The EU Unified Patent Court and the Demand for European Governance

Conventional wisdom holds that firms and industry associations prefer less government regulation.  However, in the case of the EU, some firms and industry associations have been lobbying for an increase in EU regulation or EU governance authority, essentially demanding to be regulated. This is the case of the software industry and the creation of the EU Unified Patents Court. In June 2012, the European Council agreed to create a single patent and copyright system for 25 EU member states. Currently patents have been filed at the national level and face steep transaction costs across borders. In addition to administrative fees, technology firms litigate in 27 different member state courts. The preferences of firms with intellectual property concerns has evolved in the last few decades to a position in favor of more EU authority in the area of intellectual property rights.  In the case of EU patents, the primary private actors are the software industry, the Association for Competitive Technology (ACT), and other industry associations representing pharmaceutical and engineering firms. Under globalization pressures, these private actors often move faster than their regulatory government structures, and this creates two phenomena: 1) private sector recognition of the need for government regulation at the supranational level of governance in exchange for the creation of larger markets or more coherent regulatory agencies, and 2) private sector initiative in filling the governance gap at the supranational or international level by generating policy in the absence of appropriate institutions.