Introduction to Patent Validation
Update: The European unitary patent is expected to commence by the end of 2022 providing an additional option. Please see our initial comments here.
When a European patent is granted, patent protection comes into force in any member states of the European Patent Convention (of which there are currently 38) in which the patent is validated. The costs vary between countries depending on any local fees that apply, as well as the extent of any translation requirements (if any) into a local language.
In more than half of the countries, the London Agreement ensures that reduced translation requirements typically apply (such as translation of only the claims into a local language). In some countries, no further translation requirements apply at all and the validation may be completed automatically, though it is often helpful to appoint an address to service to ensure any communications are sent to a representative, rather than to the official address of the registered applicant.
There are also options to choose to bring the patent into force in extension or (confusingly named) validation states, which are different to the EPC member states mentioned above, and if this intention has already been indicated during the application process, though this is outside the scope of the present article.
Most applicants choose to validate their European Patent in only a subset of the possible countries, for the following reasons:
- Cost: Not only is it expensive to validate a European patent in all member states, but there are also significant ongoing costs associated with renewing the patent in those states. Renewal costs also typically increase with the age of the patent; and
- Incremental Benefit: Often, patent protection in a smaller subset of countries would already cause large, multinational corporations to choose to stay out of the European market, even if they could operate freely within a number of other individual countries outside the subset.
For these reasons, it is common for applicants to pick between three and ten countries in which to validate a European patent.
One approach may be to select countries in the following order, depending on your budget and the current or expected value of the associated product or service offering to your business:
- Countries which represent significant actual or expected sales for you or potential licensees: One to three countries where you might expect the lion’s share of your sales to take place. Another way to look at this is to choose countries where you might expect to reliably make annual profits of £10,000’s, £100,000’s or even £millions (depending on the size of your business);
- Countries where you expect to undertake manufacturing, or, where the invention is a process, any countries in which you carry out at least significant parts of the process. This makes it more difficult for competitors to make use of existing supply chains;
- Countries in which your main competitors typically conduct their manufacturing or sales, have their headquarters, or would be expected to carry out a significant part of the patented process. This makes it more difficult for competitors to enter into your market using their existing facilities; and
- Any countries in which you expect to find investors for your company. Investors may sometimes want to see patent protection for a product in their own home market.
In some industries, particularly the pharmaceutical sector, it may be that expected sales are indeed large enough in all countries that a competitor would still choose to enter the market in only a small number of countries if those were the only countries in which they were free to operate, but such instances are rare.
For some technology, it may be that the invention makes use of cloud computing for carrying out a patented process on a remote server. In these cases, it may be difficult to prevent infringement without having a patent in every country in which the process could possibly be performed (though note that Data Protection issues in Europe may constrain that to being within the EU for some data processing inventions that use personal information).
Unlike choosing countries in which to file patent applications, the decision about where to validate a European granted patent typically comes at least four to six years after patent protection for the inventive concept was first filed. Therefore, in most industries, relevant sales are already occurring. Since the value of the patent to the business is often better understood, more informed decisions can be taken about the countries which are of most significance to cover off the major markets. Of course, this does not always hold true, particularly in industries with long development timescales such as in pharmaceuticals and aerospace.
Before grant of a European patent, renewal fees are paid to the European Patent Office, whilst the application is pending. After grant of the European patent, future renewal fees are paid to the individual countries in which the European patent is to be granted. Therefore, where more than four or five countries are chosen for patent validation, it is not uncommon for the renewal costs to be greater than for the European patent. In some cases, it is possible to delay grant of the European patent to continue paying the renewal fee to the EPO for another year. Please ask us about this if you think it may be of interest to you.
Finally, the decision you take on validation should be considered carefully, but you can always choose to drop some of these countries in future if the market changes. However, you can never choose to retrospectively add countries in which you decided not to validate your European patent.