12 May 2015

UPC fees consultation launched

The likely success of the proposed Unified Patent Court and Unitary Patent regime depends to a very large extent on the costs involved in relation to:

  • Obtaining and renewing the Unitary Patent
  • Opting standard European patents out of the UPC regime
  • Court fees and recoverable costs in the UPC

To date, without this information having been available, businesses have been unable to reach an informed conclusion on key decisions such as whether a Unitary Patent will be cost-effective, and whether to opt their existing and future standard European patents out of the UPC regime (during the transitional period that such opt-outs are available).

On 8 May, the UPC Preparatory Committee issued its much anticipated public consultation on the UPC fees and recoverable costs which contains a number of interesting aspects. Responses to the consultation should be sent to the Committee by midnight on 31 July.

Court fees in the UPC 

Court fees before the UPC will comprise fixed fees, and value-based fees where the value of the action is more than EUR 500,000. 

Fixed fees

The consultation contains a list of all of the proposed fixed fees which include:

 Actions Fixed Fee
Infringement action  11,000 €
Counterclaim for infringement 11,000 €
Action for declaration of non-infringement 11,000 €
Appeal 16,000 €
Revocation Action 20,000 €
Counterclaim for revocation  Same as the infringement action subject to a limit of 20,000 €
Opt-out of standard European patent 80 € (per patent)
Withdrawal of opt-out 80 € (per patent)

The fee for a counterclaim for revocation is particularly controversial.  Patent holders will also be interested to see the proposed fee for opting their standard European patents out of the UPC regime, particularly those with extensive portfolios.  The proposed opt-out fee is set at EUR 80 per patent (but covers all designations of those patents).  The proposed fee for withdrawing an opt-out is also EUR 80 per patent.

Value-based fees

In relation to value-based fees, the consultation sets out a rising scale of fees payable for all actions over EUR 500,000 (up to a maximum value-based fee of EUR 220,000).  For example, an action which is valued at up to and including EUR 1 million will attract a value-based Court fee of EUR 5,000; whereas an action valued at up to and including EUR 3 million will attract a value-based Court fee of Eur 20,000.  The consultation states that it is assumed that 25% of actions will fall below the EUR 500,000 threshold and that 90% will have a value up to EUR 4 million.  It also notes that there will be guidelines to enable the Court to assess the value of an action, pending development of its case law.

Proposals re fee reduction

The consultation refers to two proposals designed to ensure that, as provided for in the UPC Agreement, the UPC fees are fixed at such a level that they ensure a right balance between the principle of fair access to justice (in particular for SMEs etc) and an adequate contribution to the costs incurred by the Court, bearing in mind the objective of a self-financing Court with balanced finances. 

The first option provides for reimbursement of the fixed and value-based fees to reward certain behaviour by the parties that essentially leads to the Court having to do less work, i.e., where:

  • The action is heard by a single judge (reimbursement of 25% of the court fees);
  • The action is withdrawn (reimbursement of up to 60% depending upon the stage of proceedings when the action is withdrawn); or
  • The parties reach a settlement (reimbursement of up to 60% depending upon the stage of proceedings when the settlement is concluded)

Under the alternative proposal, certain entities (SMEs, micro-entities, non-profit organisations universities and public research organisations) may apply for an exemption of the value-based fees.

Under both of these alternatives, the consultation also provides that the Court may reimburse the fixed fee and reduce the value based fee if it is satisfied that the amount of fees threatens the economic existence of a party.

Recoverable costs

The consultation proposes a scale of recoverable costs (including representation costs) with set ceilings to protect losing parties against excessive costs liabilities, based on the value of the dispute.  The UPC preparatory committee suggests that the figures proposed steer a middle course as to what constitutes reasonable representation costs:

 Value for Action Ceiling for recoverable costs of representation per instance and party
 Up to and including 250,000 €  Up to 50,000 €
 Up to and including 500,000 €
 Up to 75,000 €
 Up to and including 1,000,000 €
 Up to 150,000 €
 Up to and including 2,000,000 €
 Up to 200,000 €
 Up to and including 4,000,000 €
 Up to 400,000 €
 Up to and including 8,000,000 €
 Up to 600,000 €
 Up to and including 16,000,000 €
 Up to 800,000 €
 Up to and including 30,000,000 €
 Up to 1,000,000 €
 Up to and including 50,000,000 €
 Up to 1,500,000 €
 More than 50,000,000 €  Up to 3,000,000 €

Unitary Patent

In the meantime, discussions on the fees of the Unitary Patent continue, in particular in relation to renewal fees.   In March 2015, the EPO confirmed that two proposals are currently being considered: fee levels equivalent to the renewal fees which have to be paid for the four or five countries out of the 25 EU-participating member states in which most European patents are currently validated (so-called TOP 4 and Top 5 proposals).  The TOP 5 proposal also incorporates a 25% fee reduction for the first ten years of the patent for e.g. SMEs, universities and research institutions.   The overall effect of this in terms of total fees over 20 years is as follows:

  • TOP 4 proposal: total renewal fees of Eur 37,995
  • TOP 5 proposal: total renewal fees of Eur 43, 265 (or 41,665 on the reduced basis).

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