By decision CA/D 19/13 of 13.12.2013 the Administrative Council of the European Patent Organisation amended Rule 6 EPC and Article 14(1) of the Rules relating to Fees (RFees) so as to introduce a new system of language-related fee reductions designed to support small applicants who are nationals of, reside in or whose principal place of business is in a contracting state with an official language other than English, French or German when they file European patent applications or requests for examination in an official language of that state (“admissible non-EPO language”). The reductions apply to the filing and examination fees, and entered into force on 1.04.2014. In a notice dated 10.01.2014 (OJ EPO 2014, A23) the EPO has published the eligibility criteria and other information about the new procedure. The present list of frequently asked questions is intended to provide additional information for users.
Questions
Answers
What are the consequences if the applicant pays a reduced filing or examination fee but is not entitled to the fee reduction under Rule 6(4) EPC?
A reduced payment made by an applicant not belonging to one of the categories listed in Rule 6(4) EPC has the same effect as if no payment was made at all. The EPO issues a communication noting a loss of rights, and the applicant may file a request for further processing (Article 121 and Rule 135 EPC) within two months of notification of the communication. Within the same period, he has to pay the missing amount of the fee (omitted act) together with 50% of the (full) unpaid fee (further processing fee for late payment, cf. Article 2(1), item 12, RFees).
If however the applicant does belong to one of the categories in Rule 6(4) EPC but has not filed the declaration under Rule 6(6) EPC in time, he can still file it within two months of notification of the loss of rights communication. He must then pay the flat-rate further processing fee (for late performance of a procedural act).
Lastly, if the applicant considers that the finding of the EPO was not correct, e.g. that there was no actual underpayment or the declaration was indeed filed, it is important that he react by informing the EPO accordingly within two months of the loss of rights communication (Rule 112(2) EPC). Otherwise the loss of rights will become final and any invalidly paid fee will be refunded (Article 8, second sentence, RFees).
What does the EPO do if the declaration under Rule 6(6) EPC appears to be missing?
If an applicant pays a reduced amount of the filing or examination fee and files a valid request for examination in an admissible non-EPO language, without however filing the necessary declaration, the EPO will proceed as follows:
If the period for paying the fee has not yet expired, the applicant can either pay the missing amount or file the missing declaration under Rule 6(6) EPC. After expiry of the payment period, the action taken by the EPO depends on the method of payment chosen by the applicant.
For payments made by debiting a deposit account held with the EPO, the EPO corrects the debit order ex officio, in line with board of appeal decision T 152/82 (dated 5.09.1983, cf. point 7 of the reasons) and debits the full amount of the fee concerned. The applicant may object to this within two months of notification of an EPO communication informing him about the “corrected” debit it has made. Within this time limit, the applicant may file the declaration under Rule 6(6) EPC showing that it is entitled to the fee reduction. The EPO will then refund the additional amount debited.
For payments made by bank transfer, if the underpayment amounts to less than about 10% of the full fee due, the EPO will set a two-month time limit for paying the (small) amount lacking (cf. board of appeal decision J 11/85, point 8 of the reasons). Within the same period the applicant may alternatively file the declaration under Rule 6(6) EPC. Should the applicant neither pay the missing amount nor file the declaration, the application will be deemed withdrawn and a communication noting a loss of rights will be issued.
If however the underpayment amounts to more than about 10% of the full fee due, the EPO will issue a communication noting a loss of rights, without giving the applicant the possibility to pay the amount lacking (cf. next question).
Do Euro-PCT applications for which the 31-month period expires on or after 01.04.2014, and the form for entry into the European phase (EPO Form 1200) was filed before 01.04.2014, fall under old or amended Rule 6 EPC?
Amended Rule 6 EPC is applicable to Euro-PCT applications for which the 31-month period under Rule 159(1) EPC expires on or after 01.04.2014, unless an explicit request for early processing (Articles 23(2) and 40(2) PCT) was filed and all applicable requirements of Rule 159(1) EPC fulfilled before 01.04.2014. If EPO Form 1200 was filed before 1.04.2014 without a request for early processing and with the 31-month time limit expiring after 1.04.2014, amended Rule 6 EPC applies. Before 1.04.2014, EPO Form 1200 did not contain a reference to the amended provision or a box to check the declaration under Rule 6(6) EPC, and a transitional procedure has therefore been devised to handle such cases. Where the EPO could not individually draw the applicant’s attention to the requirements of amended Rule 6 EPC before 01.04.2014, once the 31-month period expires it will give him the opportunity to either file the declaration under Rule 6(6) EPC, if applicable, or pay the missing amount of the examination fee. So underpayment of the examination fee would not normally lead to a loss of rights. In such a case, the fee amount is determined by the fee schedule in force at the date of payment (cf. Guidelines for Examination, A‑X, 5.1.2).
What happens if the EPO finds out that the applicant was actually not entitled to a reduction?
The new system under amended Rule 6 EPC is based on trust, which means that the EPO will usually grant the reduction on the basis of the applicant’s declaration of entitlement. But it will also carry out random checks on pending patent applications in order to verify whether the eligibility criteria were actually fulfilled. If it transpires that the applicant was not in fact entitled to the fee reduction, the reduced fee will be deemed not to have been paid and the application will be deemed withdrawn. The loss of rights thus arising may be remedied by filing a request for further processing or by requesting a decision.
Random checks will be conducted only as long as grant proceedings before the EPO remain pending (cf. point 11 of the notice dated 10 January 2014, in OJ EPO 2014, A23). Once the patent has been granted, the EPO will not check whether the requirements of Rule 6 EPC were met or require the patent proprietor to provide any evidence to that effect. So if a deficiency in the declaration is discovered only post-grant, it would not affect the validity of the granted patent.
How are the staff headcount and financial criteria in the SME definition to be understood? Are there guidelines for whether an enterprise qualifies as an SME?
According to the definition of SMEs in European Commission Recommendation 2003/361/EC of 6 May 2003 (L 124 of 20 May 2003, p. 36), to which amended Rule 6(5) EPC refers, the main criteria for qualifying as an SME are:
1) the number of employees (fewer than 250) and
2) either annual turnover not exceeding EUR 50 million, or an annual balance sheet total not exceeding EUR 43 million.
The staff headcount is a compulsory criterion, but only one of the two financial criteria needs to be fulfilled. When making the staff and financial calculations, the data in the latest approved annual accounts must be used.
To assess whether an entity fulfils the SME definition criteria, it is necessary to ascertain whether it is an autonomous, partner or linked enterprise. To do this, any relationship with other enterprises must be taken into account.
An enterprise is considered autonomous either if it is totally independent or if it has a holding of less than 25% of the capital or voting rights (whichever is the higher) in one or more other enterprises, and/or outsiders do not have a stake of 25% or more of the capital or voting rights (whichever is the higher) in it (cf. Article 3.1 of Recommendation 2003/361/EC).
In the light of the definition of “partner enterprise” and “linked enterprise” given in Recommendation 2003/361/EC (Article 3.2 and 3.3) and depending on the category applicable in the particular case, it will be necessary to add some or all of the data from the “partner” or “linked” enterprises.
If for instance enterprise A has three investors, B, C and D, each owning 20% of its capital or voting rights, and these investors are interconnected, forming a group of linked enterprises (B has a stake of 70% in C which itself has a stake of 60% in D), when calculating A’s data to assess whether the SME definition criteria are met, it would at first sight appear that A is autonomous because each investor owns less than 25% of it. However, since B, C and D are linked to each other, as a group they own 60% of A. Therefore, 100% of the data of B, C and D must be added to the data of A.
For further information and guidelines, see Recommendation 2003/361/EC and the user guide and model declaration for the new SME definition.
Are entitled natural persons or entities automatically considered for the reduced filing or examination fees, or is the filing of a declaration compulsory?
A declaration under Rule 6(6) EPC is an explicit requirement to benefit from the fee reductions, even for applicants who obviously fulfil the criteria of Rule 6(4) EPC, such as natural persons or universities. Thus, this declaration must always be filed; there is no automatic recognition process. If the relevant box has not been crossed in the request for grant form (EPO Form 1001), the declaration may still be filed up to expiry of the period for payment of the fee(s) in question. A pre-printed declaration (EPO Form 1011) is also available for this purpose.
In case of multiple applicants, is it sufficient if only one of them is eligible within the meaning of Rule 6(4) EPC?
No, Rule 6(7) EPC stipulates that in such a case each applicant must be an entity or a natural person within the meaning of Rule 6(4) EPC for the fee reduction to apply (cf. also point 6 of the notice from the EPO dated 10.01.2014, in OJ EPO 2014, A23). If for instance an SME with place of business in Italy files a European patent application together with its business partner, an SME with place of business in France, and in doing so files a request for examination in Italian, no reduction of the examination fee will apply, because the language criterion is not fulfilled by the French co-applicant.
Does the reduction still apply if an application filed by an eligible applicant, together with the request for examination and the declaration under Rule 6(6) EPC, is transferred to a non-eligible entity before the examination fee is paid?
No, the full examination fee has to be paid in such a case. What counts is the applicant’s entitlement at the time when both requirements – payment of the examination fee and filing of the declaration under Rule 6(6) EPC – were fulfilled. Had the reduced fee been paid by the previous owner, the examination fee would have been validly paid without any further consequences for a new owner not entitled to the reduction (cf. also point 10 of the notice from the EPO dated 10.01.2014, in OJ EPO 2014, A23).
Does ticking the declaration box in the Online Fee Payment tool mean that a declaration under Rule 6(6) EPC has been duly submitted?
No. Ticking the current box only serves fee-computation purposes. To get the fee reduction, you still need to file a declaration.
If you have ticked the box but not filed a declaration under Rule 6(6) EPC, the Office will correct the debit order and then refund the 30% reduction once you file the declaration.
The wording for this box will be clarified in the next release of the tool, planned for November 2016.