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UPC Court Fees Consultation London Event (CIPA/IPO/IP Federation)

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IMG_8533-1Last week saw the London meeting of the joint CIPA/IPO/IP Federation event relating to the consultation on court fees for the Unified Patent Court. What follows below are IPcopy’s notes on the event and consultation.

If you are planning on submitting a response to the consultation then you have until midnight 31 July 2015. The consultation document can be found here. Anyone who missed the consultation can take advantage of the video recording of the event here to review what was said.

  • It was noted on a couple of occasions by IPcopy’s reckoning that the panellists reminded everyone that the court has eventually to be self financing and so the proposed court fee structure should be considered with this fact in mind.
  • CIPA will be sending a response to the consultation but, as of the London event, this response had not been finalised. Anyone wanting to send comments to CIPA on the consultation should contact the Litigation Committee (Vicki Salmon).
  • Janis Makarewich-Hall (Head of UPC Taskforce at the IPO) noted that the court fees document does not represent “a done deal”. The contents of the document are not set in stone and things can apparently change. Respondents are encouraged to submit evidence and hard numbers where possible.
  • Tracey Webb (IPO) took the audience through the key areas of the consultation. Tracey noted that court fees fell within the responsibility of two working groups of the Preparatory Committee (the legal and finance groups) and a Fees sub-group had been formed to prepare the current draft fee structure. Negotiations apparently were tricky (not really a surprise) and took around 6 months.
  • Key areas within the above negotiation were:
    • the counter-claim for revocation (the UK wanted this to be a low fixed fee as it felt the fee would otherwise amount to a fee for defending yourself);
    • SME support
    • recoverable costs (some member states still feel the ceiling for this is too high)
    • the opt-out fee (the smallest fee which seems to cause the biggest headache!) Apparently most member states felt that a fee of 100 Euros per patent family was representative of the administrative costs associated with running and maintaining the opt-out register. However, it became clear later on that this was something of a finger in the air assessment. The proposed fee is 80 Euros.
  • After the consultation, the Fees sub-group will meet in mid September with a view to preparing a summary of responses for the Prep Committee in September. The fee structure will be finalised in the December and February meetings of the Prep Committee.
  • Kevin Mooney (Simmons and Simmons) took the audience through the structure of the court fee and floated a number of issues to think about when responding to the consultation, namely:
    • the UPCA is pretty skeletal when it comes to the fee structure and Article 36 UPCA in particular does not say when a value based fee should apply.
    • Kevin noted that there are 18 fixed fee only actions within the fee structure ranging from 80 Euros (opt-out) up to 20,000 Euros. The value based fees max out at 220,000 Euros.
    • Kevin suggested a number of topics to consider when responding: should the value based fee element have been removed from the revocation actions? Should someone counterclaiming for infringement in a revocation action have to pay a value based fee? Is a value based fee appropriate for appeal actions?
    • Kevin suggested that the way the fee structure is currently set up means that the Court may be getting two bites of the cherry as far as charging fees are concerned (referring to this as a “double suck”).
    • The way the value of an action is to be calculated has not yet been published. There are Guidelines coming but these are not yet public. Kevin however noted that the plan is for the mechanism to be as simple as possible and it will be based on the idea of a notional royalty.
  • Mr Justice Birss presented the section of the event relating to SME support. He noted that it is not his experience that the needs of SMEs are being ignored but the tricky question is how SMEs needs should be met.
    • The fees consultation of course encompasses two different options. Option 1 rewards certain behaviours but is not necessarily targeted at SMEs. Option 2 specifically targets SMEs (and other entities) and makes them exempt from value based fees.
    • Justice Birss noted that as well as the Option 2 proposal there are other elements within the UPCA and Rules of Procedure that could be considered as SME relevant/beneficial. In particular rule 370.7 of the Rules of Procedure may also help SMEs. The cap on recoverable costs can be thought of as a form of SME support and it is also relevant that some actions do not have value based fees associated with them.
  • Richard Vary (Nokia) discussed the opt-out process and fee:
    • Richard asked whether the opt-out process would be worth it given the uncertainty surrounding the meaning of Article 83 UPCA
    • It was noted that the opt-out fee is meant to cover administrative costs only and the court is not meant to profit from the opt-out/out-in fees
    • Richard noted that he would prefer that there was no opt-out fee for existing patents/patent applications on the basis of fairness: current proprietors had not signed up to the court and so should not have to pay to avoid using the system
    • The 80 Euro figure was still seen as a little high and somewhat arbitrary. Richard proposed a volume discount or cap for proprietors opting out large numbers of patents
  • Alan Johnson (Bristows) discussed the issue of recoverable costs under article 69.1 UPCA. Alan noted that the number of patents within a suit seemed to be irrelevant to the issue of recoverable costs and questioned whether some of the fees in the high value action bands were on the low side. Alan also noted that the recoverable fees were to be set on the basis of the value relevant to the pursuing party (rule 370.5 Rules of Procedure) which could lead to large differences in recoverable costs (compare an action started by a large company with an important patent to a revocation action started by a new starter to the same technology space).

The panel noted that there was no particular structure to the consultation in terms of questions to answer and so anything goes as far as the responses are concerned. However, it was also noted that comments along the four topics discussed (counterclaims for revocation, SMEs, the opt-out and recoverable costs) might be a good place to start.

We’ll follow this post up with a shorter one on some of the issues discussed in the Q&A session.

Mark Richardson 29 June 2015

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