economic viability within the European
landscape. Innovators who develop unique
technologies which address these specific
challenges may find themselves well placed
to benefit hugely fromwhat is expected to
become a strong emerging industry over
the next twenty years.
The second layer of uncertainty stems
from the regulatory environment within
Europe. Europe is at present divided on
whether shale extraction is a positive or
a negative activity. Given that shale plays
may be located close to cities, towns and
villages, or areas of natural beauty, there is
understandable concern over the safety of
shale extraction techniques. Governments
therefore have difficult decisions to make
on whether to permit shale extraction,
especially in view of public opposition.
The UK is currently one of the leading
European territories in favour of permitting
shale extraction, and exploration licenses
were granted at a number of sites in
2015/2016. Countries such as Poland and
Romania are thought to have sizeable shale
reserves, and the governments of those
countries are in favour of permitting shale
extraction. We have however seen major
US oil and gas companies entering these
territories for shale exploration purposes
and subsequently pulling out, citing poor
test results among other concerns. In
contrast, countries such as France, which
appears to have significant shale reserves,
are currently prohibiting shale extraction
using existing technologies. Similarly,
Germany appears to have reasonable shale
potential but is restricting exploration at
present. Thus, there are territories which
appear to have the potential to support a
local shale industry, yet at present, due to
concerns over the technologies currently
available for shale extraction, progress
towards unlocking the potential in these
countries is being stifled.
Innovators seeking to exploit this emerging
market are therefore faced with a dilemma:
in which European territories do they seek
patent protection? Do they take the less
costly but risky approach of gambling on
which territories might be commercially
important over the next 10 to 20 years,
and seeking patent protection in only those
territories, or do they take the safer but
much more expensive approach of covering
all bases?
Under the current European patent
system, a patent owner must at the point
of grant nominate the territories in which
the European patent is to be made to have
effect. For a given country, the cost of this
validation process will include an official
fee payable to the national patent office
and may require the filing of a translation
of the patent specification into the national
language of the territory. For a patent owner
to validate its European patent in all EPC
member states, the cost is significant.
However, help may be at hand in the form
of the Unitary Patent Package. As explained
elsewhere in this issue, the Unitary Patent
will provide a single patent right covering all
of the EUmember states that have signed
up to the relevant agreements. Given that
many of the countries which appear to
have significant potential for being key shale
territories are within the EU, the ability to
cover all of these territories together via
the Unitary Patent is of significant benefit
to innovators within the European shale
industry. We estimate that savings of
between €25,000 and €65,000 (depending
on the size of the patent specification) can
be made at the validation stage by validating
a granted European patent as a Unitary
Patent rather than individually validating in
each of the corresponding countries. More
significantly, we estimate that the cost of
maintaining a Unitary Patent over its full
potential 20 year term could be reduced
by as much as €125,000 in comparison to
nationally renewing each national patent in
the corresponding state.
Of course, it is not all about cost. Patentees
should weigh up the potential cost benefits
against other considerations such as
whether the patents should be within
the exclusive jurisdiction of the Unified
Patent Court and the ability to drop the
patent in individual countries, which will
not be present under the Unitary Patent
Package. However, we think that for the vast
majority of innovators within this sector, the
Unitary Patent will be viewed as a welcome
commercial tool.
To find out more
contact Stuart Latham
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