Friday, 29 May 2015

New proposal renewal fees unitary patent

The EPO has made a new proposal for the level of the renewal fees that would be payable for a unitary patent. Accompanying the proposal is a document with costs comparisons between a classic European patent and a unitary patent.

According to the document, the new proposal is in response to requests that the level of the renewal fees payable during the first few years of a unitary patent's life be adjusted. The adjusted proposals, bases the fees for the first ten years on the sum of the national renewal fees payable in the countries in which European patents are most frequently validated.

The previous two proposals had names TOP4 and TOP5. The TOP5 proposal is higher than the TOP4 proposal but has a fee reduction for small and medium sized enterprises (SMEs). The new proposals are named true TOP 4 and true TOP5.

The new true TOP 4 renewal fee scheme level is based on the sum of the renewal fees paid today for the four most frequently validated countries. The true TOP 5 level is based on the sum of renewal fees paid today for the five most frequently validated countries.


The new renewal fees are in the table below, together with the previous proposal.



Top4 True
 Top4
Top5 True
Top5
2nd year: 350 35 350 85
3rd year: 465 105 465 165
4th year: 580 145 580 255
5th year: 810 315 810 455
6th year: 855 475 880 645
7th year: 900 630 950 825
8th year: 970 815 1110 1050
9th year: 1020 990 1260 1255
10th year: 1175 1175 1475 1475
11th year: 1460 1460 1790 1790
12th year: 1775 1775 2140 2140
13th year: 2105 2105 2510 2510
14th year: 2455 2455 2895 2895
15th year: 2830 2830 3300 3300
16th year: 3240 3240 3740 3740
17th year: 3640 3640 4175 4175
18th year: 4055 4055 4630 4630
19th year: 4455 4455 5065 5065
20th year: 4855 4855 5500 5500
Total over 20 years 37995 35555 43625 41955
Total over 10 years 7125 4685 7880 6210


As you can see the renewal fees are considerably less in the early years. This means that the price increase after grant of patent has disappeared. The total renewal cost over the first 10 year is thus reduced: 34% for Top4, 21% for Top5.

Over the total 20 years patent can remain in force, the total cost reduction is less in percentage. (The table does not show the renewal fees for SMEs in case of the TOP5 proposals. Both in case of TOP5 and in case of True TOP5, some entities receive a 25% cost reduction).

The graph below shows the accumulated costs in euro for the Top4, True Top4, Top5, and True Top 5.  









Luxembourgh fully ratified Agreement on unified patent court


Luxembourg has deposited its instrument of ratification with the Council of the European Union, making it the seventh state to officially ratify the Agreement on a Unified Patent Court.

We reported earlier that the ratification had been adopted unanimously in the Luxembourg parliament. The current formal step completes the ratification process.

At present 7 states have completed the ratification process. 13 states, including  France, Germany, and the United Kingdom, are required to ratify before the unitary patent comes into effect. Of the required states only France has ratified at this moment.

Wednesday, 27 May 2015

Last Monday was the final day of the public consultation concerning the draft amendments of the Dutch national patent law. Quite a number of articles are amended or introduced to accommodate the unitary patent. Of we course we have also been looking at the proposal in the past weeks. On the whole the proposal looks solid and will make the Netherlands ready for adoption of the unitary patent.

Some of the interesting articles include the following:

Reestablishment


A new article 23a1 will allow reestablishment in case of the request for registration of unitary effect is denied. The deadline for filing this request is one month after publication of the mention of grant. The deadline for classic national validation is 3 months. So if your request for registration of unitary effect is denied, you may not have the opportunity for national validation anymore. This article allows you to get a Dutch patent in case your request for registration of unitary effect is denied and you missed the normal validation deadline.

One problem that I see with this article is that the delayed validation is not applicable while in Court. So if you challenge the denial in Court, you need to wait until the Court made its decision. Should that decision be negative, i.e., your request for registration is still denied, you can then apply for validation according to the new article. It is not possible to withdraw the Court case and validate earlier.


Protection in Curaçao and Sint-Maarten

A Dutch patent or a European patent validated in the Netherlands are also valid in Curaçao and Sint-Maarten. However, the unitary patent only applies to the European parts of the Netherlands. There is thus a loss of protection if one chooses for a unitary patent instead of a nationally validated patent. This has been implemented in a new article 50a which says that once the request for unitary effect has been registered, the patent is no longer in force in the European part of the Netherlands.

This has the interesting (and intentional) side-effect that even if unitary effect has been registered, one can still validate the European patent in the Netherlands. However, this Dutch validated patent will only be valid in the non-European part of the Netherlands, i.e., Curaçao and Sint-Maarten.

This means that if the loss of protection for these regions is a problem one can still validate for them, and obtain protection. Unfortunately the cost for this protection on top of the unitary patent is the same as a Dutch validation currently costs, i.e., the same renewal fees.

Pharmacy exception 

The agreement on a unified patent court includes the so-called pharmacy exception; the extemporaneous preparation by a pharmacy, for individual cases, of a medicine in accordance with a medical prescription is excepted from patent protection (Article 27(e) of the Agreement). This exception has been included in the Dutch patent law, and will thus also apply to non-unitary patents in the Netherlands. Interesting the phrase 'extemporaneous' has been translated as 'voor direct gebruik' (for immediate use). I'm not sure those two mean exactly the same thing. Then again, I'm not sure what extemporaneous really means either.

According to the official notes to the proposal (my translation):
The exemption applies, however, only if the preparation is for immediate use and is carried out in individual cases. This exception does not apply to producing for stock. In view of this the exemption will only apply in exceptional cases. The Dutch law is therefore in line with the Judiciary Treaty and the laws in the surrounding countries.
I have no idea about the law in the surrounding countries with respect to the pharmacy exception. I only found this Italian case. Apparently Italy also has an exception for the extemporaneous preparation by a pharmacy. The Italian court ruled that this allowed the preparation of a patented drug with a different dosage in view of a patient’s special needs. The preparation of a patented drug by the Italian pharmacists however did infringe. It will be interesting to see how the Dutch Court and/or the Unified Patent court will apply this exception.

The final proposal for amendments of the Dutch national patent law should be available before summer. 




Wednesday, 20 May 2015

Joining the unitary patent is now a priority for Italy

A press release on the website of the Italian Ministry of Economic Development stated that Italy wants to join the Unitary patent. We speculated earlier that Italy was considering making this step after the Italian Ministry of Economic Development submitted a formal call for comments the unitary patent.


The Secretary for Economic Development Simona Vicari stated that (our translation)

"For the Ministry of Economic Development, accession to the unitary patent it is a priority. After the judgment of the Court of Justice of the EU on May 5 that rejected the appeal of Spain, we have had confirmation that the legal framework of the unitary patent system is not in discussion.

Membership to the unitary patent system is, for the Ministry of Economic Development, in line with the interests of a country that focuses on innovation and internationalization of its companies and which wants to ensure a timelier and uniform EU-protection to whom invests in research, development, innovation and thereby applies for a patent.

In addition, the new system should promote to combat counterfeit on a transnational scale and consequently improve attraction of foreign direct investment in our country.

Having in Italy a branch of the Unified Patent Court (TUB), will enable our companies to have available a national office in which they can protect their interests also in Italian, not to mention that if we adhere now to the unitary patent system we can still hope to have a voice regarding the unitary patent renewal fees and their distribution, and ask for more support for our SMEs"

Having Italy in the unitary patent would be a welcome addition as Italy is one of the larger European economies (fourth in GDP according to Wikipedia).

I'm guessing that Vicari's wish for more support for SME, means that she supports the so-called TOP5 proposal of Battistelli, in which renewal fees are generally higher but in which SMEs get a 25% reduction for the first renewal years. Likewise, she may favor the fee proposal for the Unified patent court in which SMEs pay no fees at all. 

For Italy to join the unified patent court they will have to ratify the Agreement on a Unified Patent court. This should not be problem, as they are already a signatory to this agreement. 

However, Italy also needs to ensure that the EU regulations apply to them. The Unitary patent is regulated as an enhanced cooperation which excludes Spain and Italy. I understand from Article 20 of the European Union Treaty that such cooperation shall be open at any time to all Member States. So Italy can join the EU part of the unitary patent any time they wish.

Tuesday, 12 May 2015

Draft proposal unified patent court fees available

A draft proposal for the fees that will be applicable to the unified patent court has been published. At the same time a public consultation round has started.

As expected some of the fees for the unified patent court are quite a bit higher than the fees of some national courts. For example, an infringement action would set you back 11.000 euro.
 
It is one of the goals of the system that the new court will be self-supporting financially. Much like the EPO is, at the moment.  So, the level of the court fees does not seem to be up for discussion. According to the document: "The fee levels suggested are the lowest that will enable sustainability of the Court."

The document offers two different alternatives that mainly differ how costs can be reduced for smaller parties. In the first alternative, costs are reduced by allowing various fee reductions for 'good behavior', e.g., settling, especially early settling, having only one judge.

In the second alternative certain categories of applicants get a fee exemption. Eligible applicants include small and medium-sized enterprises, non-profit organizations, public research organizations, and university.

In both alternatives, the court can reimburse the fees if "the economic existence of a party who is not a natural person" is threatened due to the amount of payable Court fee.

I'm not a big fan of the reduced fees for some applicants, as the fee reduction is may be less than the additional administrative overhead. In this case however, a fee reduction of 11.000 euro (or more if the value of the patent is high) would be a significant part of a small infringement case. I'm guessing that these rules may very well have a real impact on how the court is used.

There is one thing that I wonder about. When accused of infringement, a standard defense would be to raise a counterclaim for revocation. In the draft proposal such a counterclaim would cost the same as the infringement claim, i.e., 11.000 or more (with a cap of 20.000 euro). I suppose that you can still raise non-validity of a patent as a defense against infringement, even without filing a counterclaim--you can't infringe a non-valid patent. But if parties fail to file a counterclaim due to costs, the result would be that the patent remains in force, even if the judge considered it to be invalid. This seems to be a less than ideal situation.

Responses to the public consultation should be filed before midnight on the 31 July.

Wednesday, 6 May 2015

CJEU rejects Spains objections against unitary patent and unified patent court

The Court of Justice of the European Union has issued its decisions on Spain's legal challenges against the unitary patent. The two decisions can be found here C-146/13 and here C-147/13.

The decisions of the court do not come as a total surprise since the same court denied earlier challenges by Spain and Italy. Moreover, the advocate general had already opined to deny the objections.


One of the important objections is that the Spanish language is discriminated against. The official languages of the EPO are English, German, and French. An inventor who does not master one of these languages clearly is at a disadvantage. The advocate general had acknowledged this point in its opinion.

The court is careful to avoid the word 'discriminate' but acknowledges a 'difference in treatment on the grounds of language'. Nevertheless, the court rules that this different treatment is appropriate to serve the goal of cost reduction.



Recitals 4 and 5 of the contested regulation add that, in accordance with the decision on enhanced cooperation, the translation arrangements for European patents with unitary effect should be simple and cost-effective. They should moreover ensure legal certainty, stimulate innovation and benefit, in particular, small and medium-sized enterprises, so as to make access to the EPUE and to the patent system as a whole easier, less costly and legally secure. It follows from the above that the aim of the contested regulation is to facilitate access to patent protection, particularly for small and medium-sized enterprises.
The legitimacy of such an objective cannot be denied. One of the choices facing an inventor when planning to obtain protection for his invention by the grant of a patent concerns the territorial scope of the desired protection, which will be decided after an overall assessment of the advantages and drawbacks of each option, which includes complex economic evaluations of the commercial interest of having protection in the various States compared with the sum of the costs entailed in obtaining the grant of a patent in those States, including translation costs
 
Most of the other objections question whether the European Union has the power to the implement the unitary patent, especially given the rather convoluted legal construction that was used. The EU has issued two directive which only enter into force if a unified patent court is set up (which is not an EU institute) so that a patent issued by the EPO (also not an EU institute) would be valid throughout the EU (except that is doesn't--at least Spain is not in). It is a valid concern if this construction passes mustard.

Also the objections of this nature are rejected. For example, the court notes that


Neither does the creation of the Unified Patent Court undermine any competence of the European Union. First of all, the power to create a unified patent court and to determine the scope of its powers continues to fall to the Member States and has not been entrusted exclusively to the European Union. Next, the contested regulation expressly requires Member States to grant the Unified Patent Court exclusive jurisdiction.

This is the second time Spain has tried to invalidate the unitary patent through the Court of Justice: the first time was together with Italy. This second time it was alone, as Italy appears to have warmed a bit towards the unitary patent. In fact, as we blogged earlier, Italy may even join the system.

At the moment no further legal objections are pending with the court of justice. The unitary system continues to be postponed until the sufficient ratifications are in. Currently 6 out of 13 required have ratified, with the Netherlands recently announcing it started the ratification process. 

Tuesday, 5 May 2015

Internet consultation started for Dutch unitary patent law


The Netherlands have started the ratification process of the Agreement on a Unified Patent Court. A draft proposal ratifying the agreement is online. The Netherlands have indicated that it wants to be part of the new European patent system from the start. At present, six countries have fully ratified the agreement (Austria, Belgium, Denmark, France, Malta, and Sweden)

In addition to ratifying the agreement also a proposal for amendment of the Dutch Patent act is presented. The proposed amendment brings the Patents Act 1995 in line with the substantive provisions of the agreement, and includes any other adjustments to ensure proper functioning of the European patent with unitary effect. This means that when the amendments and the ratification are done, the Dutch the legislature should be ready for the unitary patent.

Last Friday, May 1st, 2015 the Dutch government launched an Internet consultation for the proposed amendments to the Dutch Patent act.

The consultation period is three weeks, that is, until May 25, 2015. The consultation period has been shortened from the regular 4 weeks so that the bill may be presented for advice to the Raad van State (State Council) before summer. This advice is a required part of amending a law. 

The Internet consultation is online. All text is in Dutch. Should you want to send in a response the Ministry of Economic affairs asks you to make concrete text suggestions and to send in your response as early as possible.