Will the Unitary Patent Really Lower Costs for Applicants by up to 70% ?

Benoît Battistelli and Michael Barnier at the 2011 European Inventor Award ceremony

Yesterday the EPO News channel reported on a “renewed commitment to cost-efficient European patents” by the EPO and the European Commission. As nobody really had the slightest doubts on the continued and strong support by the project’s two main driving forces, this “news” does not sound that confident and persuasive as it apparenty was intended.

I cannot help, but to me it sounds more like political PR language or even autosuggestion if the President of the EPO, Benoît Battistelli, and the European Commissioner for the Internal Market and Services, Michel Barnier, jointly confess that “the unitary patent is [...] expected to simplify procedures and lower the costs for applicants by up to 70%“.

No doubt, that sounds like excellent news for European patent applicants. However, what is actually intended is that

The unitary patent will be granted by the EPO under the same procedure, criteria and rules for examining patentability as the existing European patent, all of which are laid out in the European Patent Convention (EPC). Its advantage will lie in the post-grant phase, when the patent will be given unitary protection effect throughout the territory of the EU member states participating in the unitary patent scheme.

In other words, it is not any more desired that patent APPLICANTS profit from the promised cost savings but rather patent PROPRIETORS who decide to enforce their granted patent – i.e. a vanishing minority of all patentees. This has been made clear by Mr Battistelli earlier this year, when he openly confessed in an interview that:

1. We need to help SMEs use the EPO and we must reduce the cost of doing so”;
2. [I do] “not believe there should be any changes in the overall level of EPO fees“;
3. “If any increases were needed, [...] they should come from renewals and not from applications”.

Wow! So, despite the conclusion of Unitary Patent advocates that “the current system for obtaining patents throughout the EU is too expensive“, this truly self-confident statement of the EPO’s political president clarifies that the promised cost savings will not hit patent applicants at all. So it appears that Mr Battistelli’s claims that “we must help SMEs” and “we must reduce costs” actually means that someone else should help SMEs and someone else should reduce costs.

It has been continuously argued that the unitary EU Patent would be significantly cheaper than the existing EP Patent (as currently granted by the EPO) since translation costs would drop dramatically:

[...] for a granted patent to be effective in a [EPO] Member State, the inventor has to request validation in each country where patent protection is sought. This process involves considerable translation and administrative costs, reaching approximately €32.000 when patent protection is sought in the EU27, of which €23.000 arises from translation fees alone. In comparison, a US patent costs €1.850 on average. [EU Commission, press release of 13 April 2011]

Even if that might be the case, the calculation is not that candid since the sketched scenario is unrealistic as only an extremely limited number of applicants really desires and thus would validate a patent in each single EU member state. Applicants are not so much interested in theoretical cost savings that only occur in comparison to a hypothetical patent validated in the EU27 or EU25. Rather, applicants want to know how much cheaper patent prosecution will be in comparison to their today’s costs. And these figures almost entirely depend on the translation fees that applicants effectively spend today.

Considering that the London Agreement has already abolished translation requirements for most of the more important EPC/EU economies, such as UK, FR, DE, NL, SE, DK – but not, however, for IT and ES – the cost savings from unneeded translations will be very limited, especially since the two most important countries that did not enter the London Agreement, namely Italy and Spain, do not participate in the Unitary Patent either.

The only significant cost reduction of EU patent prosecution as compared to the present situation can be expected from decreased renewal fees. This difference, thought, might not be overwhelming and by far not 70% since the EPO’s renewal fees already are significantly higher than national renewal fees – besides this, the EPO president appears to even consider increasing renewal fees ‘if needed”. All together, European SMEs might be rather surprised ewhen they realise that the political promises did not come true – or only to very little extent.

(Photo : © EU, 2011)