Costs, risks and strategies for a commercially-sensitive decision
In recent years, following the European Patent Office initiative known as "raising the bar", there is the impression that the examination procedure at the European Patent Office has become increasingly difficult for applicants. Furthermore, it appears that the EPO is trying to minimize the number of interactions between examiners and applicant in an apparent attempt to speed up the examination procedure (see, for example, the article on the new Guidelines for Examination).
At the same time, with the increase of applications filed at the EPO, some national patent offices across Europe have seen a decline in the number of applications filed nationally. One of the effects of this decline has been a reduction in the examination backlog at the national patent offices. For example, in the UK 22,000 national patent applications were filed at the UK Patent Office in 2011/12, compared with about 30,000 in 2003/2004. Also, the UK Patent Office issued 90% of the patent search reports in 2011/2012 within 4 months of request, compared with 90% of the patent search reports in 2003/2004 being issued within 6 months from request. Finally, the UK Patent Office cleared all outstanding examination matters older than 42 months (3 ½ years) in March 2012.
Accordingly, there is increasing interest from applicants to exploit the advantages provided by national routes. We compare below the advantages and disadvantages of choosing the national route and the EPO route, and propose some strategies that applicants may find useful when the time for decision comes.
One of the greatest advantages of using the national route is the possibility of obtaining a national patent in a relatively short time, particularly if the national patent application is filed within the priority period rather than as the national phase entry of a PCT application. Moreover, national offices are in general more lenient when examining and granting patent applications than the EPO (except for a few specific fields, e.g. pure software patents in the UK).
The initial costs of pursuing this route across a significant number of countries may, however, be high as separate filing fees need to be paid in each country and translations may need to be prepared. Further, prosecution costs will be incurred in each country. However, in contrast with the EP route, renewal fees do not need to be paid for pending national applications. This can be a major saving, particularly if one or more divisional applications are required. Given that the London Agreement (see below) has reduced the translation costs for European patents at the time of grant, as a rule of thumb the overall cost of the national route may be lower if protection is sought in no more than three countries.
Prosecution may differ from office to office, potentially resulting in different scopes of protection in different countries. This may be seen as a weakness, but in general the scope of protection is unlikely to be narrower than the scope available through the EPO.
In summary, national routes may be advantageous over the EP route if an applicant is looking for a quick patent in no more than three EPC countries.
Despite the perceived increase in difficulty of obtaining a patent at the EPO, the EP route has a number of advantages over national routes.
First, prosecution and formalities are uniform. The eventually granted patent will (with rare exceptions) provide the same scope of protection across the various countries chosen for protection. Second, the final decision on which EPC countries to select is postponed until the time of grant, thus leaving more time for applicants to decide. Third, a relatively large number of EPC countries are signatories of the London Agreement, which reduces the requirements of post-grant translation. Only the claims (at most) need to be translated in London Agreement countries.
The EP route does, however, have disadvantages. The overall cost of prosecution (filing and search fees, renewal fees, etc.) is high in comparison with individual national patent offices, and there is the risk of additional costs due to oral proceedings, oppositions and appeals. The examination is in general slow, and there are not many mechanisms to speed it up if necessary. A significant drawback for applicants is the risk of opposition, as an opposition can result in the revocation of a granted EP patent in all countries.
In addition, the EPO is adopting an increasingly strict and rigid approach to examination that offers little freedom to applicants when addressing objections. A particular problem arises if the claims require amendment, either as a result of prior publications cited in the search report or as a result of ‘unclear' claim drafting (it is worth mentioning that the EPO is likely to consider a claim whose entire scope is not fully justified by the description to be unclear), as the EPO examines any amendments very strictly. This can lead to the EPO requiring undesirably narrowing amendments, and even in the worst-case scenario, considering that the claim cannot be amended in a clear manner.
In summary, the EP route is advantageous over national routes if an applicant is looking for (i) uniform protection across selected EPC countries; (ii) centralized prosecution; and (iii) more time to decide which EPC countries are worth selecting for protection.
If the Unitary Patent goes ahead, this option will be available only through the EP route. This may add to the attractiveness of the EP route, but the ultimate form of the Unitary Patent is not yet known and, for reasons set out on page 1 of this edition of Patent issues, there are still undecided issues that may yet cause applicants to prefer national patents by one route or the other in preference to the Unitary Patent.
A useful tactic for PCT applications is, if possible, to have the EPO perform the International search because the written opinion provided with the International search report will often give a good indication if problems are likely to be encountered pursuing the EP route. If it looks as though problems will be encountered, then the national route may be the better option. Even for applications filed within the priority period or PCT applications for which the EPO did not perform the International search, we recommend a review of the specification for compliance with EP practice before deciding between the EP route and the national route.