From 1 April 2024, the EPO will introduce new official fee reductions for micro-entities and natural persons to “support small and medium-sized applicants in obtaining patent protection and commercialising their inventions throughout Europe and the world”.
The fee reduction is a flat 30% reduction in all of the main official fees payable during the European patent application procedure, and is available to applicants who are microenterprises, natural persons, non-profit organisations, universities and public research organisations, provided that the applicant has filed fewer than five European patent applications within the preceding five-year period.
Eligibility Requirements – Microenterprises, Natural Persons, Non-Profits, Universities, Public Research Organisations
The definition of a microenterprise under the new fee reductions scheme is provided in Article 2.3 of the European Commission Recommendation 2003/361/EC, which sets out two criteria for classification as microenterprise:
- fewer than ten employees, and
- an annual turnover and/or annual balance sheet total that does not exceed EUR 2 million.
A natural person refers to an individual applicant rather than a business or other entity, as the term is normally understood.
The EPO defines the other qualifying applicants as follows:
“Non-profit organisations” are organisations which, by virtue of their legal form or statutes, are not permitted under the relevant law to be a source of income, profit or other financial gain for their owners, or, where they are permitted to make a profit, there is a legal or statutory obligation to reinvest the profits made in the interest of the organisation.
"Universities" are "classic" universities, i.e. higher education and research institutions as defined by the relevant legislation. However, comparable institutions, such as secondary or higher education establishments, are considered to be universities.
"Public research organisations" are entities such as universities or research institutes that are organised under public law and which, irrespective of the way they are financed, 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. All profits must be reinvested in carrying out these activities, in the dissemination of the results or in teaching.
The EPO states that it will carry out random checks regarding the status of applicants during the grant procedure. If such a check leads to reasonable doubt about the eligibility of the applicant for the fee reduction, the EPO may request that the applicant provides appropriate evidence in support of its eligibility.
Where a European patent application is co-owned, the fee reductions only apply if all applicants meet the relevant criteria.
Eligibility Requirements – Number of Previously Filed Applications
As mentioned above, the reduction is only available to qualifying applicants who have filed fewer than five European patent applications within the preceding five-year period. This cap on eligible applications is intended to provide the fee reductions only to applicants “with little or no experience of the European patent system”.
In practice, eligibility of a given application is determined by counting the number of applications with a “relevant date” in the five years preceding the “relevant date” of the given application. The relevant dates are the filing date for direct-filed European patent applications, and the date of regional phase entry for Euro-PCT applications.
The EPO states that it will systematically check the cap on eligible applications per applicant when eligibility is claimed. If a reduced fee was paid but the cap has been exceeded, the EPO will invite the applicant to pay the full amount within a period of two months. The exception to this rule is renewal fees, which will be deemed not to have been paid in time and will need to be paid using the six-month late payment grace period along with a 50% late-payment surcharge.
Changes in Eligibility
If the applicant’s status changes during the application procedure such that it no longer qualifies as one of the entities listed above, e.g. due to growth of microenterprise out of the bounds of the above definition, the EPO must be informed of the change and future fees will not be eligible for the fee reduction.
If an application is transferred, the fee reduction will only continue to apply if the new applicant meets the eligibility criteria listed above and if the new applicant files a new declaration of entitlement to the fee reduction.
Furthermore, if an application is transferred to a new proprietor, it will be deemed to be owned by the new proprietor as of the date of the transfer and will not be taken into account in the calculation for the old proprietor. For the new proprietor, this may mean that another application that was previously eligible for the fee reduction will no longer be eligible with the increase in the number of applications in the preceding five years. On the other hand, for the old proprietor, an application that was not previously eligible for the fee reduction may become eligible with the reduction in the number of applications in the preceding five years.
It will therefore be important for applicants who rely on the new fee reduction to ensure that they continue to be eligible for the fee reduction when paying each relevant fee.
Interaction with Existing Fee Reductions Schemes
If more than one fee reduction applies to the same fee for the same application, the reductions will be applied sequentially.
For example, this reduction sits alongside the existing 30% reduction in the filing fee or examination fee for SMEs, natural persons, non-profit organisations, universities, and public research organisations from EPO states that have an official language other than English, French, or German, and who file the application or request for examination in that official language.
Where an applicant qualifies under both the new micro-entity fee reduction and the existing language-based fee reduction, both reductions are applied, i.e. giving a 51% total reduction in the relevant fees.
In practice, this 51% fee reduction only applies to the filing and/or examination fees since these are the only fees to which the language-based reduction applies.
Furthermore, if the applicant is eligible for a 75% reduction in the EPO examination fee on entry to the European phase of a PCT application as a result of the EPO having acted as the International Preliminary Examination Authority during the PCT phase, the 30% reduction in the examination fee as a qualifying entity will be applied along with the 75% reduction.
Conclusion
The new fee reduction scheme will provide a valuable reduction in official fees for microenterprises and natural persons filing patent applications at the European Patent Office. In practice, relatively few non-profits, universities, and public research institutions will meet the eligibility criteria based on the number of European patent applications filed in the preceding five years.
Unfortunately, the calculation of eligibility is more complex than similar calculations in other jurisdictions, which may lead to confusion and additional costs, and even loss of the application in the worst cases. Applicants (or, more sensibly, their European Patent Attorneys) will need to keep track of their eligibility to ensure that the appropriate fees are paid at each point in time. This added burden is will not completely cancel out the fee reductions, but it does reduce their effectiveness in achieving the stated aim of “support[ing] small and medium-sized applicants in obtaining patent protection and commercialising their inventions throughout Europe and the world”.
