fees applicable to the european unitary patent: facts ... · the unitary patent system – ups i:...

Fees Applicable to the European Unitary Patent: Facts & Considerations

Dr. Andreas Popp

Senior Vice President Global Intellectual Property , BASF SE

September 2014

Agenda

� Introduction of the unitary patent system (UPS)

z Next steps

� Considerations by the applicant

� Legal considerations

� User behavior

z Current

z Under UP system

� Conclusion & recommendation

September 2014 Dr. Andreas Popp 2

UPS: The alternative in European Union after granting an EP

� Existing patent system in Europe

z National route: Individual patent applications and granted patents country by country;

z EP route:

– common application and grant procedure;

– after grant (and opposition) same as national route

z Before grant: Mainly independent and parallel systems

� UPS System

z After grant in EP route: alternative option for some EU states

3 September 2014 Dr. Andreas Popp

The Unitary Patent System – UPS I: Status 9/2014

� The Regulation on Unitary Patent Protection (1257/2012 EU) & the UP Translation Regime(1260/2012) in force

z Applicable with date of entry into force: Agreement on a Unified Patent Court (UPC Agreement, Council EU 16351/12)

z Territorial scope

– enhanced cooperation; UP regulations: EU ex ES & IT;

– UPC Agreement: EU ex ES & PL;

– HR did not join UPS after becoming member of the EU

z Minimum list of ratification: 13 EU States including DE, FR, GB

– Ratification: AT (8/2013); FR (3/2014); SE, BE, DK (all 6/2014)

– Missing DE, GB and 6 further EU states


The Unitary Patent System – UPS II: Status 9/2014

� UPC-Applicable law

z Harmonized law with exceptions

– Warning letters, evidentiary proceeding, ...

z Patent applicants from US (UPS non-member state) governed by German law (seat of the European Patent Office)

� EUCJ Rulings & Law Suits z 2013 EUCJ: permissibility of enhanced cooperation

z 2013 pending law suits (C147/12 & C147/13) filed by ES on the construction of the regulations & the UPC Agreement

– Oral proceedings: 1 July 2014

– Opinion of the Advocate General: scheduled for 21 October 2014


The Unitary Patent System – UPS III: Status 9/2014

� Further steps: Rules, Judges, Fees

z UPC Agreement: Judges, Rules & Fees => Decision EP/UP or national procedures

– Preparatory Committee for the UPC has progressed well

– Selection of UPC Judges: 1300 candidacies, including well experienced judges from German courts handling patent matters

z Renewal fees UP => Decision: EP with or without UP

� Relevant political decisions external to UPS

z Referendum in Scotland

z EU referendum in GB 2015 ?


Case study

� Wish-list of countries to file from research function:

z market size, competition (actual & potential)

z mid term strategy

z Not so much cost oriented

z Optimistic regarding

potential of invention


Case study



z mid term strategy




� Focus of controlling: costs & resources


Case study



z mid term strategy




� Focus of controlling: costs & resources

� Final decision: balanced approach


Economic considerations for costs of UPS – applicants view

� Business Considerations

z Market: additional regional coverage of countries of some or minor interest

z Applicant internal processes & resources: Minor complexity reduction, additional costs ?

� Legal Considerations:

z Mid/long term: enforcement better and faster outside litigation hotspots DE, GB, NL ? costs ?

� Competition of IP budget with other needs

z Within IP budget: competition of jurisdictions and inventions

z Reduction of country list during patent term

z Translation costs: UPS vs. London Agreement 10 September 2014 Dr. Andreas Popp

The Legislators view on UP renewal fees

� Verordung 1257/2012 Artikel 12

Höhe der Jahresgebühren

(1) Die Jahresgebühren für [einheitliche Patente]

b) sind ausreichend, um sämtliche Kosten für die Erteilung und Verwaltung des einheitlichen Patentschutzes abzudecken,

(2) Die Höhe der Jahresgebühren ist [u.a. unter Berücksichtigung von KMUs] auf folgende Ziele festzulegen:

a) Erleichterung von Innovationen und Stärkung der Wettbewerbsfähigkeit europäischer Unternehmen,

c) Anlehnung an die Höhe der nationalen Jahresgebühren für ein durchschnittliches Europäisches Patent, das in den teilnehmenden Mitgliedstaaten zu dem Zeitpunkt wirksam wird, zu dem die Höhe der Jahresgebühren erstmals festgelegt wird.

(3) Zur Erreichung der in diesem Kapitel festgelegten Ziele wird die Höhe der Jahresgebühren so festgesetzt, dass:

a) sie der Höhe der Jahresgebühren entspricht, die für die durchschnittliche geografische Abdeckung der üblichen Europäischen Patente zu entrichten sind,

b) sie die Verlängerungsrate gegenwärtiger Europäischer Patente widerspiegelt und

c) die Zahl der Anträge auf einheitliche Wirkung widerspiegelt.

� Regulation 1257/2012 Article 12

Level of renewal fees

1. Renewal fees for [unitary patents] shall be:

(b) sufficient to cover all costs associated with the grant of the European patent and the administration of the unitary patent protection;

2. The level of the renewal fees shall be set, [taking into account among others SMEs] with the aim of:

(a) facilitating innovation and fostering the competitiveness of European businesses;

(c) being similar to the level of the national renewal fees for an average European patent taking effect in the participating Member States at the time the level of the renewal fees is first set.

3. In order to attain the objectives set out in this Chapter, 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. 11 September 2014 Dr. Andreas Popp

Current Validation Behavior Statistical Data I

� EP: time until grant: ~ 5 years; slight upward trend

� Average EP lifetime in the UP member states: 8.5 years +/- 1 year

� Potential UPs at the date of grant of EP > 99% (Valid. DE, GB or FR)

� Average validation rate in the UP member states: 4.1; slight downward trend

12

10+: 5% Number of validations

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1 2 3 4 5 6 7 8 9 10

September 2014 Dr. Andreas Popp

Current Validation Behavior – Influence of Translation Costs Validierungsverhalten statistische Daten III

� >80% of validations of potential UPS countries are performed in member states with no substantial translation cost incurred

(Ŷ London Agreement or national regulations)

13

0%

5%

10%

15%

20%

25%

AT BE BG CY CZ DE DK EE FI FR GB GR HU IE LT LU LV MT NL PL PT RO SE SI SK


Flexibility in country scope

� During patent term: gradual laps of countries to contain costs.

� High impact on annuities to pay


0

5000

10000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Advantages and Disadvantages of the UP System

15

EP only (“bundle patent“)

EP with UP (Assessment UP)

National route

Grant procedure and cost

+ + -

Translation cost in transitional period

0 0 (+ after transitional period)

-

Patent renewal fees

Point of reference ??? same

Flexibility of cost management after grant

+ ? +

“Complexity costs“

0 Slightly better -

Existing courts

+ (in case of opting out)

Selection and training of judges

0

Court fees for 1 procedure

+ - +

Cost & consistency in multi-national procedures

- ??? & + -


Projected User Behavior in the UP System - Fee Structure � Based on: Fees applicable in

years 6 – 14

� Acceptance of fees depends on the number of potential validations in the bundle patent

z Fee models according to Pottelsberghe (VCOM) roughly correspond to the fees for 4 or 6 validations

Ŷ reasonably priced translations

16

0

5000

10000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Number of vaildations additional countries

0

5000

10000

15000

20000

25000

30000

35000


Projected User Behavior in the UP System - Model & Result � Maximum cash inflow regarding renewal fees in the order of 2 or 3 validations

z Regarding 56,000 granted EPs annually and current costs & fees

� 20% of the current volume does not depend on UP fees as it originates from non-EU countries (particularly CH, TR) or ES, IT

0%

10%

20%

30%

AT BE BG CY CZ

DE

DK EE FI FR GB

GR

HU IE LT LU LV MT

NL PL PT RO SE SI SK

0

50

100

150

200

250

300

Mio€

During the transitional period After the abandonment of the translation requirement

05000

100001500020000250003000035000

DE

DE

,GB

+FR

+NL

+SE

+BE

+IE

+AT

+DK

+FI

VCO

M(2

00)

VCO

M(3

00)0%

10%

20%

30%

40%

50%

1 2 3 4 5 6 7 8 9 10


Current Validation Behavior Statistical Data

� Patent renewal fee income from granted EPs z Renewal fees for patent years 6-14, validation frequency of grants: 2007-2011, 56,000 EP-B

p.a.

� Model Sum: 757m €, enhanced cooperation (UP): 612m € z DE 212m €, FR 86m €, GB 85m €, IT 66m €, CH 35m €, ES 31m €

z Real income 680m €

18

DEFRGBNLATSEFIDKBEIEOthersITCHESTR


Projected User Behaviour in the UP System. Model & Result

� Model: same portion of

z Users preferring the UP System when level of renewal fees does not change

z Cost-sensitive users (renewal fees & translations)

z Users who would only use the UP System at a cost advantage

� The acceptance of the system significantly increases after the abandonment of the translation requirement

Amount of fees for the UP in fees for the number of national validations

0%10%20%30%40%50%60%70%80%90%

100%

Acceptance during the transitional period for translations (6-12 years) Acceptance after the abandonment of the translation requirement


Conclusion � Nearly all granted European Patents can participate in the Unitary Patent

System (UPS)

z Requirements for translations make UPS less attractive than current system including London Agreement

� Expected participation rate in UPS is sensitive to renewal fees

z Renewal fees as high as for 3 validations: expected participation 50%



� Additional advantages of court proceedings may increase participation rates


Recommendation to both make the system attractive and finance the system � Expected participation rate in UPS means less participation in current

system

z Renewal fees as high as for 3 validations: unchanged fee income 50%



� Lower fees in the higher years => generate more annuities

z longer patent term,

z less pressure form lower flexibility

� Include IT (validation in 45% of granted EPs, save translation costs)

� extension of UP to CH (validation in 31% of granted EPs)


Das Bild kann zurzeit nicht angezeigt werden.

Februar 2013 22

*

* Pascal Griset 2013 Das Europäische Patent

Februar 2013

� Verordung 1257/2012 Artikel 12

Höhe der Jahresgebühren

(1) Die Jahresgebühren für Europäische Patente mit einheitlicher Wirkung

a) sind über die gesamte Laufzeit des Patents hinweg progressiv gestaltet,

b) sind ausreichend, um sämtliche Kosten für die Erteilung und Verwaltung des einheitlichen Patentschutzes abzudecken, und

c) sind ausreichend, damit sie zusammen mit den an die Europäische Patentorganisation in der Antragsphase zu entrichtenden Gebühren einen ausgeglichenen Haushalt der Organisation sicherstellen.

(2) Die Höhe der Jahresgebühren ist unter anderem unter Berücksichtigung der Situation bestimmter Einheiten wie kleiner und mittlerer Unternehmen im Hinblick auf folgende Ziele festzulegen:

a) Erleichterung von Innovationen und Stärkung der Wettbewerbsfähigkeit europäischer Unternehmen,

b) Orientierung an der Größe des durch das Patent abgedeckten Marktes, und

c) Anlehnung an die Höhe der nationalen Jahresgebühren für ein durchschnittliches Europäisches Patent, das in den teilnehmenden Mitgliedstaaten zu dem Zeitpunkt wirksam wird, zu dem die Höhe der Jahresgebühren erstmals festgelegt wird.

(3) Zur Erreichung der in diesem Kapitel festgelegten Ziele wird die Höhe der Jahresgebühren so festgesetzt, dass:

a) sie der Höhe der Jahresgebühren entspricht, die für die durchschnittliche geografische Abdeckung der üblichen Europäischen Patente zu entrichten sind,

b) sie die Verlängerungsrate gegenwärtiger Europäischer Patente widerspiegelt und

c) die Zahl der Anträge auf einheitliche Wirkung widerspiegelt.


� Regulation 1257/2012 Article 12

Level of renewal fees

1. Renewal fees for European patents with unitary effect shall be:

(a) progressive throughout the term of the unitary patent protection;

(b) sufficient to cover all costs associated with the grant of the European patent and the administration of the unitary patent protection; and

(c) sufficient, together with the fees to be paid to the European Patent Organisation during the pre-grant stage, to ensure a balanced budget of the European Patent Organisation.

2. The level of the renewal fees shall be set, taking into account, among others, the situation of specific entities such as small and medium-sized enterprises, with the aim of:

(a) facilitating innovation and fostering the competitiveness of European businesses;

(b) reflecting the size of the market covered by the patent; and

(c) being similar to the level of the national renewal fees for an average European patent taking effect in the participating Member States at the time the level of the renewal fees is first set.

3. In order to attain the objectives set out in this Chapter, 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.


fees applicable to the european unitary patent: facts ... · the unitary patent system – ups i:...

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