On June 24, The European Patent Organization’s Administrative Council Select Committee agreed to the “True Top 4” proposal made by the European Patent Office (EPO) concerning the annuity fees for unified patents with the required three-quarters majority. The proposed fees, covering the territories of all 25 participating EU member states, correspond to the total amount of annuities for those four countries in which European patents are most validated at the moment (Germany, France, UK, and the Netherlands).
According to the current system, European patents have to be validated in every single country in which protection is sought after grant. This means high administrative and financial effort for the companies, especially for SMEs. Therefore, European patents are currently validated in only three or four of the participating countries on average. In other European countries, as a result, companies remain without protection and are vulnerable to illegal counterfeiting. The current system inhibits the creation of a unified European market for innovation and affects European companies adversely compared to their competitors, especially from the USA or Asia, who can launch their products in their large national and regional markets in an easier and cheaper manner before launching their inventions in the international market.
Therefore, the creation of a unified patent for all EU-member states is an important step, which has been awaited for more than forty years. This first decision by the Select Committee concerning annuity fees has now paved the way for a system of unified patent protection in Europe.
To what extent will the “True Top 4” proposal reduce costs? In the first ten years–which corresponds to the average duration of a European patent–annuity fees for a unified patent amounted to less than 5,000 € and the total amount of fees for maintaining the patent for the maximum duration of 20 years is only slightly more than 35,000 € (see chart below). In comparison, according to the current system, annuity fees for the same 25 member states amount to 29,500 € for the first ten years and almost 159,000 € for the maximum of 20 years. The now resolved fee table for the unified patent according to the “True Top 4” proposal thus implies a reduction in costs of 78% compared to the current system, as long as a validation of a European patent in all member states is assumed.
Also transaction costs including translation costs, which have to be paid for by patent attorneys or specialized service providers in every single member state, will be reduced significantly; with respect to an average patent validated in four countries, these costs are practically halved.
Owing to the low fees, especially in the first ten years, the unified patent is of major interest to companies, especially SMEs, as well as universities, research centers, and individual inventors. Additionally, special regulations regarding the financial adjustment of translation costs for SMEs and similar entities in EU countries not having one of the official EPO languages (German, English or French) as an official language have been agreed on. With respect to the future surveillance and regular review of the unified patent system, member states will pay attention to small entities like SMEs using the system and are able to permit further specific measures on demand.