Unitary Patent Renewal fees: New adjustments by the EPO

The EPO published at the beginning of May two new proposals for an adjusted level of renewal fees for the European Patent with Unitary Effect, which were examined at the 14th meeting of the Select Committee of EU Participating Member States in the enhanced cooperation on Unitary Patent Protection. (See our post on the EPO’s first draft of the renewal fees here)

The EPO describes these two proposals in the following terms:

These proposals foresee fee levels of respectively the equivalent of the renewal fees which have to be paid for the four or five countries out of the twenty-five EU participating member states in which most European patents are currently validated (a “true” TOP 4 and a “true” TOP 5- in contrast to the previous approach, the EPO’s internal renewal fees are no longer taken into account). The “true” TOP 5 proposal in addition foresees a 25% fee reduction for the first ten years of the lifetime of the patent for specific entities such as SMEs, universities and public research institutions. Member States held an exchange of views with some Member States not yet able to take a concrete position on these proposals.

The question is therefore how do these new proposals differ from the first draft of renewal fees presented in March 2015 by the EPO. The first proposal had been criticized and judged inadequate for the ambitions of the Unitary Patent. The level of renewal fees for the first ten years of the unitary patent had in fact been established by reference to the EPO’s internal renewal fees payable to the EPO before grant while the application is pending, rather than by reference to the renewal fees payable to national patent offices for a similar patent. Renewal fees only matched the fees payable for 4 (TOP 4: Germany, France, Great Britain, and the Netherlands) or 5 (TOP 5: Germany, France, Great Britain, the Netherlands and Sweden) top validation countries for European Patents after year 10.

The new proposals took into consideration these criticisms, and national renewal fees for Top 4 and Top 5 thus now form the basis of the proposed Unitary Patent renewal fees from years 2 to 20. This created reduce fee levels for patent years 2 to 9.  In addition, in the true TOP 5, the 25% SME reduction in years 2 to 10 and the 15% licenses of right reduction remain.

So what are the new adjusted fees? (See SC/18/15)

For Top 4 level, over 20 years the sum total of the fees would be EUR 35, 555 divided as follow:

2nd year: 35 EUR

3rd year: 105 EUR

4th year: 145EUR

5th year: 315 EUR

6th year: 475 EUR

7th year: 630 EUR

8th year: 815 EUR

9th year: 990EUR

10th year:  1, 175 EUR

11th year: 1, 560 EUR

12th year: 1, 775 EUR

13th year: 2, 105 EUR

14th year: 2, 455 EUR

15th year: 2, 830 EUR

16th year: 3, 240 EUR

17th year: 3, 640 EUR

18th year: 4, 055 EUR

19th year: 4, 455 EUR

20th year: 4, 855 EUR

This is to be contrasted with the total of 37,995 EUR, which means that under the adjusted fees the patent owner would save 2,440 EUR. (See our post on the first version of Court fees here)

For Top 5 level, over 20 years the sum total of the fees would be 41, 955 EUR and 40, 403 EUR for the normal and reduced levels. The Reduced fees correspond to a 25% reduction from years 2 to 10 for SMEs, natural persons, NGOs, Universities and public research organisations. The fees would be divided as follows (the amounts after the 25% reduction for SMEs and other entities are shown in brackets, in italics):

2nd year: 85 EUR (63.75 EUR)

3rd year: 165 EUR (123.75 EUR)

 4th year: 255 EUR (191.25 EUR)

 5th year: 455 EUR (341.25 EUR)

 6th year: 645 EUR (483.75 EUR)

 7th year: 825 EUR (618.75 EUR)

 8th year: 1 050 EUR (787.50 EUR)

 9th year: 1 255 EUR (941.25 EUR)

 10th year: 1 475 EUR (1 106.25 EUR)

11th year: 1 790 EUR

12th year: 2 140 EUR

13th year: 2 510 EUR

14th year: 2 895 EUR

15th year: 3 300 EUR

16th year: 3 740 EUR

17th year: 4 175 EUR

18th year: 4 630 EUR

19th year: 5 065 EUR

20th year: 5 500 EUR

Therefore a patent owner would save 1,670 EUR (or 1, 252 EUR for the reduced fees) compared to the first version of the court fees established by the EPO.

The EPO also published a second document (SC/19/15) comparing the fees and external costs of a European Patent validated in 1 to 25 countries and a Unitary Patent (based on the adjusted fees). This document shows that the Unitary Patent is only financially interesting for patentees who wish to register their patent in more than 3 countries for TOP 4 and 4 countries for TOP 5.

Paradoxically however 64% of European Patents are only validated for a maximum of 3 countries, while only 0.4% of European Patents are validated for 25 countries. It is nonetheless impossible to know from these figures whether the overall cost of the Unitary Patent will encourage patentees to choose the Unitary Patent above the European Patent or whether there is a genuine majority of patents, which only require a validation in 3 or less countries.

These adjusted fees have already been criticised by the American Intellectual Property Law Association and the EUROCHAMBRES. The AIPLA in fact wrote to the EPO to express concerns about the adjusted fees that it considers to be still to high in comparison with costs in the Americas and in Asia. AIPLA argues for example that “the current TOP 4 proposal would cost at least 3 times more over the life of a Unitary Patent than renewals of a U.S patent, an the UP will not cover all EPO countries or even all EU states.”

The Euro Chambres of Commerce and Industry notes that the fee for the “True TOP 5 with reduced fees” only equals a 4% reduction from the first draft of the Unitary Patent Court fees. These adjustments therefore do not represent a real economy for the SME that the EUROCHAMBRES represent, especially compared to the U.S where a 50% reduced fee is applied at renewal. The EUROCHAMBRES president Arnaldo Abruzzini defends the idea –shared by others, see notably this post– that the renewal fees are set up in accordance with the needs of the national patent offices in mind rather than in accordance with the principles of competitiveness and attractiveness., and therefore at the detriment of businesses.

Finally, as highlighted by the IPKat, when looking at the distribution of the reductions of the renewal fees, it can be noted that these reductions apply disproportionately to the early years of the patent. This means that these reductions benefit in particular industries with short product lifecycles where patents are less likely to be maintained after the first ten years.

It is now to the Select Committee to decide the exact level of renewal fees which will apply and the UPC Blog by LAVOIX will keep a close eye on this topic.