How much will the EU Patent save me?

Revised on November 27, 2013 and also on March 4, 2014

In December 2012, the European Parliament welcomed the resolutions on the EU patent, stating that they would result in cost savings of up to 80% for applicants (see Press Release of December 11, 2012). Subsequent reports in the daily and business press highlighted the cost reduction as well. This is understandable because the cost involved in maintaining traditional EU patents, in the form of annual fees, can be considerable, particularly if the patent has been validated and is being maintained in several countries.

But are the cost savings really that drastic? The answer is: most likely in exceptional cases only. The "80%" mentioned probably only applies to countries that have had their patent validated in every single State in the European Union (including in Malta, Cyprus, etc.). In addition, this savings potential exists only if all EU Member States participate in the EU patent, which is far from certain, however. A review by Düsseldorf-based patent law firm COHAUSZ & FLORACK (available in Germany only) arrived at the conclusion that cost savings of 80% cannot be expected.

In the end, it is not possible to make serious concrete statements about potential cost reductions at this time (March 4, 2014). The above-mentioned statement by the European Parliament is also completely speculative, because the fees that will be incurred for validating and maintaining EU patents have not yet been set. There is not even a public draft available of the relevant fee schedule.

EU Regulation 1257/2012, however, contains certain indications. Article 12(3) stipulates that the level of annual renewal fees for an EU patent should be equivalent to the level of the renewal fee to be paid for current European patents for the "average geographical coverage." So in reality, the average cost should not change much. It is not that the fees are falling, but rather you get other countries "free of charge" – at least. Although currently it is not yet conclusively certain which countries these will be because the group of participating EU Member States has not yet been determined. In addition, the following two aspects must be taken into account:

  • If you were in fact satisfied with "below-average geographical coverage," it is expected that you will pay more for the EU patent than for national validation.
  • An EU patent can only be maintained or dropped – either in full or not at all. Unlike the nationally validated European patents, therefore, it will not be possible to drop the patent on a country-by-country basis. If the holder does not want to let the patent drop in full, but rather wants to maintain it in one or two core countries, in case of the EU patent, you just have to bite the bullet and maintain the entire EU patent and pay for it, too. On the other hand, performing the validation nationally gives the holder more flexibility and makes it possible to save a lot of money.

    The annual fees, however, are not the only cost component. It is also intended that there will be savings from lower translation cost. In addition, there will also be lower administrative cost (because only one central annual fee is to be paid instead of several annual fees to be paid to the relevant patent offices). 
    On the other hand, it is not yet clear whether the court proceedings will result in cost increases. Up to now, only a fraction of patents are subject to court proceedings. In Germany, this was also ensured by Section 81(2) sentence 1 Patent Act. Accordingly, actions for nullity are only possible if the objection period has expired or pending objection proceedings have ended. An action for nullity therefore can never take place simultaneously with objection proceedings. National actions for nullity after the end of the objection period are also relatively attractive because they only relate to an individual national part of the European patent. For EU patents, however, this will be fundamentally different. That is because EU patents can be disputed not only by filing an objection with the EPA, but alternatively or additionally by filing an action for nullity with the EU Patent Court, which may also be done simultaneously. The "Agreement on a Unified Patent Court" is simply missing a provision that would correspond to Section 81(2) sentence 1 German Patent Act. An action for nullity of this kind is also extremely attractive for the party filing the action because this allows to invalidate the entire EU patent. Anyone filing an objection against an EU patent would therefore generally file an action for nullity in addition. The only thing that could prevent this would be additional procedural cost. We should therefore expect that EU patents will be subject to actions for annulment in court more frequently than was previously the case for European and national patents. This will have to be taken into account in the cost-benefit analysis. Such cost-benefit analysis will, however, only be possible when we learn the fees that will be incurred for the EU patent.

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