REDUCING FEES FOR CERTAIN CATEGORIES OF APPLICANTS: by Dr. Farag Moussa IFIA Paper Presented at the
INTRODUCTION The International Federation of
Inventors' Associations (IFIA) noted with satisfaction a reference to reduced fees for
small/medium-sized enterprises (SMEs) under the point general policy on fees to be
discussed at Session N°2 of the Hearing.
The Administrative Council of EPO having adopted several decisions since 1984 introducing systems of fee reduction for nationals of certain countries¹, it can legally take similar steps in favor of certain categories of applicants, irrespective of their country of origin or residence.
IFIA proposes a 50% reduction on
all fees in favor of the following categories: The number of employees of micro
and small enterprises corresponds to figures given by the Commission of the European Union
in its Recommendation of April 3, 1996, concerning SMEs (OJ N° L 107.30.4.1996). In
brief, three categories were defined by this Recommendation: In addition to the number of employees, each of the above categories was defined by its turn-over and final balance sheet. IFIA considers it simpler to implement a system defining the micro and small enterprises by the number of their employees, without any reference to turnover and the final balance sheet. Such a possibility is provided for in the Recommendation of the Commission of the European Union mentioned above. IFIA also considers it sufficient to reduce the fees in favor of micro and small enterprises to promote innovation in Europe. In this respect, the system proposed by IFIA corresponds to the system adopted in Canada (entities that employ up to 50 'fifty' employees), and is far from the system adopted since 1982 by the USA (small business concerns up to 500 [five hundred] employees). By not adding the medium-sized enterprises as defined by the Commission (50 to 249 employees), the Burden on the EPO budget would be relatively small. Taking into consideration EPO surplus, no increase of fees for other categories of applicants may be necessary, particularly if the long-term effects are studied (see para. 9 below). In this respect, the figures given in the Green Paper (under 5.2.1) would have to be seriously revised downwards. (An increase in fees of approximately 22% was noted in the Green Paper when including medium-sized enterprises [50 to 249 employees] in the 50% reduction.) A 50% reduction of all fees, for the three categories of potential applicants mentioned above, would make the European patent system more attractive to these potential applicants, because of greater accessibility. In the long run it would stimulate more patent applications and therefore generate more income for EPO.
Usually, when speaking on the subject, reference is made to the US Small Entity system only. In fact, similar systems exist in other countries on the American continent (i.e., Canada, Argentina, Mexico). Even countries like Saudi Arabia and the United Arab Emirates have adopted a 50% reduction for physical persons, compared to moral persons. No such systems exist in Europe at the national level. Systems of reduced fees, or no fees at all, do exist in some European countries in favor of different categories of independent inventors whom some call "poor" inventors. The philosophy behind these systems is that of social assistance. In view of the non-existence in Europe of systems similar to the Small Entity system and the sole reference to the USA system, including the lack of statistical studies, several arguments have been put forward in Europe against such a system. We shall answer here to the three arguments stated during the September 1995 EPO Hearing on "Strategies of the EPO Ideas and Topics". The system is said to be
complicated for the users. The system's paperwork
would be burdensome from the Patent Office perspective. The system is said to be
unfair to large entities In the USA, large entities have accepted the system: they have adopted a neutral attitude. Further, the financial impact of the US patent fees is minor. After all, patent fees paid to the USPTO are a relatively small portion of the overall costs of a patent, and bringing a new product to the market. From the inventors' community in the USA, we hear that certain companies consider that the fees paid should be even less than the current small entity fee. They believe that there is a great difference between them, and businesses with 100+ employees. We know that some US inventor groups advocate an additional category of patent applicants: those who would pay less than the small entity fee. This category would be comprised of the independent inventor with very few employees. The Canadian Intellectual Property Office confirmed to IFIA the following: "We are not aware of any complaints made regarding the small entity fee schedule."
Some speak of the possible abuses of the system. It is evident that once the political decision in favor of a reduced fee system is taken, strict rules must be drafted by legal experts. We see no difficulty in this respect. Sufficient experience exists in the USA and Canada. Yet others may say that by introducing such a system, US and Japanese inventors and companies will be the winners! Why? Are the European independent inventors, companies up to 500 employees, and universities, the winners of the US small entity fee system? The US PTO statistics show clearly that the small entity fee system benefits applicants resident in the USA to a much greater extent. These are infinitely more numerous than all foreign applicants put together (European, Japanese, etc.). Why should the European fee reduction system be any different? We are convinced that it will benefit European inventors, micro and small companies, as well as European universities in the first instance. ______________________________________________ Back to HOME page  |