Last December's dispute involving the European Patent Office, the French National Patent Office (INPI) and Questel led to a three-week suspension of updates to the EPAT file. Although the updates were quickly restored the issues raised by the dispute have yet to be resolved.

The beginnings of the dispute can be traced back to 1983, when the Administrative Council of the EPO decided it would allow third parties to distribute the EPO's internal database of patent information. Initially, this was restricted to European hosts nominated by their national patent office.

In practice, it meant that Questel acquired a privileged position as the only distributor of the EPAT file - a database produced by INPI from data supplied by the EPO - and paid only a marginal cost for being so.

In 1988, however, the Administrative Council relaxed the rules determining who can distribute EPO data and decided that it should be sold at market prices. In line with this decision, and following the EPO's acquisition in 1991 of INPADOC, a service which had historically sold its data commercially the EPO revised its charging structure and signed distribution agreements with both Dialog and STN. Under these contracts it was agreed that the hosts would pay a royalty fee of 40% to the EPO.

The EPO then began to exert pressure on Questel to agree to similar terms. Not surprisingly, Questel resisted. As Questel.Orbit President, Fr‚d‚ric Spagnou, explains: "We have a contract for the dissemination of patent information, including the EPO databases, directly with INPI. We see no reason for breaking that contract."

After two years of unsuccessful negotiations with Questel.Orbit, the EPO took the unusual step of unilaterally suspending updates to INPI, pulling the plug in early December, to the dismay - and anger - of EPAT users.

As Stuart Kabak, Scientific Advisor at Exxon Research & Engineering, puts it: "The EPO held users hostage to try and resolve its dispute. It got me very, very angry. People should be able to resolve their differences without making consumers suffer."

In response to user complaints a meeting of the EPO Administrative Council was hastily called. Explains Swedish delegate to the Council, Lars Bj”rklund: "There was agony among the delegations that the EPO and one of the larger member countries were having such a fight, and the Heads of Delegation decided that the EPO should resume delivery immediately, with a retroactive solution to be agreed in the spring."

So why such a fuss? Surely the EPO is only doing what any database producer does: selling information at what it considers to be a fair market price. The problem, says G‚rard Giroud, the EPO's Principal Director of Patent Information, is that Questel is finding it hard to give up its privileged position.

"Until now they have purchased our data at around 7-8% royalties, so they are not happy at having to pay 40%. They also don't like the fact that the data is being offered to other hosts."

To support their case, adds Mr Giroud, the French are trying to present Questel as an operating arm of the French Patent Office, rather than a commercial provider. "But Questel is competing on the world market with other commercial hosts and operating the same pricing policy. It would be difficult for the EPO to make a special case for it," he says.

INPI's Serge Chambaud dismisses the EPO's arguments. The issue at the heart of the dispute, he argues, is that the EPO is seeking to extend its brief.

"Our concern is that the EPO is changing its mission and pushing the Administrative Council into taking decisions that will result in its becoming a commercial information producer, and eventually an online host."

Ursula Schoch-Grbler, Vice President Scientific Information at BASF in Germany, believes the dispute raises fundamental questions about the respective r“les of the public and private sectors; and recent moves by the EPO, she fears, threaten to destabilise the market for patent information.

On the one hand, she argues, the EPO has been undercutting the market for patent information by selling CDROMs at a price that can only be sustainable by cross-subsidy from applicants' fees. On the other hand, it is threatening to squeeze the profits of commercial operators by imposing royalty charges.

This policy, she warns, may result in the commercial services pulling out of the patent information market. "This would be disastrous because it is they who provide the value-added databases. Moreover, the EPO would become a monopoly provider, so there would be no information source available with which applicants could challenge the decisions of patent offices."

Mr Giroud dismisses these fears as unfounded."The EPO has agreed not to become a host," he says. "And we have no intention of competing with commercial vendors."

For Ebe Ilmaier, Head of Information & Systems at Shell International Research MIJ B.V., the EPO's policy raises fears that users will be double-charged for patent information.

"We pay between DM3000 and 4000 to apply for a patent," she explains. "These and other fees finance the EPO system and it is our data that they are selling. So when commercial hosts pass on the royalties to us, as they will do, we will end up paying twice."

Mr Giroud refutes this, as he does the suggestion that applicant fees are subsidising information products. Rather, he says, revenue earned from selling patent information is subsidising patent app-lications.

"The number of users is greater than the number of applicants. Besides, if we can't raise money from patent information, application fees will have to increase."

So how will the matter be resolved? Ms Schoch-Grbler thinks it is time to re-examine the r“le patent offices are expected to play. "Their job should be one of explaining and disseminating patent information to the public, not just bombarding them with 300 CDROMs a year."

"I think the Administrative Council is now aware that they have to make a stand," says Mr Giroud. "Either they should stick to their policy and explain how we administer it, or if they think a political compromise is necessary then we will be happy to implement it."

When it will be resolved is another matter. Mr Spagnou thinks a resolution could be delayed until the new President of the EPO takes office at the end of the year. "We are now in a transition period so a decision may not be possible until the new President arrives."