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Background of the Renewal Fees

Article 12(3) of the regulation provides that “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.”

Article 12(2) requires that there be a discount for SMEs.

At first, it appeared the Select Committee considered setting the renewal fees imply a matter for its subcommittee on finances to decide later in 2014. For a while, we understood that the Select Committee had accelerated its consideration of fees; however, as of May 2015, we understand that the Select Committee is projecting that the fees probably would be set by the end of June 2015. That goal now appears ambitious.

It also appeared at first that that a renewal fees schedule comparable to an average of national renewal fees in six to eight participating states might be proposed by the Select Committee. However, the EPO administration has presented data to the Select Committee showing that the median number of states of validation is three and the average number designated is four, and that Select Committee has considered specific fee proposals by the EPO administration at its December 2013 and subsequent meetings. Since December 2013, EPO President Battistelli has been saying that the fees “will be higher than many would hope, but lower than some might fear.” He has pointed out that the unitary patent must be self-financing, but also must be attractive to industry. In October 2014, a rumor circulated that the renewal fees would be set at a level equivalent to eight states; however, EPO officials have categorically rejected that rumor as untrue, repeating President Battistelli’s statements noted above.

The EPO President sent two, alternative renewal fee schedule proposals to the Select Committee in March 2015. European, Japanese and U.S. organizations commented, uniformly saying the renewal fees were too high to attract users to the Unitary Patent. The President submitted “adjusted proposals” in early May. Both the original and the adjusted proposals were based on the national renewal fees in the four most selected (TOP4) or five most selected (TOP5) participating states. The Select Committee discussed the renewal fees at its meeting on May 25-26, 2015, but no decision has been reached.

User groups have pointed out several potential problems and have made suggestions regarding a practical renewal fee schedule.

  • If the UP is to be available in 2016, as now projected, users will want to know the final fee schedule in early to mid-2015 in order to budget and decide whether to validate pending EP applications as Unitary Patents, which they will be able to do immediately after the UP system comes into force.
  • Users have pointed out that, on average, applicants only validate in three or four states, which often include states not participating in the UP system, notably Italy, Spain, and Switzerland. Therefore, the renewal fees at the time of validation could be set at the level of the three or four principally designated states, excluding Italy, Spain, and Switzerland, without loss of renewal fee income to the EPO.
  • Users also have pointed out the common practice with conventional European Patents of discontinuing payment of renewal fees in some states initially designated, but not all, in the later years, for budgetary reasons. That will not be possible with the UP, because it is unitary in all pertinent respects for the participating states at the time of validation. Therefore, maintaining the UP renewal fee schedule in the later years at the same level as that of the states on which the early years’ renewal fees are based would be either (1) produce more income than is necessary in comparison to the present EP fee system, or (2) more likely, deter applicants from validating their EPs as UPs.

 

Updated September 21, 2015.