Plans for a European Union-wide patent - a key part of the EU's strategy for making businesses more competitive - have been shelved indefinitely.
The patent would have cut costs for drug firms
The proposal was put on the back burner on Tuesday after officials from the 25 EU countries failed to patch up their differences over the issue.
Unless fresh proposals are drafted, the plan is now likely to be abandoned.
The patent would have allowed firms to protect their inventions across the whole EU with a single application.
The European Commission, which proposed the measure, claimed it would halve the average cost of protecting intellectual property throughout Europe.
The patent proposal was a central plank of a strategy, set out four years ago at a summit of European leaders in Lisbon, to transform the EU into the world's most competitive economy by 2010.
The EU's failure to get the patent off the ground marks a setback to the so-called Lisbon Agenda, already tarnished by Europe's recent sluggish growth record.
The proposal came unstuck after EU officials were unable to reach final agreement on how many languages patent applications should be translated into.
The European Commission said it had not yet decided whether to re-draft the proposal in an effort to get around the remaining obstacles.