Wednesday, 11 March 2015

Battistelli makes proposal for unitary patent renewal fees

The unitary patent changes the way renewal fees are paid.

If you choose for classic EP validation, then after grant you cease to pay renewal fees to the EPO, but start to pay national renewal fees.  In case of a unitary patent, then after grant you will continue to pay renewal fees to the EPO, but do not start to pay national renewal fees. [Except of course for non-participating countries like Spain or Italy, where one would still do national validation and pay a national renewal fee].

One of the main open questions regarding the unitary patent is the level of the renewal fees.
 
Discussions about the renewal fee have been ongoing for some time, but are not public. Fortunately, IpKat has now leaked portions of a document  "Proposals for the level of renewal fees for European patents with unitary effect" that, apparently, Battistelli,  the president of the EPO, has sent to the Select Committee. I haven't seen the document myself yet, and am basing myself on what IpKat shared with us.

The first impression is that the document is not very surprising. For a long time, it was expected that the level of the unitary renewal fee would be based on the sum of about 4 or 5 national renewal fees. This document confirms that rumor. 

For patent proprietors who have license income based on the size of the economies their patents cover, it seems the unitary patent could be a good deal. For the price of a medium sized portfolio (4 or 5 validated countries) the area covered will be much increased.

In the document, two detailed plans for the unitary renewal fee are proposed. Both proposals have the same structure, in three phases:




Years 3 to 5:                 same as the current EPO renewal fees for patent applications (the "internal renewal fees (IRF)"

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

Years 10 and beyond:  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).

It is in the TOP level where the two proposals diverge. 

In a first proposal the Year 10 onwards level is based on current renewal fee levels for FOUR European countries (TOP 4 level). In the second proposal the Year 10 onwards level is 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 following table gives the level of the proposed fees. The table is copied from the IpKat posting:


The first thing to notice is that both of the proposed renewal fees (Top4 and Top5) are actually lower than the EPO's current internal renewal fees for the first 10 years. So getting a grant within these first 10 year would lower your renewal fee cost compared to the renewal fee you would have to pay if your application was not yet granted. 

To put these numbers into perspective I compared the renewal costs for years 6 and 15 for traditional validations of three different sizes to a unitary patent using the TOP4 or TOP5 fee level.

The three validations that I've compared consisted of the following countries: Large (13 countries DE, UK, FR, AT, NL, BE, LU, IE, SE, DK, FI, GR, PT), Medium (5 countries: DE, UK, FR,NL, SE) and Small (3 countries: DE, UK, FR).

For the year 6 renewal fee, I get the following numbers:

Large EP validation:    1585
Medium EP validation: 651
Small EP validation:    309
Unitary Patent, Top4:   855
Unitary Patent, Top5:   880


For the year 15 renewal fee, I get the following numbers

Large EP validation:     7482
Medium EP validation: 3307
Small EP validation:     1906
Unitary Patent, Top4:    2830
Unitary Patent, Top5:    3300


As expected, for large validations the unitary patent is less expensive, while for a small validation the unitary patent is more expensive. The more interesting case is the medium validation. For the year 6 renewal fee, the unitary patent is more expensive, but for the year 15 renewal fee the TOP5 unitary patent is almost exactly the same. 

Agent costs and translation costs have not been taken into account. My first impression is that these proposals are not that bad. Especially, the TOP4 scenario seems like a good deal. Even compared to a modest portfolio, you get coverage for a much large area for the same amount of money. On top of this, you save on translation and administrative overhead.

















2 comments:

  1. Really really disappointing that large industries like multinational electronics companies, food companies and pharma companies will again be cheaper off than SMEs!

    One of the major moticvations for the EP patent with unitary effect was to reduce cost, and now my SME client sees himself confronted with higher cost for himself and lower cost for the big guys he already can hardly fight against!!! So, also the other promise of fostering the internal market is only achieved for the big guys, and the unitary EP patent only increases the imbalance more!!!

    The Unified Patent is again a nice tool for BigFarma, BigFood and BigElectronics to reduce their costs, expand their protection to even larger territories, and have no barrier to increase the prices we pay even more!

    Or is there a measure proposed, but not yet knownn to implement the promise that there would be a renewal fee scheme taking into account the type of campany to make the system attractive for all - see consideration (19): " The level of the renewal fees should be set with the aim of facilitating innovation and fostering the competitiveness of European businesses, taking into account the situation of specific entities such as __small and medium-sized enterprises__, for example in the form of __lower fees__."?

    ASmallRep

    NB: EU Regulation 1257/2012, consideration (4): Unitary patent protection will foster scientific and tech­nological advances and __the functioning of the internal market__ [!!!] by making access to the patent system easier, __less costly [!!!]__ and legally secure. It will also improve the level of patent protection by making it possible to obtain uniform patent protection in the participating Member States and __eliminate costs__ [!!!] and complexity for undertakings throughout the Union.

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    1. NB: Maybe high-tech startups are even worse off as my SMEs, as most of my SME only act in one or two countries, whereas high-tech startups may have the prospect of becoming active themselves or via licensing in many many countries !

      ASmallRep

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