Patent Fees and Pricing: Structures and Policies
Nikolaus
Thumm, EPOChief Economist
Sevilla24 May, 2012
The Output of R&D activities: Harnessing the Power of Patent Data
JRC-IPTS 4th
Workshop
Background
0
50 000
100 000
150 000
200 000
250 000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
European Patent Filings (1991-
2011)
Total Filings 244 372
Euro PCT Int. Phase 181 813
Euro Direct 62 559
GRANTED; ≤15 YEARS AFTER FILING
Proportionally less granted patents
44,640 49,680
PATENTING TRENDS
2008(207,000)
16%
60%
1998(124,000)
13%
36%
51%
GRANTED; ≥16 YEARS AFTER FILING
Twice as many granted patents
last very long
16,120 33,120
63,240 124,200
NOT GRANTED
Twice as many casesend up not granted
24%
Uncertainty by filing practice (1)Practice Description
1. Drafting of applications with too broad claims from the start
Applications are drafted with claims that are non-inventive and unclear. Basis is created in the description that can establish inventive step/clarity, if necessary.
2. Amendment(s) creating new deficiencies / Multiple amendments
In reply to the examiner's communication, amendments are filed that meet the objection but that create new deficiencies such as lack of clarity or new deficiencies under Art. 123(2) EPC.
The examiner has to write another communication in reply to which another amendment is filed that may give rise to yet other deficiencies (multiple amendments).
3. No constructive reaction until summoned for oral proceedings
Frequently, constructive responses, such as claim restrictions or the filing of experimental data are not submitted until oral proceedings are summoned.
4. Filing of divisionals applications with similar scope than parent
One or more divisionals are filed claiming subject-matter similar to that of the parent application. Very often, the divisional creates problems with Article 76(1) EPC (not supported entirely on parent).
Often, the parent is withdrawn before a final decision is taken (often a day before the oral proceedings for the parent).
Alternatively the parent is not withdrawn and therefore refused, and goes to the Board of Appeals. That means that the same subject matter is treated in parallel by the Board of Appeals (the refused parent) and the Examining Division (the divisional, filed before refusal).
Proceedings for the divisionals are very often delayed by the applicant.
Uncertainty by filing practice (2)Practice Description
5. Auxiliary request(s) in examination and opposition proceedings
Auxiliary requests are filed in examination and opposition proceedings. The filing of auxiliary requests occurs very late, typically after summons to oral proceedings.
The number of requests is felt by examiners to be high and very often without reasoning.
The requests are very often filed by the attorney while knowing that his main request is not allowable.
6. Appeal against refusal and immediately filing of new/amended claims
First instance is not considered. Some applicants do not bring all arguments in the examination phase. They go for a straight refusal and an appeal.
At appeal, amendments are submitted for the first time.
7. Filing of a bundle of similar to overlapping applications in parallel and such that spread among many directorates
Filing of applications with similar but not identical scope or appearing to relate to different technical fields due to wording.
Frequency Effect on Office Resources
Effect on Pendency Time
Development over time
Fees at EPO amount in EUR Filing (online) 115 European search 1165 International search 1875 Renewal for European application (3rd year) 445 Renewal for European application (10th year) 1495 Examination 1555 Opposition 745 Appeal 1240 Further processing (late payment) (50%) Further processing (other) 240 Claim fee (claim 16- 50) 225
TRADITIONAL FEE STRUCTURE: ACCUMULATED CASH FLOWS OVER PATENT LIFE TIME
-€300
-€250
-€200
-€150
-€100
-€50
€0
€50
€100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Filing feesvs.
Initial costs
Search feesvs.
Search costs
Examination fees & internal
renewals
Internal renewal fees vs.
Exam, Opposition,Appeal costs
External renewal feesvs. Opposition and Appeal
costs
Externalrenewal
fees
millions
Final gap -
excluding Patent Inf. costs etc.
Fee related changes at EPO
Year Fee-related changes Type of fee Direction of change
1996 Reduction of the search fee for EPO applications and where the EPO acts as International Searching Authority (ISA) in 1996
EARLY procedur
al fees
decrease
1997 Reduction of the filing fee by more than 50% in 1997 EARLY procedur
al fees
decrease
1999 Newly structured payment of the designation fee in 1999 -
originally, applicants were obliged to pay a designation fee for each designated contracting state. As of July 1, 1999 designation fees are being deemed paid for all contracting states upon payment of
seven times the amount of this fee
LATE procedur
al fees
decrease
1999 Reduction of the search fee for EPO applications and where the EPO acts as ISA in 1999
EARLY procedur
al fees
decrease
Year Fee-related changes (continued) Type of feeDirection of
chang
e
2004 Introduction of the reduced fee for online filings in April 2004 EARLY procedur
al fees
decrease
2004 Introduction of the written opinion for PCT international searches with higher search fees in January 2004
EARLY procedur
al fees
increase
2005 Introduction of the Extended European Search Report with higher search fees in July 2005
EARLY procedur
al fees
increase
2005 Introduction of the Extended European Search Report with lower examination fees in July 2005
LATE procedur
al fees
decrease
2008 Abolition of the translation requirement for countries which signed the London Agreement, which came into force in 2008 leading to lower validation costs
LATE procedur
al fees
decrease
2008 Change in the structure of internal renewal fees in April 2008, except for the 3rd
yearRenewal fees increase
2008 Introduction of new claim fees at the EPO, from April 2008, applicants had to pay 200 €
per claim after the 15th
claim (before: 45 €
for the 11th
and each subsequent claim)
EARLY procedur
al fees
increase
2009 From April 2009, for each claim after the 50th, the excess claim fee has been 500 €
rather than 200 €EARLY
procedur
al fees
increase
2009 Introduction of the payment of the page-based fee for the application document at the time of application rather than at grant in April 2009
EARLY procedur
al fees
increase
2009 Change in the structure of the designation fees in April 2009 such that a flat designation fee amounting to 500 €
provides protection in all EPC member states
LATE procedur
al fees
decrease
EPC national renewal fees -
absolute fee levels
National renewal fees - absolute fee level
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
AT BEBGCHCYCZDEDKEEES FI FRGBGRHRHU IE IS IT LT LULV MCMKMT NLNO PL PTROSE SI SKSMTR
Euro
year 16-20year 11-15year 6-10year 3 - 5
EPC National Renewal Fees: National Fee Policies
•
Fee policies pursued over the last ten years by six European NPOs:–
Swiss Federal Institute of Intellectual Property (CH)
–
Norwegian Industrial Property Office (NO)–
Netherlands Patent Office (NL)
–
Hungarian Patent Office (HU)–
UK Intellectual Property Office (UK)
–
Italian Patent and Trademark Office (IT)
EPC National Renewal Fees: Method
•
Survey: Data on procedural and renewal fees charged in the last ten years was gathered
•
Phone interviews (approx. 1 hr.): –
Rationale behind individual changes in fees in the past
–
General objectives of national fee policies–
Main motivations for setting procedural and renewal fees
EPC National Renewal Fees: Key Findings -
Similarities
•
The majority of NPOs
adopt, to varying degrees, the 'traditional fee policy' approach:–
Procedural fees generate less income than renewal fees
–
Renewal fees are progressive (except at the Swiss Federal Institute of Intellectual Property)
•
A move away from this traditional system is highly unlikely
EPC National Renewal Fees: Key Findings -
Differences
•
Despite high-level similarities in fee-policies, some features are distinctive to each NPO:–
Financing structure of the NPO
–
Relative and absolute levels of procedural and renewal fees
–
Intended goals of procedural and renewal fees
EPC National Renewal Fees: Key Findings –
Financing
•
Fully financed by the state ― does not retain any income from procedural and renewal fees (NO, NL)
•
Partially financed by the state ― publicly financed but retains some income from procedural and renewal fees (IT)
•
Self-financed ― the income is generated from procedural and renewal fee payments (CH, HU, UK)
EPC National Renewal Fees: Key Findings –
Procedural Fees
•
Self-funding NPOs
tend to have a larger procedural fees-to-renewal fees ratio than fully (or partially) funded offices
0%
20%
40%
60%
80%
100%
120%
Netherlands Norway Italy Hungray UK Swiss
Procedural fees as a % of renewal fees over 10 years
EPC National Renewal Fees: Key Findings –
Renewal Fees
•
Self-funding NPOs
have a ‘flatter’
renewal fee schedule than fully (or partly) funded offices
Key Findings –
Primary Motivations for Setting Procedural Fees
•
The Hungarian Patent Office provides a particularly interesting example:
–
It has a progressive structure of the fees for amendments and for requesting extensions to time limits
–
The rationale for having progressively increasing fees for amendments and extension requests could be very similar to that for having progressive renewal fees (revelation principle)
•
Further investigation is required
Key Findings –
Primary Motivations for Setting Renewal Fees
•
Most NPOs
recognise the cost-recovery role. Self-financed NPOs indicated that welfare considerations are not the primary motivation.
Maximise welfare Cost recovery Steering income
NO X X NL X X ITA X HU X X UK X CH X X
1.1
EPC National Renewal Fees: Conclusion
•
Even if all NPOs
adopt a traditional fee policy based on low procedural fees, the relatively sophisticated procedural fees set by some offices
indicate that they recognise the important role that procedural fees can play in shaping applicants’
behaviour.•
The NPOs’
financing status appear to influence fee policy. In the given sample of NPOs, renewal fees are more progressive over the years of patent lifetime with state-financed NPOs
than with self-funded NPOs.
EMPIRICAL EVIDENCE ON EPO FEES
FINANCE(COST COVERAGE)
POLICY(STEER APPLICANT*)
FILING AND SEARCH
EXAMINATION
FURTHER PROCESSING
NATIONAL RENEWAL FEES
*propensity to proceed to the next stage
The 'Traditional Fee Policy'
•
Assumptions:•
Demand for patents should be encouraged (more patents are better
for the economy).
•
Patents should be properly designed (i.e. through the right mix of breadth/length).
•
Patentees file applications with genuine intent searching protection for inventions.
•
Patent offices have unlimited resources.•
Patent offices are concerned about social welfare.•
Single patent authority and single representative market for patent protection.•
Reality:•
The scarce resource is patent offices’
capacity to process applications.•
Economic benefits from patent pending status. •
Patent backlogs, strategic patenting and uncertainty make patents less predictable.
•
Self-funding status of offices may imply that welfare considerations are not taken into account when fee policies are set.
•
The reality of the European patent system is extremely complex because of the multitude of institutional players involved, and the possibility
of misalignment of incentives associated with it.
Key facts•
Basic principles–
a European patent granted under the EPC
–
unitary effect
for the territories of the 25 EU member states currently participating, at the applicant's request
–
co-existence with the existing European patent and national patents
–
validated in one single administrative step by the EPO
for all the participating states in the language in which it was granted
–
language regime being finalised; transition measures foreseen
•
Objective European Council Presidency and
EU Commission intend to have the first unitary patent
granted in 2014
The Unitary patent
The Unitary Patent: Advantages•
For inventors–
protection in one single step for the 25 states
currently participating
–
significant cost savings
(translation, validation, administration)–
simplified validation procedure
(instead of up to 25 different procedures)
–
simplified and more cost-efficient renewal
procedure–
increased legal certainty
due to uniform litigation system
•
For Europe–
optimal protection
in the participating states as a whole
–
better framework conditions for innovative companies
and organisations
–
simplified European protection mechanism
for companies from outside Europe
–
improved competitiveness
of the European patent system
Europeanpatentapplication
Filing andformalitiesexamination
Search report with preliminaryopinion onpatentability
Grant ofEuropeanpatent
Refusal or withdrawal of application
Substantiveexamination
The unitary patent as a European patent
UNITARY PATENT
for the territories of the 25 participating states
At the request
of the patent proprietor
Limitation/revocation/oppositionproceedings
Appealproceedings
Same grant procedure as for classic European patent
The unitary patent replaces the individual effects of the European patent
in the 25 participating states
THANK YOU FOR YOUR ATTENTION
www.european-patent-office.orgNikolaus
Thumm