European Patents – Start-Up Discounts
A new reduction in EPO fees introduced for small businesses
The EPO have set out a new discount scheme for ‘micro-entities’ providing a 30% discount almost across the board for EPO fees.
EPO Fee Update
The European Patent Office (EPO) routinely increases the official fees that they charge for European patent applications. From 1 April 2024, many fees across the board will increase – it is worth considering whether any upcoming fees on your applications can be paid before this fee increase because the increase is quite significant in some cases. However, there is good news for start-ups and entrepreneurs with small businesses.
The EPO have announced that, from 1 April 2024, the following fees will be reduced by 30% for micro-entities:
the filing fee, including any additional fees part of the filing fee;
the fee for a European search or the fee for a supplementary European search in the case of a Euro-PCT application searched by an International Searching Authority (ISA) other than the EPO;
the examination fee, and in addition, if applicable, the previously paid international search fee where the EPO acted as ISA;
the designation fee;
the fee for grant; and
the renewal fees for the European patent application.
It is worth noting that the discount also applies to Euro-PCT applications, i.e. European regional phase entries of international PCT applications. Interestingly, this means that the examination fee can – in some cases – receive a double discount where the applicant qualifies for the micro-entity discount and the application would already attract a reduce examination fee due to the EPO having already searched the invention during the international phase.
As some readers may be aware, there are already certain discounts for applicants based in a country party to the European Patent Convention (EPC) which has an official language other than English, French, and German. These discounts are, however, limited both geographically and in the scope of the fees that are discounted. The new microenterprise discount is available regardless of the applicant’s country of domicile and is applicable to most of the ‘core’ EPO fees involved in the filing and prosecution of European patent applications. Critically, however, the language-based discount and the micro-entity discount stack (multiplicatively) for a total reduction of 51% on the relevant fees that are discounted under both schemes.
Qualifying Micro-Entities
There are some important limitations to be aware of. While there is no geographic limitation on where the micro-entity is based, the fee reduction is only available to those meeting the following criteria:
a) The applicant must be a microenterprise, natural person, non-profit organisation, university or public research organisation; and
b) The applicant must have filed fewer than five European patent applications or Euro-PCT applications within a period of five years preceding either the date of filing the European patent application or the date of entry into the European regional phase of the Euro-PCT application concerned.
If there are multiple applicants, every applicant must fulfil both of the above requirements.
A ‘microenterprise’ is an enterprise employing fewer than 10 people and that has an annual turnover and/or balance sheet total not exceeding 2m EUR (this definition is given in Art. 2 of Commission Recommendation 2003/361/EC of 6 May 2003 as published in the European Union’s Official Journal (L 124 of 20 May 2003, p. 36).
Previous European and Euro-PCT applications count toward the five-application limit irrespective of their fate and irrespective of whether those earlier applications benefitted from the fee reduction themselves. Thus, regardless of whether the earlier application(s) are granted, pending, withdrawn, deemed withdrawn, etc., they still count toward the limit if they were filed in the five-year period preceding the filing of the new application.
As a point on terminology – ‘university’ is understood to mean ‘classic’ universities as defined under relevant legislation, whereas ‘public research organisation’ is broader, understood to include universities and other research institutions – regardless of how they are financed – that have as their primary goal the conduct of fundamental research, industrial research or experimental development and the dissemination of the results by way of teaching, publication, or technology transfer.
It is not clear how relevant this discount will be to universities and most public research institutions, many of whom will typically have filed five or more European applications or Euro-PCT applications in any five-year period, but nevertheless in some cases the discount will be applicable.
In order to obtain the discount, a declaration must be filed – this is a simple tick-box on the relevant EPO forms. If a declaration is wrongly filed (i.e. declaration made incorrectly), then the relevant fee is deemed not paid and the application will be deemed withdrawn. To remedy this, the applicant will need to rely on further processing, with the cost being a 50% surcharge on the relevant fee. Making an incorrect declaration is therefore a costly mistake!
Analysis
We are sure that this will be very welcome news to our clients and start-ups everywhere for whom IP spend must be considered carefully. As European patent protection is highly sought after by applicants of all sizes, this reduction in fees will make seeking patent protection in Europe a little more affordable for smaller businesses.
By way of a worked example showing the relevant fees either side of the fee schedule change, we consider a European application filed by a qualifying micro-entity with all the normal prosecution fees that proceeds to grant after the 3rd year renewal fee is paid:
| EPO Fee | 2023/2024 Fees (EUR) | 2024/2025 Fees (EUR) | 2024/2025 Fees with Discount (EUR) |
|---|---|---|---|
| Filing Fee | 135.00 | 135.00 | 94.50 |
| Search Fee | 1,460.00 | 1,520.00 | 1,064.00 |
| Examination Fee | 1,840.00 | 1,915.00 | 1,340.00 |
| Designation Fee | 660.00 | 685.00 | 479.50 |
| Grant Fee | 1,040.00 | 1,080.00 | 756.00 |
| 3rd Year Renewal Fee | 530.00 | 690.00 | 483.00 |
| TOTAL | 5,665.00 | 6,025.00 | 4,217.50 |
It can be seen that this new discount more than offsets the increased fees imposed this year, making the official fees this micro-entity must pay for a European application 25% cheaper in 2024/2025 than in 2023/2024. As such, if timing allows, it could be worth being strategic in your filing strategy to make the most of this new regime – if you need help with this, let us know.
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