Patent Protection Costs in Business-Friendly Jurisdictions: Where to File Patents
The processes of filing a patent application, prosecuting the patent application, getting a patent granted, and maintaining the patent across its lifecycle can be an expensive affair. In the face of scathing budget cuts, multi-national corporations are resorting to smart filing strategies, with judicious thought being given to where to file. The question of where to file patent applications, in turn, is a business consideration that involves the assessment of: the nature of the invention; market potential and growth; the location of manufacturing centers; competitors; and the enforceability of patents. Given such a scenario, a good starting point for strategy formulation may be to consider patent protection in the most business-friendly jurisdictions, which possess favorable business regulations and climates, and are likely to offer competitive returns on investments.
Business-Friendly Jurisdictions
The Ease of Doing Business Index is the World Bank’s flagship ranking, in which “economies are ranked on their ease of doing business, from 1–190.” The ranking is based on ten parameters: starting a business; construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; and resolving insolvency.
The Index is a powerful tool that can influence investment decisions; multi-national corporations widely rely on the Index to guide their strategic investment decisions (Ricardo Pinheiro-Alves and João Zambujal-Oliveira; 2012).
As per the latest rankings, the top ten easiest jurisdictions for doing business are: New Zealand; Singapore; Denmark; South Korea; Hong Kong (Special Administrative Region of China); the United States of America; the United Kingdom; Norway; Georgia; and Sweden.
Patent Protection in the Business-Friendly Jurisdictions
In the year 2016, the National Intellectual Property/Patent Offices of Denmark (“DK”), Georgia (“GE”), New Zealand (“NZ”), Norway (“NO”), Singapore (“SG”), South Korea (“KR”), Sweden (“SE”), the United States of America (“US”), and the United Kingdom (“GB”) collectively received close to 860,000 patent applications, with 70% of the applications being filed with the United States Patent and Trademark Office (World Intellectual Property Indicators 2017).
However, the United Kingdom, in addition to the Scandinavian jurisdictions of Denmark, Norway, and Sweden are also members of the European Patent Office, which implies that patents granted by the European Patent Office can be validated in these jurisdictions.
As per the latest Annual Report published by the European Patent Office (“EP”), about 105,000 patents were validated in the United Kingdom in 2017, corresponding to approximately 99% of all granted European patents in 2017. Likewise, about 101,000 patents were validated in Denmark and Sweden, with about 90,000 patents being validated in Norway.
The Costs of Patent Protection in the Business-Friendly Jurisdictions
Let us now study the costs involved in obtaining and maintaining a patent in the business-friendly jurisdictions (excluding Hong Kong). Since a patent is typically maintained for at least six to ten years, we shall consider the costs from May 2018 through December 2027. There are three categories of costs involved: official fees, attorney charges, and translation costs.
For the purposes of this article, we shall consider a patent specification drafted in English comprised of 40 pages (including five pages of drawings and 15 pages of claims), 15 claims, and three independent claims, which is to be filed electronically by a company (i.e. large entity) in the aforementioned jurisdictions. Further, we shall consider that the applicant does not intend to grant a license and that a European patent application is filed, which is to be validated in the United Kingdom and the Scandinavian jurisdictions.
For the above scenario, the total costs to file a patent application, get the patent issued, and maintain the patent are approximately $85,000. As shown in Table 1, the estimated costs are spread across the six different stages of the patenting process: Patent Filing, Patent Examination, Patent Prosecution, Patent Grant, Patent Maintenance Fees/Patent Renewal Fess/Patent Annuities, and European Patent Validation.
Patent Filing Costs and the Costs of Translating the Patent Specification
The estimated patent filing costs with the European Patent Office are inclusive of the official fees for each page of the specification in excess of 35 pages, and the attorney charges for handling the excess pages; the European Search Fee, and the attorney charges for filing the search request; the Designation Fees, and the attorney charges for handling the same; and the attorney charges for filing a Designation of Inventorship.
For the other jurisdictions, the estimated patent filing costs are inclusive of the attorney charges for filing a Statement of Inventorship with the State Intellectual Property Office of Singapore; the search and examination fees in the U.S; and the attorney charges for recording an assignment with the United States Patent and Trademark Office.
Translation of the specification into the official language is mandatory in Georgia and South Korea. The estimated costs of translating the patent specification into Georgian and Korean are $2,100 and $3,080, respectively (i.e. 83% and 78% of the total patent filing costs for each country).
Patent Examination Costs
In Georgia, the estimated costs of requesting a substantive examination are inclusive of the official fees for requesting an examination of each independent claim in excess of one independent claim and the attorney charges for handling the excess independent claims.
Unlike the other jurisdictions, South Korea has a unique patent examination fee structure that comprises a basic patent examination fee and an additional patent examination fee for each claim in the patent specification, which has been factored in the estimation of the costs.
Patent Prosecution Costs and Translation Costs
The estimated patent prosecution costs are based on between one and two office actions with substantive objections being issued in each jurisdiction. These costs are inclusive of the attorney charges for reporting each office action, preparing a response, and processing the response.
As is the case with patent filing, translation is also required during prosecution in Georgia and South Korea. Assuming 10 pages of translation per prosecution action, the estimated translation costs are $900 and $880, respectively (i.e. 58% and 38% of the total patent prosecution costs in each country).
Patent Grant Costs and the Costs of Translating the Claims
In Georgia, the estimated patent grant costs are inclusive of the base publication fee; the official fee for publishing each page of the patent specification in excess of 30 pages, and the attorney charges for handling the excess pages; and the patent maintenance fees for the first two years.
In South Korea, the estimated patent grant costs are inclusive of the patent maintenance fees for the first through the third year, and are based on a patent being issued in 2021.
The European Patent Office mandates the translation of the granted claims into the other two working languages of the Office, apart from the language in which patent filing and patent prosecution occurred. The estimated costs of translating the granted claims into German and French are approximately $2,000 per translation.
Patent Validation Costs and Translation Costs
A European Patent is a “bundle of individual national patents.” A granted European Patent is to be validated in member countries of interest, a process that may involve translation of the claims or the entire specification, in addition to the payment of official fees (where applicable).
In the Scandinavian jurisdictions, the granted claims are to be translated into the official language. The estimated costs of translation to validate a European Patent in Denmark, Norway, and Sweden are more or less similar, and range from $1,668 in Norway to $1,895 in Denmark (i.e. between 48% and 60% of the total patent validation costs).
Patent Maintenance Fees and Patent Annuity Fees by Country
The estimated patent annuity fees by country, when expressed as a percentage of the total estimated costs, approximately vary between 20% of the total estimated costs in South Korea to 38% of the total estimated costs in the United States.
In South Korea, as is the case with patent examination fees, the payment of patent maintenance fees also entails the payment of an annual basic patent maintenance fee, in addition to an annual patent maintenance fee for each claim of the granted specification.
In the European Patent Office, where the patent maintenance fees are to be paid only until the grant of the patent, with the subsequent patent maintenance fees being payable to the National Patent Offices of each jurisdiction in which the European Patent has been validated, the estimated patent maintenance costs are based on a patent being issued in 2022.
Patent Management Software
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Venkatesh Viswanath (Senior Content Strategist, Quantify IP) contributed to this article.
Exchange Rates Used: 1 U.S. Dollar = 0.85 Euros, 1081.65 Korean Won, 1.45 New Zealand Dollars, 1.34 Singapore Dollars, 6.3 Danish Krone, 0.74 British Pounds, 8.1. Norwegian Krone, and 8.71 Swedish Krona
