The UK Patent Office (UK IPO) ran an open consultation from mid-April to June earlier this year on proposed changes to the current official patent fees. This consultation followed a previous one on official registered design fees which ran in January 2016 and resulted in reduced fees coming into effect in October 2016.
The consultation on patent fees, which was launched a few days before the June election was called, followed the Government’s manifesto commitment to make the UK the best place in Europe for businesses to innovate and protect their new ideas. To bring this commitment into fruition, the UK IPO has committed to undergoing a major investment programme to improve electronic and online services and to increase examination capacity, which is expected to result in improved customer services.
At present, a granted UK patent can be obtained at a minimum cost of £230, patent attorney fees aside. On the other hand, it costs the UK IPO £2500 to prosecute a patent application through to grant, which means the UK IPO only breaks even if a patent is kept in force for more than 15 years. UK patent fees are structured in this way to attract businesses to seek national protection in the UK, but it certainly appears to have its drawbacks. Low fees have a negative impact on examination quality by diverting examiner resource from serious, well thought out patent applications to assess speculative, poor quality applications which are unlikely to result in granted patents. As a consequence, the UK patent fee structure requires a careful balance between keeping the barriers to the patenting system low and the need to discourage the filing of applications with minimal likelihood of success. In an attempt to restore balance, the UK IPO proposed the following changes in the consultation:
- Increase the fee for electronically-filed applications from £20 to £60 when paid at filing and introduce a 25% surcharge for late-paid filing fees. The UK IPO hopes that higher fees will encourage businesses and individuals to consider whether patent protection is suitable, instead of filing speculative applications which will divert resources away from applications which are more likely to grant. This will optimistically reduce backlogs and delays in processing. A UK IPO analysis shows that in one year over 3000 applications were filed by just 10 individuals, where only 3 of these applications resulted in a granted patent. These 3 granted patents were kept in force for only a few years after grant and, out of the 3000 applications, only 51 application fees were paid. Therefore, the vast majority terminated due to non-payment of the application fee. The UK IPO hopes that fee increases will encourage those 10 individuals to file, for example, 51 (or much fewer than 3000) applications, where serious protection is sought. Despite this proposed fee change representing a large increase in percentage terms (+200%), the UK IPO believes that their fees would remain comparative with the those charged in other countries. For applicants represented by a patent attorney, the application fee will continue to be a nominal proportion of the total costs to acquiring patent protection.
- Increase the search and examination fees for e-filed applications by £20: from £130 to £150 for search, from £100 to £120 for search of an international (PCT) application and from £80 to £100 for substantive examination. As mentioned earlier, the current fees do not cover the UK IPO’s costs for processing an application. The UK IPO is attempting to reduce heavy reliance on renewal fees to recover their costs.
- Introduce a £30 fee for each of the 16th and subsequent claims contained in an application and a £10 fee for each additional description page over an initial 35 pages. Patent applications with a significant number of claims and lengthy technical descriptions require more processing time from UK IPO staff to be considered. The UK IPO believes introducing excess claims and page fees would promote the filing of more succinct and clear applications. Excess claims fees would be paid with the search fee, where non-payment of these excess fees would result in an application being withdrawn by the UK IPO. With research from the UK IPO indicating an average of 22 claims being filed with applications, £210 in additional income would result from applications with average number of claims.
Despite a proposed increase in the minimum cost of obtaining a granted UK patent from £230 to £310, the UK IPO predicts that it will have only recovered a maximum of 16% of processing costs at the time of grant of a patent.
The consultation also included an alternative proposal involving smaller increases to renewal fees (for example by £10) and yet smaller increases to the pre-grant fees, approximately half of what was proposed in points 1 to 3 above. In this scenario, it would be possible to achieve a granted patent with a minimum cost of £270.
The public feedback to the consultation, which closed in June , is currently being reviewed. Any fee changes would further require legislative change. Therefore, if the outcome of the consultation does turn out to be in favour of increasing the fees, the UK IPO estimates that neither of the above proposals would happen before October 1st 2017.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.