Getting a patent granted for your innovation can be a costly process. There are, of course, fees associated with the work your patent attorneys do to advise you, to prepare your patent application, and to work with the Patent Office to obtain a granted patent for you. Your patent attorneys have some control over these costs and can work to your budget. Another cost associated with getting a patent is the official fees, which are set by Patent Offices and which your patent attorneys cannot control.
In some jurisdictions, there are different fee levels based on the size of your business, which essentially provide some discounts to small businesses. No such fee discounts exist in the UK, but the official Patent Office fees in the UK are already very low!
In this article, we discuss the new fee reductions available at the European Patent Office, which you may be able to utilise for your or your clients’ own European patent applications.
Fee reductions
In many jurisdictions, such as the US, a reduction to some or all of the official Patent Office fees is available for an applicant that is a “small entity”, such as a start-up or SME. Historically, no such reduction for fees was available at the European Patent Office (EPO). Previously, fee reductions at the EPO have only been available for nationals or residents of contracting states that have an official language other than those of the EPO, i.e. an official language other than English, French or German. Even then, these fee reductions were tied to strict eligibility criteria and only available for a few fees that are due when applying for a European patent.
However, recently, the EPO launched a new scheme to improve access to the patent system for micro entities, by giving them a discount on most of the major fees that need to be paid during the lifetime of a patent application filed at the EPO. In particular, eligible applicants may be able to take advantage of a 30% fee reduction. The new scheme came into effect from 01 April 2024.
Who qualifies as a micro entity
Under the EPO’s new scheme, natural persons, micro enterprises, non-profit organisations, universities and public research organisations are eligible for fee reductions.
The EPO defines a micro enterprise as a company that (the full definition can be found here):
- Employs fewer than 10 full-time employees; and
- Has an annual turnover and/or annual balance sheet of up to EUR 2 million (~£1.7 million).
Are there any additional requirements to obtain the discount?
There is an additional cap requirement to qualify for the reductions. That is, in addition to falling into one of the above categories and thus qualifying as a micro entity, applicants must have filed fewer than five patent applications in the previous five years at the EPO. Patent applications filed at other patent offices do not count for the purposes of the cap.
How much can I save under the new scheme?
The reduction applies to most of the fees payable before the EPO, including:
- the filing fee;
- the fee for a European search;
- the examination fee;
- the designation fee;
- the fee for grant; and
- the annual renewal fees for the European patent application.
For an average patent application before the EPO, from filing to grant, this means that applicants that qualify for the above fee reductions may be able to save at least around £2k (assuming a patent is granted within a few years).
What happens if the fee reductions are used incorrectly?
While the savings can be significant, applicants that are considering using the new fee reduction scheme should ensure that they do qualify as a micro entity under the EPO’s rules.
- Where an entity does not qualify, the consequences may be severe, as the EPO may deem the application to be withdrawn if the incorrect fee is paid.
- If an applicant no longer qualifies as a micro entity, it is important to let the EPO know about this and to stop paying the reduced fees. The same is true for micro or small entity status in other jurisdictions, such as the US.
Accidentally not fulfilling the cap requirement on the other hand, while not recommended, will not result in the application being deemed withdrawn. Instead, the EPO will issue an invitation to pay the missing fee amount.
Can the new micro entity reductions be combined with other fee reductions?
Yes! If you qualify for a language-based fee reduction also, this can be combined with the micro entity fee reductions. However, the language-based reductions in fees apply to a limited number of fees and in very specific circumstances only.
Language-based fee reductions are only available for the filing and examination fees due for a European patent application. Applicants that are entitled to the language-based fee reductions receive a 30% discount on these fees, meaning that they can save around £580 when filing a European patent application. Applicants that qualify for both the language and micro entity fee reductions may save a total of around £2.4k over the lifetime of a European patent application (assuming a patent is granted within a few years).
To qualify for the language-based fee reductions as an enterprise you have to:
- be an entity engaged in an economic activity, irrespective of the legal form of your company;
- have your principal place of business in an EPC contracting state that has an official language other than English, French or German;
- employ fewer than 250 people; and
- have an annual turnover not exceeding EUR 50 million (around £43 million) and/or an annual balance sheet total not exceeding EUR 43 million (around £37 million) and have no more than 25% of the capital being held directly or indirectly by another company that is not an SME (small or medium enterprise).
Other types of organisations that may qualify are:
- non-profit organisations;
- universities; and
- public research organisations.
Natural persons have to be a national or resident of an EPC contracting state with at least one official language other than English, French or German to qualify. For example, an individual resident in the Netherlands will be entitled to the EPO’s fee reductions under the language regime.
These fee reductions are meant to compensate people or organisations in EPC contracting states that have to obtain translations of their patent application and other documents to obtain a European patent, which is why there is a residency/nationality requirement.
If you would like to know more about the fee reductions available at the EPO, or would like to start making use of these reductions, please get in touch with us.
