Following last week’s CJEU ruling, the unitary patent plans are well on track. Procedural rules for the court are being finalised, work is being done on the finance, IT, facilities and training systems, and every day seems to bring a new seminar on UPC litigation strategies. But one big problem remains for potential applicants: how much will it cost?
There are three elements to cost: application, renewal and court fees. The application fees we know will be pretty much what they are now for European patents (minus those nasty translation costs). Court fees are uncertain – but litigation is a long way off, no one goes to court thinking it will be cheap and there are reasons to hope litigation may be priced competitively. Renewal fees, however, are unavoidable, and we have very little idea of what they will be. This is a problem.
Chapter V of the EU Regulation on the unitary patent helpfully sets out some guidelines on renewal fees. In summary, it says they should be progressive and sufficient to cover the costs and to ensure a balanced budget at the EPO. They should also be set at a level that is equivalent to “the average geographical coverage of current European patents” (believed to be six countries), reflects the renewal rate and reflects the number of requests for unitary effect.
But the language is sufficiently vague that patent practitioners can only speculate on what the costs will be. At our International Patent Forum last week, Belinda Gascoyne of IBM (below left) suggested that a unitary patent is likely to be cheaper than a European patent in only the 10% of cases in which protection is sought in 13 member states or more. Other commentators have considered in detail how renewal fees might be calculated, and there is a paper on the subject, but it dates from 2010 (before the unitary patent system in its present form was agreed). The European Commission’s Q&A on unitary patents barely mentions renewal fees.
Then there is unlucky Article 13 of the Regulation, which is where things could get really difficult. This concerns “distribution” of fees: the principle is that the EPO keeps 50% of renewal fees and the other 50% is shared around national offices based on “fair, equitable and relevant criteria”. An EPO Select Committee has been set up to consider how to do this and it held its first meeting in March. Unfortunately, we learned last week that its next meeting is not until May and that there will be no discussion on fees until after June at least. I’d love to be a witness to that meeting, as representatives of 25 countries haggle over the division of millions of euros.
A number of owners of significant patent portfolios have told me in recent weeks that in principle they are willing to use the unitary patent, if it is cost-effective. But I know other patent owners who believe that the new system (which is designed, above all, to save money) will actually be more expensive for their portfolios than existing options. Unfortunately, it looks like it will be a long time before we know what the costs will be. In the meantime, we can only guess.
The European Commission and EPO want the first unitary patents to issue in 2015. That is only two years away, and within the budget plans of many companies today. If they’re serious about this project, we need to see some figures soon.