Europe’s new patent system, expected to come into force in 2017, consists of two parts. First, patent owners will have the option to apply for a European Patent with Unitary Effect (or 'unitary patent' for short) to avoid the costs of validating the patent in individual countries. It will remain possible to apply for a European patent under the current system, which requires validation in individual countries of choice. Second, a new court known as the Unified Patent Court (UPC) will be created to act as a single forum for disputes relating to unitary patents. The UPC will also have jurisdiction to hear disputes relating to European patents granted under the current system, although it will be possible for such patents to be opted out of the UPC's jurisdiction.
Following a public consultation launched in May 2015, the Preparatory Committee for the UPC agreed on the long-awaited Rules on Court fees and recoverable costs at its meeting on 24 and 25 February 2016. The Rules and list of fees can be found here.
Key aspects of the UPC fees include:
- There will be no fee for opting out European patents from the jurisdiction of the UPC. Likewise, there will be no fee for withdrawing an opt-out. This news will come as a relief to patentees, particularly those with large portfolios.
- All actions will carry a fixed fee, whilst infringement actions valued above 500,000 EUR will also carry a value-based fee.
- The fixed fee for an infringement action will be 11,000 EUR. The value-based fees for infringement actions will range from 2,500 EUR (for an action valued between 500,000 and 750,000 EUR) to 325,000 EUR (for an action valued above 50,000,000 EUR).
- Revocation actions will carry a fixed fee of 20,000 EUR. No value-based fee will be payable. Counterclaims for revocation, however, will carry the same fee as the infringement action, up to a limit of 20,000 EUR.
- Appeal fees will be the same as the fees payable at first instance.
- Small and micro entities will be entitled to a 40% reduction on all Court fees. Parties who wrongly claim small or micro entity status can be ordered to pay the remainder of the fees plus a 50% surcharge.
- Partial reimbursements of Court fees will be available for any party when an action is withdrawn or settled. A 60% reimbursement will be available if the action is withdrawn or settled before the end of the written procedure, with the reimbursement falling to 20% if the action is withdrawn or settled before the end of the oral procedure. A 25% reimbursement is available if an action is heard by a single judge.
- The costs that a successful party can recover from an unsuccessful party will be subject to ceilings ranging from 38,000 EUR (for actions valued up to 250,000 EUR) to 2,000,000 EUR (for actions valued above 50,000,000 EUR). However, there will be flexibility on recoverable costs, including the ability to go above the stated ceilings by up to 50% on lower value cases.
Guidelines for the determination of Court fees and the ceiling of recoverable costs of the successful party have also been published. These suggest approaches for valuation of actions such as infringement claims, claims and counterclaims for revocation, declarations of non-infringement, actions for compensation of license of right, and applications for interim relief. The Guidelines can be found here.
While it remains to be seen just how the Court will develop, it is clear that the UPC fees will be cheaper than the total of those for parallel litigation in multiple jurisdictions. The threat of recoverable costs (i.e., the ‘loser pays’ principle) may discourage weak cases, whilst partial reimbursements of fees may promote early settlement. Reduced fees will also be encouraging for small and micro-entities. However, compared to the European Patent Office (EPO) opposition fee, currently set at 775 EUR, the UPC revocation fee may seem disappointingly high.
To read more about the UPC, please visit finnegan.com/unifiedpatentcourt.