Tag: Court Fees

Posted on

The UPC Court Fees in detail: How much will we need to pay for each action before the UPC?

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 actionAdditional 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/ApplicationsFees
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 actionAdditional 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/applicationsFee
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.
Posted on

News Rules, new Judges and new Court Fees…The 14th meeting of the Preparatory Committee:

The Preparatory Committee met on 24th and 25th of February 2016 and published today the report of their 14th meeting. Here is what the Committee agreed upon:

Rules:

The Committee agreed on the Rules governing the Registry of the UPC and the Rules of Procedure of the Advisory Committee.

The Committee however decided to come back to the Arbitration Rules and the Rules of Operation of the Arbitration and Mediation Centre at its next meeting in April.

The Protocol on Privileges and Immunities was agreed by the Committee. This is an important achievement especially since it is necessary for a number of Member States to conclude their national ratification processes.

 

Judiciary:

The Committee agreed, by vote, on the judges’ salaries.

The Committee is close to be able to launch the recruitment process for the UPC judges, thanks notably to the Human Resource and Training Working Group who presented a timeline and draft application. The Committee therefore decided to launch the recruitment process in Spring 2016 for the UPC to take shape before the start of the provisional application phase.

 

Fees:

The Committee  agreed on the Rules  for the Court Fees and Recoverable Costs, which it published together with the Guidelines (for the UPC judges) for the determination of the Court fees and Recoverable costs.

See our post on Monday for more details.

 

Posted on

Consultation on Court Fees: What were the public responses ?

In May 2015, the IPO and CIFA organised a consultation on Court Fees. See our post here.  In July, the UPC Blog participated to the webinar organised by both organisations and summarised for you the  Background of the consultation, The Issues at stake in the consultation document and the Discussion that followed between the participants. These can be found here.

Finally, in its October Newsletter (See below), the EPLAW reveals that 146 responses were received, 68 from the Italian Chambers of Commerce, and identified the main issues raised by the participants:

  • greater clarity is required where multiple parties / patents are involved
  • the guidelines for the calculation of value-based fees should be published for comment
  • no value-based fee should be payable for a counterclaim for revocation the opt-out fees should be lower than 80 Euros
  • there is divided opinion on the desirability of alternative one as compared to alternative two to aid SMEs
  • the caps on recoverable costs are too high at the lower values of cases.
  • there should be a value-based fee for an application for a preliminary injunction

These responses were presented to the Preparatory Committee on 19th October who will present a final draft of Court Fees in February 2016 after negotiating with Member States.

Posted on

An update on the UPC consultation on Court fees and recoverable costs and the issues that this consultation raises:

On 23rd June was organised in London by the IPO and CIPA an event on the consultation launched in May by the Preparatory Committee on Court fees and recoverable costs. The consultation focuses primarily on Court fee structure, SMEs support, Opt-out and Recoverable costs. This event aimed at raising issues relevant to the consultation and encouraging responses from the general public.

You can see our post on the consultation here. The consultation documents can be found here. You can participate to the consultation by clicking here.  The link to the video of the IPO and CIFA event can be found here.

The UPC Blog participated to the webinar and has summarised for you the Background of the consultation, The Issues at stake in the consultation document and the Discussion that followed between the participants.

I. The background of the consultation:

The background was presented by Janis Makarewich-Hall (Head of UPC Taskforce at the IPO) who insisted that the court fees consultation document does not represent “a done deal”. The contents of this document could in fact evolve following the results of the consultation.

Janis  Makarewich-Hall explained that the propositions listed in the consultation document had first been circulated to all participating member states but that the responsibility for the fee structure was split between two committees: the legal and finance committees.

Part of the finance committee’s work is to calculate the court fees so that the court is self-sustaining by the end of the transitional period, this consequently entails a regular review of the fee structure. The structure however follows completely new rules specific to the Unified Patent Court and unrelated to national norms that were considered inappropriate.

II. What are the main points of the consultation?

Counter claim for revocation: The main issue at stake is whether a value-based fee (or high fee) is established or whether a low fixed fee is a better choice. The UK wanted a low fixed fee as it fears that a value-based fee could be seen as an impairment to the defence. The compromise that was suggested by the expert panel was to have both fees combined.

SMEs :  The second issue that is addressed by the consultation is the impact of the court fee structure on SMEs. In order to avoid adopting a fee structure that would be detrimental to SME a few options were considered. Some states wanted to focus and promote behaviours favoured by SMEs, such as early settlement. Others wanted more direct support with either reductions of fees or no value based fees. The consultation documents includes these two options and the public is invited to comment on what they think more suited to SMEs.

Recoverable costs: The maximum ceiling of 3 millions for recoverable costs has been controversial and some states have expressed their concerns considering that it is too high and therefore should be reduced.

Opt-out fee: Most member states felt that 100 euros would have been fair (after taking into consideration the administrative costs of the Opt-out procedure) based on an EPO estimate. A compromise of 80 euros was however agreed.

The consultation is opened until 31st July. All the responses will then be sent to the Preparatory Committee, which will take the final decision in its December and February meetings.

III. Discussion of the key points:

In the second part of the event the participants were invited to critically assess the propositions submitted in the consultation document.

 Court structure fees (Kevin Mooney, Simmons & Simmons):

Under Article 36,  during the transitional period, the UPC is financed by litigants  and its budget is balanced by member states’ contributions.  However it is important to note that the budget of the court has not yet been published;  it is thus impossible for users to know the financial assumptions underlying the level of court fees which justify the current fee structure.

The fees are fixed by the Administrative committee, and will evolve in line with the needs of the court. The fees are at the moment divided between fixed fees and value based fees. It is however not yet known when the value based fee will apply. Under article 370 there are 7 fixed fees with an additional value based fee, and 18 fixed fee only actions. The fixed fees start at 80 euros for the opt-out and go up to 20,000 euros for the revocation. Value-based fees will cost up to 220,000 euros for the most valuable cases (more than 30 millions). The guidelines that will determine the method of assessment of the value-based fee have not been published yet but it appears that the case will be valued on a notional royalty for the period of the alleged infringement. Moreover, the valuation should relate to the whole action.

One issue highlighted by Kevin Mooney is the fact that under Article 70, value-based fees should be paid in advance which reveals a problem of timing as the value might not be known from the start. Targeted support measures for small and medium-sized enterprises and micro entities may be considered. However the word “may” highlights the fact that it is not compulsory.

Kevin Mooney suggested moreover  to consider  the following questions when responding:

  • A value based fee for infringement action and for an application to determine damages will apply, when the fee should have initially covered the whole action. The same applies to appeals as the consultation document shows that there could be a further fee payable on appeal. So does this amount to a double payment of a value-based fee by the applicant ?
  • Should the value based fee element have been removed from the revocation actions? Should someone counterclaiming for infringement in a revocation action have to pay a value based fee? Is a value based fee appropriate for appeal actions? Is the Court not getting double fees in some circumstances?

Fee structure and SMEs (Justice Birss):

The consultation proposes three alternatives for the fee structure concerning the SMEs:

  •  Alternative 1 : would apply to SMEs only , which would have discounts based on the behaviours of SMEs such as the use of a single judge or early settlements.
  • Alternative 2 : would apply to SMEs and Universities, Public Organisation, micro-entities and Public research organisations. All of them could be exempt from value based fees.
  • Alternative 3 : would apply to any entity whose economic stability would be threatened.

 Justice Birss further highlighted two more systems that could benefit SMEs :

  • The first one is a cap on recoverable costs which would support SMEs. This has already proved effective in other jurisdictions but the necessary and appropriate levels would need to be discussed and agreed.
  • The second one would be a definition of what attracts value based fees that take directly take into consideration the needs of SMEs. A value-based fee for infringement for example would very detrimental to SMEs.

Opt out  (Richard Vary, Nokia):

As Richard Vary explained, a fee for opting-out and opting back in will apply to deter companies opting all or most of their patents in fear of the new court. The fee will be 80 euros for opt-out fees.

The opt-out fee however raises questions. Applicants will in fact be charged for a system they do not want to use and will therefore subsidise a system that they decided to leave. The direct financial consequence of that will be that the more people opt-out, the more money the court receives but the less work it has to do.

Richard Vary  also suggested that there should be a reduced opt-out fee for patentees who want to opt-out more than one patent, as he believes the administrative costs is unlikely to increase when dealing with patents that all belong to the same patentee.

Recoverable costs (Alan Johnson, Bristows):

It is important to note first that recoverable costs under article 69(1) include legal representation, court fees, and costs incurred in court. However it appears that the table of recoverable costs caps that is submitted in the consultation document only relates to the legal representation; court fees would thus be recoverable on top of this.

Another issue arises with recoverable cost caps, which should apply per action. However if a patentee brings a case  for infringement and validity, should it be considered as one or two actions ?

The assessment of the value is also a problem as it is unclear whether the “value of action” is to be necessary the same as that assessed for the value based-fee. The following problem may occur: if patentees assess a large value for theirs patents they can therefore recover a large amount of costs, if defendants on the contrary, only see this action as being of a small value they would therefore only recover small costs. So Alan Johnson argues that there is a risk that “recovery is determined by who starts the action”.

 In case of multiple defendants there is also a question of whether it is possible for the applicant to recover multiple costs from multiple defendants. Is the payment shared between all the defendants? On the contrary if the defendants win do they all get their costs?

 The problem of VAT is also a further point to consider when responding to the consultation as whether the value of action includes VAT, or  what would happen if one party is registered for VAT while another is not, are not addressed in the consultation document.

The consultation closes on 31st July and as the panel explained there is no particular structure to the consultation as far as the responses are concerned. However, it was also noted that comments along the four topics discussed (counterclaims for revocation, SMEs, the opt-out and recoverable costs) might be a good place to start…

Posted on

UPC Court fees event in London organised by the UK IPO on 23rd June

The UK Intellectual Property Office is organising an interactive event on the UPC Court fees on Tuesday 23rd June in London (registration details here). This event co-hosted with CIFA and the IP Federation will be structured around a panel of experts discussing the key elements of the UPC Court fees. Justice Birss, Kevin Mooney, Alan Johnson and Richard Vary have been confirmed for the panel.

A live and interactive webinar on the UPC Court fees is also announced by the UKIPO, details of which will be published later this month.

 

 

Posted on

A consultation on the UPC court fees in Spring?

While the EPO is working on a fee structure for the renewal of the Unitary Patent (see our post), the UPC Preparatory Committee discussed at its 8th meeting on 27 February 2015 the court fee structure and consultation document.

According to its website, the UPC now anticipates that this consultation will launch in Spring 2015. The Chairman of the Preparatory Committee is in fact “keen to begin engaging with stakeholder and users and asked the relevant working group co-ordinators to prepare the text to meet this deadline”. The IPCopy reports that “the Fees Consultation Sub-group is working towards a redraft of the court fees consultation document to be released in May. There are apparently a number of inconclusive “key policy points” but there is recognition that they need to seek views as soon as possible.” To this effect, the comments of the Expert Panel -who advises the Chair and working group co-ordinators and met in February 2015- are now being considered by the relevant teams. Thus, if the Select Committee meets its deadline we should thus soon know more about the UPC fees…