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What is a Patent Annuity?

Anthony M. Verna, III, Esq.
Patent Application Law Firm

Patent application law firm

Understanding Patent Annuities in the USA and Europe

Introduction to Patent Annuities

Patent annuities, also known as patent renewals, are periodic fees that patent holders must pay to maintain the validity of their patents. Both in the USA and Europe, these fees are essential for sustaining patent rights throughout the life of the patent. This blog post delves into the intricacies of patent annuity payments, including the due date, grace period, and various other aspects crucial for patent owners, law firms, and corporate IP departments.

Verna Law, P.C. focuses on intellectual property and advertising law – ask us about your patent.  Call us at 914-908-6757 or anthony@vernalaw.com

The Basics of Patent Annuities

Patent annuities are required to keep a patent in force. In the United States, the United States Patent and Trademark Office (USPTO) mandates the payment of patent maintenance fees at 3.5, 7.5, and 11.5 years after the grant date of a utility patent. These fees ensure that patent rights are preserved for the term of the patent, which typically lasts 20 years from the date of filing of the application.

In Europe, the European Patent Office (EPO) requires annual renewal fees starting from the third year after the date of filing. These fees must be paid each subsequent year to maintain the European patent in force. The term of the European patent is also 20 years, but the schedule of fees and payment deadlines may vary across European countries.

Detailed Understanding of European Patent Annuities

European Patents Within the Scope of the EPC

The annuities of European patents are governed by the Convention on the Grant of European Patents (EPC) and the regulations of the member states. An important aspect of managing these annuities is understanding the “patent year,” which determines the timeline for paying annuities to the EPO and subsequently to national patent offices.

Payment Timeline

Annuities for European patents must be paid annually in advance to the EPO starting from the third year of the application, counted from the filing date. The final annuity to be paid to the EPO is in the year of grant publication. After the grant is published, patent holders must pay annuities to the national offices of the member states where they seek protection.

If the publication of the grant occurs before the anniversary of the application, and before the payment of the annuity, the payment should be made to the respective national offices instead of the EPO. Otherwise, the annuity is paid to the EPO.

Reinstating a Patent

European patents must pay annuities while they are being processed. If an annuity is not paid, it can still be paid with a surcharge within a prescribed time slot. If this deadline also expires, the European patent is considered withdrawn. However, an expired patent due to non-payment of an annuity can be reinstated if the holder can justify that all due care was taken (Article 122, Re-establishment of Rights, European Patent Convention).

 

Key Terms and Concepts

  • Due Date: The specific date by which the patent annuity fees must be paid. This is crucial to avoid the patent falling into the public domain.
  • Grace Period: A period after the due date during which the annuity fee can still be paid, often with an additional fee or surcharge.
  • Annuity Fees: The fees paid to keep the patent active. These vary depending on the year of the patent and the specific national patent office.
  • Patent Holders/Owners: Individuals or entities that hold the patent rights and are responsible for paying annuity fees.
  • Patent Maintenance Fees: In the USA, these are the fees required to keep a patent in force at specified intervals.
  • Law Firms and Patent Attorneys: Professionals who manage the payment of annuity fees on behalf of patent owners.
  • Utility Model: A lesser-known type of patent that often requires annual renewal similar to utility patents.
  • Payment Methods: Methods include online payments, bank transfers, and other methods specified by the respective patent office.
  • Official Fees: Government-mandated fees that must be paid to maintain patent rights.

Managing Patent Annuities

Effective patent annuity management is crucial for maintaining a robust patent portfolio. Service providers and law firms often offer patent annuity management services to handle the administrative burden associated with annuity payments. These services include tracking due dates, generating renewal invoices, and ensuring timely payments.

 

Specific Considerations

  1. United States Patent:

    • First Year: No maintenance fee is due.
    • Third Year: First maintenance fee is due 3.5 years after grant.
    • Fourth Year and Beyond: Subsequent maintenance fees at 7.5 and 11.5 years.

  2. European Patent:

    • First Annual Fee: Due by the end of the third year from the filing date.
    • Subsequent Year: Annual fees are due each year thereafter.
    • Post-Grant Annuities: After grant publication, annuities are paid to national patent offices.

  3. Payment Deadlines and Grace Periods:

    • Last Day of the Month: Many patent offices require that fees be paid by the last day of the month in which they are due.
    • Belated Renewal Fees: If fees are not paid by the due date, a grace period may allow late payment with an additional fee.

International and Local Considerations

Patent owners with international portfolios must consider the differing requirements of national patent offices. The Patent Cooperation Treaty (PCT) facilitates the international phase of patent applications, but annuity payments must still be managed according to local laws once the national phase begins.

 

Total Costs and Administrative Burden

Managing patent annuities involves considering the total costs over the life of the patent, including possible late fees and surcharges. An IP management system or dedicated data science team can help streamline this process, reducing the administrative burden and ensuring compliance with various patent laws.

 

Conclusion

Understanding and managing patent annuities is essential for preserving patent rights. By staying informed about due dates, grace periods, and annuity fees, patent owners can maintain their patents effectively. Service providers, law firms, and patent attorneys play a crucial role in this process, offering expertise and support to navigate the complexities of patent renewals in the USA, Europe, and other jurisdictions.

For more detailed information on patent annuities, visit the Clarivate website careers pages, explore expert interviews, and consult the schedule of fees provided by the USPTO and EPO.

 

Final Note

Effective management of patent annuities is vital, especially for those with large IP portfolios. At SHIP, we have the knowledge and software necessary to manage this critical task with no margin for errors, ensuring timely and proper payment of all annuities.

By understanding how the European patent annuity system works and ensuring all due care is taken, patent holders can maintain their patent protection and avoid costly reinstatement processes.

 

Verna Law, P.C. focuses on intellectual property and advertising law – ask us about your patent.  Call us at 914-908-6757 or anthony@vernalaw.com

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