Yudu - Finance Monthly October 2012

Patent Law UK

Peter Ellis - Browne Jacobson

Recently Sir James Dyson criticised the high cost of acquiring and enforcing patents as a barrier to innovation, especially for SMEs. He is not alone. Sir Rupert Jackson in his recent report on the cost of civil litigation found the average cost of a patent action ranges from £650k to £1.5m.

osts associated with the acquisition of patent vary enormously. In the UK patents are granted by the UK Intellectual Property Office (UKIPO). The fees payable on application,

search and examination of a patent application are around £450. It is possible to reduce these fees if the application is presented via the online service of the UKIPO.

However, because patents are complex documents and the scope of protection secured by them must be properly defined, the sensible patentee will seek the assistance of a patent attorney to prepare the patent specification and claims. The attorney will also steer the application through the patent office procedures. His costs vary. Most firms are willing to give gratuitous initial advice on patentability before agreeing fees for prosecuting the application. Those fees vary from firm to firm from £2k upwards depending upon the work required.

If an invention is good and meets a long felt want then it should be protected in other jurisdictions. Each country has its own patent office. A patent granted in the UK is of no effect outside this country and as a patent is a public document, the secrets of the invention are free for all to read. The patentee must consider whether to obtain protection in Europe and other countries. The fees charged by the European patent office for a Europe wide patent are over £1000.

Each country imposes charges. Attorneys are required to represent the patentee in countries outside Europe (most UK attorneys are also European patent attorneys). The patent application must be made within a short time of creating the inventive work and so there is little time to decide where to seek protection.

Sadly, the government has no control over other jurisdictions other than by vigorous engagement with international treaties on intellectual property rights. The costs of securing protection in the UK alone are in fact relatively modest but they mount substantially when protection is required beyond our shores and there is little the government can do about those additional costs.

Presently the European Union (EU) is negotiating the introduction of a Unitary Patent which will have validity throughout the EU on a single application. However the costs and risks associated with enforcement may render the Unitary Patent of little value.

Having obtained a patent, the costs of an action to enforce it are substantial. Sir James Dyson thought the government could learn something by looking at the system of enforcement of France and Germany. There may be some things that can be learned by an open minded comparative study but the UK courts offer judges with unrivalled patent experience at the bar before joining the bench. Also, the bifurcated system used by Germany may decide infringement relatively speedily but arguments over validity are prolonged and consequently expensive. Just because a system is different doesn’t mean it is better, and many patentees bring their disputes to London because of the expertise of the judges and the speed with which both validity and infringement can be dealt with here.

It cannot be denied court proceedings are expensive. A patent may be challenged both as to the novelty of the invention and the scope of protection. The time spent analysing the words of a patent against the alleged infringing activity are vital in a capitalist

economy. Expert evidence is typically required to assist the court with its decision making. The costs involved in preparation of representation are very high, but usually the value of the patent will justify the investment in preparation for trial.

The barrier to innovation which such costs can create to SMEs has been reduced recently by the introduction of a cost cap in the Patent County Court. A successful party will not be allowed to recover more than £50k. Therefore, win or lose, a party should be able to calculate its exposure to cost liability at the start of an action.

Also, judges dealing with cases in the High Court are willing to take a more critical look at the costs incurred in the conduct of litigation and disallow costs regarded as excessive.

Other means of dispute resolution are growing. Mediation is an informal process of structured negotiation in which the parties agree to share the costs of the mediator who helps the parties work out a solution. The Patent Office also offers an opinion service at low cost by which it will give an opinion as to the validity of a patent against a particular challenge.

There is a flexibility with UK proceedings which is not present in other European systems. It is speedy and although preparation is expensive judicial decision making is fair and reliable.

Peter Ellis, Head of Intellectual Property at Browne Jacobson