The exciting world of patent maintenance fees (part 1)

Dear Patent admin, has this ever happened to you?

One of your fellow patent attorneys makes a superb work and got this difficult patent granted (congratulations!), but just forgot to inform the client over the maintenance fees (s)he needs to pay thereafter...

... And months after grant you remind your client about this duty and your client comes back saying "eeeeh…. serious??? Do I still need to pay YOU money?"

You know my thinking: even when a patent application is granted and an attorney is performing his/her favourite winning dance, we Patent admins should never relax. Why should we, when we can still find a lot of FUN?

In this new set of articles (I think 2), please allow me to welcome you into the exciting world of Patent maintenance fees!

What are maintenance fees anyway?

Maintenance fees are (most of the times) annuity fees that an applicant needs to pay in order to keep their patents or patent applications alive. This requirement might be unknown when inventors or companies are introduced into the patent world. However, on top of all the examination and formal requirements that an applicant needs to comply with, there is also the requirement to pay maintenance fees to the national or regional patent office where you are depositing your application.

Maintenance fees are serious business because, if not paid, the patent will lapse, and you or your client will not be able to enforce the rights conferred by your patent any more. And this jsut what you want to avoid.

One might ask why patent offices request the payment of a maintenance fee for something that barely needs any effort or infrastructure to be maintained, even more when they already charge quite a lot of money for filing, search and examination fees. Yes, it is quite annoying because these fees are sometimes unexpected, but also because some patent offices charge maintenance fees while the application is pending, so if it takes a lot of years to grant, you are paying the patent office for their own ineffectiveness (try to explain this to a client).

I guess that the thinking behind is: if you are not enforcing your patent you will not be willing to pay the maintenance fee, and then your patent will enter public domain and other will benefit for its innovation. And giving the fact that all the theoretical fuss around patents is that patents exist to foster innovation and not to hinder it, maintenance fees might be a valid point.

I could imagine that, in an ideal world, a patent office would just request a letter from the applicant confirming that they want to seek protection for an extra year, without any maintenance fee involved, otherwise the patent would lapse. But, hey, who said the world is a fair place?, might the patent office ask...

In reality, the amount of money that some patent offices make out of maintenance fees is BIG and it serves as a way not only to contribute to self-financing but also to keep high quality standards.

What this means for a patent applicant

So, applicants should be aware that maintenance fees exist and must be paid. And that can be VERY expensive.

When considering costs in a patent budget, a client / in-house department might want to look into the maintenance fees and add this expense in their reports. This is for several reasons:

1. because you need to pay a maintenance fee in every country your seek patent protection,
2. because you need to pay maintenance fees every year (in most countries, but not in all) to keep every patent alive,
3. because maintenance fees can be very expensive;
4. because the older a patent gets, the more expensive the maintenance fee gets.

Imagine for a moment how much could a Standard Essential Patent (SEP) cost in its life cycle, only in maintenance fees!

Or what this can mean for a SME or Startup with an important patent family. Would the strategy be different should they had calculated this hidden expense?

Of course it can get even worse. If an applicant wants to pay all these fees by him/herself, there will be many difficulties: some patent offices only allow national representatives to pay the fees, while others would difficult payments that are done by credit card or a transaction from a foreign bank.

To achieve some peace of mind, a smart applicant will rely either in a powerful Maintenance System or in a trusted Patent Law Firm to monitor and pay the maintenance fees when needed. This is smart. But this will imply a further handling fee per transaction that can greatly vary among companies. And this should also put into the budget...

In a last word of caution, an applicant should be aware about scams that have been built about renewals. Some fake companies send letters directly to applicants warning of losing a patent (application) if a renewal is not paid. While this information might be true, the fact that this companies are asking for money to be sent directly to a unknown bank account should raise some suspicions.

In any case, it is always better to contact a patent expert for further advise.

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