Unitary patent: renewal fees disclosed
The potential cost of the European patent with unitary effect (the unitary patent), compared to the cost of a standard bundle of European patents, has been the subject of much debate - since over the lifetime of a patent, the renewal fees can account for a considerable proportion of the cost.
Patentees clearly would like the fee to be low, particularly given that popular validation countries such as Spain, Italy and Turkey are not included in the unitary patent. By contrast, the European Patent Office (EPO) relies on a proportion of national validation fees for its budget, and so wishes to maintain at least an equivalent level of income when many of these validation fees are replaced by just one.
The President of the EPO has apparently now submitted a document entitled "Proposals for the level of renewal fees for European patents with unitary effect" to the Select Committee of the Administrative Council for their opinion. This document reportedly reveals the EPO's proposed fee levels as follows:
- For years 3 to 5, the fees would be set at the level of the EPO's internal renewal fees (IRF – the fees currently payable to the EPO for pending patent applications).
- For years 6 to 9 the fees would be set at a transitional level between the IRF level and the next (year 10) level.
- For year 10 onwards, a level equivalent to the total sum of the national renewal fees payable in the states in which European patents are most frequently validated. Two versions of this proposal have been provided – based on four or five states.
These proposals are indeed greater than had been hoped. Whether they are less than had been feared remains to be seen. Readers may recall that there had been much discussion about renewal fees being set based on the average of the fees of the top three states. The current proposal results in fees significantly greater than this.
In the early years, national fees can be low or non-existent. The EPO's proposal to set these early year fees based on IRF will make those early year fees higher than basing the fees on national renewal fees. And of course the fees for later years will also be much higher if based on four or five states. (The latter proposal builds in a discount for SMEs for the early years only but it remains to be seen how attractive that proposal is to SMEs, and indeed other users who will face higher fees as a result.)
Clearly therefore patentees are likely to be disappointed that the EPO did not propose a top three state model, making the Unitary Patent more consistent with the common practice of filing in the UK, France and Germany. Interestingly, the document provides a comparison between renewal fees under the proposals and validation in all 25 participating states. Of course, these renewal fees will be substantially lower than individual protection in 25 states, and if that is desired then it is obviously attractive, financially speaking. What seems to be missing however, is a comparison between the proposals and the costs of validation in the top three states, which would have been quite interesting.
We will be revisiting these numbers in a follow-up article once they have been confirmed. In the meantime, for more details and background on the unitary patent and the renewal fee costs debate, please see the dedicated unitary patent section of our website: http://www.dyoung.com/unitarypatent.