High renewal fees for unitary patent would be a tax on innovation

28 May 2015 | News
After all the promises about lower fees, small companies are in danger of being priced out of Europe’s new patent regime, complains Eurochambres in a letter to the EU industry chief

High renewal fees for patents filed under Europe’s new intellectual property protection regime would damage European innovation according to Eurochambres. Rather than haggling about how much money goes to patent offices the focus should be on helping SMEs and start-ups, the lobby group says.

The fees to be paid under the unitary patent were supposed to have been fixed last year, but discussions are still going on. Under the scheme the European Patent Office (EPO) will be responsible for collecting the renewal fees, keeping half for itself and handing the remainder to national patent offices.

“[Renewal fees] should not support the budget of national patent offices. Such a payback option to national administrations, unrelated to any service provided to the patentee, is de facto a tax on innovation,” Eurochambres says in a letter to Commissioner for Internal Market, Industry, Entrepreneurship and SMEs Elżbieta Bieńkowska.

The irony of all this is that it was promised the unitary patent would drastically cut the cost of patent protection in the EU. Those watching the negotiations are no longer convinced.

A committee made up of representatives from the 25 European countries that signed the unitary patent treaty and the EPO are meeting in Brussels this week to continue debating costs.

The risk is that SMEs will be priced out. “A key factor… is that SMEs encounter greater cash-flow difficulties than larger, established companies. This is particularly the case for innovative SMEs in the early phase of the commercialisation of a new product,” Eurochambres says.

The cost of renewal fees is acknowledged to be a key factor in the overall success of the new patent regime in Europe, which is supposed to go live in 2016.

Similar letters of concern have been sent by Dutch company Philips, Swedish engineering group Alfa Laval, Finnish mobile equipment maker Nokia, Danish energy business Danfoss and chipmaker NXP Semiconductors NV.

Governments have yet to agree on appropriate cross-EU fees. The EPO said in December that an announcement will be made in the summer but there is some doubt at the top of the European Commission whether this deadline will be met.

Under Europe’s existing patent regime, the EPO examines and grants the patent, but patent holders must pay an initial registration fee in each country where they want it to be valid, requiring multiple translations and local lawyers.

Since on average companies currently register patents in four of the 25 countries that are part of the new system, there will be little incentive to take out a unitary patent if the renewal fees cost much more than maintaining four national patents.

Never miss an update from Science|Business:   Newsletter sign-up