Honing in on Global Patent Cost: Lower Middle-Income Economies

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Published on 7 July 2019

In one of our previous articles, Global Patent Strategy: Patent Protection Costs in Five Upper Middle-Income Economies, we shed light on the costs of patenting (i.e., the costs of protecting inventions and innovations) in the upper middle-income economies of Kazakhstan, Mexico, Malaysia, Russia, and Thailand. In this article, we shall move beyond the upper middle-income jurisdictions and discuss the patent protection costs in lower middle-income economies. These budding economies may be attractive candidates for inclusion in a global patent filing strategy on the basis of growth or market potential, Foreign Direct Investment inflows, and consumer spending potential.

Lower Middle-Income Economies

The Ease of Doing Business Index is the World Bank's flagship ranking from 1-190, in which "economies are ranked on their ease of doing business." The ranking is based on ten parameters: starting a business, construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

The Index is a powerful tool that can influence investment decisions; multi-national corporations widely rely on the Index to guide their strategic investment decisions (Ricardo Pinheiro-Alvesa and João Zambujal-Oliveira, 2012).

As per the latest rankings, ten lower middle-income economies feature in the top 75. These are: Georgia, Kosovo, Moldova, Morocco, Kenya, Vietnam, Kyrgyz Republic, Ukraine, Indonesia, and Mongolia.

Membership to Regional Organizations and Regional Patent Offices

Of the ten economies, Kenya is a member state of the African Regional Intellectual Property Organization ("ARIPO"). Likewise, the Kyrgyz Republic is a member state of the Eurasian Patent Office ("EAPO"). Vietnam and Indonesia, on the other hand, are member states of the Association of Southeast Asian Nations ("ASEAN").

Moldova was a member state of the Eurasian Patent Office. However, on 26 October 2011, the country deposited its "notification of denunciation of the Eurasian Patent Convention," which subsequently took effect on 26 April 2012.

In our earlier articles, we have discussed the costs of patent protection in ARIPO, EAPO, and ASEAN.

European Patent Validation in Morocco and Moldova

Over the last decade, the European Patent Office has been actively engaging with Patent Offices of countries that are not its members for the recognition of European patents on their territories. This engagement has resulted in the signing of Validation Agreements between the European Patent Office and the Patent Offices of Morocco, Moldova, Tunisia, and Cambodia.

As a result, it is now possible for proprietors of European patents to validate their patents in these countries, following which these patents will "confer the same rights and legal protection as national patents" granted in these countries.

Patent Filings in the Lower Middle-Income Economies

In the year 2017, the National Intellectual Property/Patent Offices of Georgia, Indonesia, Kenya, Kyrgyz Republic, Moldova, Mongolia, Morocco, Ukraine, and Vietnam collectively received more than 20,000 patent applications. This figure is based on the numbers in the World Intellectual Property Indicators 2018 Report published by the World Intellectual Property Organization.

How Much Does Patent Protection Cost in the Lower Middle-Income Economies?

Let us now study the costs of patent protection in the top five lower middle-income economies (excluding Kosovo).

Since a patent is typically maintained for at least six to ten years, we shall consider the costs from February 2019 to February 2029. 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 comprised of 40 pages (including five pages of drawings), 15 claims, and three independent claims, which is to be filed electronically by a company (i.e., large entity) to which the patent filing rights in Georgia, Kenya, Morocco, and Moldova have been assigned. We shall further consider that individual national patent applications having one priority claim are to be filed.

For the above scenario, the total costs to file a patent application, get the patent issued, and maintain the patent are approximately US $43,500. As shown in Table 1, the total patent costs are spread across the five different stages of the patenting process: Filing, Examination, Prosecution, Grant, and Maintenance Fees/Renewal Fees/Annuities. The costs are inclusive of Value Added Tax, which has been added to the attorney charges and translation costs in Morocco.

Patent Filing Costs

In Georgia and Moldova, the estimated patent filing costs are inclusive of the attorney charges for handling the priority claim. In Moldova, the estimated patent filing costs are also inclusive of the official fee for claiming a priority, the official fees for each claim in the patent specification in excess of five claims, and the attorney charges for handling the excess claims.

In Kenya, the estimated patent filing costs are inclusive of the official fee for each claim in the patent specification in excess of 10 claims, the first patent maintenance fee (for the second year), the official patent publication fee, the attorney charges for handling the excess claims and the priority claim, and the attorney charges for the payment of the official patent publication fee.

In Morocco, the estimated patent filing costs are inclusive of the official patent publication fee, the official fee for the publication of each claim in the patent specification in excess of 10 claims, the official fee for requesting a search report and patentability opinion, and the official stamp duty and legalization fees. Further, the estimated patent filing costs are also inclusive of the attorney charges for the payment of the official patent publication fee, the attorney charges for handling the publication of the excess claims, and the attorney charges for handling the priority claim.

'Go Green' Incentives: Reduction of Official Fees

A Go Green incentive for the electronic filing of the patent application and the electronic payment of official fees is offered only in Morocco and Georgia.

The basic official fee for the electronic filing of a patent application with the Moroccan Office of Industrial and Commercial Property is approximately US $95, while that for non-electronic filing is approximately US $126. Likewise, the official publication fee and the official fee for requesting a search report and patentability opinion are approximately US $95 and US $756, respectively, when paid electronically, as against US $126 and US $1,008, respectively, when paid non-electronically.

The Georgian Patent Office, on the other hand, offers a 20% reduction on its official fees, up to and including the official fee for registration of a patent, for the electronic filing of the patent application and the electronic payment of official fees.

Patent Specification Translation Costs

Translation of the patent specification into the official language is mandatory in Georgia, Morocco, and Moldova. The estimated costs of translating the patent specification into Georgian, French, and Romanian vary between US $2,100 in Georgia to US $2,620 in Moldova. When expressed as a percentage of the total patent filing costs, the translation costs vary between about 41% of the total estimated costs in Morocco to about 80% of the total estimated costs in Georgia.

Patent Examination Costs

While a request for substantive examination is to be mandatorily filed along with the patent application in Morocco, it is possible to defer the filing of the request for substantive examination in Moldova and Kenya by a maximum time period of 30 months and 36 months from the patent application filing date respectively. In Georgia, on the other hand, substantive examination is to be requested within two months from the date on which an applicant is notified by the Georgian Patent Office that the formality procedures have been completed.

The estimated patent examination costs are inclusive of the official fee for requesting an examination of each independent claim in excess of the first independent claim in Georgia and Moldova, the attorney charges for handling the excess independent claims, the official fee for requesting an examination of each dependent claim in excess of five claims in Moldova, the official fee for the examination of each page in the patent specification in excess of 15 pages in Moldova, and the attorney charges for handling the excess pages.

Patent Prosecution Costs and Translation Costs

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

As is the case with patent filing, translation is also required during patent prosecution in Georgia and Moldova. Assuming 10 pages of translation per prosecution action, the estimated translation costs are US $900 in Georgia (about 58% of the total estimated patent prosecution costs) and US $1,123 in Moldova (about 48% of the total estimated patent prosecution costs).

Patent Grant Costs

An official patent grant fee or patent issue fee is charged in all four jurisdictions. The estimated patent grant costs in Georgia are inclusive of the official fee for publishing each page in the patent specification in excess of 30 pages, the attorney charges for handling the publication of the excess pages, and the official patent maintenance fees for the first two years.

The estimated patent grant costs in Moldova are inclusive of the official fee for publishing each page in the patent specification in excess of 15 pages and the attorney charges for handling the publication of the excess pages.

As is the case with patent filing, the Moroccan Office of Commerce and Industrial Property and the Georgian Patent Office also offer a Go Green incentive for the electronic payment of the patent grant fee or patent issue fee. Said fee is approximately US $378 in Morocco, when paid electronically, as against US $504, when paid non-electronically.

Patent Maintenance Fees and Patent Annuity Fees by Country

When expressed as a percentage of the total estimated patent protection costs, the estimated patent annuity fees or patent renewal fees by country vary between about 27% of the total estimated costs in Georgia to about 52% of the total estimated costs in Kenya.

Patent Maintenance Fees in Georgia

In Georgia, the patent maintenance fees for the first two years are included in the patent grant fee that is to be paid to the National Intellectual Property Center upon its decision to grant a patent. The accumulated patent maintenance fees (if any) for the third year through the year in which the patent has been granted are additionally payable along with the patent grant fee. Subsequent patent maintenance fees are payable on an annual basis in advance, with the due date for payment being the date of filing of the patent application.

Patent Maintenance Fees in Kenya

In Kenya, the first patent maintenance fee is to be paid on or before the first anniversary of the patent application for the second year. Subsequent patent maintenance fees are payable on an annual basis in advance, with the due date for payment being the date of filing of the patent application.

Patent Maintenance Fees in Morocco

Unlike in Georgia and Kenya, no patent maintenance fees are payable towards a pending patent application in Morocco. The first patent maintenance fee is to be paid on or before the anniversary of the patent application filing date in the year following the year of patent grant. Subsequent patent maintenance fees are payable on an annual basis in advance, with the due date for payment being the date of filing of the patent application.

Patent Maintenance Fees in Moldova

In Moldova, the accumulated patent maintenance fees for the first year through the year in which the patent has been granted are payable along with the patent grant fee. Subsequent patent maintenance fees are payable on an annual basis in advance, with the due date for payment being the date of filing of the patent application.

Patent Management Software and Patent Portfolio Budgeting Software

Worried about keeping pace with the dynamic Intellectual Property/Patent costs landscape? The Global IP Estimator and the Portfolio Estimator – Patents are smart, robust, 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 and Patent 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. The calculations may be fine-tuned to the level of any particular stage of an Intellectual Property across its lifecycle, such as patent maintenance fees. Therefore, they can also function as patent maintenance fee 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 = 9.52 Moroccan Dirham and 0.88 Euros
Note: The estimates and fees depicted in this article are based on the Official Fee Schedules as on February 22, 2019