Patent Costs in the United Kingdom: The Centerpiece of Global Attention

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Published on 6 June 2018

Over the last 22 months, the United Kingdom has been the cynosure of all eyes, both within Europe and outside, ever since its citizens threw the global economy and markets into a tizzy by voting in favor of the country's withdrawal from the European Union. In this article, we discuss the costs of patenting in the United Kingdom, which is the second largest economy within the European Union.

Patenting in the United Kingdom

As per the Annual Report of the United Kingdom Intellectual Property Office ("UKIPO"), close to 22,000 patent applications were filed with the Office during the 2016/17 Financial Year.

Furthermore, the United Kingdom is designated in approximately 98% of the patents granted by the European Patent Office (average based on patents granted by the European Patent Office over the last four years, as per the Annual Reports published by the organization).

However, 93% of the patents granted by or covering the United Kingdom are owned by foreign proprietors. As per an analysis on the performance of the Patent System in the United Kingdom published by the UKIPO in August 2017, local businesses that do not utilize the patent system cited unpredictable costs and the possibility of cost escalation as one of their foremost concerns.

Benefits of a United Kingdom Patent: Extension to Other Jurisdictions

Unlike patents in other jurisdictions, which are territorial and cannot be extended beyond the jurisdiction in which the patent is obtained, a United Kingdom patent can be extended to close to 30 jurisdictions and territories across the globe, of which approximately 25% have populations greater than 250,000 and, thus, may be of interest to patent proprietors. These jurisdictions are: Brunei, Fiji, Gambia, Hong Kong, Sierra Leone, Solomon Islands, and Zanzibar (Martyn Townsend; 2017).

The Costs of Patenting in the United Kingdom

Let us now study the costs involved in obtaining and maintaining a patent in the United Kingdom. We shall consider the costs involved in maintaining a patent for the first ten years, based on the World Intellectual Property Indicators 2017 report published by the World Intellectual Property Organization, in which it was found that "between 40% and 43% of patents granted remained in force for at least 6 to 10 years after the filing date." Typically, there are two categories of costs involved: official fees and attorney charges.

For the purposes of this article, we shall consider a patent application, which is to be filed electronically by a company in the United Kingdom. Further, we shall assume that the company does not intend to license the patent.

For the period from March 2018 through March 2027, it costs an estimated $6,554 to file a patent application electronically in the United Kingdom, get a patent issued, and maintain the patent. The costs are split across the five major stages of the patenting process: filing, examination, prosecution, grant, and maintenance/renewal/annuities (Table 1).

The estimated prosecution costs are based on the issuance of 1.5 office actions and include the attorney charges for reporting each office action, preparing a response, and processing the response.

Official Filing Fees:

For the above scenario, the approximate official fees to be paid at the time of filing the patent application (basic filing fee and the fee for requesting a search) amount to $208.

Official Examination Fee:

The patent system in the United Kingdom follows a deferred system of examination. A request for substantive examination is to be filed within six months of the patent application's publication in the Patents Journal. The approximate official fee for filing this request is $111.

Official Patent Maintenance Fees:

In the United Kingdom, there will be no accrual of annuities for patents granted within three years and nine months (i.e. 45 months) from the date of filing. The due date for the payment of the first annuity is the last date of the month in which the fourth anniversary of the filing date falls (in respect of the fifth year), or three months from the date of grant, whichever is later. Therefore, the payment of the first maintenance fee may entail the payment of the maintenance fees in respect of more than one year (i.e. accumulated maintenance fees), in case the grant of the patent gets delayed.

The estimate shown above is for a patent that will be granted in 2021. The approximate official patent maintenance fees for maintaining the patent through December 2027 amount to $1,000.

Reduction of Patent Maintenance Fees

As per United Kingdom patent legislation, the proprietor of a patent may get the patent endorsed in the Register of Patents with a "License of Right" entry. Once this endorsement is carried out, the proprietor is obliged to grant licenses to willing third parties on mutually agreed terms and conditions, or on terms and conditions set forth by the United Kingdom Intellectual Property Office.

To encourage proprietors to grant licenses, a License of Right entry comes along with the handsome incentive of a 50% reduction in the official patent maintenance fees. For the given scenario, the approximate official patent maintenance fees will reduce from $1,000 to $500, if the License of Right entry is made immediately after the patent is granted.

Official Fee Increases from April 6, 2018

A revised official fee schedule entered into force on April 6, 2018. While the basic filing fee has been increased by 200%, the search fee and the examination fee have been increased by 15% and 25%, respectively.

Further, two new categories of fees have been introduced: an excess claims fee (for each claim beyond 25 claims) that is to be paid along with the search fee; and an excess pages fee (for each page of the description beyond 35 pages) that is to be paid along with the examination fee. In case of an increase in the number of pages and/or the number of claims during prosecution, such fees may also be payable at the grant stage.

The earlier patent maintenance fees in respect of the fifth through the eleventh years have been retained, while the fee to maintain a patent for the subsequent years have been increased by 10 British Pounds per year.

Brexit and Unitary Patent

After being in the making for decades, there seemed to be light at the end of the Unitary Patent tunnel in early 2016, when there was hope that the proposed system would see the light of day in 2017. The system, also known as European Patent with Unitary Effect ("EPUE"), was expected to significantly simplify translation requirements. In our previous articles, we have discussed the cost implications of the proposed system and the translation costs incurred at the validation phase of a European Patent.

However, two crucial events have subsequently put the brakes on the Unitary Patent proceedings: Brexit, and, more recently, a constitutional complaint against its ratification in Germany.

The only silver lining amidst this haze of uncertainty is the completion of all the legislative formalities in relation to the ratification of the Unified Patent Court Agreement in the United Kingdom, and its subsequent ratification by the Government, which was confirmed by the Minister for Intellectual Property, Sam Gyimah, on World Intellectual Property Day (April 26, 2018).

In fact, when asked about the future participation of the United Kingdom in the system, the President of the European Patent Office was recently quoted as saying, "I don't know what will happen. The Unitary Patent requires access to single market. It will depend on an answer to this question" (Éanna Kelly; 2018).

With the D-Date of March 29, 2019, looming large on the horizon, United Kingdom businesses await with bated breath the results of ongoing negotiations with the European Union.

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Venkatesh Viswanath (Senior Content Strategist, Quantify IP) contributed to this article.
Exchange Rate Used: 1 US Dollar = 0.72 British Pounds
Note: The estimates and fees depicted in this article are based on the Official Fee Schedule as on April 5, 2018