The EU’s AI Act: Where Are We Now And What Could Its Impact Be On EU Companies?
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The cost of renewal fees and translations will be a big influence on the decision whether or not to opt for a Unitary Patent. The balance of costs will depend upon the number of European countries in which it is wished to enforce and maintain the European patent.
If a European patent application is not filed in English, German or French (the official languages of the EPO), a translation into one of the official languages of the EPO needs to be provided. This becomes the language in which the proceedings are conducted and in which the patent is granted. Before grant, translations of the claims into two other official languages other than the language of the proceedings have to be filed. This pre-grant language regime remains the same for both "classic" European Patents and Unitary Patents.
For "classic" European Patents, validation must be completed in each of the designated countries in which the European patent is to be granted and maintained. For many countries, this requires a translation of the claims or sometimes the whole patent to be filed at the relevant national patent office in a national language of that country and typically a local address for service is appointed in each country where the European patent is validated. Effectively the single European patent application breaks up into a bundle of separate national patents. Therefore, there is a validation cost associated with each designated country in which the European patent is to be maintained.
For European patent applications granted as Unitary Patents, there will be no need to separately validate the European in any of the participating countries. Currently the UPC will begin with 17 participating countries (those that have ratified). A further 7 countries have signed the UPC, but not yet ratified. However, of the six biggest countries by population in which a European Patent can be made effective, only Germany, France and Italy will participate (the United Kingdom cannot participate having left the EU).
The Unitary Patent has effect in all of the participating countries for the life of the patent. However, it will still be necessary to separately validate and renew the European patent in any non-participating countries, such as the UK, Spain and Poland, filing translations at the relevant national office, where required.
Depending upon the number of countries required for validation, particularly where many of those countries are selected from the list of participating countries, the cost of validation of a Unitary Patent can therefore be significantly reduced compared to a "classic" European Patent, due to reduced translation costs and local attorney charges. However, separate national validation will still be necessary for any selected non-participating countries.
During a transitional period, initially six years but extendable to a maximum of twelve years (or ending sooner if the European Council decides), Unitary Patents that were granted in French or German will need to be translated into English and the ones granted in English (the majority) will have to be translated to another official language of the European Union (i.e. any official EU language, not just the official languages of the EPO).
The translation must be filed together with the request for unitary effect (which must be filed within one month of the date of grant). The translation is for information only and has no legal effect.
A translation of the claims into the EPO's other two official languages will already have been filed at the end of the grant procedure. This means that if one of those other two EPO languages is chosen for the translation, only the description will need to be additionally translated when filing the request for unitary effect; the translation of the claims can be re-used.
Where the language of the proceedings is English and the patent proprietor chooses to file a translation of the specification into an official EU language other than French or German, it will often be possible to revert to an application filed with a national patent office and to adapt it.
After expiry of the transitional period, a translation will no longer be required to obtain a Unitary Patent.
It is important to stress that in this phase, a translation to another official language of the Union has no legal effect and is for information purposes only. However, the importance of choosing another official language of the EU comes later if proceedings before the Unified Patent Court (EPC) are instigated. In the event of a dispute relating to an alleged infringement of a Unitary Patent, the patent proprietor must provide, at the request and the choice of an alleged infringer, a full translation of the Unitary Patent into an official language of either the participating Member State in which the alleged infringement took place or in which the alleged infringer is domiciled. In the event of a dispute related to a Unitary Patent, the patent proprietor must provide, at the request of a competent court in the participating Member States, a full translation of the patent into the language used in the proceedings. Therefore, this may be a consideration in the choice of language for the translation when filing the request for a Unitary Patent.
A compensation scheme has been established providing a 500 Euro compensation payment towards this translation cost for qualifying entities. The compensation scheme is available to SMEs, natural persons, non-profit organisations, universities and public research organisations who have their residence or principal place of business in an EU member state and who have filed the European patent application, or Euro-PCT application leading to the Unitary Patent, in an official EU language other than English, French or German.
For "classic" European patents, an annual renewal fee must be paid separately to each national patent office in which the European patent has been validated and in which it is desired to be maintained. Effectively the European patent is a bundle of separate national patents in each of the countries in which it has been validated, renewable annually and separately in each country.
The procedure up to grant of the Unitary Patent remains the same as for regular or "classic" European patents without unitary effect. Before grant, annual renewal fees are still payable to the EPO and the cost of obtaining the grant of a European patent will not change, whether the resulting patent becomes a Unitary Patent or a "classic" European Patent.
In order to keep a Unitary patent in force in all of the participating countries, the patent owner need only pay a single annual renewal fee to the EPO. As long as this fee is paid, the Unitary Patent remains in force in all participating countries as a single Unitary Patent. This single annual renewal fee has been set to correspond to the combined renewal fees due in the four countries where European patents were most often validated in 2015, when the fee level was agreed by the Select Committee (i.e. the UK, France, Germany and Netherlands).
However, a separate renewal fee will still have to be paid at the relevant national office of any non-participating countries in which the Unitary Patent has been validated (e.g. UK, Spain or Poland) if the patent is to remain effective in such countries.
A comparison of the overall costs of a Unitary Patent with those of a "classic" European Patent should consider not only the official renewal fees but also the additional costs associated with the validation and maintenance of a "classic" European patent in the participating countries. These additional costs typically include translation costs incurred for validations and the publication fees payable to the various national patent offices, as well as the fees charged by attorneys or other service providers for validation and the payment of national renewal fees.
Based on such a comparison of the overall costs, it is believed that a Unitary Patent will be less expensive than a European patent validated and maintained in four or more of the participating countries (i.e. those participating in the Unitary Patent system). Consequently, the more participating countries a "classic" European Patent would have been validated in, the more cost-effective a Unitary Patent will be.
For example, the overall validation and renewal costs incurred for a "classic" European Patent validated in the four (participating) countries over 12 years can amount to EUR 11 850 (estimate based on sample information collected from patent attorneys; with specialised service providers the transactional costs are likely to be somewhat lower).
Although the renewal fees for a Unitary Patent for the same period will be slightly higher, the transactional costs are likely to be lower, bringing the overall cost down to EUR 11 260, which amounts to a 5% saving on the cost of a "classic" European Patent. That saving will increase to 8% for patents maintained for 15 years.
However, for more modest validation requirements the "classic" national validation route can be considerably cheaper than opting for a Unitary Patent. For example, the renewal cost over the lifetime of a European patent can be more than 60% higher for a Unitary Patent compared to a "classic" European Patent where validation in only France, Germany and the United Kingdom is required.
The renewal fee for a Unitary Patent payable at the EPO will be due at the end of the calendar month containing the anniversary of the filing date, as normal. It may be paid up to six months late with a 50% late payment surcharge. If the renewal fee is not paid in that period, then re-establishment will be possible but this will require a demonstration that the deadline was missed in spite of all due care having been taken.
A 15% reduction in the renewal fees (and any additional fees due) can be obtained if the patent owner files a statement with the EPO that they are willing to allow any person to have a licence in return for appropriate consideration. The availability of a ‘licence of right’ can be withdrawn at any time but if an exclusive licence is recorded at the EPO for a Unitary Patent or a request to record such a licence is pending before the EPO, it is not possible to record licences of right.
To summarise, if the patent owner of a European patent application is likely to wish to validate the resulting European patent in four or more of the participating countries, then the validation and renewal costs are likely to be cheaper for a Unitary Patent than for a "classic" European Patent. However, this then precludes the opportunity to later selectively allow the patent to lapse in just one or more of such participating countries, which would be an option to reduce the annual renewal fee burden with a "classic" European Patent. It is also necessary to factor in the cost and risk of carrying out any litigation before the new Unified Patent Court, and the risk of a central invalidation action before the Unified Patent Court.
This article continues FRKelly's series on the upcoming Unitary Patent and Unified Patent Court. For more details, check out the following articles:
8. UPC Opt-Out