The Court Fees were agreed last week by the Preparatory Committee. They are divided between Fixed and Value-based Fees.
Fixed Fees start at 100€ for an Application to prolong the period of a protective letter kept on the register and go as high as 20,000€ for a Revocation action.
As for Value-based Fees, there will be none for an action up to and including 500.000€ and will reach 325.000€ for an action valued at more than 50.000.000€.
This post will look in detail at the different categories of fees and at the method chosen by the Preparatory Committee to value the action.
It will refer to the “Guidelines for the determination of Court fees and the ceiling of recoverable costs of the successful party” and the “Rules on Court Fees and Recoverable Costs” both published by the Preparatory Committee on the UPC website on 25/02/2016.
Actions requiring a Fixed AND Value-based Fee:
Claimants must pay a fixed and a value-based fee for the five following actions:
(1) Infringement action [R. 15]
(2) Counterclaim for infringement [R. 53]
(3) Action for declaration of non-infringement [R. 68]
(4) Action for compensation for license of right [R. 80.3]
(5) Application to determine damages [R. 132]
First Instance
Tables of Fees (Fixed Fee and Value-based Fee):
Procedures/actions Fixed Fee
Fixed fee Infringement action [R. 15] 11.000 €
Counterclaim for infringement [R. 53] 11.000 €
Action for declaration of non-infringement [R. 68] 11.000 €
Action for compensation for license of right [R. 80.3] 11.000 €
Application to determine damages [R. 132] 3.000 €
Value of action Additional Value-based Fee
Up to and including 500.000 € 0 €
Up to and including 750.000 € 2.500 €
Up to and including 1.000.000 € 4.000 €
Up to and including 1.500.000 € 8.000 €
Up to and including 2.000.000 € 13.000 €
Up to and including 3.000.000 € 20.000 €
Up to and including 4.000.000 € 26.000 €
Up to and including 5.000.000 € 32.000 €
Up to and including 6.000.000€ 39.000 €
Up to and including 7.000.000 € 46.000 €
Up to and including 8.000.000 € 52.000 €
Up to and including 9.000.000 € 58.000 €
Up to and including 10.000.000 € 65.000 €
Up to and including 15.000.000 € 75.000 €
Up to and including 20.000.000 € 100.000 €
Up to and including 25.000.000 € 125.000 €
Up to and including 30.000.000 € 150.000 €
Up to and including 50.000.000 € 250.000 €
More than 50.000.000 € 325.000 €
Appeal
Tables of Fees (Fixed Fee and Value-based Fee):
Appeals/Applications Fees
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to an infringement action [R. 15] 11.000 € + additional value-based fee according to the value of the action (see below for its method of calculation)
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to a counterclaim for infringement [R. 53] 11.000 € + additional value-based fee according to the value of the action (see below for its method of calculation)
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to an action for declaration of non-infringement [R. 68] 11.000 € + additional value-based fee according to the value of the action (see below for its method of calculation)
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to an action for compensation for license of right [R. 80.3] 11.000 € + additional value-based fee according to the value of the action (see below for its method of calculation)
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to an application to determine damages [R. 132]
3.000 € + additional value-based fee according to the value of the action (see below for its method of calculation)
Value of action Additional Value-based Fee
Up to and including 500.000 € 0 €
Up to and including 750.000 € 2.500 €
Up to and including 1.000.000 € 4.000 €
Up to and including 1.500.000 € 8.000 €
Up to and including 2.000.000 € 13.000 €
Up to and including 3.000.000 € 20.000 €
Up to and including 4.000.000 € 26.000 €
Up to and including 5.000.000 € 32.000 €
Up to and including 6.000.000€ 39.000 €
Up to and including 7.000.000 € 46.000 €
Up to and including 8.000.000 € 52.000 €
Up to and including 9.000.000 € 58.000 €
Up to and including 10.000.000 € 65.000 €
Up to and including 15.000.000 € 75.000 €
Up to and including 20.000.000 € 100.000 €
Up to and including 25.000.000 € 125.000 €
Up to and including 30.000.000 € 150.000 €
Up to and including 50.000.000 € 250.000 €
More than 50.000.000 € 325.000 €
See section 3 for the valuation method
Actions requiring a Fixed Fee only:
First Instance
The following actions require a Fixed Fee only :
(1) Revocation action [R. 47]
(2) Counterclaim for revocation [R. 26]
(3) Application for provisional measures [R. 206.5]
(4) Action against a decision of the European Patent Office [R. 88.3, 97.2]
(5) Application to preserve evidence [R. 192.5]
(6) Application for an order for inspection [R.199.2]
(7) Application for an order to freeze assets [R. 200.2]
(8) Filing a protective letter [R. 207.3]
(9) Application to prolong the period of a protective letter kept on the register [R.207.8]
(10) Application for rehearing [R. 250]
(11) Application for re-establishment of rights [R. 320.2]
(12) Application to review a case management order [R. 333.3]
(13) Application to set aside decision by default [R. 356.2]
Table of Fees (Fixed Fees):
Procedures/actions
Fixed Fee
Revocation action [R. 47] 20.000 €
Counterclaim for revocation [R. 26] Same fee as the infringement action subject to a fee limit of 20.000 €
Application for provisional measures [R. 206.5] 11.000 €
Action against a decision of the European Patent Office [R. 88.3, 97.2] 1.000 €
Application to preserve evidence [R. 192.5] 350 €
Application for an order for inspection [R. 199.2] 350 €
Application for an order to freeze assets [R. 200.2] 1.000 €
Filing a protective letter [R. 207.3] 200 €
Application to prolong the period of a protective letter kept on the register [R. 207.8] 100 €
Application to review a case management order [R. 333.3] 300 €
Application to set aside decision by default [R. 356.2]
1.000 €
Court of Appeal
The following actions require a Fixed fee only:
(1) Appeal pursuant to Rule 220.1 (a) and (b) [R 228]
(2) Interlocutory appeals [R. 220.1 (c)]
(3) Application for leave to appeal [R. 221]
(4) Request for discretionary review [R. 220.2, R. 228]
(5) Application for re-establishment of rights [R. 320.2]
(6) Application to review a case management order [R. 333.3]
(7) Application to set aside decision by default [R. 356.2]
Table of Fees (Fixed Fees):
Appeals/applications Fee
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to an application for provisional measures [R. 206.5] 11.000 €
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to a revocation action [R. 47] 20.000 €
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to a counterclaim for revocation [R. 26]
Fee paid in the first instance
Application for rehearing [R. 250] 2.500 €
Appeal pursuant to Rule 220.1 (a) and (b) [R 228] as to an action against a decision of the European Patent Office [R. 88.3, 97.2] 1.000 €
Interlocutory appeals [R. 220.1(c.), 228] 3.000 €
Application for leave to appeal against cost decisions [R. 221, 228] 1.500 €
Request for discretionary review [R. 220.3, 228] 350 €
Application for re-establishment of rights [R. 320.2] 350 €
Application to review a case management order [R. 333.3] 300 €
Application to set aside decision by default [R. 356.2] 1.000 €
How to determine the value of the action when faced with a value-based fee:
The governing principles of valuation
Where the parties agree on a valuation the Court should in principle base its valuation on their estimate.
If the parties do not agree on the valuation, the “Guidelines for the determination of Court fees and the ceiling of recoverable cost of the successful party” set a method for the UPC Judges to follow:
- The main principle is that valuation should be as simple as practically possible.
- Valuation should therefore be based on “an appropriate license fee”.
- A valuation based on the claimant’s loss of profits or the defendant’s profits gained may also be applied, where appropriate, but the Preparatory Committee warns that it “will normally be too complex to be determined at the beginning of proceedings resulting in a mini-trial”.
- Valuation should also relate to the summed up values of the main remedies claimed (injunction for the future, damages for the past), not excluding, where appropriate, the value of other remedies claimed.
If the amount of payable Court fees threatens the economic existence of a party who is not a natural person, who has presented reasonably available and plausible evidence to support that the amount of Court fees threatens its economic existence, the Court may upon request by that party, wholly or partially reimburse the fixed and value-based fee. The request shall be dealt with by the Court without delay. In reaching a decision the Court shall reflect on all circumstances of the case including the procedural behaviour of the party. Before making such a decision the Court may give the other party an opportunity to be heard. A party who is adversely affected by the order may bring an appeal pursuant to Rule 220.
The Suggested Approaches
(1) Infringement action / Action for Declaration of non-Infringement / Action for compensation for license of rights
(a) Determining the value for applying the Rules on Court fees & (b) Determining the value for applying the Rules on recoverable costs:
The calculation of the value of the injunction claim and for the damage claim should be based on a royalty calculation as follows:
- The defendant’s turnover in the alleged infringing product for the future up to the expiry of the patent (injunction claim) and for the past (damage claim) should be calculated based upon the known existing turnover of the defendant or, if not known or not yet existent, the market share the defendant has taken and/or may reasonably be assumed to take.
- A royalty rate should be applied to the defendant’s turnover based upon: (a) the existing royalty rate for the same invention charged by the claimant, or (b) the generally accepted industry rate for the type of invention in question, or (c) a royalty rate determined by the Court after hearing the parities.
- Where a damage claim (i) is limited to awarding damages in principle, the value of that claim should be reduced by 50%; (ii) specifies the amount of damages, the value should correspond to the amount claimed.
- The value of an Application for the Determination of Damages including any Request to lay open books should correspond to the amount of damages specified in the Application or if no such sum is specified the value as calculated in accordance with the defendant’s turnover and the royalty rate applying to this turnover.
- If the action is based on more than one patent and/or if the action is directed against more than one party the value should be calculated in accordance with the defendant’s turnover and the royalty rate applying to the defendant’s turnover on the basis of a combined license for all patents and all defendants across all territories covered by the patents.
(2) Counterclaim for revocation / revocation actions
(a) Determining the value for applying the Rules on Court fees:
There is no need to determine the value of revocation counterclaims or revocation actions since for both actions there is only a fixed fee to be paid.
(b) Determining the value for applying the Rules on recoverable costs:
- The value of a counterclaim for revocation or of a revocation action should be determined having regard to the value of the patent to be revoked.
- In the absence of relevant information (i) the value of a revocation action may be assumed to be equal to the value of an appropriate license fee calculate on the basis of the turnover of the parties for the remaining lifetime of the patent, (ii) the value of the revocation counterclaim may be assumed as being equal to the value of the infringement action (1. (a), above) plus up to 50%.
- If the action concerns more than one patent, the value of each patent should be calculated separately and the values determined should be added together to become the value of the action.
- The value of the infringement action and the value of the revocation counterclaim pending before the same division should be added together for determining the level of recoverable costs.
(3) Application for interim relief pursuant to Article 62 of the UPC Agreement
(a) Determining the value for applying the Rules on Court fees:
There is no need to determine the value of an Application for interim relief since for such an Application there is only a fixed fee to be paid.
(b) Determining the value for the Rules on recoverable costs:
In case of the application for interim relief which is not followed by an infringement action on the merits the value of an application for interim relief for determining the level of the recoverable costs should be calculated at 66% of the value calculated in accordance with 1. (b) above.
Payments and Reimbursements of Fixed and Value-based Fees:
- The issue as to when to assess the case value and pay the value-based fee was discussed in depth by the Expert Panel of the Preparatory Committee. The Panel recommended that claimants make their own value assessment and pay the fee based on that at the same time as the fixed fee; that is when lodging the relevant application. If there is any contention over the assessment this will be rectified at the interim conference.
- If the action is heard by a single judge (Rule 345.6.) the party liable for the Court fees will be reimbursed by 25 %.
- In case of the withdrawal of an action (Rule 265) the party liable for the Court fees will be reimbursed by:
- 60 % if the action is withdrawn before the conclusion of the written procedure
- 40 % if the action is withdrawn before the conclusion of the interim procedure
- 20 % if the action is withdrawn before the conclusion of the oral procedure
- If the parties have concluded their action by way of settlement the party liable for the Court fees will be reimbursed by:
- 60 % if the action is settled before the conclusion of the written procedure
- 40 % if the action is settled before the conclusion of the interim procedure
- 20 % if the action is settled before the conclusion of the oral procedure
- Only one of the reimbursements referred to in subsection (a), (b) and (c) will apply per action and party. Where more than one reimbursement is applicable, the larger will be applied for each party.
- In exceptional cases, having regard, in particular, to the stage of the proceedings and the procedural behavior of the party, the Court may decide to deny or decrease 6 / 21 the reimbursement according to subsection (b) and (c) of the aforementioned provisions.