Keeping a Patent Application in Force: Pre-grant Annuities

A patent annuity (also referred to as an annual, maintenance or renewal fee) is a type of Intellectual Property fee that is to be paid to a particular patent office to “maintain a granted patent or a patent application in force (1).” Failure to pay a patent annuity will result in the serious consequence of the lapsing of the patent application or granted patent.

Patent annuities can broadly be categorized into two types: pre-grant annuities and post-grant annuities. While a pre-grant annuity is required to keep a patent application in force, a post-grant annuity is required to keep a granted patent in force.

Estimation of pre-grant annuities can be challenging as they depend on the time taken to grant, which, in turn, varies from one jurisdiction to another. Cheryl L. Huseman (Senior IP Counsel, Chevron Phillips Chemical Company LP), alluded to this in her talk on “IP Budgets Gone Wild: Best Practices for Managing Global IP Budgets” at the Marcus Evans IP Law Summit in September 2016. Further, even within a particular jurisdiction, the time taken to grant is generally dependent on the complexity of the invention.

The legislations in 37 jurisdictions across the globe mandate the payment of pre-grant annuities (this figure excludes jurisdictions in which pre-grant annuities are accumulated until grant). Included in this are the top ranked European jurisdictions of Germany and France. Of these, we considered only the jurisdictions within the top 75 positions (2) (excluding Lithuania and Finland) for this analysis, along with regional patent organizations.

The jurisdictions with the lowest pre-grant annuities (<$300) are listed in Table 1 (the number within parentheses indicates the average time taken to grant in years, based on our research). The estimates are inclusive of attorney charges. Member states of the European Patent Office constitute 75% of the jurisdictions.

It’s quite surprising that the pre-grant annuities are quite low in the much sought after jurisdiction of France, which is part of the ‘big three’ in Europe, along with Germany and the United Kingdom.

At the other end of the spectrum, the estimated pre-grant annuities (including attorney charges) exceeds $1,000 in 6 jurisdictions (Table 2), which includes the significant jurisdictions of Canada and Norway. Two jurisdictions are from the Middle East, while a further two jurisdictions are regional patent organizations. We excluded Brazil because “it takes over 10 years (from the filing of an application) for examination to begin” (Luiz Leonardos, Gustavo Leonardos, and Ana Paula Jardim; 2016). Likewise, we also excluded the African Regional Intellectual Property Organization because of the lack of authentic time-to-grant data.

It’s quite surprising that the advanced economies of Norway and Canada take close to 7 years to grant a patent.

The estimated average time taken to grant across the jurisdictions listed in Table 2 (5.5 years) is almost twice the average time taken to grant across the jurisdictions listed in Table 1 (approximately 3 years). This could be one reason why the pre-grant annuities are higher for the jurisdictions listed in Table 2. Further, regional patent organizations generally charge higher fees when compared to national patent offices, as they represent several jurisdictions.

The pre-grant annuities are very high (>$2,500) in the individual jurisdiction of Saudi Arabia and the regional jurisdiction of the Gulf Cooperation Council.

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Venkatesh Viswanath (Senior Analyst, Quantify IP) contributed to this article.

1- https://www.maxval.com/patent-annuities.html; and

2- Rankings taken from WIPO’s World IP Indicators 2016