Distribution key of the renewal fee income adopted by the EPO:

On 17th November the European Patent Organisation adopted the distribution key for the repartition of the 50% share of the participating Member States in the renewal fee income among them.

In fact while the EPO retains 50% of the renewal fee income, its Select Committee had to decide how the apportionment of the 50% share of the Unitary patent renewal fees would be apportioned amongst the participating EU Member States.

According to Bristowsit has been agreed that for an initial period of operation the 50% of the fees (minus an administrative charge) will be distributed according to a formula that takes account of the GDP and the number of applications filed from each participating Member State.

The Select Committee has adopted the True Top 4 for the renewal fees of the Unitary Patent:

The Select Committee endorsed today the True Top 4 proposal for the renewal fees applicable to the Unitary Patent. The EPO reports that this proposal was adopted by the EU member states participating with the required 3/4 majority.

The True Top 4 proposal corresponds to the total sum of the renewal fees currently paid for the four most frequently validated countries (Germany, France, UK and the Netherlands), and contains a clause for possible revision after four years. Special consideration is also given to the situation of SMEs.

The True Top 4 proposal is divided as follow:

2nd year: 35 EUR12th year: 1, 775 EUR
3rd year: 105 EUR13th year: 2, 105 EUR
4th year: 145 EUR14th year: 2, 455 EUR
5th year: 315 EUR15th year: 2, 830 EUR
6th year: 475 EUR16th year: 3, 240 EUR
7th year: 630 EUR17th year: 3, 640 EUR
8th year: 815 EUR18th year: 4, 055 EUR
9th year: 990 EUR19th year: 4, 455 EUR
10th year:  1, 175 EUR20th year: 4, 855 EUR
11th year: 1, 560 EUR

This proposal was preferred to the True Top 5 for which the renewal fees matched the five most frequently validated countries (Germany, France, UK, Netherlands and Sweden) and foresaw 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. Under Top 4 proposal the patentee will have to pay a total of EUR 35, 555, whereas under Top 5 the patentee would have faced an overall cost of EUR 41, 955 and EUR 40, 403 for respectively the normal and reduced levels.

Putting aside the fear that these fees are still too high for SMEs, it is good news to have a definite idea of renewal fees for the Unitary Patent as it should enable us all to anticipate better when Unitary Patents are the most relevant to patentees.

You can see our previous posts about the different proposals made by the EPO on renewal fees here (May 2015) and here (March 2015).


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.

Renewal fees for the Unitary Patent: What does the EPO suggest?

The IPKat has published a post this week (09/03/15) on the Unitary Patent’s renewal fees that raises important questions for the cost and the attractiveness of Unitary Patents. Renewal fees have in fact always been a hot topic as the cost of obtaining a Unitary Patent and renewing it might weigh heavily in the decision of the patentee as to which kind of patent to get. This is also particularly relevant in a context where Italy and Spain, two popular validation countries, will not take part in the UPC with the consequence that additional fees will have to be paid for both countries.

Moreover, renewal fees are central to the functioning of the European Patent Organisation (EPO), which is partly dependent on this income for its budget, as provided in Chapter Five of the European Patent Convention on Financial Provisions. Article 39 in particular states that “Each Contracting State shall pay to the Organisation in respect of each renewal fee received for a European patent in that State an amount equal to a proportion of that fee, to be fixed by the Administrative Council; the proportion shall not exceed 75% and shall be the same for all Contracting States.”  This amount shall following Article 40 be fixed at such a level as to ensure that the revenue is sufficient for the budget of the Organisation to be balanced.

To this effect, the Unified Patent Court’s Select Committee launched at its 11th meeting -that took place in December 2014- preparatory work on the “distribution key for the repartition of renewal fees between the EU participating member states”, on the basis of “additional simulations of fee level scenarios submitted by the EPO”.

Therefore, although not yet public and consequently unverifiable, the document referred to by the IPKat, entitled Proposals for the level of renewal fees for European patents with unitary effect, sheds light onto the fee structure that could apply to the renewal of the Unitary Patent’ fees.

But what are EU Regulations saying about renewal fees? Before looking into the data published by the IPKat and their analysis, let’s look at what Regulation (EU) No 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection dated 17 December 2012 says.

Article 12 of this Regulation states that:

“1. Renewal fees for European patents with unitary effect shall be:

(a) progressive throughout the term of the unitary patent protection;

(b) sufficient to cover all costs associated with the grant of the European patent and the administration of the unitary patent protection; and

(c) sufficient, together with the fees to be paid to the European Patent Organisation during the pre-grant stage, to ensure a balanced budget of the European Patent Organisation.

2. The level of the renewal fees shall be set, taking into account, among others, the situation of specific entities such as small and medium-sized enterprises, with the aim of:

(a) facilitating innovation and fostering the competitiveness of European businesses;

(b) reflecting the size of the market covered by the patent; and

(c) being similar to the level of the national renewal fees for an average European patent taking effect in the participating Member States at the time the level of the renewal fees is first set.

 3. In order to attain the objectives set out in this Chapter, the level of renewal fees shall be set at a level that:

(a) is equivalent to the level of the renewal fee to be paid for the average geographical coverage of current European patents;

(b) reflects the renewal rate of current European patents; and

(c) reflects the number of requests for unitary effect.”

Hence, according to the IPKat, in order to reconcile the imperatives of a balanced budget and an attractive cost for renewal, the EPO would have adopted the following structure for setting Unitary Patent’s renewal fees:

“Years 3 to 5: the level of the EPO’s internal renewal fees (IRF) [these are the fees payable to the EPO for pending patent applications currently] 

Years 6 to 9: a transitional level between the IRF level and the year 10 level 

 From year 10, a level equivalent to the total sum of the national renewal fees payable in the states in which European patents are most frequently validated (TOP level).”


So what does it mean? Between years 3 and 5, the renewals applicable to a Unitary Patent would correspond to the same fee level as those applicable to European Patent applications; thus ensuring consistency in the application of the fees in the pre and post grant phases. In fact, as highlighted by the IPKat, charging a renewal fee for the first few years of the patent could discourage patentees to opt for a Unitary Patent, especially as “in some states, national renewal fees (which apply equally to national patents and to European patents validated in those states) are initially very low or non-existent until the fourth or fifth year.”

Moreover, the document that the IPKat had access to appears to argue that paying the total sum for national countries (three to five) might initially look more attractive in terms of costs than paying the internal renewal fees. The EPO however seems to point out in this document that the cost of hiring a local patent attorney or a specialist renewal firm would add to the final cost of renewal, with the consequence that the difference between the renewal costs of a Unitary Patent and those of a European Patent would be very small.

The three-tier fee structure proposed would then be divided between years 3-5, years 6-9 and years 10-20. For years 10-20 the calculations for the level would be based on the total of national renewal fees payable in the most frequently validated countries. But as the IPKat explains, “in the classical European patent system, patentees who have validated their patent in an average number of states after grant can always abandon the protection state-by-state over the patent term, and in the later years often narrow it down to the three major European markets. As they will lose this flexibility under the Unitary Patent protection in 25 states, they might be discouraged from opting for unitary protection if the fees for the last five years are prohibitive compared with those for just three to five of the bigger countries.” The EPO however seems to have taken this issue into consideration and for years 10 onwards, it proposes to charge the total sum of national renewal fees payable in the most frequently validated states, thus significantly reducing costs for users as their additional fee-administration charges will be considerably lower.

Following these observations and with the necessity to render the Unitary Patent cost-efficient for patentees in mind, two proposals have apparently been made. In the first one the years 10 onwards level would be based on current renewal fee levels for four European countries (TOP 4 level). In the second one the years 10 onwards level would be based on current renewal fee levels for five European countries (TOP 5 level) but with a reduction for certain categories of patentees, namely SMEs, natural persons, non-profit organisations, universities and public research organisations.

The IPKat gives the following numbers for TOP 4 and TOP 5 levels and provides us with a table presented as “the Annex 2 which compares the “Top 4” and “Top 5” proposal with the current EPO internal fees for pending applications, and the national renewal fees for 25 member states”:

The TOP 4 level renewal fees would be as follows:

2nd year: EUR 350

3rd year: EUR 465

4th year: EUR 580

5th year: EUR 810

6th year: EUR 855

7th year: EUR 900

8th year: EUR 970

9th year: EUR 1 020

10th year: EUR 1 175

11th year: EUR 1 460

12th year: EUR 1 775

13th year: EUR 2 105

14th year: EUR 2 455

15th year: EUR 2 830

16th year: EUR 3 240

17th year: EUR 3 640

18th year: EUR 4 055

19th year: EUR 4 455

20th year: EUR 4 855

Over 20 years, that adds up to EUR 37 995.


The TOP 5 proposal involves a 25% reduction for the entities mentioned above in respect of years 2 to 10 only.  The proposed fees are as follows with the fee reduction in brackets:

 2nd year: EUR 350 (EUR 262.50)

3rd year: EUR 465 (EUR 348.75)

4th year: EUR 580 (EUR 435.00)

5th year: EUR 810 (EUR 607.50)

6th year: EUR 880 (EUR 660.00)

7th year: EUR 950 (EUR 712.50)

8th year: EUR 1 110 (EUR 832.50)

9th year: EUR 1 260 (EUR 945.00)

10th year: EUR 1 475 (EUR 1 106.25)

11th year: EUR 1 790

12th year: EUR 2 140

13th year: EUR 2 510

14th year: EUR 2 895

15th year: EUR 3 300

16th year: EUR 3 740

17th year: EUR 4 175

18th year: EUR 4 630

19th year: EUR 5 065

20th year: EUR 5 500

Over 20 years, that adds up to EUR 43 625 and EUR 41 655 for the normal and reduced level respectively.


Renewal Fees Table:

in € per OY             TOP4               TOP5          SME            EPO Internal renewal fees    25 MS

2                                     350                      350            252.50                              0                                            0

3                                     465                      465            348.75                          465                                         1,298

4                                     580                      580                 435                         580                                          1,874

 5                                    810                       810           607.50                         810                                         2,545

6                                     855                      880                660                        1,040                                         3,271

7                                     900                      950           712.50                         1,155                                         3,886

8                                     970                      1110         832.50                         1265                                          4,625

 9                                  1020                     1260               945                        1380                                           5,513

10                                  1175                     1475        1106.25                         1560                                           6,416

11                                 1460                      1790             1790                        1560                                           7,424

12                                 1775                      2140             2140                        1560                                          8,473

13                                 2105                      2510            2510                        1560                                           9,594

14                                2455                      2895            2895                        1560                                          10,741

15                                2830                      3300           3300                        1560                                          11,917

16                                3240                      3740            3740                        1560                                         13,369

17                                3640                    44175             4175                        1560                                          14,753

18                               4055                      4630            4630                        1560                                          16,065

19                               4455                       5065           5065                         1560                                         17,660

20                              4855                       5500           5500                         1560                                         19,197

Total                   37,995                  43,625       41,655                    23,855                                   158,621

So what should we conclude from these different fees? It appears from this table that the Unitary Patent will not be financially attractive for patentees who wish to have a protection for less than 4 states, such as the UK, Germany and France. For users who on the contrary wish to get protection for at least four countries, and a fortiori for a large number of countries, then the Unitary Patent would be cost efficient and thus attractive. We thus fully agree with the IPKat who points out that many users would have liked the EPO to draft a TOP 3 –or lower- level. However, according to the EPO’s communiqué dated 15 December 2014, we will only have to wait until June to find out the exact content of  “the appropriate decisions on the financial and budgetary aspects of the implementation of the Unitary Patent Protection”…