EXECUTIVE SUMMARY: Technological advances are a key factor in sustaining economic growth. In a globalized economy, it is becoming increasingly difficult to innovate, and the rents of innovation in some technological areas are difficult, if not impossible, to appropriate without legal protection. Patent protection can be an essential factor in determining whether to invest in research and development in certain industries, which several studies have shown is the case in biotechnology. In a globalized economy, the need for patent protection in more than one country becomes more and more important, and it is possible to obtain a patent in more than one of the member states of the European Patent Convention, via one single patent application to the European Patent Office. However, the legal basis for decisions made by the EPO lies solely in the European Patent Convention, and EU law does not bind the EPO. In this thesis, I will show that based on the recent interpretation of the Biotechnology Directive by the European Court of Justice, the EPO has given patent protection to inventions regarding human embryonic stem cells, which will most likely not be upheld by the national courts, rendering the patents inevitably worthless. This is problematic, as many inventors apply for patent protection in the EPC countries via the EPO, meaning that patents awarded before the decision of the ECJ are now unenforceable in the national courts of EU member states. EU law is binding on the member states of the EU, including preliminary rulings by the ECJ. The decision of the ECJ is not binding on the EPO, but the EPO has stated that it will follow the interpretation given by the ECJ in order to avoid this problem in the future. The EU has recently made further efforts to harmonize patent regulations, which leads me to the question of whether or not harmonization leads to Kaldor-Hicks efficiency. The issue here is what effects perfect harmonization of patent regulations in Europe will have on future innovation in biotechnology, and whether the costs of harmonization will outweigh the benefits in regards to biotechnological inventions in comparison to individualization of the patent system. I have arrived at the conclusion that a perfect harmonization of the patent system will be to the detriment of innovation in biotechnology and biomedicine, which is not Kaldor-Hicks efficient, and goes against one of the main purposes of the patent system, which is to give incentive to invent by rewarding inventive activity. However, the patent reform that has been negotiated into agreement by 25 EU member states, is a better solution than perfect harmonization, as it allows for strategic consideration of the type of patent to apply for, which means reducing “hold-up” problems in comparison to perfect harmonization. At the same time, the patent reform ensures legal certainty by harmonizing practice in regards to patent cases, to the benefit of patentees as well as third parties.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||121|