The London Agreement and the cost of patenting in Europe

Abstract

This paper analyses the consequences for the European Patent System (EPS) of the recently ratified London Agreement (LA), which aims to reduce the translation requirements for patent validation procedures in 15 out of 34 national patent offices. The simulations suggest that the cost of patenting has been reduced by 20 to 30 percent since the enforcement of the LA. With an average translation cost saving of €3,600 per patent, the total savings for the business sector amount to about €220 millions. The fee elasticity of patents being about -0.4, one may expect an increase in patent filings of eight to 12 percent. Despite the translation cost savings, the relative cost of a European patent validated in six (thirteen) countries is still at least five (seven) times higher than in the United States.JEL: P14, P51, O34

The Role of Fees in Patent Systems: Theory and Evidence

“…(Bottom panel) The figures for China and India were capped at 1.5, but amount to 3.37 and 5.07, respectively. Sources : Fees were collected on patent office websites, except for fees at the EPO which come from van Pottelsberghe de la Potterie and Mejer (). Note that fees at the EPO are computed for the six most frequently targeted countries (DE, GB, FR, NL, IT, and CH).…”

“…As a matter of fact, translation requirements make the European market expensive to protect, especially when compared with the United States or Japan. van Pottelsberghe de la Potterie and Mejer () report that translation costs account for half the total cost of patenting for a patent that is to be validated in six EPC member states . They also estimate that the recently ratified London Agreement, which aims to reduce the translation requirement for patent validation procedures in 14 out of 34 national patent offices, has reduced the cost of patenting by 20%–30%.…”

“…() predict that national patent validations may increase by almost 30% for those countries. Yet, despite the substantial cost savings, the relative cost of a European patent validated in six (thirteen) countries is still at least five (seven) times higher than in the United States, according to van Pottelsberghe de la Potterie and Mejer ().…”

“…Note that EPO fees are a lower bound estimate because they do not include translation fees. See van Pottelsberghe de la Potterie and Mejer () for technical details on how fees are computed.…”

Economic incongruities in the European patent system

“…In contrast to other large regional or national patent offices in the world, payment of national validation and renewal fees, and the translation requirements must be multiplied by the number of countries where the applicant wants to have an effective protection. Despite the implementation of the London Agreement that aims at reducing translation requirements 3 a European patent is still at least five times more expensive than in the United States (van Pottelsberghe and Mejer 2009).…”