Although there were proposals for the creation of a European Patent system in the early 1960's shortly following the creation of the European Common Market, the real impetus to unification of European patent law came from considerations of cost rather than any real drive to avoid legal anomalies, although the harmonization of laws was a real subsidiary factor.[2] Prior to creation of the European system, the cost of securing patents throughout Europe was becoming prohibitive for all but the most affluent of applicants. The European Patent Convention (EPC) by permitting applicants to file and prosecute a single application that would give rise to a bundle of rights in may countries provided a means for effecting a substantial reduction of costs and also deferral of translation costs (always a major part of the cost of securing patent protection) until after the applicant was sure that it would secure a patent.

The success of the venture is shown by the fact that the EPO received 123,000 applications in 1999 and the rate of growth is approximately 8% per annum.

The EPC created the European Patent Office (EPO) in Munich to act as a central searching and examining authority for applications filed designating a number of different European countries. The E P C in principle has nothing to do with the European Community (EC) or Union (EU), since it was not created by the Community authorities but rather by a separate treaty between the participating countries. However, in practice it is clearly a major force in harmonizing European Patent law. Indeed for many years Ireland and Portugal were members of the EC but only joined the Patent Convention in 1993. Austria and Sweden were members of the Convention long before joining the EC. Today, Cyprus, [3] Switzerland and Monaco are members of the convention, but are not members of the EC. Furthermore, five countries of Central Europe have implemented agreements to become affiliated with the European Patent Office so that it is possible to obtain patent protection for Albania, Latvia, Lithuania, the Former Yugoslav Republic of Macedonia, Romania and Slovenia through an extension of a patent obtained through the EPO [4].

Turkey is due to join the EPC during 2000 and Bulgaria, Czech Republic, Estonia, Hungary, Poland, Roumania, Slovenia and Slovakia have agreed that they will become members of the European Patent Convention on July 1, 2002.

The purpose of the Convention, as set out in Article 1, is to create a system of law common to the contracting states for the grant of patents of invention. To this end, the Convention had to set out what constitutes a patentable invention, what steps had to be taken in order to secure protection for such a patent and keep it in force, and also make provision for a common interpretation of patents granted.

It should, however, be noted that the Convention leaves to the courts of the member states the questions of whether a particular applicant is entitled to a patent vis a vis other claimants from whom the first applicant may have obtained the invention [5] and of the enforcement of rights arising from a European Patent.

In addition to filings of patent applications with the European Patent Office, national filings still continue and it is still possible to secure a patent in a single member state or in several member states by filing with the national Patent Offices.

In order to understand what was achieved by the European Patent Convention, it is perhaps worthwhile stopping briefly to look at the situation as it existed prior to the Convention coming into effect. Perhaps the only thing common to all systems prior to the European Patent Convention was that to be patentable, something had to be new and inventive. Even with this the definition of "new" varied from country to country. Thus, in the United Kingdom, something simply had to be new within the United Kingdom and the fact that it had been published elsewhere in the world was irrelevant. In Germany, publications anywhere in the world counted as a bar, but use of the invention would only bar the grant of a patent if that use had been in Germany. Furthermore, any publication that was more than 100 years old was discounted on the basis that if nobody had seen fit to put an invention into practice within the past 100 years or had written about it within the past 100 years, then it was just as much use to society to resurrect the invention now as it would be to have invented it from scratch. In France, even the idea that there had to be some measure of inventivity, or non-obviousness, to use American terminology, was new. Prior to 1968, the only requirement in France was novelty. In Belgium and Italy, patents were granted automatically on filing and it was left to the court subsequently to determine whether they were valid or not. In France, the search was carried out, but the Patent Office did not have the power to refuse the grant of a patent based on that search. In the United Kingdom, examination was carried out, but the Patent Office was not given the right to refuse a patent in ex parte proceedings on the ground of obviousness. In Germany, the Patent Office was given the power to refuse the grant of a patent on the ground of obviousness. Furthermore, one had to demonstrate to the German Examiners that the invention constituted a technical advance in the art, that is to say, that it was better than what had gone before. The toughest examination under the old procedure, however, was in the Netherlands where the Patent Office was fairly firmly convinced that everything was obvious.

The differences were not confined to methods of obtaining patents and the standards by which they were to be judged. There were and are also significant differences in how patents were to be interpreted by the courts.

While considering the effects of its antecedents on the European Patent Convention, a preliminary point worth noting from the point of view of comparative law is that, notwithstanding the civil law traditions of most member states of the European Patent Convention, the law in the European Patent Office has essentially developed on a case law basis with appeal boards frequently citing earlier decisions in their reasoning in the case before them. This is not to say that they regard themselves as bound by earlier precedents. Except for the comparatively rare decisions of the Enlarged Board of Appeals, they do not. Furthermore, the Enlarged Board of Appeals is itself not bound by its own decisions.

[6] Nor do Examiners regard themselves as necessarily bound by an earlier appeal board decision. But the Appeal Boards do regard it as their duty to ensure that the law develops in a coherent way. Thus, looking at the way in which previous cases have been decided is a useful way to try to predict the outcome of new cases to be decided[7]

When the EPO opened its doors in 1978, it did not have an entirely blank sheet of paper on which to write the applicable law.

Three documents were already in existence:

So far, there has been only one amendment of the Convention itself: to permit member states to provide for extension of the duration of European Patents in cases where marketing of the invention was delayed by the need to obtain governmental approval, for example in the case of medicinal products.[8]

The Implementing Regulations have been amended several times over the last thirteen years. However, the principal development of the law, which has in turn resulted in amendments to the guidelines, has evolved from decisions of the Appeal Boards. The Boards are the final arbiters of the law to be applied by the EPO. Members are appointed for terms of five years by the Administrative Council. [9] They are required to operate without instructions from the EPO, being guided solely by the terms of the Convention itself. [10] There are currently thirteen Technical Appeal Boards (four chemical, five mechanical, two electrical and two for other aspects of physics), a Legal Appeal Board, a Disciplinary Board of Appeal and an Enlarged Board of Appeals to which any of the normal Boards of Appeal may refer a matter of outstanding importance. [11] Additionally the President of the EPO may refer a point of law to the Enlarged Board in situations where two ordinary appeal boards have given different decisions on the same legal issue. [12] It is normal for the Appeal Boards to issue decisions of the Board as such and not to give opinions of individual members. However, there is nothing to prevent a minority view from also being given. [13]

The European Patent Office has its headquarters in two separate buildings in Munich. One houses the administrative staff, the boards of Appeals and some of the examining groups, and the other houses the chemical and many of the mechanical examining groups. There are sub-offices in Berlin, the Hague and Vienna. Most searching is done in the former IIB facility in the Hague, but some is done in the other two branch offices. Initial filing formalities are dealt with in the Hague. Vienna is the source of the EPO's publications and software products.