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UPC preparatory committee decides on court fees

The Preparatory Committee for the Unified Patent Court has today announced its long-awaited decision on the costs to patentees associated with using the Unified Patent Court.  The provisions would seem to work in favour of genuine claimants, especially small ones, whilst sending a warning shot across the bows of any vexatious litigants.  The full document describing the decisions on fees can be found here.

Key points are as follows:

1. There will be no opt-out fee.
It had been thought that it might cost patent owners up to 80 euros per patent to opt out of UPC jurisdiction.  The lack of such a fee is welcome news for all patentees.

2.  Court fees will be made up of a fixed fee plus a value-based fee.
By way of example, the fixed fee for actions such as infringement actions and actions for a declaration of non-infringement will be 11,000 euros.  On top of this, a fee based on the value of the action will be levied.  This will range from zero for actions having a value up to 500,000 euros through to 325,000 euros for actions worth more than 50 million Euros.  The full guidelines on how the value of an action is to be determined are set out here.

3. Small and Micro-Enterprises will receive a 40% reduction of court fees.
However, parties falsely claiming the reduction will be required to pay the full fee plus a penalty of an extra 50% of the full fee.  The definition of small and micro-enterprises to be adopted by the UPC is that set out by the European Commission in Recommendation No. 2003/361 of 6 May 2003.  The full recommendation text can be found here.  It depends on head-count and financial circumstances.

4.  The general principal that the loser will pay the winner’s costs will be subject to significant Court discretion.
There is a sliding scale of ceilings on recoverable costs which ranges from 38,000 euros in respect of actions worth up to 250,000 euros through to 2 million Euros for actions worth more than 50 million euros.  This ceiling can be raised by up to 50% in some cases, for example in particularly complex cases or those involving multiple languages.  The ceiling can also be lowered, if the award of costs would otherwise threaten the economic existence of the party against whom they are being awarded, especially if that party is a small or micro-enterprise, non-profit organization or a natural person.  It should be noted that the Court may take the parties’ behaviour into account, as well as their economic circumstances, when applying its discretion.  The explanatory notes state that one aim of these provisions is to guard against "potential abuse by so called patent trolls".  The full guidelines on how the recoverable costs of an action are to be determined are set out here.

If you have any questions on this article, please contact any Slingsby Partners attorney.