Unitary patent: 26 countries agree on distribution key

On 17 November a major roadblock on the path to a European unitary patent was cleared when 26 EU countries reached an important agreement on the distribution of revenues.

Although the mechanism for the patent was agreed back in 2012, the fee structure and the distribution mechanism for revenues remained open to later agreement. A balance had to be achieved between ensuring competitiveness for our companies, setting fees that would encourage people, particularly SMEs, to undertake innovate on the one hand, and ensuring the financing of high-quality administrative structures (the European and National Patent offices) on the other.

An agreement on 24 June 2015 set a renewal fee level ('TOP4' fees - equivalent to the national renewal fees of the 4 EU countries where European patents are most frequently validated) that made the unitary patent an attractive option. The latest agreement reached on 17 November 2015 fixes the distribution key for an initial period of operation: 50% of fees will be retained by the EPO (European Patent Office) while the remainder (minus an administrative charge) will be distributed among the participating countries according to a formula that takes account of the GDP and the number of applications filed from that country.

This latest agreement is an important step to making the unitary patent a reality as soon as possible. The participating countries showed their commitment to a genuine European Single Market by taking this step forward. The unitary patent advances the common interest in having an effective and attractive unitary patent, and shows a clear determination to move forward its implementation.

The unitary patent provides a new way for inventors and innovators to protect their intellectual property in the EU. Today, patents are awarded by national bodies and give protection in one country. The unitary patent means that just a single application is needed for a patent grant, which can then be activated in 26 countries by a simple and speedy procedure.

The unitary patent will reduce patenting costs for companies, especially small and medium-sized enterprises (SMEs) and start-ups, providing a one stop shop covering the territory of 26 EU countries. It will further strengthen support to innovative companies in Europe. While the unitary patent will be a fundamental tool for all innovative companies, the European Commission is working on a whole package of measures to support innovative SMEs requesting unitary patents and possibly other European IP protection instruments.

The distribution arrangements will be reviewed regularly. The EPO will report on revenues and the fee distribution, and it will be possible, though not obligatory, to adapt the distribution key if practice differs greatly from projected figures. The distribution key will be subject to revision every five years.

Next steps

The Commission will continue to work with the participating countries to set up the European Patent Court (UPC), an essential element in making the Unitary Patent operational. So far 8 EU countries have ratified the UPC: Austria, France, Belgium, Sweden, Denmark, Malta, Luxembourg and Portugal.

The Commission is calling for a rapid agreement on technical issues. It calls also on all remaining participating EU countries to ratify the Unified Patent Court Agreement as soon as possible so that the Unitary Patent package comes into force by the end of 2016.