Costs and fees at the UPC

This article looks at the Unified Patent Court (UPC) Rules on recoverable costs and court fees. It considers how the UPC's court fees compare to those applicable in national courts and looks at the interplay between the UPC's rules on recoverable costs and court fees.

One of the key factors that patent proprietors will weigh up when considering the UPC as a forum for patent litigation is the likely cost of litigating before it. Such costs include not only the amount of legal costs recoverable from the other side but also the level of court fees.

Recoverable costs

The Rules of the UPC provide that a successful party is entitled to recover reasonable and proportionate costs. A ceiling is set on recoverable costs, which is subject to the value of the claim (see graph below). The maximum award of recoverable costs is €2m for a case valued at more than €50m. For particularly complex cases the ceiling may be raised but cannot exceed a maximum of €5m. The Court has discretion, on request of a party, to lower the ceiling if the amount of recoverable costs would threaten the economic viability of the requesting party, particularly if that party is a university, non-profit organisation, university, public research organisation or natural person.

Court fees

In comparison with the costs and recoverability of attorney’s fees, court fees are likely to be a smaller consideration in choice of forum. It is however, interesting to see how the fees at the UPC compare to those applicable in national courts. Court fees before the UPC include fixed fees and value based fees. Infringement actions and declarations of non-infringement will have fixed court fees of €11,000. The fixed fee for revocation actions is €20,000. Value based fees on a rising scale apply to claims for infringement and declarations of non-infringement with a value of more than €500,000. The maximum value based fee is €325,000 for actions with a value of more than €50m. Value based fees will not apply to revocation actions or counterclaims.

From the graph below it can be seen that the court fees at the UPC for lower value cases are broadly comparable to those for a German action. Fees for cases between €10m and €50m are lower at the UPC. For cases in excess of €50m in value the total fees at the UPC are slightly higher, with total fees of €336,000 payable. The fees seem high compared with the UK, where court fees top out at around €12,500. For high value cases, however, particularly where infringement occurs in multiple jurisdictions the differences between UPC court fees and fees for initiating national proceeding are unlikely to be a significant factor driving choice of forum.

Observations

Case value is used to determine not only the ceiling of recoverable costs at the UPC but also the court fees payable. Although the Preparatory Committee has issued some guidance on the application of the rules on recoverable costs and court fees, there is likely to be an element of variation as to how the guidelines apply in individual cases. In any event, only reasonable and proportionate costs may be recovered. The cost ceilings are a safeguard against undue recovery not an indication of the amount that will be recoverable. In case of partial success or in exceptional circumstances, the court may order the parties to bear their own costs, or apply a different apportionment of cost based on equity.

The graphs show that there is interplay between the cost ceiling and the court fees, with the key values at the €30m and €50m thresholds:

  • Up to €30m: For infringement proceedings valued over €16m up to and including €30m the ceiling for recoverable costs is €1.2m (€1.5m in exceptional cases) and the total court fee is €161,000 (€11,000 fixed fee plus €150,000 value based fee).
  • Up to €50m: For infringement proceedings valued in excess of €30m and up to and including €50m the ceiling for recoverable costs is €1.5m (€1.875m in exceptional cases) and the total court fee is €261,000 (€11,000 fixed fee plus €250,000).
  • Over €50m: For infringement proceedings valued in excess of €50m the ceiling for recoverable costs is €2m (€5m in exceptional cases) and the total court fee is €336,000 (€11,000 fixed fee plus €325,000 value based fee).

Moving from the “up to €30m” band to the “up to €50m” band means an additional €100,000 is payable in court fees but this also raises the ceiling on recoverable costs by €300,000 to €1.5m (by €375,000 to €1.875m in exceptional cases). Moving to the “over €50m” band means paying an additional €75,000 in court fees but also raises the ceiling by €500,000 to €2m and potentially by €3.5m to a maximum of €5m in exceptional cases. With this in mind it seems that cases valued at around €30m and around €50m will be the most likely to result in disputes over valuation.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.