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A boost for ‘micro-entities’ as the EPO lowers barriers

iStock 1264872617 - Global Banking | Finance

A boost for ‘micro-entities’ as the EPO lowers barriers

Protecting new inventions is about to get much easier for small businesses…

Picture10418824 - Global Banking | FinanceBy Annabel Williams, Senior Associate at Marks & Clerk

The 1st April 2024 marks the start of a new era for ‘micro-entities’, as the EPO’s new fee reduction scheme for ‘micro-entities’ comes into force. The reduced fee scheme will make it easier for smaller and less experienced organisations to access the European patent system.

Eligible applicants that meet the definition of ‘micro-entity’ will benefit from a 30% reduction in all the EPO’s main patent prosecution fees, applicable for both European patents and Euro-PCT applications. The new scheme follows existing support measures already available to ‘small entities’, but crucially the new ‘micro-entity’ status will be available to entities regardless of their nationality or domicile. Given the impact of inflationary pressures, rising energy costs and the fact that the EPO usually adopts a yearly fee increase on 1st April, the change has been warmly welcomed by founders and small business owners.

What benefits are already in place?

The EPO currently offers various benefits for ‘small entities’, these ‘small entities’ include:

  • natural persons;
  • non-profit organisations, universities and public research organisations;
  • microenterprises; and
  • small and medium-sized enterprises (SMEs).

A major benefit is the language-related fee reductions that are in place for these persons/organisations, where they have their residence or principal place of business in an EPC contracting state, and file their European patent application and/or request for examination in an official language of that state that is not English, French or German. This entitles such persons/organisations to a 30% reduction of the filing and/or examination fees.

The current support measures also provide a reduced appeal fee for such persons/organisations, and a compensation lump sum for Unitary Patent related translation costs. However, these reductions relate to fees which are utilised relatively infrequently.

Who will benefit from reduced fees?

From 1st April 2024, the new ‘micro entity’ status will take effect at the EPO. This new status will apply to the same ‘small entities’ mentioned above, with the exception of SMEs.

Whilst the definitions of natural persons, non-profit organisations, universities and public research organisations are more obvious, alongside a number of other requirements, a micro-enterprise is defined as an enterprise with fewer than 10 employees and whose annual turnover does not exceed EUR 2 million.

The 30% reduction in fees that micro-entities are set to benefit from will apply to all of the most commonly utilised fees payable during patent prosecution (including the filing, search, examination, designation, grant and renewal fees), as long as the applicant has filed fewer than five patent applications in the last five years. The effect of these reductions is shown in the table below:

Typical fee Standard fee (as of 1 April 2024) / EUR 30% reduction / EUR Reduced fee for ‘micro-entities’ (as of 1 April 2024) /EUR
Filing (online) 135 40.50 94.5
Search 1520 456 1064
Examination 1915 574.50 1340.50
Designation 685 205.50 479.50
Grant 1080 324 756

The reduced fees will apply to both European patent applications and Euro-PCT applications that have entered the European regional phase, providing a substantial cost saving to a wide range of applicants.

How to apply for ‘micro-entity status’?

Much like the process for claiming ‘small entity’ status, to benefit from ‘micro entity’ status, applicants must submit a declaration to the EPO evidencing that they fulfil the eligibility criteria. Reductions can then be applied to relevant fee payments made on or after 1st April 2024 (assuming the declaration is filed with/before any such fee payment is made).

Where there is more than one applicant for a given application, each one of the applicants must qualify, and where any European patent application is transferred, it is the status of the new applicant which will determine whether the application qualifies for the ‘micro entity’ reduction.

The EPO must also be informed where there is any change to the applicant’s ‘micro entity’ status; this is important. The EPO will carry out random checks regarding the status of applicants and will request appropriate evidence concerning the applicant’s status where their checks give rise to any reasonable doubts. If the EPO finds a declaration concerning the applicant’s status to be incorrect, any reduced fee will be deemed not validly paid and the application may thus be deemed withdrawn (whilst it may well be then possible to ‘revive’ the application, this will be even more costly for the applicant).

It is therefore important to make sure that all applicants qualify for the ‘micro entity’ status when a declaration is filed, that they continue to qualify for said status, and that the EPO is readily informed if/when the applicant(s) no longer qualify.

EPO recognising the value of small organisations

Whilst the new scheme can’t rival the generosity of the USPTO’s offering of an 80% reduction in various fees for ‘micro entities’, it is nonetheless a positive step for the EPO, demonstrating their recognition of the value in supporting smaller organisations. The EPO’s move to support organisations regardless of their location is a win for global innovation and will be welcomed by micro-entities in a tough economic climate.

Global Banking & Finance Review


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