EPO Proposes Two Unitary Patent Renewal Fee Options

After many months of anticipation, the EPO has put forward two proposals setting the level at which renewal fees will be payable for unitary patents. Both proposals set the fees at a level that is considered to be high in the later years of patent life. The proposals will now be considered by a select committee who are asked to pick one of the proposals.

Under the agreed arrangements for unitary patent protection, proprietors will be required to select, upon grant of a European patent, either unitary patent protection or a traditional European patent validated in the various member states of the European patent convention. The level of renewal fees payable on unitary patents will be a key factor in the decision on whether to select unitary patent protection at all.

The two renewal fee proposals have three time phases each. Each time phase of each proposal is based on a different rationale.

For both proposals, the renewal fees for years 3 to 5 are set the same as the EPO's own renewal fees for pending European applications. In addition, a fee for the 2nd year is provided, even though a 2nd year fee is not charged by the EPO on pending applications.

For years 10 to 20, the renewal fees are based on a renewal fee level that equals the combined level of renewal fees that the top 4 or 5 most frequently validated states would charge for patents in the 10th to 20th years.

Years 6 to 9 are set at a level that transitions from the 5th year fee to the 10th year fee.

The first proposal, called "TOP4" has renewal fees for years 10 to 20 which are set to be the same as the combined renewal fees for the four most popular EP states.

The second proposal, called "TOP5" has renewal fees for years 10 to 20 which are set to be the same as the combined renewal fees for the five most popular EP states. In addition a 25% discount for years 2 to 9 is provided for SMEs, natural persons, non-profit organisations, universities and public research organisations.

The two proposals are illustrated graphically below, together with the level of renewal fees payable on pending European applications for comparison.

The proposed renewal fee levels generally remain under control for the first 10 years of patent life. After that, they accelerate quickly, reaching EUR 4,855 for TOP4 and EUR 5,500 for TOP5 in year 20. These later year fee levels dwarf those payable in other worldwide markets of comparable size, for example, the renewal fee levels in China and the USA are much lower overall.

Most applicants validate their European patent in 4 states or fewer. Whichever of TOP4 and TOP5 is selected, it seems likely that most applicants will need to pay a premium for unitary patent protection, although there is of course a saving for those who would otherwise validate and maintain a standard European patent in a larger number of countries and even proprietors who would choose a small number gain protection over a broader area than before. However, the unitary patent does not provide the ability to reduce renewal fees by selectively dropping individual countries - a feature that is well used by proprietors of existing European patents. Overall, the fee proposals will be a disappointment to many.