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Unified Patent Court: court fees and recoverable costs announced
The Prepatory Commitee for Unified Patent Court has published levels of court fees and costs caps which may come as a shock to those used to litigating in the English Patents Court and IPEC.
On 26 February 2016, the Preparatory Committee for the Unified Patent Court (UPC) published its agreed Rules on court fees and the recovery of costs. The rules are subject to “legal scrubbing” but have been published in the interests of transparency.
Court fees payable in the UPC will include fixed fees and value based fees. Value based fees will be payable in addition to a fixed fee in cases exceeding €500,000 and will apply to claims for infringement and declarations of non-infringement. For other actions, including revocation actions, there will only be a fixed fee. For example, it will cost €11,000 plus a value-based fee to bring an action for infringement whereas a claim for revocation will be fixed at €20,000.
The value-based fees are contained in a table and start at €2,500 for a claim valued between €500,000 and €750,000 and go up to €325,000 for claims valued at more than €50million (which is paid in addition to the fixed fee of €11,000).
Very small business may be able to claim a discount to the court fees if they meet specified criteria; if a claim is settled, parties will be able to claim partial reimbursements of court fees by an amount which will depend on the time a claim is withdrawn.
Under the Rules, a successful party will be entitled to recover its “reasonable and proportionate” costs. However, a ceiling has been set on recoverable costs which is subject to the value of the claim. The maximum award of recoverable costs is €2million, for a case valued at more than €50million. The minimum award is €38,000, for claims up to €250,000.
In most cases, the ceiling figures will be the limit that a party can claim as the UPC have stated that, in deciding an award for costs, it will take into account factors such as the behaviour of the parties, whether success has been partial, costs are reasonable or if they have been incurred unnecessarily. It is therefore anticipated that many of the awards for costs will be below the ceiling figures set by the UPC.
Nevertheless, the UPC does maintain discretion to raise the ceiling costs in cases which are particularly complex or which involve multiple languages (so the representation cost is higher) and also the ability to lower the ceiling costs where it considers that a normal award of costs would threaten the economic existence of a party particularly if that party is a university, a charity, non-profit making etc.
As is evident from the table below, in many cases the court fees in the UPC are likely to be significantly higher than is currently the case in the Patents Court. However, it must be kept in mind that, although higher than current fees in the UK courts, the awards made from the UPC will apply across Europe and therefore the fees are still less than would be payable if you were to bring separate proceedings in each relevant jurisdiction.
|Infringement issue fee||Up to £10,480 for issue (damages over £200k and injunction)||Up to £10,480 for issue (damages over £200k and injunction)||€11,000 (plus, if over €500,000, value based fee of €2,500 – 325,000)|
|Interim injunction application||£50 – 155||£50 – 155||€11,000|
|Costs awards||“Loser pays” as default, costs budgeting||“Loser pays” as default, capped at £50,000 on liability and £25,000 on inquiry to damages/account of profits||“Loser pays” as default, capped from €38,000 to €2m depending on value of proceedings|
The UPC fees may deter small to medium enterprises from pursuing a claim in the UPC. The limits placed on recoverable costs is also likely to act as a further deterrent for many businesses, particularly given that the average cost of most Patent Court litigation has been calculated as averaging £1million.
Disclaimer: This article is produced for and on behalf of White & Black Limited, which is a limited liability company registered in England and Wales with registered number 06436665. It is authorised and regulated by the Solicitors Regulation Authority. The contents of this article should be viewed as opinion and general guidance, and should not be treated as legal advice.