The European Union has failed to agree a new, slimmed down patent system, after a dispute over whether companies should be allowed to apply for a patent in Spanish or Italian scuppered talks.

Michel Barnier, the European commissioner for the internal market, said the failure to agree the creation of an EU-wide patent would have “serious consequences”.

The EU has been trying to reform its patent system for over a decade. Currently, a company that wants to protect its intellectual property across the trading bloc has to apply for a separate patent in each of its 27 member states. This is too expensive, costing companies ten times more than they would pay in the US, Barnier said.

“The absence of a European patent hinders our competitiveness, hinders European innovation, research and development,” he added. “In the midst of the economic crisis, it is not the right signal.”

The EU was close to agreeing a deal this week, but talks failed when Spain and Italy refused to support it.

Under the proposed system, companies would be able to file an EU-wide patent application, but it would have to be written in either English, French or German.

The Spanish and Italians didn’t like the fact that their languages were excluded, even though the EU offered to pay for translation.

The EU is now looking at getting the measure through under its “enhanced co-operation powers”, which would let the members who support a common patent system go ahead without the dissenters.

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