An underlying purpose of the unitary patent is to introduce cost and management efficiencies for patent owners in circumstances where they need to protect more than one European market: instead of paying renewal fees for multiple national counterparts of a European patent, and the associated costs of patent attorneys, a single renewal fee can be paid every year. It is intended that this will also promote affordable protection for SMEs in Europe.
However, the process of setting the appropriate fee has been complex and controversial. The reason is that the level of the renewal fee must strike a balance: it must be low enough to make the system attractive to users, including SMEs, while generating enough revenue to cover the administration costs of the unitary patent. An important factor in striking this balance is the fact that the average number of country validations for a classical patent is relatively low – just four to five countries – compared with the number of Member States covered by the Unitary Patent. A renewal fee that is set much above the average renewal cost that would have to be paid on this number of European patents carries the risk that it will be unattractive for patentees who validate their patents in just a small number of countries – a particular concern for SMEs. For some, however, the large number of extra Member States covered by the unitary patent is worth an additional cost. For others, the ability to allow less valuable national validations of a European patent to lapse is a flexibility that they would prefer to keep as renewal fees increase, year-on-year.
In March, the EPO President published two renewal fee proposals made to the EPO Select Committee responsible for the Unitary Patent. These were: i) 'TOP 4' (based on equivalent renewal fees for 4 countries); and ii) 'TOP 5' (based on equivalent renewal fees for 5 countries). TOP 4 begins at €350 in the 2nd year, escalating to €4,855 in the 20th year. TOP 5 offers a 25% reduction for years 2 to 10 for, amongst others, SMEs and universities, but the 20th year fee is higher at €5,500.
Following criticism that the level of fees in both proposals was too high in the first half of the patent term, a revised proposal was submitted on 7 May. This provides "true TOP4" and "true TOP5" levels of renewal fee in which the fee for years 2 to 9 is reduced compared to the earlier proposal. Under the renewed proposal, true TOP4 begins at €35 in the 2nd year, escalating to €990 in the 9th year and finally €4,855 in the 20th year. Over 20 years, the total sum of fees is €35,555. True TOP 5 begins at €85, rising to €1,255 in the ninth year and finally €5,500 in the final year. The total cost over 20 years is €41,955. However, for SMEs, natural persons, non-profit organisations, universities and public research organisations, a 25% reduction is applied from years 2 to 10.
With its latest proposal, the EPO has adjusted its suggested renewal fee structure to make it more attractive to potential patentees. There has been no agreement on the final structure, but when this is settled the EPO will hope that it attracts sufficient uptake of the patent and sufficient revenue to administer it.