The consultation provides for a mixture of fixed and value based fees. There are also two proposals for amendment of Rule 370 (Court fees) of the Rules of Procedure along with a table of fees and a scale of ceilings for recoverable costs.
The explanatory comments in the consultation note that under Article 36(3) of the UPC Agreement the court fees should be fixed at a level that ensures a balance between the principle of fair access to justice (in particular for SMEs, natural persons, NPOs, universities and the like) and the need for the Court to be self-financing.
In implementing Article 36(3) the consultation document presents the above-mentioned two proposals to amend Rule 370 of the Rules. In Proposal 1, support is given to everyone but is focused on certain behaviours whereas in Proposal 2, support is targeted at the legal persons listed in Article 36(3) UPCA.
In Proposal 1 a number of reimbursements (between 20-60% of Court fees) are presented that reward certain behaviours such as the action being heard by one judge, the withdrawal of an action and if the parties conclude their action via settlement. The thinking here is that the Court is having to work less and this can be the basis of a reward to the parties.
In Proposal 2 the possibility is provided for the legal persons listed in Article 36(3) UPCA to apply for an exemption to the value based fees. The legal persons listed in the UPCA include: small and medium sized enterprises, micro-entities, natural persons, non-profit organisations, universities and public research organisations. It is noted on the Bristows UPC website that the legal persons eligible for exemption is pretty wide and may encompass many NPEs.
The fees that have been proposed are based on estimates of expected volume of activity, staff and operating costs. The fees proposed are regarded as the minimum to ensure the Court is sustainable.
Highlights from the fees table and also the recoverable costs table are as follows:
- The fixed fees for starting an infringement action are 11,000€ as are the fixed fees for an infringement counter-claim and a declaration of non-infringement. These seem pretty high in their own right so IPcopy wonders how SMEs will view them.
- The value based fees do not kick in until the value of the action exceeds 500,000€ and then range from 2,500€ (for actions with a value between 500,000-750,000€) to 220,000€ (for actions with a value over 30 million Euros).
- The notes within the consultation state that it is assumed, based on experience in Germany, that 25% of actions will fall below the lower value based threshold and will therefore not attract any fees over and above the fixed amounts. It is also highlighted in the notes that 90% of all actions will have a value up to 4 million Euros (which translates into a value based fee of 25,000€ or lower).
- The value based fees will be assessed, according to Rule 371(4) of the Rules of Procedure, during the interim procedure phase of a UPC action. The interim phase may be expected to start around 6 months after the commencement of an action and last for 3 months.
- Filing a revocation action attracts a fixed fee of 20,000€ (ouch). Counterclaiming for revocation is set at the same value as the infringement action but is capped to 20,000€ (again, ouch).
- Opting out from the exclusive competence of the UPC will be 80€ (per patent and not per designation). Withdrawing that opt-out will set you back another 80€. The opt-out/”out-in” fees have therefore been set in an “administrative costs” range. However, for patent owners with large portfolios this will still represent a fairly noticeable total charge.
- Recoverable costs are subject to a cost ceiling to protect a losing party from excessive cost burdens coming from the expenses of the other party. The amount of recoverable costs is also dependent on the value of the dispute.
- It is noted that there was a wide range of cost ceilings discussed during the preparation of the cost ceilings and for an action with a value of 500,000€ it seems the discussed cost ceilings ranged from 24,000€ to 200,000€ per instance. With such a wide range of ceilings under discussion, the consultation document has gone down the middle (75,000€ is the ceiling proposed for an action up to 500,000€).
- All in all the cost ceilings range from 50,000€ (for an action valued up to 250,000€) to 3 million Euros (for an action valued over 50 million Euros).
- Finally, it is noted that until case law has been developed, some guidelines will be issued to help in the process of evaluating the value of an action.
Mark Richardson 14 May 2015