includes an employee, even if the work has been generated in the course of employment. However, for software programs, the law provides that only the employer is entitled to exploit the work. For other works, the employee is only under a duty to grant a right of use to the employer free of charge if this is required by the content or nature of the employment agreement. Therefore, a diligent employer will include a comprehensive provision in the employment agreement which ensures that the employer is granted full rights of use and exploitation of all works created by employees as part of their duties.
The employer is entitled to all design rights and does not have to pay compensation, unless this has specifically been agreed otherwise.
The general rules of trade mark law apply and the applicant becomes the owner of the trade mark.
IPRs created by an external consultant are owned by the consultant, unless the agreement provides for an assignment, or for the grant of an exclusive right of use (for copyright protected works). It is advisable to include comprehensive provisions in the consultancy agreement that ensure the assignment, or grant of exclusive rights of use and exploitation of any IPRs created as part of the duties of the consultant.
For a licensing agreement between a foreign licensor and a German licensee (an inbound licence), withholding tax at a rate of 15.825% applies on the gross royalties paid by the licensee based in Germany for the use of IPRs in Germany (section 50a, Act on Income Tax). The withholding tax is payable by the licensee, unless:
A tax treaty applies and either:
the licensor has obtained a confirmation from the German tax authority that the requirements of relief under the tax treaty are fulfilled; or
the licensor has applied for reimbursement of the withholding tax.
Relief from withholding tax is available under Directive 2003/49/EC on interest and royalty payments.
For a licensing agreement between a licensor based in Germany and a licensee based abroad (an outbound license), the general principles of income taxation apply to royalties paid by the foreign licensee. For a corporate licensor, the aggregate rate of corporate and trade tax is about 30%. For an individual, the income tax rate ranges from 0% to 47.475% (depending on overall annual income). The German licensor should also consider the possibility of withholding tax being applied at the level of the foreign licensee (see above, Inbound licence). Therefore a licensor is best advised to have a gross-up clause in place for cross-border licensing.
Where a seller is based abroad without a permanent establishment in Germany, no withholding tax applies at source (this has been the case since 1 January 2009). Instead, general principles of German income taxation apply (see Question 24, Outbound licence). The seller has to file tax returns and pay tax, unless treaty relief has been obtained.
For a seller based in Germany, as a rule, the general principles of income taxation apply (see Question 24, Outbound licence). However, if the seller is an individual who complies with holding periods, the income from the sale may not be taxable.
The main international IP treaties to which Germany is a party are listed below:
WIPO Paris Convention for the Protection of Industrial Property 1883.
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS).
Patent Cooperation Treaty 1970 (PCT).
Strasbourg Agreement Concerning the International Patent Classification 1971 (IPC).
Revised European Patent Convention 2000 (EPC).
WIPO Patent Law Treaty 2000.
WIPO Madrid Agreement Concerning the International Registration of Marks 1891 (Madrid Agreement).
Protocol Relating to the Madrid Agreement 1989 (Madrid Protocol).
WIPO Trademark Law Treaty 1994.
Hague Agreement Concerning the International Deposit of Industrial Designs 1925.
WIPO Berne Convention for the Protection of Literary and Artistic Works 1971 (Berne Convention).
Universal Copyright Convention for the Protection of Literary and Artistic Works 1952.
In addition to international IP treaties, EU IPR-related legislation is relevant for IP in business transactions in Germany (for example, Regulation (EC) 207/2009 on the Community trade mark (Community Trade Mark Regulation), Regulation (EC) 6/2002 on Community designs (Community Designs Regulation), as well as various Directives).
The principle of territoriality applies to IPRs and generally, an IPR must be granted in Germany to take effect in Germany. Foreign IPRs are recognised in Germany to the extent set forth by international IP treaties (see Question 26) and claims for infringement of foreign IPRs can be brought in Germany if German courts have jurisdiction (for example, if the defendant is based in Germany).
The EU patent reform process which aims to implement unitary patent protection as well as a unified EU patent court is progressing. In December 2011, the European Council and the Parliament reached a provisional agreement on the two draft regulations implementing enhanced co-operation in the area of unitary patent protection, one regarding the EU patent itself (Unitary Patent Regulation) and the other on the applicable translation requirements (Language Regime Regulation). The use of the enhanced co-operation procedure was necessary since Spain and Italy did not agree to the translation requirements to be implemented by the proposed regulation in 2011. It is estimated that the creation of a unified EU patent by the two proposed regulations could be achieved by 2013 if the Court of Justice of the European Union does not reject the enhanced co-operation.
The third pillar of the patent system, the creation of a Unified Patent Court (having jurisdiction over European patents and the unified EU Patents) is still pending final agreement on the seat of the central instance of the court.