Is “True Top 4” a good deal for patentees?

One of the key questions regarding the unitary patent was answered last month, when the European Patent Office (EPO) formally endorsed the “True Top 4” renewal fee proposal.

The EPO’s announcement is welcome news for patentees on two counts.   First, they now know what the cost of renewal fees for the unitary patent will be (see table).  Moreover, by opting for “True Top 4”, the EPO selected the cheaper of the two proposals on the table following a long period of consultation and negotiation.

The cost of renewal fees for the unitary patent was a significant issue for patentees with potential implications for the cost-competitiveness and therefore attractiveness of the unitary patent.  If the cost of the renewal fees was set too high, then patentees may well have preferred to continue validating their European patents in a selection of individual countries, rather than opting for the unitary patent.  Currently, European patents are validated on average in three or four of the countries participating in the unitary patent.

The two proposals – “True Top 4” and “True Top 5” – that the EPO ultimately had to choose between were themselves evolved from two earlier proposals, “Top 4” and “Top 5”.  The idea behind these proposals was that the cost of the renewal fees for the unitary patent would be comparable with the total renewal fees paid in respect of national patents obtained in the most popular EU countries in which European patents are validated.  The top four countries are Germany, France, the UK and the Netherlands.

Accordingly, under the “True Top 4” proposal, the lifetime cost of renewing a unitary patent would be around the same as for renewing a German, a French, a UK and a Dutch patent. This would seem to represent relatively good value, since the unitary patent will cover all of the EU countries except Spain, Poland and Croatia (i.e. 25 countries).

The EPO hopes that “True Top 4” “will make the unitary patent very attractive for business, and especially for SMEs, universities, research centres and individual inventors.”

However, some parties had lobbied for an even cheaper renewal fee model based on the top three countries in which European patents are validated.  Part of their rationale was that the top three countries – Germany, the UK and France – account for around 52% of the EU’s GDP.  Accordingly, patentees can cover more than half of the EU economy by validating their European patents in only the top three countries.

The option of validating a European patent in individual countries will still be available even after the advent of the unitary patent.  Also, for applicants who want patent protection in a small number of European countries or who find dealing with the European Patent Office expensive or slow, it will still be possible to pursue national patent applications.

While the amount of the renewal fee for the unitary patent will not be as low as some might have hoped, equally it will not be as high as some might have feared. “True Top 4” provides considerably better value for money than the EPO’s initial unitary patent renewal fee models and is probably as good a deal as could have realistically been expected for patentees, since each country signed up to the unitary patent will be expecting to receive a share of the unitary patent renewal fee paid to the EPO.  The details of how unitary patent renewal fee revenue will be shared between national patent offices have not yet been finalised.

For many patentees, “True Top 4” will make the unitary patent genuinely cost-competitive with validating the European patent in a few, important EU countries.

Table: “True Top 4” unitary patent renewal fees

If you would like more information about the unitary patent, then please contact the authors or your usual Barker Brettell attorney.

If you would like more information about our renewals and validations services, then please get in touch.

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