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From now on litigation costs for patent cases will be based on indicative fees

litigation costsIf you decide to instigate proceedings because you want to challenge an infringement issue for instance, the costs of the proceedings will, in theory, be payable by whoever loses the case. As far as this is concerned nothing has changed, but last month a new regulation came into force which aims to clarify how high those costs are going to be. Indicative fees now apply and that is good news, especially for SMEs and independent inventors. We have compiled some frequently asked questions and answers for you.

How do the indicative fees for patent cases work?

Up until a month ago the litigation costs could vary quite considerably because of the amount of time involved, the fees charged by attorneys, and the complexity of a case. They differed from case to case but were often quite substantial. It was not uncommon for them to amount to tens of thousands of euros and in extreme cases to hundreds of thousands of euros. Such high and varied amounts made litigation a major and hard to assess risk, especially for SMEs and independent inventors. One disadvantage of this was that the costs could prove to be so high that they stood in the way of access to justice.

Since September 2020, this risk has become somewhat clearer, thanks to the introduction of indicative fees. Prior to a case, a court will decide, on request, which of four predefined categories that case falls into. On the basis of this indication, you will know roughly what the costs are going to be should you lose the case.

What are the indicative fees?

There are four categories: simple, normal, complex or very complex. Each has its own maximum amount. The court distinguishes between interim injunction proceedings and proceedings on the merits. In the event of an appeal at the Court of Appeal, the same fees apply as for a case on the merits before the court.

Category I. Interim injunction proceedings
a. simple: maximum € 10,000
b. normal: maximum € 40,000
c. complex: maximum € 80,000
d. very complex: maximum € 120,000

Category II. Proceedings on the merits
a. simple: maximum € 30,000
b. normal: maximum € 75,000
c. complex: maximum € 150,000
d. very complex: maximum € 250,000

In this blog you can find more information about the difference between interim injunction proceedings and proceedings on the merits.

How do you know which category you fall into?

The court will determine this, taking into account matters such as the scope of the fact-finding investigation and the estimated number of defences and procedural actions. On the basis of this, it is expected that mechanical engineering cases are more likely to fall into the Normal category, while pharmaceutical cases are more likely to be considered to be Complex. It is expected that the Very complex category will be reserved for exceptional, comprehensive cases involving lots of laborious defences.

What are the experiences with indicative fees to date?

Indicative fees have been in use for trademarks, design rights and copyrights, among other things, since 2017 and work reasonably well. Because indicative fees for patent cases have only just started, it is too early to say what the experiences are like. Do the courts have enough information to give a correct indication? Do the fees cover a sufficiently large part of the actual costs incurred? Will the number of patent cases increase? It will take some time before we have the answers to these questions.

For now, it is just good to know that these fees are in place and that they are likely to benefit less wealthy parties. Whether or not this is how things are going to work out in practice and if there are any pitfalls or problems is something we will discuss in a new blog in a couple of months from now.