Patent renewals demand some careful thought: they can involve a great deal of money, and missing a renewal can have catastrophic consequences for a business.
In this article, Head of Intellectual Property, Lindsay Gledhill discusses how often a patent needs to be renewed, the costs involved and the consequences of letting a patent expire.
Contents:
- How often must a patent be renewed?
- When can I renew a patent and how long does it take?
- Consequences of patent expiry
- Developing a patent renewal strategy
- What is the patent renewal process?
- How much does it cost to renew a patent?
- What happens if you miss a patent renewal deadline?
- Late grants and patent renewals
- Summary
How often must a patent be renewed?
In the UK, and in most other jurisdictions around the world, once patents reach a certain age they must be renewed every year (so the maintenance fees are often referred to as “annuities”). Contrast this with trade marks (renewals every ten years) and registered designs (five years) and it’s clear that patents are a bigger administrative burden than other forms of intellectual property.
The first renewal fee for a UK patent is due four years from when the patent application was filed (regardless of any priority claim). It must be paid within three months before and one month after the end of the month in which the anniversary falls.
Patent owners commonly use patent attorneys for renewals, they will make sure your patent is renewed on time, ensuring that you stick to all of the relevant deadlines. While the rules have similarities from one jurisdiction to another, the detail can be very different – and it’s in those detailed points where the danger lurks. It can be well worth plugging in to the international experience and connections of a specialist, to ensure you don’t put a foot wrong in a country with a rule that you haven’t encountered here.
When can I renew a patent and how long does it take?
Renewing a UK patent is a simple enough matter: it’s only when the UK patent forms part of a larger portfolio that things become complicated. As we noted already, the payment window opens three months before the due date and closes a month after it. As the IPO doesn't have to carry out any sort of search or examination, renewal is pretty well instantaneous once your payment has been received.
If you have a European patent, any renewal fees payable before the patent is granted will have to be paid to the European Patent Office. Once the application has been granted, though, you have a bunch of patents that have to be renewed just like ordinary national ones, so what this article says about renewing patents granted under our domestic law applies.
Consequences of patent expiry
If you fail to renew your patent on time, and it expires, this means you lose patent protection for your invention. There are good reasons why you might be content for your patent to lapse, but it needs to be a properly thought-through decision. If you lose your patent, you lose the ability to sue for infringements taking place after your protection expires: you might still be able to claim damages for earlier infringements, but you won’t be able to get an injunction to stop the infringement in future (for the simple reason that there is no longer anything to infringe).
If you’ve granted patent licences to other businesses to use your patent, there may well be consequences under the licence agreement (the licensee probably insisted on an obligation for you to keep the patent in force) but apart from that the whole arrangement will have lost its purpose. You won’t be getting any more royalty payments for the use of your patent.
The whole business case for having patents, or any form of IP, is based on the competitive advantage you enjoy from owning exclusive rights. Having a patent expire could have a severe impact on the value of your business.
Developing a patent renewal strategy
Because of the consequences of failing to renew, it’s important to have a patent renewal strategy for your business. If the business is strapped for cash and management are looking to save money, patent annuities might be an attractive area for savings. Indeed, there might well be cuts that could be made: patents for inventions that haven’t taken off, patents in countries where there’s no significant risk of an infringement, and so on. When times were good you might have secured protection in, say, most European countries, but letting your protection in smaller ones go while keeping your patents in big countries might enable you to save on renewal fees without seriously compromising your protection.
Unless you are outsourcing renewals to a patent attorney, you’ll have to invest in systems to track renewal timelines and deadlines and make sure payments are made on time. You’ll also have to prepare to make payments in all the countries where you have patents, in their local currency.
Budgeting for patent renewal costs will also be simplified if you are dealing with one patent attorney who will handle everything for you. If you are not, you will still have to budget for the official renewal fees – which is why you must also give careful thought to prioritising patents for renewal.
There is more to the cost-benefit analysis than just working out whether the renewal fees exceed the profits to be made from the patents, though. The patent might not be generating much revenue, but it might be a very important way to stop the competition using the patented technology. Letting the patent lapse might achieve a short-term gain but at a much greater long term cost. And if the owner cannot earn enough from the patent to make renewal worthwhile, could a licensee do better? Or is it worth looking for a buyer for the patent, rather than scrapping it?
What is the patent renewal process?
Patent renewals are usually done online (although there is still an option to do it by post, and you can send a cheque with the form if you really want to be traditional about it). The IPO will send a reminder, by post or if you have opted-in when renewing online, by e-mail.
It’s extremely important to observe the deadlines, however flexible them might look. A four-month window for payment of the renewal fee might seem generous, especially with the possibility of late renewals with an extra fee, but miss the extended deadline inadvertently and you are in serious trouble.
How much does it cost to renew a patent?
The official fees for renewing a patent in the UK start at £70 for year five (due on or about the fourth anniversary of the application) and rise each year, eventually to £610 for year 20 – the maximum term for patent protection. All fees applicable to patents are pitched so as not to deter inventors from using the system in the first place, but to recognise that a patent that’s kept in force for a long time must be valuable to its owner.
Charging more the older a patent becomes serves another useful purpose: it provides encouragement to patent owners to allow unwanted patents to die. The technology they protect might not be particularly valuable, otherwise it would be worth paying the fees, but clearing the old patent off the register means that there is no impediment to other people making use of the invention. Disseminating technology is, after all, the underlying purpose of the patent system. Progressive fees also discourage the creation of patent thickets – dense collections of patents that surround a key invention – and trolling, the practice of collecting unwanted patents, seeking out infringements and suing to recover damages.
Although there is no obligation to engage a patent attorney to handle renewals for you, there are good reasons for doing so. They will have systems in place to handle renewals for a large number of clients, and many, many patents. Nine out of ten in-house patent departments surveyed for Michael Jewess’s book, Inside Intellectual Property (Chartered Institute of Patent Attorneys, 2013) chose to outsource renewals to agents, which gives an idea of how desirable such an arrangement might be.
Most patent owners have patents in multiple jurisdictions and each patent owner’s needs will be different, but a patent attorney won’t charge a huge amount for attending to renewals and patent owners will usually consider it money well spent.
If you have foreign patents to renew too, the advantages of outsourcing the process become even greater. Although you could renew your own patents online in a growing number of countries, there are still many where you will need a local representative. Finding a lawyer to help you in foreign countries will be time-consuming and fraught with uncertainty – better to work with a patent attorney who has already put that network in place.
What happens if you miss a patent renewal deadline?
The renewal fee must be paid within three months before and one month after the end of the month in which the anniversary of the application falls. If you miss the date all is not lost, because you can pay up to six months after the due date – subject to a late fee of £24 per month it is overdue. If you miss that, you can still apply to have your patent restored during the 13 months following the end of that six month period – but you will have to show a very good reason for missing the payment.
These provisions are derived from an international convention, the Paris Convention on Industrial Property of 1882, so around 190 countries take a similar – but not identical – approach. So while missing a renewal deadline isn’t necessarily fatal everywhere, what you might have to do to recover the situation could be difficult to do.
Late grants and patent renewals
Patent applications do not always mature into granted patents within four years (although if they are not accepted within four years and six months they are treated as refused), but if an application isn’t granted within three years and nine months from the application date (which takes account of the fact that you can pay three months before the due date) the due date will be three months after grant, and payment will be due at the end of that month.
Summary
While renewing patents isn’t in the same league of complexity as getting them in the first place, there are plenty of pitfalls to catch out the unwary with some serious deadlines to meet. Avoiding those pitfalls justifies putting renewals in the hands of an expert patent attorney, but when you add in the fact that patent owners commonly have patents for numerous inventions in many different jurisdictions, the scope for errors and omissions becomes enormous and the benefits of outsourcing to a specialist become compelling.
