Innovation Battlefront: Patent Protection Costs for Trailblazers

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Published on 26 January 2019

We live in a fast-paced and rapidly changing world that is innovating like never before. With innovation as their heartbeat, companies and corporations are vying against one another for gaining the first-mover advantage in various technologies in an era that is witnessing the ushering in of the fourth industrial revolution. Innovations such as smart phones and wearable gadgets, in conjunction with technologies such as Artificial Intelligence and Cloud Computing, are transforming and revolutionizing the day-to-day lives of global citizens in myriad ways. In this article, we shall discuss and analyze the costs of protecting inventions and innovations (i.e. patent protection costs) in the economies that are at the forefront of global innovation.

Global Innovation Index

The Global Innovation Index is a detailed quantitative tool that "ranks 126 economies based on 80 indicators, ranging from Intellectual Property filing rates to mobile-application creation, education spending, and scientific and technical publications."

The 11th edition of the Index (i.e. the 2018 Version) was released on July 10, 2018, with "Energizing the World with Innovation" as its theme. As per the latest rankings, the top ten innovative economies are: Switzerland, the Netherlands, Sweden, the United Kingdom, Singapore, the United States of America, Finland, Denmark, Germany, and Ireland. Of the ten economies, eight economies are situated within Europe, with Singapore being located in Asia and the U.S. being located in North America.

The other salient findings of this year's rankings include the continued rise of China on the global innovation landscape, which broke through into the top twenty for the first time with a bang, in addition to an increase in the number of 'innovation achievers.' Innovation achievers are economies that perform at least 10% above their peers at their level of GDP.

Patent Filings in the Top Five Innovative Economies

In the year 2016, the National Intellectual Property/Patent Offices of Switzerland ("CH"), The Netherlands ("NL"), Sweden ("SE"), the United Kingdom ("GB"), and Singapore ("SG") collectively received close to 40,000 patent applications (World Intellectual Property Indicators 2017). Of these, about half of the total applications were filed with the Intellectual Property Office of the United Kingdom.

However, Switzerland, the Netherlands, Sweden, and the United Kingdom are also members of the European Patent Office, which implies that patents granted by the European Patent Office can be validated in these jurisdictions.

As per the latest Annual Report published by the European Patent Office ("EP"), about 105,000 patents were validated in the United Kingdom in 2017, corresponding to approximately 99% of all granted European patents in 2017. Likewise, about 101,000 patents were validated in Switzerland, the Netherlands, and Sweden, corresponding to approximately 96% of all granted European patents.

The Costs of Patent Protection in the Top Five Innovative Economies

Let us now study the costs of patent protection in the top five innovative economies. Since a patent is typically maintained for at least six to ten years, we shall consider the costs from August 2018 through July 2027. There are three categories of costs involved: official fees, attorney charges, and translation costs.

For the purposes of this article, we shall consider a patent specification drafted in English comprising 40 pages (including five pages of drawings and 15 pages of claims), 15 claims, and three independent claims, which is to be filed electronically by a company to which the rights in the aforementioned economies have been assigned.

For the above scenario, the total costs to file a patent application, get the patent issued, and maintain the patent are approximately $44,500. As shown in Table 1, the estimated patent protection costs are spread across the five different stages of the patenting process: Patent Filing, Patent Examination, Patent Prosecution, Patent Grant, and Patent Maintenance Fees/Patent Renewal Fees/Patent Annuities.

The costs are inclusive of Value Added Tax, which has been added to the attorney charges in Singapore, and are based on the following assumptions: the applicant does not intend to license its rights to a willing third party; a voluntary international patent search is not requested for in Sweden and the Netherlands; and the patent application filing fee is paid at the time of filing the patent application in the United Kingdom.

Patent Filing Costs

In Switzerland, the estimated patent filing costs are inclusive of the official fees for each claim in the patent specification in excess of 10 claims; the attorney charges for handling the excess claims; and the attorney charges for filing a Declaration of Inventorship.

In the United Kingdom, the estimated patent filing costs are inclusive of the attorney charges for filing an Inventorship Statement, in addition to the official search fees to be paid to the Intellectual Property Office of the United Kingdom.

In the Netherlands, the estimated patent filing costs are inclusive of the official fees for registering a deed of assignment with the Netherlands Patent Office, and the associated attorney charges.

In Singapore, the estimated patent filing costs are inclusive of the attorney charges for filing a Statement of Inventorship and Declaration of Agent Authorization with the Intellectual Property Office of Singapore.

In Sweden, the estimated patent filing costs are inclusive of the official search fee to be paid to the Swedish Patent and Registration Office.

A 'Go Green' incentive or reduction in the official fees for electronic filing of the patent application is offered only in the Netherlands and the United Kingdom, both of which offer fee reductions of approximately 33%.

Patent Specification Translation Costs

Translation of the complete patent specification into the official language is mandatory in Switzerland. The estimated costs of translating the entire patent specification are about $4,589 (about 71% of the total estimated patent filing costs).

In the Netherlands and Sweden, on the other hand, only the claims of the patent specification are to be translated into the official language. The estimated costs of translating the claims into the official language in the Netherlands and Sweden are about $1,649 and $1,681, respectively (about 56% of the total estimated patent filing costs in both the jurisdictions).

Patent Examination Costs

The estimated patent examination costs are inclusive of the official patent search and examination fees in Switzerland, the basic official patent examination fee in the United Kingdom, the official fees for each page of the patent specification in excess of 35 pages in the United Kingdom, and the official novelty search fees in the Netherlands.

Patent Prosecution Costs, Translation Costs, and Patent Grant Costs

The estimated patent prosecution costs are based on the average number of office actions with substantive objections being issued in each jurisdiction (estimated based on our research). These costs are inclusive of the attorney charges for reporting each office action, preparing a response, and processing the response.

As is the case with patent filing, translation is also required during patent prosecution in Switzerland. Assuming 10 pages of translation per prosecution action, the estimated translation costs are about $1,967 (about 48% of the total estimated patent prosecution costs).

The estimated patent grant costs are inclusive of the official patent publication fee in Switzerland and the official patent grant fee in Singapore.

Patent Maintenance Fees and Patent Annuity Fees by Country

All five economies follow a patent annuity system in which the due date for payment of the patent annuities is calculated from the patent application filing date. When expressed as a percentage of the total estimated patent protection costs, the estimated patent annuity fees by country vary between approximately 20% of the total estimated costs in Switzerland to approximately 34% of the total estimated costs in Singapore.

Patent Cost Calculator

Worried about keeping pace with the dynamic patent costs landscape? The Global IP Estimator and the Portfolio Estimator – Patents are smart, robust, and state-of-the-art Patent cost calculators from the stables of Quantify IP, which greatly simplify the arduous and challenging task of Intellectual Property budgeting management. They offer what traditional Intellectual Property docketing software and patent portfolio management software do not - they can instantly and accurately calculate the costs of worldwide protection for either a single patent, trademark, design, or utility model, or a portfolio of patents, designs, or utility models, respectively. The calculations may be fine-tuned to the level of any particular stage of an Intellectual Property across its lifecycle, such as patent annuity costs. Therefore, they can also function as patent annuity cost calculators.

The addition of Quantify IP's Patent Cost Calculators has empowered the decision-makers in many Fortune 500 companies and over 70% of the top 100 IP law firms in the U.S to solve diverse challenges in managing Intellectual Property budgets. To see what we can do for you, email us at qipcontact@quantifyip.com or call us at +1-808-891-0099.

Venkatesh Viswanath (Senior Content Strategist, Quantify IP) contributed to this article.
Exchange Rates Used: 1 U.S. Dollar = 0.99 Swiss Francs, 0.76 British Pounds, 0.87 Euros, 9.1 Swedish Krona, and 1.36 Singapore Dollars
Note: The estimates and fees depicted in this article are based on the Official Fee Schedules as on August 3, 2018